Seventh Circuit Rules State Law Claim Preempted

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Seventh Circuit Rules State Law Claim Preempted

Postby Administrator » Fri Oct 03, 2014 9:33 pm

The Seventh Circuit’s ruling in Purcell v. Bank of America offers something for aficionados of civil procedure, statutory interpretation and the Fair Credit Reporting Act. After removal from state court, the district court dismissed the plaintiff’s federal claims under the FCRA, but remanded the plaintiff’s state law claims back to state court. Section 1681t(b) of the Act states that “[n]o requirement or prohibition may be imposed under the laws of any State (1) with respect to any subject matter regulated under….(F) section 1681s-2 of this title, relating to the responsibilities of persons who furnish information to consumer reporting agencies.” The district court ruled that”laws” applied only to state statutes, not state common law claims.

The Seventh Circuit reversed. The panel found that under Erie v. Tompkins, state “laws” comprise “all sources of legal rules, including judicial opinions.” The panel also ruled that the district court erred in trying narrowly reading Section 1681t(b) so as not to conflict with Section 1681h(e), which allows for state-law claims for “false information furnished with malice or willful intent to injure.” The panel found that these two provisions do not conflict; rather, Section 1681t(b)(1)(F), enacted in 1996, simply preempts more conduct than Section 1681h(e), enacted in 1970.

Seventh Circuit Rules That State Law Claim Preempted Under Section 1681t(b) of FCRA
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
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