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finding informational injury in the form of a deprivation of the statutory right under FCRA to receive a stand-alone disclosure sufficient to confer standing
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Andrew Ross Frisch, Morgan & Morgan, PA, Plantation, FL, C. Ryan Morgan, Marc Reed Edelman, Morgan & Morgan, PA, Orlando, FL, for Plaintiffs.
Cary Alan Cash, Darren M. Caputo, Brasfield, Freeman, Goldis & Cash, PA, St Petersburg, FL, Robin Taylor Symons, Gordon & Rees Scully Mansukhani, LLC, David Alan Wagner, Clyde & Co. U.S. LLP, Miami, FL, for Defendant.
ORDER
JAMES S. MOODY, JR., UNITED STATES DISTRICT JUDGE
THIS CAUSE comes before the Court upon Plaintiff’s Motion for Class Certification (Dkt. 33), Defendant’s Brief in Opposition (Dkt. 41), and the parties’ supplemental briefing (Dkts. 52, 57). The Court, having reviewed the motion, response, supplemental briefs, and being otherwise advised in the premises, concludes that Plaintiff’s motion should be granted in part and denied in part.
INTRODUCTION
Plaintiff is suing his former employer for alleged violations of the Fair Credit Reporting Act ("FCRA") related to employment background checks. The claims are brought on behalf of Plaintiff and classes of similarly situated persons. Plaintiff asks the Court to certify two distinct national classes of consumers. First, a "Background Check Class" of consumers who applied for work with Defendant Area Wide Protective, Inc. ("AWP") and upon whom AWP obtained consumer reports for employment purposes without having a statutory basis for doing so. Second, an "Adverse Action Class" of consumers upon whom AWP took adverse employment action without providing them with statutorily required pre-adverse action notice. The Court concludes that certification is appropriate for the "Background Check Class" with the modification that the class period will be limited to two years, rather than five years. The Court will not certify the "Adverse Action Class" because Plaintiff has not established that this class is clearly ascertainable.
BACKGROUND
Plaintiff applied to work as a traffic control specialist for Defendant in February 2016. As a condition of his employment, Defendant required that Plaintiff sign a Notice and Acknowledgment form authorizing Defendant to receive periodic background checks on him. While employed, Plaintiff alleges Defendant obtained a background check on him and subsequently terminated Plaintiff based upon the contents of the background check.
Based on the above, Plaintiff alleges Defendant’s actions violated the FCRA in the following three ways: (1) the Notice and Acknowledgment form Defendant required Plaintiff to sign authorizing the background checks violated 15 U.S.C. § 1681b(b)(2)(A)(i) because the form was not a stand-alone FCRA disclosure (Count I); (2) Defendant violated 15 U.S.C. § 1681b(b)(2)(A)(ii) by conducting a background check on Plaintiff without receiving proper authorization (Count II); and (3) Defendant violated 15 U.S.C. § 1681b(b)(3)(A) by failing to provide Plaintiff with a copy of the background check before Defendant relied on it to take an adverse employment action against Plaintiff (Count III). Plaintiff alleges Defendant’s FCRA violations were systemic, emanating from common forms, policies, and procedures.
Plaintiff brings these claims on behalf of himself and two classes of similarly situated persons. Specifically, as to Counts I and II, Plaintiff brings the claims on behalf of the following:
All AWP, Inc. employees and job applicants in the United States who were the subject of a consumer report that was procured by AWP, Inc. within five years of the filing of this complaint through the date of final judgment in this action as required by 15 U.S.C. § 1681b(b)(2)(A) and as to whom AWP, Inc. used the purported disclosure and authorization form, or substantially similar forms, attached hereto as Exhibit A.
Exhibit A is the Notice and Acknowledgment form that Defendant provided to Plaintiff in order to obtain a consumer report for employment purposes.
