FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SARMAD SYED, an individual, on

behalf of himself and all others

similarly situated,

Plaintiff-Appellant,

v.

M-I, LLC, a Delaware Limited

No. 14-17186

D.C. No.

William B. Shubb, District Judge, Presiding

Argued and Submitted November 17, 2016

San Francisco, California

Filed January 20, 2017

Amended March 20, 2017

Before: Mary M. Schroeder, Kim McLane Wardlaw,

and John B. Owens, Circuit Judges.

Order;

Opinion by Judge Wardlaw

SYED V. M-I, LLC2

dismissal pursuant to Federal Rule of Civil Procedure

12(b)(6) of an action under the Fair Credit Reporting Act.

employer violates 15 U.S.C. § 1681b(b)(2)(A) when it

procures a job applicant’s consumer report after including a

liability waiver in the same document as a statutorily

mandated disclosure. The panel also held that, in light of

the clear statutory language that the disclosure document

consist “solely” of the disclosure, a prospective employer’s

violation of § 1681b(b)(2)(A) is “willful” when the employer

Blanchard Law Group, Los Angeles, California; for Plaintiff-

Appellant.

been prepared by court staff for the convenience of the reader.

SYED V. M-I, LLC 3

Lewis & Bockius LLP, Los Angeles, California; Allyson N.

Ho, Morgan Lewis & Bockius LLP, Dallas, Texas; Thomas

M. Peterson, Morgan Lewis & Bockius LLP, San Francisco,

California; Judd E. Stone, Morgan Lewis & Bockius LLP,

Pincus, Mayer Brown LLP, Washington, D.C.; Warren

Postman and Kate Comerford Todd, U.S. Chamber Litigation

Center, Inc., Washington, D.C.; for Amicus Curiae Chamber

of Commerce of the United States.

and an amended opinion is filed concurrently with this order.

to deny the petition for panel rehearing. Judges Wardlaw and

Owens have voted to deny the petition for rehearing en banc,

and Judge Schroeder has so recommended.

SYED V. M-I, LLC4

petition for rehearing en banc are DENIED. No further

petitions for rehearing or for rehearing en banc will be

entertained. The mandate shall issue forthwith.

information privacy, and on the widespread use of consumer

credit reports to collect information in violation of

consumers’ privacy rights. This case presents a question of

first impression in the federal courts of appeals: whether a

prospective employer may satisfy the Fair Credit Reporting

Act’s (“FCRA”) disclosure requirements by providing a job

applicant with a disclosure that “a consumer report may be

obtained for employment purposes” which simultaneously

serves as a liability waiver for the prospective employer and

others.

limited to employer-employee relationships. However, for the sake of

brevity, we describe the parties governed by the statute as “prospective

employers” and “job applicants,” while recognizing that the statute in fact

applies more broadly.

SYED V. M-I, LLC 5

mandated disclosure. We also hold that, in light of the clear

statutory language that the disclosure document must consist

“solely” of the disclosure, a prospective employer’s violation

of the FCRA is “willful” when the employer includes terms

before procuring a consumer report or causing one to be

A. Fair Credit Reporting Act.

concerns about corporations’ increasingly sophisticated use

of consumers’ personal information in making credit and

other decisions. Fair Credit Reporting Act of 1970, Pub. L.

91-508, § 602, 84 Stat. 1114, 1128. Specifically, Congress

recognized the need to “ensure fair and accurate credit

reporting, promote efficiency in the banking system, and

protect consumer privacy.” Safeco Ins. Co. v. Burr, 551 U.S.

47, 52 (2007). Congress thus required the use of reasonable

SYED V. M-I, LLC6

15 U.S.C. § 1681a(d).

amount of inaccurate information that was being reported by

consumers faced getting such errors corrected.” S. Rep.

No. 108-166 at 5–6 (2003) (describing 1996 amendments).

Congress was specifically concerned that prospective

employers were obtaining and using consumer reports in a

manner that violated job applicants’ privacy rights. S. Rep.

