In a recent opinion, Henderson v. The Source for Public Data, L.P., et al, the U.S. Court of Appeals for the 4th Circuit considered whether Section 230(c)(1) of the Communications Decency Act (CDA) – a federal law that allows social media websites to provide a forum for users to post videos or other information without holding the owner of the website responsible for the content of the uploaded material – likewise shielding online aggregators of public records from liability as a Consumer Reporting Agency under the Fair Credit Reporting Act (FCRA).   Disagreeing with the District Court, the Court of Appeals held that Section 230 did not apply because the online aggregator was an “information content provider that provided the improper information” and not merely providing a forum for its users to upload information. 

In Henderson, defendants were in the business of gathering publicly available information including criminal and civil records, voting records, driving information, and professional licensing, aggregating the information, and selling it to third parties. Defendants acknowledged the data they sold was used to determine an individual’s creditworthiness and perform background checks for employment purposes. The plaintiffs, job seekers who had background checks done on them by the online aggregators, filed claims under the FCRA, asserting that the online aggregators were producing “consumer reports” but not complying with the technical provisions of the FCRA, such as providing the plaintiffs with copies of their “consumer reports” upon request.

At the district court level, defendants sought to dispose of claims alleging that they were protected by Section 230 of the CDA. The district court agreed and granted the defendants’ dispositive motion.

On appeal, the 4th Circuit held that the activities of the online aggregators did not fall within the scope of protection provided by Section 230. The panel held that the defendants contributed in a material way to what made the online content inaccurate.  The panel opinion stated that the defendants made substantive changes to the records’ content that materially contributed to the records’ unlawfulness, making the defendants a content provider for the information meaning they are not entitled to protection under Section 230.

This opinion will likely have an impact on whether FCRA defendants can rely on Section 230, in whole or in part, as a source of immunity from FCRA claims.  More so, this ruling will influence the ongoing CDA reform debate, as legislators who already have reservations about the scope of CDA protection may look askance at the Henderson ruling and seek to add the FCRA as a statutory exemption to the CDA in a future reform bill.  Either way, this is an area that is developing and worth watching closely.  

If you have questions about FCRA compliance or related issues, contact the authors of this article or the Jackson Lewis attorney with whom you regularly work.