(Dkt. 33, p. 8 of 23). As to Count III, he brings the claim on behalf of the following:
All AWP, Inc. employees and prospective employees in the United States against whom adverse employment action was taken by AWP, based, in whole or in part, on information contained in a consumer report obtained within five years of the filing of this complaint through the date of final judgment in this action, and who were not provided the proper pre-adverse notice as required under 15 U.S.C. § 1681b(b)(3)(A).
(Dkt. 33, p. 9 of 23).
Plaintiff moves for class certification of both proposed classes under Rule 23 of the Federal Rules of Civil Procedure. Defendant opposes Plaintiff’s motion for various reasons. Defendant argues that Plaintiff does not have standing to bring this action because he did not suffer a concrete injury. Defendant also argues that the proposed classes are not clearly ascertainable and do not otherwise meet the Rule 23 requirements. Because standing is a threshold issue, the Court will address this argument first.
DISCUSSION
I. Plaintiff’s Standing
As Defendant points out, standing is a threshold jurisdictional question. To establish standing a plaintiff "must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins, __ U.S. __, 136 S.Ct. 1540, 1547, 194 L.Ed.2d 635 (2016). As both parties recognize, this Court has previously held in a similar FCRA case that a plaintiff "has statutorily-created rights under the FCRA to receive a clear and conspicuous stand-alone disclosure." Graham v. Pyramid Healthcare Sols., Inc., No. 8:16-CV-1324-T-30AAS, 2016 WL 6248309, at *2 (M.D. Fla. Oct. 26, 2016) (citing Church v. Accretive Health, Inc., 654 Fed.Appx. 990, 994 (11th Cir. 2016) (holding that not receiving information to which one is statutorily entitled is a "concrete" injury) ); see also Nicklaw v. CitiMortgage, Inc., 839 F.3d 998, 1002 (11th Cir. 2016) (noting that a "plaintiff who alleges a violation of a statutory right to receive information alleges a concrete injury"); Palm Beach Golf Center-Boca, Inc. v. John G. Sarris, D.D.S., P.A., 781 F.3d 1245, 1251 (11th Cir. 2015) (quoting various decisions of the Supreme Court for the following proposition: "Congress may create a statutory right or entitlement[,] the alleged deprivation of which can confer standing to sue even where the plaintiff would have suffered no judicially cognizable injury in the absence of statute. In other words, ‘[t]he actual or threatened injury required by Art[icle] III may exist solely by virtue of statutes creating legal rights, the invasion of which creates standing.’ "); Moody v. Ascenda USA, Inc., Case No. 16-cv-60364-WPD, 2016 WL 5900216, at *3 (S.D. Fla. Oct. 5, 2016) ("Plaintiffs suffered a concrete informational injury because Defendant failed to provide Plaintiffs with information to which they were entitled to by statute, namely a stand-alone FCRA disclosure form. Through the FCRA, Congress has created a new right— the right to receive the required disclosure as set out in the FCRA— and a new injury— not receiving a stand-alone disclosure.").
The Court does not depart from its prior reasoning in Graham . Notably, Plaintiff’s Declaration states that he attempted to read Defendant’s "Notice and Acknowledgment but was overwhelmed and confused by the volume of information and the way it was presented." Plaintiff still finds the Notice and Acknowledgment form "confusing" and points out that the paragraphs titled "Notice Regarding Background Investigation and Acknowledgment and Authorization are combined into one authorization." According to Plaintiff, he was distracted from the disclosure by the presence of inapplicable information and he may not have signed the form had he known it did not comply with federal law. (Dkt. 57-2).
In sum, Plaintiff has established that he was deprived of a statutory right to receive a stand-alone disclosure. See Hargrett v. Amazon.com DEDC LLC, 235 F.Supp.3d 1320, 1326-27 (M.D. Fla. 2017) (denying a nearly identical standing argument because: "The invasion of Plaintiffs’ right to receive a stand-alone disclosure document required by the FCRA is not hypothetical or uncertain.").