No. 104-185 at 35 (1995). The disclosure and authorization

provision codified at 15 U.S.C. § 1681b(b)(2)(A) was

intended to address this concern by requiring the prospective

employer to disclose that it may obtain the applicant’s

prospective employer from doing so—withholding of

in addition to securing job applicants’ privacy rights by

enabling them to withhold authorization to obtain their

consumer reports, the provision promotes error correction by

providing applicants with an opportunity to warn a

prospective employer of errors in the report before the

SYED V. M-I, LLC 7

information contained in the report.

2

unless certain specified procedures were followed:

(B), a person may not procure a consumer

procured, for employment purposes with

respect to any consumer, unless—

(i) a clear and conspicuous

disclosure has been made in writing to

the consumer at any time before the

report is procured or caused to be

procured, in a document that consists

solely of the disclosure, that a

See Richard Fischer, A.S. Pratt & Sons, Law of Financial Privacy

¶ 1.04[2][F] (2014).

SYED V. M-I, LLC8

clause (i)) the procurement of the

report by that person.

15 U.S.C. § 1681b(b)(2)(A). Congress amended the statute

be made on the same document as the disclosure. Consumer

who violate its statutory requirements in procuring and using

damages for a negligent violation. 15 U.S.C. § 1681o. For a

willful violation, however, a consumer may recover statutory

damages ranging from $100 to $1,000, punitive damages, and

attorney’s fees and costs. 15 U.S.C. § 1681n.

B. Syed’s Lawsuit Against M-I.

Syed with a document labeled “Pre-employment Disclosure

could be collected and used as a basis for the employment

authorization for M-I to procure his consumer report, and as

a broad release of liability.

SYED V. M-I, LLC 9

reads as follows:

Appendix A.

the disclosure requirements mandated by 15 U.S.C.

§ 1681b(b)(2)(A). Syed does not contend that M-I’s form

contained too little information. Instead, he argues that it

requirement that the disclosure document consist “solely” of

with which it had provided him. He alleges that he filed the

complaint within two years of reviewing his file.

district court on behalf of himself and any person whose

SYED V. M-I, LLC16

disclosure by the prospective employer, Congress’s purpose

would have been frustrated because applicants would not

understand what they were authorizing. The disclosure and

authorization clauses therefore work in tandem to further the

“improper invasion[s] of privacy.” See id.

of each clause. A job applicant may read a disclosure more

obtain his consumer report only if he signs an authorization

for it to do so. The decision to authorize or deny the

prospective employer’s use of his report to accept or reject

his employment application may be better informed if the

authorization immediately follows the disclosure.

1681b(b)(2)(A) is internally inconsistent. “It is our duty to

give effect, if possible, to every clause and word of a statute.”

to give effect to the term “solely,” violating the precept that

provisions mandating disclosure omit the term “solely” is

further evidence that Congress intended that term to carry

meaning in 15 U.S.C. § 1681b(b)(2)(A)(i). See 15 U.S.C.

§§ 1681d, 1681s-3.

SYED V. M-I, LLC 17

allowing the disclosure document to also contain the

that the statute contains other implicit exceptions as well. See

additional, implied, exceptions. See Tenn. Valley Auth. v.

contention that a liability waiver is an implicit exception to

the “solely” requirement in 15 U.S.C. § 1681b(b)(2)(A)(i).

is justifiable only when it comports with the basic purpose of

the statute.” Walker v. Fairbanks Inv. Co., 268 F.2d 48, 53

(9th Cir. 1959). Here, an implied exception permitting the

inclusion of a liability waiver on the same document as the

disclosure does not comport with the FCRA’s basic purpose.

of sensitive personal information. See 15 U.S.C.

inability to obtain that information without his consent. But

a liability waiver does just the opposite—it pulls the

applicant’s attention away from his privacy rights protected

by the FCRA by calling his attention to the rights he must

forego if he signs the document. Indeed, by reading M-I’s

SYED V. M-I, LLC18

conclude that his signature was not consent to the

procurement of the consumer report, but to a broad release of

the employer from claims arising from the totality of the

“investigative background inquiries” referenced in the first

§ 1681b(b)(2)(A) does not contain an implied exception

exception allowing for the inclusion of a liability waiver,

positing that a liability waiver is one type of authorization.

