Bultemeyer v. CenturyLink Incorporated

Filing 116

ORDER: Plaintiff's Motion for Partial Summary Judgment 111 and Defendant's Cross-Motion for Partial Summary Judgment 109 are denied. See order for details. Signed by Judge Steven P. Logan on 10/14/2020. (LMR)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Lydia Bultemeyer,

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Plaintiff,
vs.

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CenutryLink, Inc.,
Defendant.

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No. CV-14-02530-PHX-SPL
ORDER

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Before the Court is Plaintiff Lydia Bultemeyer’s Motion for Partial Summary

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Judgment (Doc. 109), and Defendant CenturyLink’s Cross-Motion for Partial Summary

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Judgment. (Doc. 111) The Motions have been fully briefed and are ready for

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consideration.1

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I.

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Defendant is a national telecommunications provider whose services are available

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in Maricopa County. (Doc. 2 at 3) Plaintiff is an individual residing in the City of Phoenix.

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(Doc. 1 at 3) On April 6, 2014, Plaintiff accessed Defendant’s website and began an online

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order for residential internet services. (Doc. 110 at 3) Plaintiff proceeded most of the way

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through the five-step process, going as far as to enter her personal information, agreeing to

BACKGROUND2

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Because it would not assist in resolution of the instant issues, the Court finds the
pending motion is suitable for decision without oral argument. See Fed. R. Civ. P. 78(b);
Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998).
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The following facts are undisputed unless otherwise noted.

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Defendant’s terms and conditions, and proceeding to the final “Checkout” stage. (Doc. 1

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at 4) It was then that she abandoned her order, without entering her payment information.

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(Doc. 1 at 4) Defendant ran a consumer report on Plaintiff between Step 4 (where she

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entered her personal information), and Step 5 (Checkout). (Doc. 110 at 2) Plaintiff filed a

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complaint on November 14, 2014, on behalf of herself and all others similarly situated,

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alleging one violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681 et

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seq. (Doc. 1) Plaintiff claims Defendant accessed her information without a permissible

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business purpose, which is prohibited under 15 U.S.C. § 1681b(f). (Doc. 1 at 5) Defendant

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later filed a Motion to Dismiss pursuant to Federal Rule of Civil Procedure (“Rule”)

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12(b)(6), which the Court denied on September 18, 2015. (Docs. 12, 29) In its September

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18, 2015 Order, the Court instructed the parties to conduct expedited discovery and submit

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bifurcated summary judgment pleadings. (Doc. 29 at 4–5) The parties were instructed to

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address two issues: 1) whether Plaintiff “initiated” a business transaction; and (2) whether

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Defendant had a legitimate business purpose to run Plaintiff’s consumer report. (Doc. 29

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at 4) The Court also invited the parties to consider Bickley v. Dish Network, LLC, 751 F.3d

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724 (6th Cir. 2014). (Doc. 29 at 5)

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The parties initially moved for summary judgment in June of 2016. The Court

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granted summary judgment to Defendant due to lack of Article III standing, which Plaintiff

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appealed. (Docs. 85, 96) The Court of Appeals for the Ninth Circuit reversed and remanded

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this Court’s grant of summary judgment. (Doc. 98) The Court ordered a rebriefing on

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March 3, 2020. (Doc. 106)

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Plaintiff again moves for partial summary judgment on the issue of whether

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Defendant had a permissible business purpose under 15 U.S.C § 1681b(a). (Doc. 109)

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Defendant moves for partial summary judgment on the same issue. (Doc. 111)

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II.

LEGAL STANDARDS
A. Motions for Summary Judgment

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A court must grant summary judgment “if the movant shows that there is no genuine

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dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
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Rule 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). Material facts

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are those facts “that might affect the outcome of the suit under the governing law.”

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Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine dispute of material

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fact arises if “the evidence is such that a reasonable jury could return a verdict for the

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nonmoving party.” Id. In other words, where different inferences can be drawn, summary

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judgment is inappropriate. Boulder Oro Valley LLC v. Home Depot USA Inc., No. CV-17-

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00453-TUC-DCB, 2019 WL 2106419, at *1 (D. Ariz. Mar. 26, 2019) (quoting Sankovich

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v. Life Ins. Co. of North Am., 638 F.2d 136, 140 (9th Cir. 1981)).