Similarly, Plaintiff has established standing with respect to the violation of § 1681b(b)(3)(A), which requires employers taking adverse action against a consumer based in whole or in part on their consumer report to provide the consumer with pre-adverse action notice, a copy of the consumer report, and a summary of their rights. According to Plaintiff’s Declaration, he "never received pre-adverse action notice, a copy of [his] consumer report or a written notice of [his] rights pursuant to the Fair Credit Reporting Act prior to Defendant terminating [his] employment." (Dkt. 57-2). This is sufficient to establish a violation of rights to information that were congressionally elevated by the FCRA.
II. Plaintiff’s Motion for Rule 23 Class Certification
A. Standard of Review
A district court is vested with broad discretion in determining whether to certify a class. See Washington v. Brown & Williamson Tobacco Corp., 959 F.2d 1566, 1569 (11th Cir. 1992). However, a district court may certify a class action only if Plaintiff has met the implicit and explicit requirements of Rule 23 of the Federal Rules of Civil Procedure. See Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 131 S.Ct. 2541, 2551-52, 180 L.Ed.2d 374 (2011); Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1267 (11th Cir. 2009).
As a threshold issue, Plaintiff must demonstrate that the proposed class is "adequately defined and clearly ascertainable." Little v. T-Mobile USA, Inc., 691 F.3d 1302, 1304 (11th Cir. 2012). Assuming the class is ascertainable, Plaintiff must then prove that there are "in fact sufficiently numerous parties, common questions of law or fact, typicality of claims or defenses, and adequacy of representation as required by Rule 23(a)." Comcast Corp. v. Behrend, 569 U.S. 27, 133 S.Ct. 1426, 1432, 185 L.Ed.2d 515 (2013) (emphasis in original). Plaintiff must also satisfy through evidentiary proof at least one of the provisions of Rule 23(b). See id. Only after a "rigorous analysis" may a court determine that the movant has satisfied Rule 23’s prerequisites and properly certify the class. See id.
B. "Adequately Defined and Clearly Ascertainable"
The Eleventh Circuit instructs that "a class is not ascertainable unless the class definition contains objective criteria that allow for class members to be identified in an administratively feasible way." Karhu v. Vital Pharm., Inc., 621 Fed.Appx. 945, 946 (11th Cir. 2015) (citing Bussey v. Macon Cnty. Greyhound Park, Inc., 562 Fed.Appx. 782, 787 (11th Cir. 2014) ). Identifying class members is administratively feasible when it is a "manageable process that does not require much, if any, individual inquiry." Id. (internal quotation marks omitted).
1. The "Background Check Class"
The Background Check Class is adequately defined and clearly ascertainable because the class members are limited to those individuals who were provided the same or substantially similar Notice and Acknowledgment form as Plaintiff and there is nothing in the record to indicate that it would be unfeasible to identify the class members. Plaintiff’s motion states that Defendant has already produced documents containing the identities of thousands of individuals who were provided the same or substantially similar form during the relevant time period. Accordingly, identifying the class members should be a manageable process.
2. The "Adverse Action Class"
Unlike the Background Check Class, the Adverse Action Class is not ascertainable. Plaintiff’s motion fails to establish this threshold issue. Indeed, Plaintiff merely states that "[t]here is no reason to believe the Adverse Action Class is any different or that it would be ‘infeasible’ to identify class members since the information necessary to identify class members is presumably also in Defendant’s possession." (Dkt. 33 at p. 11). This is woefully deficient. Indeed, "[a] plaintiff cannot establish ascertainability simply by asserting that class members can be identified using the defendant’s records; the plaintiff must also establish that the records are in fact useful for identification purposes, and that identification will be administratively feasible." Karhu, 621 Fed.Appx. at 948.
