WASHINGTON (Legal Newsline) – The U.S. Court of Appeals for the Fourth Circuit recently upheld a lower court’s ruling that approved a settlement in a case against LexisNexis, which was accused of violating the Fair Credit Reporting Act.
In the case, the plaintiffs alleged that LexisNexis violated the FCRA by selling certain Accurint brand reports to debt collectors but not labeling those reports properly. The plaintiffs believe the reports should have been treated as consumer reports.
The defendants claimed the Accurint reports are not actually consumer reports. Plaintiffs attorneys are to receive more than $5 million in the settlement.
The ruling on the settlement could set a precedent for future class action cases. The Center for Class Action Fairness, which is a project of the Competitive Enterprise Institute, appealed the district court’s ruling approving it
The CCAF claimed that the settlement was not fair to the class because class members could not opt out. It additionally claimed that class attorneys were seeking unfair fees and that injunctive relief provided by the settlement is forbidden by statute.
“The ruling today in Berry v. Lexis has created a split among the Fifth, Seventh, Eleventh and Fourth circuits concerning injunctive relief for a class in a class action suit,” CCAF attorney Adam Schulman said.
“Even though the underlying statute prohibits injunctive relief, the Fourth Circuit affirmed a class settlement subjecting the entirety of the 200 million member class to injunctive relief, leaving the class with limited options for recourse.”
The lower court had granted the approval of a settlement between the two parties. The parties agreed to provide injunctive relief to members of one of the settlement classes and agreed to a monetary settlement to the members of the other settlement class.
Members of the first class had information about them residing in the Accurint database, while members of the second class either received a copy of an Accurint report or submitted a dispute or other inquiry regarding an Accurint report.
Schulman went on to say that he fears the ruling will let unscrupulous class counsel settle in self-beneficial ways, all while withholding the remedies that Congress wanted class members to have.