Case 1:15-cv-07456-PGG Document 1 Filed 09/21/15 Page 1 of 10

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ROBERT DUNCAN,

Case No.: 1:15-cv-07456
Plaintiff,

COMPLAINT FOR
DAMAGES

-againstI
STERLING INFOSYSTEMS, INC.,
Defendant.

Violations of the Fair Credit
Reporting Act, 15 U.S.C. §§
1681e(b), 1681k(a)
DEMAND FOR JURY TRIAL

Plaintiff Robert Duncan, by and through his attorneys, brings the following Complaint
against Sterling Infosystems, Inc. (“Sterling” or “Defendant”) for violation of the Fair Credit
Reporting Act (“FCRA”) arising out of a background check that falsely portrayed Plaintiff as a
criminal and a sex offender.
THE PARTIES
1.

Plaintiff Robert Duncan is an individual person and a resident of Port Lavaca,

2.

Defendant Sterling Infosystems, Inc. is a consumer reporting agency

Texas.

headquartered in New York City, New York.
JURISDICTION AND VENUE
3.

This Court has federal question jurisdiction over this action pursuant to 28 U.S.C.

§ 1331.
4.

Venue is proper in this District pursuant to 28 U.S.C. § 1391 because Defendant

resides here, and because a substantial part of the events or omissions giving rise to this claim
occurred in this District.

 Case 1:15-cv-07456-PGG Document 1 Filed 09/21/15 Page 2 of 10

THE FCRA’S PROTECTION FOR JOB SEEKERS
5.

Despite its name, the Fair Credit Reporting Act covers more than just credit

reporting, and regulates criminal background checks like the one procured on Plaintiff. See 15
U.S.C. § 1681a(d)(1).
6.

The FCRA provides a number of protections for job seekers who are subjected to

background checks.
7.

In the parlance of the FCRA, criminal background checks are “consumer reports,”

and providers of criminal background checks like Sterling are “consumer reporting agencies.”
15 U.S.C. §§ 1681a(d), f.
8.

The FCRA imposes duties on consumer reporting agencies to ensure that

consumer reports are accurate and that “consumer reporting agencies exercise their grave
responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy.” 15
U.S.C. § 1681.
9.

Under 15 U.S.C. § 1681e(b), consumer reporting agencies are required “to follow

reasonable procedures to assure maximum possible accuracy of the information concerning the
individual about whom the report relates.”
10.

Under 15 U.S.C. § 1681k(a), a consumer reporting agency furnishing reports for

employment purposes which contains “matters of public records [which are] likely to have an
adverse effect upon a consumer’s ability to obtain employment” is required to either notify the
consumer of the fact of the report or “maintain strict procedures designed to insure that whenever
public record information which is likely to have an adverse effect on a consumer’s ability to
obtain employment is reported it is complete and up to date.”
11.

As described below, Defendant wholly disregarded these duties with respect to

2

 Case 1:15-cv-07456-PGG Document 1 Filed 09/21/15 Page 3 of 10

Plaintiff’s background check.
PLAINTIFF’S INACCURATE BACKGROUND CHECK
12.

Plaintiff Robert Duncan is a military veteran who served over twenty years in the

Navy and Marine Corps, and received an honorable discharge.
13.

Outside of minor traffic violations, Plaintiff Duncan has no criminal record,

having never been convicted of a felony or misdemeanor.
14.

In February of 2015, Plaintiff Duncan applied for a position with U.S. Security

Associates, (“U.S. Security”) as a security guard.

After an initial screening process, U.S.

Security offered him a job.
15.

This job offer was contingent on successfully completing a background check. In

order to facilitate the background check process, Plaintiff Duncan provided his full legal name,
address, date of birth, social security number, and telephone number.
16.

Sterling received a request from U.S. Security to produce a report on Plaintiff

Duncan on or about February 25, 2015, and provided that report to U.S. Security on or about the
same day. (Ex. 1.)
17.

In that report, Sterling falsely reported that Plaintiff Duncan had been charged

with 29 child-pornography-related felonies, and convicted of 5 of them, in Chester County,
Pennsylvania in 2011. (Id. at 9-11.) Sterling further falsely reported that Plaintiff Duncan had
been sentenced to imprisonment of between 6 and 23 months, and placed on probation for seven
years. (Id. at 10-11.)
18.

In actuality, none of this was true. Plaintiff Duncan has never been convicted of

any felonies or misdemeanors, has never been imprisoned, has never been on probation, and has
never lived in Chester County, Pennsylvania.

3

 Case 1:15-cv-07456-PGG Document 1 Filed 09/21/15 Page 4 of 10

19.

When U.S. Security received his report, Jessalyn Wright, a U.S. Security

employee in Corpus Christi, TX, contacted him to see if the report was accurate.
20.

Plaintiff Duncan assured Ms. Wright that the report was inaccurate, and took a

number of steps to attempt to correct the situation.
21.

