Berry v. LexisNexis Risk and Information Analytics Group, Inc. (4th Cir. 2015)
Case Overview
This case concerns a class action lawsuit against LexisNexis Risk and Information Analytics Group, Inc., Seisint, Inc., and Reed Elsevier, Inc. (collectively, “Lexis”). The plaintiffs alleged that Lexis sold personal data reports to debt collectors without providing the protections required under the Fair Credit Reporting Act (FCRA).
Consumers argued that Lexis acted as a data broker providing background information to debt collectors and businesses without proper disclosure, access rights, or accuracy checks. While Lexis denied liability, it agreed to major reforms, including new systems to separate regulated and non-regulated data, add dispute mechanisms, and offer free annual access to consumer records.
As part of the landmark settlement, LexisNexis agreed to overhaul its systems, separating regulated and nonregulated data products, offering free annual access, and creating a new LexisNexis dispute process for consumers to challenge and correct inaccurate or misleading records.
After years of litigation, the parties reached a settlement agreement that required Lexis to change its business practices and implement stronger consumer data protections. In exchange, the class members released their claims for statutory damages under the FCRA. The Fourth Circuit Court of Appeals affirmed the settlement approval, marking a significant precedent in background check and data privacy law.
I. BACKGROUND OF THE DISPUTE
A. The FCRA and LexisNexis
The Fair Credit Reporting Act (15 U.S.C. §1681 et seq.) regulates the collection and use of consumer data by consumer reporting agencies (CRAs). It requires CRAs to ensure accuracy, fairness, and privacy when compiling or sharing information that affects credit or employment decisions.
LexisNexis, operating as a data broker, marketed and sold a product called Accurint® for Collections, used by debt collectors to locate individuals and verify personal information. The product contained extensive personal data — covering over 200 million people — but Lexis claimed it was not a “consumer report” under the FCRA, and thus not subject to its requirements.
Plaintiffs argued otherwise, asserting that Accurint’s reports should be covered by the FCRA since they influenced eligibility determinations and contained sensitive consumer information.
B. Litigation History and Prior Class Actions
This lawsuit was the third national class action brought by consumer attorneys against Lexis over similar issues. Earlier cases, Graham v. LexisNexis and Adams v. LexisNexis, alleged identical FCRA violations but were either dismissed or settled without broad injunctive relief.
Throughout years of litigation, class counsel and Lexis engaged in nine in-person mediations and multiple teleconferences. The central issue remained whether Lexis’s conduct was “willful” under the FCRA — a crucial point because willful violations can trigger statutory damages of $100–$1,000 per person under 15 U.S.C. §1681n(a).
Lexis relied on a 2008 Federal Trade Commission (FTC) Opinion Letter, which concluded that Accurint reports were not “consumer reports” under the FCRA. Based on that, Lexis argued its conduct was not objectively unreasonable, and thus not willful. This became pivotal to the later settlement.
C. The 2011 Class Action Complaint
In 2011, a new group of plaintiffs filed the Berry v. LexisNexis class action in the Eastern District of Virginia. They alleged that Lexis violated the FCRA by:
Selling Accurint reports without ensuring permissible purpose;
Refusing to let consumers access their own reports; and
Denying requests to investigate inaccuracies in those reports.
Plaintiffs sought actual and statutory damages, asserting that Lexis’s practices deprived millions of Americans of their FCRA rights. After more than a year of discovery and mediation, the parties reached a nationwide settlement agreement — one of the largest FCRA-related data privacy settlements to date.
D. The Settlement Agreement
The settlement created two distinct classes:
Rule 23(b)(3) Class – About 31,000 individuals who directly interacted with Lexis (e.g., requested or disputed Accurint reports). They received $300 each in exchange for releasing all FCRA claims.
Rule 23(b)(2) Class – Approximately 200 million U.S. residents whose data appeared in Accurint reports. This group received injunctive relief only, not monetary payments, and waived statutory (but not actual) damages.
Lexis agreed to fundamental reforms in its products, creating two new services:
Collections Decisioning – Covered by the FCRA, requiring credentialed buyers and allowing consumer access and disputes.
Contact & Locate – Limited to non-FCRA data (like locating assets or individuals) and subject to FCRA-like protections such as free annual access and dispute rights.
The district court described these reforms as making Lexis “the industry leader in data privacy protection among data aggregation companies.”
II. CLASS CERTIFICATION AND LEGAL ANALYSIS
A. Rule 23 Class Certification
The district court certified both settlement classes under Federal Rule of Civil Procedure 23(b)(2) and 23(b)(3).
The (b)(2) Class included every U.S. resident whose personal data was stored in Lexis’s Accurint system.
The (b)(3) Class consisted of individuals who had requested or disputed Accurint reports.
The Court found that the plaintiffs met all Rule 23(a) requirements — numerosity, commonality, typicality, and adequacy — and that the settlement was fair, reasonable, and adequate under Rule 23(e).
Judge Robert E. Payne noted that Lexis’s agreement to restructure its products and introduce FCRA-compliant systems provided tangible, long-term relief to consumers.
B. Key Settlement Terms and Reforms
Under the settlement, Lexis agreed to transform its background check and data aggregation practices by:
Separating regulated and unregulated data use — creating a clear distinction between FCRA-covered and non-FCRA products.
Providing consumer access — allowing individuals to request free annual access to their Accurint files.
Adding dispute mechanisms — enabling consumers to challenge false or misleading information.
Implementing user verification standards — ensuring data buyers had permissible purposes consistent with the FCRA.
The settlement was valued primarily in injunctive relief, affecting nearly 200 million Americans and establishing Lexis as a model for data privacy reform in the background screening industry.
C. Objections and Due Process Arguments
A small group of objectors argued that:
The settlement released statutory damages claims without compensation for most class members.
The injunctive relief was vague or insufficient.
The settlement process lacked individual notice for all affected consumers.
The Court rejected these objections, holding that:
The FCRA statutory damages claims were weak given the FTC’s prior opinion that Lexis’s conduct was not willful.
The injunctive changes were substantial, addressing future consumer harm.
Direct notice was impractical for a class of nearly 200 million individuals, and the publication notice was adequate under Rule 23.
D. Fourth Circuit’s Analysis and Affirmation
On appeal, the Fourth Circuit Court of Appeals unanimously affirmed the settlement approval, emphasizing several key principles:
FCRA Compliance and Reform Over Punishment – The Court favored broad structural reform over speculative statutory damages, recognizing Lexis’s nationwide changes as “significant and meaningful.”
Reasonableness of the Release – Because the plaintiffs’ likelihood of proving “willful” violation was low, releasing statutory claims in exchange for systemic reform was reasonable.
Adequacy of Representation – Class counsel effectively protected all interests, and the injunctive relief benefited even those who received no monetary payment.
Judge Payne’s opinion described the settlement as “a landmark result that brings transparency and accountability to the background check industry.”
E. Precedent Set by the Case
This case became one of the most influential FCRA settlements in U.S. data privacy law.
It reinforced that data brokers, even if they claim not to be CRAs, must still ensure accuracy, transparency, and fairness when selling consumer information.
Following this decision, other companies offering background screening or data verification services reexamined their FCRA compliance policies to avoid similar litigation.