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Envision to Sell to KKR for $9.9 Billion

We represented Envision Healthcare Corporation (NYSE: EVHC) in its definitive agreement to sell to KKR in an all-cash transaction for $9.9 billion, including debt. KKR will pay $46 per Envision share in cash to buy the company, marking a 32 percent premium to the company's volume-weighted average share price from November 1, when Envision announced it was considering its options. The transaction is expected to close the fourth quarter of 2018. Read more


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Six Things to Know Before Buying a Physician Practice spotlight

Dermatology, ophthalmology, radiology, urology…the list goes on. Yet, in any physician practice management transaction, there are six key considerations that apply and, if not carefully managed, can derail a transaction. Download the 6 Things to Know Before Buying a Physician Practice to keep your physician practice management transactions on track.

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In Bizarre Procedural Posture, Ninth Circuit Finds FCRA Willful Violation

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January 30, 2017

In Syed v. M-I, LLC, the U.S. Court of Appeals for the Ninth Circuit recently held that combining a liability waiver and a Fair Credit Reporting Act (FCRA) disclosure in an employment application constitutes a willful violation of the FCRA. The employee claimed that his employer obtained his credit report unlawfully because the disclosure form he signed did not consist "solely of the disclosure" as required by the FCRA. The Ninth Circuit's decision reversed the judgment of a California district court, which had dismissed the lawsuit because the complaint failed to allege that the employer's understanding of its obligation under the FCRA was unreasonable.

We previously reported on the uptick in these types of class action claims against employers when these cases began percolating in the district courts. Syed is the first appellate court to hold that an employer willfully violated the FCRA by combining a liability waiver and an FCRA disclosure in one document. The merits of the decision are not entirely unusual given that several district courts have made similar holdings on motions for summary judgment. 

What we found peculiar is how an appeals court could determine a willful violation at this stage of the lawsuit. The lower court granted a Rule 12(b)(6) motion to dismiss, meaning the defendant had not answered the complaint and no discovery had taken place. It does not appear the defendant was given the chance to investigate potential defenses, such as advice-of-counsel or affirmative defenses, which would negate a claim of willfulness. Furthermore, the question of intent—deciding whether an act was done negligently or recklessly—is generally left to the jury. We understand a court can make that determination when there are no undisputed facts, but that usually occurs at summary judgment, after the defendant has the opportunity to investigate the underlying facts. 

Also perplexing is the Ninth Circuit's cursory discussion of standing under the Supreme Court's recent decision in Spokeo Inc. v. Robins. Unless a plaintiff suffered a real-world harm, most district courts have held that a plaintiff asserting a "stand-alone disclosure" claim does not have Article III standing. The Ninth Circuit's analysis in support of Article III standing in Syed is comprised of five sentences and a citation to an unpublished district court case whose reasoning has been rejected by a number of courts.

Despite the peculiar procedural posture, Syed is now authority upon which other courts may rely. Because the FCRA places no cap on class-wide damages, allows for attorney fee-shifting, and provides statutory damages between $100 and $1,000 for each willful violation of the Act, this decision could have a major impact on employers if their disclosures are not in compliance with the FCRA. Employers should ensure that their FCRA disclosures are not contained in the same document as a liability waiver if they obtain credit reports or conduct background checks on their employees or job applicants.


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