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The party moving for summary judgment bears the initial burden of informing the

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court of the basis for its motion and identifying those portions of the record, together with

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affidavits, which it believes demonstrate the absence of a genuine issue of material fact.

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Celotex, 477 U.S. at 323. If the movant is able to do so, the burden then shifts to the non-

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movant who “must do more than simply show that there is some metaphysical doubt as to

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the material facts,” and, instead, must “come forward with ‘specific facts showing that

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there is a genuine issue for trial.’” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475

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U.S. 574, 586-87 (1986). When considering a motion for summary judgment, a court must

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view the factual record and draw all reasonable inferences in a light most favorably to the

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nonmoving party. Leisek v. Brightwood Corp., 278 F.3d 895, 898 (9th Cir. 2002). “In

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reviewing cross-motions for summary judgment, each motion must be considered on its

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own merits.” Acosta v. City Nat’l Corp., 922 F.3d 880, 885 (9th Cir. 2019) (internal

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quotations omitted). When parties file cross-motions for summary judgment, the court must

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review each motion separately, giving the nonmoving party for each motion the benefit of

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all reasonable inferences. Eat Right Foods Ltd. v. Whole Foods Mkt, Inc., 880 F.3d 1109,

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1118 (9th Cir. 2018).

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B. Statutory Background

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FCRA prohibits a person (or company) from using or obtaining consumer reports

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without a permissible purpose. 15 U.S.C. § 1681b(f). Permissible purposes include when

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the consumer to whom the report relates gave written instruction, and when it is used for
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“legitimate business need[s]” in connection with a business transaction “initiated by the

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customer.” 15 U.S.C. §§ 1681b(a)(2),(F)(i).

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III.

DISCUSSION

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The parties move for partial summary judgment on some of the same issues, mainly

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whether Defendant had a permissible purpose under FCRA. Whether Defendant had a

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permissible purpose turns on whether Plaintiff “initiated” a “business transaction,” thus,

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both issues the Court requested were briefed. Plaintiff also included an argument about

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written consent, which Defendant failed to address. The Court now considers each motion

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on its merits.

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A. Whether Defendant had a permissible purpose under FCRA

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Defendant asserts that it needed Plaintiff’s data to verify her identity and prevent

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identity theft, which it contends is a “legitimate business need.” (Doc. 111 at 9) Defendant

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cites Bickley for support. 751 F.3d at 731 (“[Service providers] have a legitimate interest

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in confirming that prospective consumers are who they claim to be and are eligible for

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services.”). Plaintiff contends that Defendant did not use her information after it obtained

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a consumer report, and that it should have waited until after the purchase was initiated to

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pull her information. (Doc. 113 at 4–5) The determination of whether there was a legitimate

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business purpose turns on whether Plaintiff provided written instruction or initiated a

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business transaction. See infra III.B and C for the Court’s analysis.

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B. Whether Plaintiff gave written permission to Defendant to pull her
consumer report

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Plaintiff asserts that she did not give Defendant written permission under 15 U.S.C.

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§ 1681b(a)(2) to obtain or use her consumer report. (Doc. 109 at 10) Plaintiff has alleged

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that she checked a box that confirmed she was aware that a credit check would be required

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to complete an online order. (Doc. 110 at ¶11) She argues this is not written consent for

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purposes of FCRA. (Doc. 109 at 10) Defendant did not address this argument in its

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opposition brief. Regardless, lack of written permission alone is insufficient to show a

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FCRA violation. See Traveler v. Glenn Jones Ford Lincoln Mercury 1987, No. CV-054

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0817-PHX-SRB, 2006 WL 173687, at *3 (D. Ariz. Jan. 24, 2006). Accordingly, the Court

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will focus its analysis on 15 U.S.C. § 1681b(a)(3)(A).