Defendant argues that determining membership in this class would require significant individualized undertakings. Defendant states that, for each putative class member, the Court would need to determine whether Defendant (1) obtained a consumer report, (2) took adverse action following procurement of the report, (3) took the adverse action based on the report, and, if so, (4) provided requisite pre-adverse action notice. The Court concludes that Defendant’s arguments are well-taken. In short, Defendant has shown that, under these circumstances, class members cannot be identified in an administratively feasible (or manageable) way. In other words, Plaintiff has not met his burden to establish ascertainability. Accordingly, class certification is inappropriate for the Adverse Action Class and Plaintiff’s motion will be denied with respect to this class.
Because Plaintiff has failed to meet the ascertainability requirement, the Court declines to analyze the remaining Rule 23 factors with respect to the Adverse Action Class. However, the Court notes that the class would not meet the elements of Rule 23(a) and Rule 23(b). For example, Plaintiff has not provided any factual support for his contention that the size of the putative Adverse Action Class renders joinder impracticable. Plaintiff merely speculates that this class is more than forty individuals.
C. Requirements under Rule 23(a)
The four elements required for class certification under Rule 23(a) are: (1) numerosity, the class is so numerous that joinder of all members is impracticable; (2) commonality, there are questions of law or fact common to the class; (3) typicality, the claims or defenses of the class are typical; and (4) adequacy, the class representative will fairly and adequately protect the interests of the class. Luna v. Del Monte Fresh Produce (Southeast), Inc., 354 Fed.Appx. 422, 423-24 (11th Cir. 2009) (citing Fed.R.Civ.P. 23(a) ); Hines v. Widnall, 334 F.3d 1253, 1255-56 (11th Cir. 2003); Franze v. Equitable Assurance, 296 F.3d 1250, 1253 (11th Cir. 2002).
1. Numerosity and Impracticability of Joinder
Rule 23(a)(1) requires that "the class is so numerous that joinder of all members is impracticable." Plaintiffs seeking class certification do not need to know the exact size of the proposed class. See Agan v. Katzman & Korr, P.A., 222 F.R.D. 692, 696 (S.D. Fla. 2004). While the size of the proposed class is relevant to a court’s determination, other factors such as "the geographic diversity of the class members, the nature of the action, the size of each plaintiff’s claim, judicial economy and the inconvenience of trying individual lawsuits, and the ability of the individual class members to institute individual lawsuits" should also be considered. Id. (quotations omitted).
Defendant does not challenge Plaintiff’s assertion that Rule 23(a)’s numerosity requirement is met with respect to the Background Check Class. The Court concludes that Plaintiff has satisfied Rule 23(a)’s numerosity requirement.
2. Common Questions of Law and Fact
The commonality requirement typically "refers to the group of characteristics of the class." Prado-Steiman ex rel. Prado v. Bush, 221 F.3d 1266, 1279 (11th Cir. 2000). To satisfy the commonality requirement, "a class action must involve issues that are susceptible to class wide proof." Cooper v. Southern. Co., 390 F.3d 695, 714 (11th Cir. 2004), overruled on other grounds, (quoting Murray v. Auslander, 244 F.3d 807, 811 (11th Cir. 2001) ). However, it is not necessary that all members of the class have identical claims. See Prado-Steiman, 221 F.3d at 1279 n.14. Commonality, like typicality, focuses "on whether a sufficient nexus exists between the legal claims of the named class representatives and those of individual class members." Id. at 1278.
The Court concludes that a sufficient nexus clearly exists here. Plaintiff asserts common questions of fact among the class members, who were provided the same or substantially similar Notice and Acknowledgment form. The common legal questions include whether Defendant willfully violated the FCRA when it provided the class members the Notice and Acknowledgment form. Plaintiff has satisfied Rule 23(a)’s commonality requirement with respect to the Background Check Class.