But we need not speculate about how broadly Congress

intended us to read the term “authorization,” because

Congress told us exactly what it meant when it described the

authorization as encompassing only “the procurement of [a

consumer] report.” 15 U.S.C. § 1681b(b)(2)(A)(ii). Further,

even assuming the statute were not as clear as it is, M-I’s

power to.” American Heritage Dictionary 120. To waive is

“authorize” a “waiver.” We decline to so harry the English

language. See Int’l Primate Prot. League v. Adm’rs of Tulane

Educ. Fund, 500 U.S. 72, 82 (1991). We thus reject M-I’s

SYED V. M-I, LLC 19

inclusion of a liability waiver on the disclosure document.

that a disclosure made pursuant to Section 1681b(b)(2)(A) is

waiver is “not so great a distraction as to discount the

effectiveness of the disclosure.” The district court in Smith

concluded that “in order to give Congress’s inclusion of the

word ‘solely’ meaningful effect, . . . inclusion of the waiver

provision was statutorily impermissible and . . . the waiver is

therefore invalid.” Id. Only then, analyzing the single,

separated sentence releasing the company from liability, did

the court hold that the waiver was “not so great a distraction

as to discount the effectiveness of the disclosure.” Id. It is

“clear and conspicuous,” an additional requirement under the

distract from the disclosure’s clarity. In any event, “it is well-settled that

‘reference to legislative history is inappropriate when the text of the

statute is unambiguous.’” United States v. Sioux, 362 F.3d 1241, 1246

(9th Cir. 2004). Thus, we look no further than the statutory text.

SYED V. M-I, LLC20

and conspicuous” within the meaning of Section

1681b(b)(2)(A)(i) is separate from the question of whether a

document consists “solely” of a disclosure, and is not one that

is before us here, we decide only that including the waiver

question whether the Smith court’s approach comports with

actual damages. Statutory and punitive damages are available

under the FCRA only where a defendant “willfully fails to

comply” with the statute. 15 U.S.C. § 1681n(a). Therefore,

we must decide whether M-I willfully failed to comply with

Section 1681b(b)(2)(A) by procuring Syed’s consumer report

after including a liability waiver on the same document as the

statutorily mandated disclosure. We may resolve this

question as a matter of law, as the parties acknowledge.

disregard of statutory duty,” in addition to actions “known to

law substantially greater than the risk associated with a

reading that was merely careless.” Id. at 69.

SYED V. M-I, LLC 21

procuring Syed’s consumer report, its interpretation of 15

non-compliance was willful within the meaning of

the reasons outlined above, we conclude that the FCRA

unambiguously bars a prospective employer from including

a liability waiver on a disclosure document provided a job

applicant pursuant to Section 1681b(b)(2)(A).

objectively reasonable in light of the dearth of guidance from

federal appellate courts and administrative agencies. No

court of appeals has spoken to the issue of whether a

Nor has an administrative agency promulgated authoritative

disclosure and the authorization for obtaining a consumer report.”); FTC,

Opinion Letter, 1998 WL 34323748, at *2 (Feb. 11, 1998) (disclosure may

describe the “nature of the consumer reports” it covers, but otherwise

should “not be encumbered with extraneous information”); FTC, Opinion

SYED V. M-I, LLC22

I’s interpretation reasonable. The Supreme Court has

analogized the assessment of whether a FCRA violation may

give rise to a claim for statutory damages to the determination

of whether government employees may be held personally

qualified immunity context, we have held that “when an

the law is clearly established.” Boyd v. Benton Cty., 374 F.3d

Similarly, at least one circuit court of appeals has concluded

that, in the FCRA context, a “lack of definitive authority does

not, as a matter of law, immunize [a party] from potential

liability” for statutory damages. Cortez v. Trans Union, LLC,

617 F.3d 688, 721 (3d Cir. 2010).

time M-I procured Syed’s consumer report, M-I’s inclusion

of a liability waiver in the statutorily mandated disclosure

I’s interpretation was “objectively unreasonable.”