First, Plaintiff Duncan contacted the court clerk in Chester County, Pennsylvania,

and the clerk faxed a statement to Ms. Wright stating that Plaintiff Duncan had no criminal
record in that jurisdiction. (Ex. 2.) Ms. Wright told Plaintiff Duncan that she would forward that
information on to Sterling.
22.

Second, Plaintiff Duncan attempted to call Sterling several times, but was never

able to get through Sterling’s automated call answering system to speak to a live operator.
23.

Sterling’s records reflect none of this. Its customer service records reflect no calls

from Plaintiff Duncan, and one call from Ms. Wright, but state only that Ms. Wright “called to
check status of the background check.” (Ex. 3.)
24.

Eventually, Ms. Wright contacted Plaintiff Duncan again, and informed him that

Sterling was not correcting his report, and that, without a corrected report, U.S. Security could
not hire him.
25.

Sterling’s false reporting, and its refusal to correct its false reporting, caused U.S.

Security to withdraw the job offer. (Exs. 4, 5.)
26.

Sterling’s inaccurate reporting was a direct result of its failure to use reasonable

procedures.
27.

At the time the background check was run, Sterling knew Plaintiff Duncan’s full

legal name, address, date of birth, social security number, and telephone number. See supra ¶
15. Specifically, Sterling knew that Plaintiff Duncan’s full name was Robert Eustace Duncan,

4

 Case 1:15-cv-07456-PGG Document 1 Filed 09/21/15 Page 5 of 10

and that he was a resident of Texas.
28.

Despite knowing this information, Sterling reported child pornography charges

against Robert Everett Duncan, Jr., who lived in Downingtown, PA (henceforth, “the
Pennsylvania defendant”) as though those charges had been brought against Plaintiff. (Ex. 6 at
13).
29.

The fact that the Pennsylvania defendant is not the same person as Plaintiff

Duncan is readily apparent from an examination of the publicly accessible Pennsylvania court
records, which make clear that neither the Pennsylvania defendant’s full name nor address match
those of Plaintiff Duncan. (Id.) Importantly, Plaintiff Duncan’s Sterling report includes five
pages of addresses allegedly associated with him, but none of those addresses are in
Pennsylvania. (Ex. 1 at 4-8.)
30.

Rather than consulting the publicly available court documents, Sterling relied

upon an inaccurate electronic matching algorithm which created false positives. This reliance
was unreasonable.
31.

Further, if Sterling had engaged in meaningful manual quality control review of

Plaintiff Duncan’s report, or if it had responded appropriately to U.S. Security’s inquiry, it would
have recognized its error. That it did not do so is further evidence of its failure to use reasonable
procedures to ensure maximum possible accuracy.
32.

As part of its service agreement with its customers, Sterling requires that its

subscribers contact it to obtain special procedures for preparation and use of a consumer report in
the case of suspected misconduct or violation of state, federal, or local law. Plaintiff’s report
was not procured using these special procedures.
33.

Plaintiff’s report was not procured in connection with any investigation of an

5

 Case 1:15-cv-07456-PGG Document 1 Filed 09/21/15 Page 6 of 10

employee for suspected misconduct relating to employment, or compliance with federal, state, or
local laws and regulations, the rules of a self-regulatory organization, or any preexisting written
policies of the employer.
34.

As of result of Defendant’s conduct, Plaintiff has suffered actual damages in the

form of lost income, harm to reputation, and emotional distress, including embarrassment and
humiliation.
35.

After U.S. Security rescinded the job offer, Plaintiff Duncan was unemployed for

a number of months, despite his best efforts to find employment. Plaintiff Duncan eventually
found work at a McDonalds, beginning in approximately June 2015, but the pay is substantially
less than what he would have been receiving at U.S. Security.
36.

This time of unemployment was stressful for Plaintiff Duncan, both personally

and financially. He receives Navy retirement payments, but they are not enough to cover his
living expenses, so he was forced to borrow money from friends.
37.

Further, Plaintiff Duncan experienced emotional distress over his unemployment

and, in particular, over it being the result of Sterling’s inadequate procedures. The abhorrent
nature of the charges incorrectly associated with his good name furthered his distress.
DEFENDANT’S CONDUCT WAS WILLFUL
38.

Defendant negligently violated the FCRA.

39.

Defendant’s violations of the FCRA were not only negligent, but were also

knowing and willful.
40.

Sterling is aware of FCRA’s clear mandates “to follow reasonable procedures to

assure maximum possible accuracy,” and, when reporting public record information in
employment reports, to “maintain strict procedures designed to insure that [such records are]

6

 Case 1:15-cv-07456-PGG Document 1 Filed 09/21/15 Page 7 of 10

complete and up to date.” 15 U.S.C. §§ 1681e(b), 1681k(a).
41.