3. Typicality
Typicality requires that a class representative "possess the same interest and suffer the same injury as the class members." Cooper, 390 F.3d at 713. Thus, "the typicality requirement is satisfied if ‘the claims or defenses of the class and class representative arise from the same event or pattern or practice and are based on the same theory.’ " Agan, 222 F.R.D. at 698 (quoting Kornberg v. Carnival Cruise Lines, Inc., 741 F.2d 1332, 1337 (11th Cir. 1984) ). Even if the fact patterns are unique to each claim, the typicality requirement will be satisfied if the class representative and class members experienced the same unlawful conduct. See Agan, 222 F.R.D. at 698. However, like commonality, Rule 23 does not require that all members of the class possess identical claims. See id. at 714.
In this case, the legal theory underlying the claims of the members of the Background Check Class is virtually identical to Plaintiff’s FCRA claims, which arise from the same conduct and essentially the same factual and legal bases. Therefore, the Court concludes that Plaintiff has satisfied Rule 23(a)’s typicality requirement for the Background Check Class.
4. Adequacy of Protection of Class Interests
Rule 23(a)(4) requires that "the representative parties will fairly and adequately protect the interests of the class." There are two separate inquiries under this section: (1) whether there are any substantial conflicts of interest between the named representatives of the class and the class members; and (2) whether the representatives will adequately prosecute the action. See Busby v. JRHBW Realty, Inc., 513 F.3d 1314, 1323 (11th Cir. 2008) (citing Valley Drug Co. v. Geneva Pharm., Inc., 350 F.3d 1181, 1189 (11th Cir. 2003)). This requirement serves to uncover any conflict of interest that named parties may have with the class they represent. See Amchem Products, Inc., v. Windsor, 521 U.S. 591, 627, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). "If substantial conflicts of interest are determined to exist among a class, class certification is inappropriate." Id. Minor conflicts alone will not defeat class certification, the conflict must be "fundamental" to the specific issues in the case. Id. Under this section, the Court must also consider the competency and any conflicts that the class counsel may have. See id. at 627 n.20, 117 S.Ct. 2231.
Defendant does not contest this element. The Court’s independent review reveals that there are no conflicts of interest between Plaintiff and the class members. Moreover, it appears that Plaintiff will adequately prosecute this action. Plaintiff has satisfied Rule 23(a)’s adequacy requirement. The Court also concludes that Plaintiff’s counsel are adequate as class counsel.
D. Requirements under Rule 23(b)
As stated above, in order to have a class certified, the representative Plaintiff must not only satisfy Rule 23(a), but must also show that he meets one of the alternative requirements of Rule 23(b). Plaintiff’s motion indicates that the claims satisfy the requirements for certification under Rule 23(b)(3).
For class certification to be appropriate under Rule 23(b)(3), common questions must predominate over questions that affect only individual members and the class action must be a superior method for a "fair and efficient adjudication of the controversy." Cooper, 390 F.3d at 722 (citing Fed.R.Civ.P. 23(b)(3) ). Thus, rule 23(b)(3) imposes two additional requirements to Rule 23(a): predominance and increased efficiency (superiority). See id. (citing Jackson v. Motel 6 Multipurpose, Inc., 130 F.3d 999, 1006 (11th Cir. 1997) ).
1. Predominance
The issues raised in the class action that are subject to generalized proof and that are applicable to the class as a whole "must predominate over those issues that are subject only to individualized proof." Babineau v. Federal Exp. Corp., 576 F.3d 1183, 1191 (11th Cir. 2009) (quoting Kerr v. City of West Palm Beach, 875 F.2d 1546, 1558 (11th Cir. 1989)). "Common issues will not predominate over individual questions if, ‘as a practical matter, the resolution of [an] overarching common issue breaks down into an unmanageable variety of individual legal and factual issues.’ " Id. at 1191 (quoting Andrews v. Am. Tel. & Tel. Co., 95 F.3d 1014, 1023 (11th Cir. 1996) ). A class should not be certified if it appears that most of the plaintiff’s claims have highly case-specific factual issues. See id. The predominance requirement is "far more demanding" than the commonality requirement. Jackson, 130 F.3d at 1005.