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C. Whether Plaintiff initiated a business transaction

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Plaintiff’s position is that she did not initiate a business transaction because at the

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time her consumer report was pulled, she was “comparison shopping.” (Doc. 109 at 2, 13–

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14) Plaintiff argues that this situation distinguishes her case from Bickley. In Bickley, the

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customer was an identity thief making an order from over the phone, using the plaintiff’s

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personal information. 751 F.3d at 726. The phone representative ran a consumer report

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based on the information provided. Id. Plaintiff argues that a telephone customer or an in-

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store customer would expect their information to be used by the provider, but that an online

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customer would not, because the online customer is just “shopping” for prices. (Doc. 109

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at 13–14) Plaintiff argues price comparisons are not business transactions for the purposes

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of FCRA, because according to Federal Trade Commission guidance, “the customer must

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clearly understand that he or she is initiating the purchase.” (Doc. 109 at 12) Under this

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definition, Plaintiff argues that “initiation” would not occur she clicked on the submit

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button at the final stage of the order process. (Doc. 109 at 12)

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Defendant’s position is that, in starting an online order, Plaintiff initiated a business

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transaction. (Doc. 111 at 13) Defendant argues that “initiated” should be interpreted using

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“dictionary definitions” and Ninth Circuit interpretations of “commence” as used in a

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different federal statute. (Doc. 111 at 12) The Oxford English Dictionary defines initiate

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as “begun, commenced, introduced.” The Ninth Circuit defined “commence” as “to initiate

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by performing the first act. To institute or start.” Smith v. Confederated Tribes of Warm

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Springs Reservation of Oregon, 783 F.2d 1409, 1412 (9th Cir. 1986).

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The issue is not only whether Plaintiff initiated the transaction; it is also whether

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Defendant knew or should have known that Plaintiff did not intend to initiate the

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transaction. See Rand v. Citibank, N.A., No. 14-CV-04772 NC, 2015 WL 510967, at *3

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(N.D. Cal. Feb. 6, 2015) (the plaintiff was a longtime customer of the defendant and the

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defendant knew or should have known a new application was fraudulent before pulling a
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consumer report).

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This Court has stated that when a consumer is “comparison shopping” there is no

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permissible purpose under 15 U.S.C. § 1681b(a)(3)(A) and written permission from the

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consumer is needed. Traveler, 2006 WL 173687, at *4 (defendant car dealership pulled

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plaintiff’s credit report after plaintiff inquired as to pricing and lending options). In 2015,

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the Northern District of California addressed issues extremely similar to those in the instant

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case. In Heaton v. Social Finance, Inc., one plaintiff followed an online multistep process

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to potentially obtain student loan refinancing or a personal loan. No. 14-CV-05191-TEH,

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2015 WL 6744525, at *2 (N.D. Cal. Nov. 4, 2015). The layout of the terms and conditions

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and the loan products on the website were very similar to the website display here. Id. In

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one of the steps, the plaintiff clicked “agree” to the defendant’s credit disclosure, signifying

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his agreement to a soft credit pull. Id. Before the plaintiff finalized the transaction, but after

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he had “requested” a loan, the company performed a hard pull on his credit report. Id. The

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plaintiff in that case cited the same Federal Trade Commission letter as Plaintiff and argued

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that his actions on the website constituted comparison shopping behavior. Id. at *4. The

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court found it persuasive but not binding. Id. The defendant argued that by agreeing to the

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terms and conditions and progressing to a certain point in the loan application, plaintiff had

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initiated a transaction. Id. Ultimately the court concluded that material issues of fact existed

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as to whether a permissible purpose for conducting a hard credit inquiry existed. Id. at *5.

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IV.

CONCLUSION

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In reviewing the record, motions, and responsive briefings, the Court has found

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there to be issues of material fact as to whether a permissible purpose under 15 U.S.C. §

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1681b(a) exists.

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Accordingly,

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IT IS ORDERED that Plaintiff’s Motion for Partial Summary Judgment and

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Defendant’s Cross-Motion for Partial Summary Judgment are denied.
Dated this 14th day of October, 2020.

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Honorable Steven P. Logan
United States District Judge

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