Sterling knows that it is common for criminal records to be erroneously attributed

to the wrong person. In fact, Sterling has been repeatedly sued for erroneous criminal record
reporting. See, e.g., Johnson v. Sterling Infosystems, Inc., No. 1:15-cv-05523 (S.D.N.Y. July 16,
2015); Holifield v. DirecTV, et al., No. 2:14-cv-07622 (C.D. Cal. Oct. 1, 2014); Doe v. Sterling
Infosystems, Inc., 2:15-cv-04770 (C.D. Cal. June 24, 2015); Sanchez v. Sterling Infosystems, Inc.,
1:12-cv-00157 (D.R.I. Mar. 3, 2012); Mitchell v. Am. Background Info. Serv., Inc., et al., 14-cv2650 (S.D.N.Y. April 14, 2014). In 2011 alone, Sterling received over 5,000 disputes from
consumers who claimed that Sterling sold a background check about them containing criminal
records belonging to another person. See Jones v. Sterling Infosystems, Inc., 1:14-cv-03076,
ECF No. 47 at 7 n. 1 (S.D.N.Y. May 18, 2015). Sterling is also aware that claims of this type
have been successfully tried to jury verdicts. See, e.g., Smith v. LexisNexis Screening Solutions,
Inc., No. 13-CV-10774, 2014 WL 7403890, at *1 (E.D. Mich. Dec. 30, 2014) (upholding
$375,000 jury verdict when background check company erroneously reported criminal
convictions).
42.

Despite this, Sterling unreasonably and willfully failed to follow reasonable

procedures to ensure maximum possible accuracy by, inter alia, failing to check the underlying
court records, failing to ensure the full name and addresses matched before issuing Plaintiff’s
erroneous report, and failing to conduct reasonable quality control.
43.

Sterling also unreasonably and willfully failed to maintain strict procedures to

ensure that the public record information it reported was complete and up to date by, inter alia,
omitting the defendant’s full name and address from the report, failing to ensure that records
reported related to the person who was the subject of the report, and failing to conduct

7

 Case 1:15-cv-07456-PGG Document 1 Filed 09/21/15 Page 8 of 10

reasonable quality control.
COUNT I: 15 U.S.C. § 1681e(b)
Failure to Follow Reasonable Procedures
to Assure Maximum Possible Accuracy
44.

Plaintiff realleges the allegations set forth in Paragraphs 1-43.

45.

Sterling negligently and willfully failed “to follow reasonable procedures to

assure maximum possible accuracy” in preparing Plaintiff’s consumer report. 15 U.S.C. §
1681e(b).
46.

Pursuant to 15 U.S.C. § 1681o and § 1681n, Plaintiff is entitled to his actual

damages, statutory damages, punitive damages, costs and attorneys’ fees.
COUNT II: 15 U.S.C. § 1681k(a)
Failure to Maintain Strict Procedures
47.

Plaintiff realleges the allegations set forth in Paragraphs 1-43.

48.

The report provided by Sterling to U.S. Security contained matters of public

record which were likely to have an adverse effect upon Plaintiff Duncan’s ability to obtain
employment.
49.

At the time this public record information was reported to U.S. Security, Sterling

did not notify Plaintiff Duncan of the fact that public record information was being reported by
Sterling, together with the name and address of the person to whom such information was being
reported.
50.

Sterling also did not maintain strict procedures designed to ensure that the public

record information regarding Plaintiff Duncan was complete and up to date.

Specifically,

Sterling’s procedures ensured the record would be incomplete, by omitting the defendant’s full
name and address.
51.

Sterling thus failed to comply with the requirements of 15 U.S.C. § 1681k(a).
8

 Case 1:15-cv-07456-PGG Document 1 Filed 09/21/15 Page 9 of 10

This violation was both negligent and willful.
52.

Pursuant to 15 U.S.C. § 1681o and § 1681n, Plaintiff is entitled to his actual

damages, statutory damages, punitive damages, costs and attorneys’ fees.
PRAYER FOR RELIEF
53.

WHEREFORE, Plaintiff prays for relief as follows:

a.

Declaring that Defendant negligently violated the FCRA;

b.

Declaring that Defendant willfully violated the FCRA;

c.

Awarding actual damages, statutory damages, and punitive damages as provided
by the FCRA;

d.

Awarding reasonable attorneys’ fees and costs as provided by the FCRA; and

e.

Granting other and further relief, in law or equity, as this Court may deem
appropriate and just.
DEMAND FOR JURY TRIAL

54.

Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff demands

a trial by jury.

Dated: September 21, 2015

NICHOLS KASTER, PLLP
/s/Michele R. Fisher
NICHOLS KASTER, PLLP
Michele R. Fisher, NY Bar No. MF4600
E. Michelle Drake, MN Bar No. 387366*
Joseph C. Hashmall, MN Bar No. 392610*
*pro hac vice applications forthcoming
4600 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
Telephone: (612) 256-3200
Fax: (612) 215-6870
9

 Case 1:15-cv-07456-PGG Document 1 Filed 09/21/15 Page 10 of 10

fisher@nka.com
drake@nka.com
jhashmall@nka.com
ATTORNEYS FOR PLAINTIFF

10