The Volokh Conspiracy
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Background Check's Reporting Expunged Conviction Isn't Defamation or Fair Credit Reporting Act Violation
From Smith v. InformData, LLC, decided Wednesday by Judge Rossie Alston (E.D. Va.):
Plaintiff Harry Smith filed suit for alleged violations of the Fair Credit Reporting Act ("FCRA") arising out of an "employment purposed consumer report published by Defendant to non-party Turn Technologies Inc…. who then resold the same to Plaintiff's potential employer, inclusive of criminal records that had been pardoned and expunged years earlier." …
In February of 2020, Plaintiff appeared before the Board of Pardons (for an unidentified jurisdiction, but presumably Delaware) and sought a pardon for convictions that were more than a decade old. Thereafter, the Board of Pardons recommended that Plaintiff be pardoned. On May 26, 2020, then-Governor of Delaware John Carney granted Plaintiff a pardon for all of his convictions.
In July 2020, Plaintiff applied for expungement of his convictions. On March 3, 2021, Plaintiffs petition for expungement was granted pursuant to 11 Del. Code § 4372(e)(1), which provides that, within 60 days of expungement, all criminal records must "be removed from the Court's files." The expungement order further stated that Plaintiff need not disclose that he was arrested, charged, or convicted of the expunged convictions, for any reason except as provided for in 11 Del. Code § 4376(a). That statute provides that it is "unlawful for any person having or acquiring access to an expunged court or law-enforcement agency record to open or review it or to disclose to another person any information from it without an order from the court which ordered the record expungement." …
The court rejected plaintiff's Fair Credit Reporting Act claim:
To prevail on a claim for violation of Section 1681e(b), a plaintiff must prove that: (1) his consumer report contains inaccurate information; (2) the CRA did not follow reasonable procedures to assure maximum possible accuracy of that consumer report; and (3) damages….
In Roberts v. Carter-Young, Inc. (4th Cir. 2025), … [t]he Fourth Circuit … referred to information as inaccurate only where it is "objectively and readily verifiable" as mistake-or error-free…. FCRA also contains specific provisions referring to convictions. Pursuant to that provision, "convictions may be reported indefinitely." Federal courts recognize that, regardless of any "diversionary disposition" or "unwinding," a finding of guilty still constitutes a conviction for purposes of FCRA and is reportable. See, e.g., Rhodes v. First Advantage Background Servs. Corp. (11th Cir. 2024) (finding "Record 1 is a 'conviction' that is not excluded under § 1681c," even where there was a diversionary disposition); Aldaco v. RentGrow, Inc. (7th Cir. 2019) (holding that federal law, not state law, determines the existence of a conviction for purposes of FCRA reporting requirements, and permitting reporting of a guilty plea despite dismissal of the charges by state court after a deferral period); Bugoni v. Emp. Background Investigations, Inc., (D. Md. 2022) ("Plaintiff's 'set aside' conviction still constituted a conviction subject to reporting under FCRA."), aff'd (4th Cir. May 30, 2023); cf. Petros v. Campbell (4th Cir. 1992) (holding that a deferred sentence of probation still constitutes a "prior conviction" for purposes of federal sentencing enhancements, although it was not a conviction under Virginia law). Indeed, the Supreme Court has held that, where a statute speaks of a "conviction" without a "modifier" or anything to suggest a "restriction on the scope of the term 'convicted,'" an "expunction" of that conviction did not change the fact of conviction.
Thus, applying the principles announced in these "conviction" cases, Plaintiff's expunged convictions still constitute convictions. Although not addressed specifically by the caselaw, the Court further notes that the precise language used by Section 1681c(a)(5) is not just "convictions" but "records of convictions of crimes." Interpreting the plain language of this provision, regardless of whether an expunged offense still constitutes a "conviction," records regarding that expunged conviction would still constitute "records of convictions of crimes." Furthermore, applying the Fourth Circuit's explanation of the meaning of "inaccurate" for purposes of FCRA, failing to report the later expungement is not inaccurate, because, as Plaintiff himself pleads, there are no public records of the expungement. Thus, under Roberts, the alleged inaccuracy—or really incompleteness as argued by Plaintiff—could not be verified by Defendant because there was no record of expungement.
Plaintiff argues that Defendant was required to "indicate that the criminal records were expunged and pardoned," but the FAC alleges that Defendant did not have access to the information necessary to make such a determination, and the Fourth Circuit has held that companies, like Defendant, are not "tribunals" and are not required to "make the kind of determinations about disputes that courts make." Essentially, Plaintiff argues that Defendant had stale information and should have known that it was stale but also acknowledges that Defendant lacked access to the information to make the record more complete. Thus, this Court joins the Bugoni decision from this Circuit and finds that reporting the expunged convictions was not inaccurate. {To the extent that Plaintiff argues that Defendant's report was misleading because it "reported] Plaintiff's records as current public record information," the FAC makes no such allegation regarding Defendant's representations about the currentness of the information in the report. And, it is axiomatic that a Plaintiff may not amend his complaint in opposition to a motion to dismiss.}
And the court also rejected Smith's defamation claim:
Plaintiff has alleged that he had criminal convictions in Delaware. Thus, any report by Defendant regarding those convictions was true, and Plaintiff does not allege otherwise. Plaintiff argues that Defendant "purported to report Plaintiff's expunged records as current public record information in connection with Plaintiff's employment background check." But that is not what Plaintiff has alleged. Plaintiff alleged that Defendant "sold and reported pertinent details of the criminal records that have been expunged."
Moreover, Plaintiff cites no authority for the proposition that accurately reporting on a criminal conviction that was expunged is defamatory. This is likely for good reason, as the Second Circuit has recognized, expungement "creates legal fictions, but it does not and cannot undo historical facts or convert once-true facts into falsehoods." Martin v. Hearst Corp. (2d Cir. 2015); see also Lueckenbach v. Horizon Mississippi Publications, Inc. (N.D. Miss. 2017) ("The fact that the charge was ultimately dropped and expunged has no bearing on the truth of the undisputed fact …."); G.D. v. Kenny (N.J. 2011) ("[T]he expungement statute does not transmute a once-true fact into a falsehood."); Bahr v. Statesman Journal Co. (Or. Ct. App. 1981) ("Because plaintiff admitted in his complaint that he had been convicted," it necessarily follows that "defendant's statement that plaintiff had been convicted was true[.]"). Here, Plaintiff's own allegations establish that the fact he had a criminal record is substantially true. Because the truth of Defendant's statements is clear from the FAC, dismissal of the defamation claim is appropriate.
Anastasiya Lobacheva, Charles E. Harris II, and Carmen Nicole Green (Mayer Brown LLP) represent InformData.