Letter, 1998 WL 34323756, at *1 (June 12, 1998) (inclusion of a waiver

in a disclosure form violates Section 1681b(b)(2)(A)). However, informal

opinion letters do not constitute authoritative guidance. See Safeco, 551

U.S. at 70 n.19. Therefore, we do not rely on them here.

SYED V. M-I, LLC 23

objectively unreasonable interpretation of the FCRA is by

definition a reckless one, as well. However, this

negligence. In tort law, negligent actions are those which do

other hand, one acts recklessly when he creates an

“substantially greater than that which is necessary to make his

conduct negligent.” See Restatement (Second) Torts § 500.

The Supreme Court has specifically distinguished

recklessness from negligence in the FCRA context, noting

that a violation is only reckless (and therefore willful) where

an employer adopts a reading of the statute that runs a risk of

error “substantially greater than the risk associated with a

reading that was merely careless.” Safeco, 551 U.S. at 69

(emphasis added); see also id. at 70 (“Safeco’s reading was

for reckless liability.”)

punitive damages for willful ones, on the other. See 15

U.S.C. §§ 1681n, 1681o; Safeco, 551 U.S. at 69–70; see also

Menasche, 348 U.S. at 538–39 (“It is our duty to give effect,

if possible, to every clause and word of a statute . . . .”)

(internal quotation marks omitted). Accordingly, if M-I’s

SYED V. M-I, LLC24

unreasonable, it does not follow that Syed is entitled to

statutory damages.

disclosure document crossed the “negligence/recklessness

a company did not recklessly disregard the FCRA’s mandate

even if the company’s actions were negligent. Murray v. New

Cingular Wireless Servs., Inc., 523 F.3d 719, 726–27 (7th

Cir. 2008) (Easterbrook, J.) (qualifying that such a practice

“would be reckless today,” given intervening legal authority).

not subject to a range of plausible interpretations. To the

contrary, 15 U.S.C. § 1681b(b)(2)(A) unambiguously

forecloses the inclusion of a liability waiver in a disclosure

reckless disregard of the statutory language, and therefore

497 F.3d 1360, 1384 (Fed. Cir. 2007), abrogated on other grounds by

Halo Elecs., Inc. v. Pulse Elecs., Inc., —U.S.—, 136 S. Ct. 1923 (2016)

(a FCRA defendant’s “subjective beliefs may become relevant . . . if [the

plaintiff] successfully makes [a] showing of objective unreasonableness”).

SYED V. M-I, LLC 25

actually believed that its interpretation was correct is

immaterial. See Reardon v. ClosetMaid Corp., No.

2:08–cv–01730, 2013 WL 6231606, at *11 (W.D. Pa. Dec. 2,

2013) (holding that there was “no issue of material fact”

willfully and granting plaintiff summary judgment).

not receive a pass because the issue has never been decided.”

recklessness may be determined by objective evidence alone. Keeton et

al., supra, § 34 at 213–14.

courts rejecting the argument that a prospective employer’s inclusion of

a liability waiver in a disclosure made pursuant to 15 U.S.C.

v. Whole Foods Mkt. Grp., Inc., No. 8:14–cv–3035–T–26TBM, 2015 WL

1456981, at *3 (M.D. Fla. March 30, 2015); Avila v. NOW Health Grp.,

Inc., No. 14 C 1551, 2014 WL 3537825, at *3 (N.D. Ill. July 17, 2014);

because there was “no plausible alternative reading of the statute in the

foundation of the statutory text”). For the reasons described in Part

IV.A.4, we disagree with the contrary analysis of the court in Smith, 2012

WL 3645324, at *6.