Defendant’s opposition on this point is persuasive to the extent that Defendant argues that Plaintiff’s proposed five-year class period would require an individualized determination for each class member as to when the violation that gave rise to his or her claim was discovered. This is because the "FCRA affords a two year statute of limitations from a plaintiff’s discovery of a violation" and a "five year absolute statute of limitations for [the] violation." See Miller v. Johnson & Johnson, 80 F.Supp.3d 1284, 1289 (M.D. Fla. 2015) (reconsideration granted on other grounds). The Court agrees with Defendant to the extent that predominance is met only under the application of a two-year statute of limitations, which would not require an individualized inquiry. As Defendant even acknowledges in its response: "It is true that the statute of limitations issue could be obviated by limiting the class period to two years— rather than five years— because regardless of when the violation was discovered, the statute of limitations for alleged violations occurring within that time period would not have expired." (Dkt. 41 at p. 11).
In sum, the Court concludes that the Background Check Class claims predominate over any individual legal and factual issues so long as the class period is limited to a two-year period. The central common issues in this case are whether Defendant’s Notice and Acknowledgment forms satisfied the notice and authorization requirements under the FCRA and, if not, whether Defendant’s failure to comply with the FCRA was willful. These common issues can be decided uniformly for all class members.
2. Superiority of Class Action
Rule 23(b)(3) requires a finding that "[the] class action is superior to other available methods for fairly and efficiently adjudicating the controversy." The Court looks to the four non-exclusive factors listed in Rule 23(b)(3):
(A) the class members’ interests in individually controlling the prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;
(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and
(D) the likely difficulties in managing a class action.
It is unlikely that the individual class members would have any interest in instituting a lawsuit or in controlling their own individual actions and Plaintiff states that, to date, class members have not filed individual FCRA lawsuits against Defendant. It is also desirable to conduct the litigation in this forum and the process of bringing individual actions would be more onerous than managing a class action. The alternative of having a plethora of individual claims for damages arising out of the exact same conduct offers neither efficiency nor fairness to Defendant or the putative class. Therefore, the Court concludes that Plaintiff has established the requirements of Rule 23(b)(3).
In conclusion, common legal questions and facts predominate over any individual issues in this case. Class action is an appropriate vehicle for the fair and efficient adjudication of this controversy. See, e.g., Speer v. Whole Foods Market Group, Inc., Case No.: 8:14-cv-3035-T-26TBM, 2015 WL 12683265 (M.D. Fla. Sep. 16, 2015) (Dkt. 58) (FCRA class preliminarily certified by Judge Lazzara based on identical FCRA claims for settlement purposes); Reardon v. ClosetMaid Corp., Case No. 2:08-cv-01730, 2011 WL 1628041 (W.D. Pa. April 27, 2011) (FCRA class certification granted based on similar claims).
Accordingly, it is hereby ORDERED and ADJUDGED that:
1. Plaintiff’s Motion for Class Certification (Dkt. 33) is granted in part and denied in part as explained herein.
2. The Court certifies the following class:
Background Check Class : All AWP, Inc. employees and job applicants in the United States who were the subject of a consumer report that was procured by AWP, Inc. within two years of the filing of this complaint through the date of final judgment in this action as required by 15 U.S.C. § 1681b(b)(2)(A) and as to whom AWP, Inc. used the purported disclosure and authorization form, or substantially similar forms, attached hereto as Exhibit A.
3. The Court approves William Fosbrink as Class Representative and his counsel, Andrew Ross Frisch, C. Ryan Morgan, and Marc Reed Edelman, as Class Counsel.
4. The parties are provided thirty (30) days from the date of this Order to confer regarding issues that may arise associated with the administration of the class, including the form and content of the notice, and the establishment of an opt-out period and procedure, and shall advise the Court on these efforts and whether there are issues that require the Court’s resolution.
DONE and ORDERED.