Randy Pitre v. Wal-Mart Stores, Inc. et al

Filing 104

MINUTE ORDER IN CHAMBERS by Judge David O. Carter: ORDER GRANTING DEFENDANTS MOTION TO DECERTIFY 63 , REMANDING THE ACTION, AND DENYING AS MOOT DEFENDANTS MOTION FOR SUMMARY JUDGMENT 62 AND PLAINTIFFS MOTION FOR SUMMARY ADJUDICATION 72 . Remanding case to Orange County Superior Court, Case number 30-2017-00927449-CU-OE-CXC. Case Terminated. Made JS-6. (twdb)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES – GENERAL
Case No. SA CV 17-01281-DOC-DFMx

Date: October 18, 2019

Title: RANDY PITRE ET AL. v. WAL-MART STORES, INC. ET AL.

PRESENT:
THE HONORABLE DAVID O. CARTER, JUDGE
Deborah Lewman
Courtroom Clerk

Not Present
Court Reporter

ATTORNEYS PRESENT FOR
PLAINTIFF:
None Present

ATTORNEYS PRESENT FOR
DEFENDANT:
None Present

PROCEEDINGS (IN CHAMBERS): ORDER GRANTING
DEFENDANT’S MOTION TO
DECERTIFY [63], REMANDING
THE ACTION, AND DENYING AS
MOOT DEFENDANT’S MOTION
FOR SUMMARY JUDGMENT [62]
AND PLAINTIFFS’ MOTION FOR
SUMMARY ADJUDICATION [72]
Before the Court are three motions (the “Motions”): Defendant Wal-Mart Stores,
Inc.’s (“Defendant” or “Wal-Mart”) Motion for Summary Judgment or, in the
Alternative, for Summary Adjudication (“MSJ”) (Dkt. 62); Defendant’s Motion to
Decertify (Dkt. 63); and Plaintiffs’ Motion for Summary Adjudication of First Cause of
Action (“MSA”) (Dkt. 72).1 Having reviewed the papers submitted by Plaintiffs and
Defendant, the Court finds that it must GRANT Defendant’s Motion to Decertify and
REMAND the action to the Superior Court of California, County of Orange.
1

The Plaintiffs in this action are Randy Pitre, Desirae Wilson, and Cassandra Walters (“Pitre,” “Wilson,” and
“Walters,” respectively, and collectively “Named Plaintiffs”), on behalf of themselves and all others similarly
situated (the “Class”).

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CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SA CV 17-1281-DOC-DFMx

Date: October 18, 2019
Page 2

Accordingly, Defendant’s Motion for Summary Judgment and Plaintiffs’ Motion for
Summary Adjudication are both DENIED AS MOOT.
I.

Background

This case arises from Defendant’s job application process, and whether its
background check procedures complied with the Fair Credit Reporting Act (“FCRA”), 15
U.S.C. § 1681 et seq., and the Investigative Consumer Reporting Agency Act
(“ICRAA”), Cal. Civ. Code § 1786 et seq. (West 2019).
A.

Facts

The following facts are drawn from Plaintiffs’ First Amended Complaint (“FAC”)
(Dkt. 51), the Responses and Supplemental Responses of Named Plaintiffs to
Defendant’s Interrogatories (“Pitre Interrog.,” “Wilson Interrog.,” and “Walters
Interrog.”) (Dkt. 63-3, Exhibits 4, 5, and 6, respectively), and Defendant’s Supplemental
Responses to Plaintiffs’ Special Interrogatories (“Wal-Mart Interrog.”) (Dkt. 72-13,
Ex. 10).2
Each of the Named Plaintiffs applied for a job at Wal-Mart, and each was
subsequently hired: Pitre in November 2015, Wilson in December 2017, and Walters in
February 2014. FAC ¶¶ 4-6. Defendant is a Delaware corporation doing business in the
State of California. Id. ¶ 7. Plaintiffs allege that, while evaluating Plaintiffs for
employment, Defendant procured credit and background reports about Plaintiffs in
violation of the FCRA and ICRAA.3 Id. ¶ 29. Specifically, Plaintiffs allege that
Defendant ran afoul of the FCRA’s disclosure requirements by willfully including
extraneous information in disclosure forms, id. ¶¶ 34-35, and by inadequately informing
Plaintiffs of their rights under the FCRA, id. ¶¶ 44-49. This same conduct, according to
Plaintiffs, also violated the analogous provisions of the ICRAA. Id. ¶¶ 56-64. Based on
Defendant’s discovery responses, Plaintiffs claim that Wal-Mart procured background
checks on approximately 6,547,400 job applicants using deficient disclosure forms in the
relevant time period (between June 2012 and March 2019). Wal-Mart Interrog., Dkt. 7213, Ex. 10 at 3-4.
2

To the extent any of these facts are disputed, the Court concludes they are not material to the disposition of any of
the Motions. Further, to the extent the Court relies on evidence to which the parties have objected, the Court has
considered and overruled those objections. As to any remaining objections, the Court finds it unnecessary to rule on
them because the Court does not rely on the disputed evidence.
3
In their FAC, Plaintiffs alleged that Defendant procured “a consumer report and/or investigative consumer report,”
which are defined in 15 U.S.C. § 1681a(d) and § 1681a(e), respectively. FAC ¶ 29. Named Plaintiffs, however, no
longer contend that Wal-Mart procured an investigative consumer report. Pitre Interrog., Dkt. 63-3, Ex. 4 at 4;
Wilson Interrog., Dkt. 63-3, Ex. 5 at 8; Walters Interrog., Dkt. 63-3, Ex. 6 at 8.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SA CV 17-1281-DOC-DFMx

B.

Date: October 18, 2019
Page 3

Procedural History

Plaintiff Pitre filed his original Complaint in the Orange County Superior Court on
June 20, 2017. The case was then removed to this Court, pursuant to 28 U.S.C. § 1441(a).
Defendant filed a Motion to Dismiss as to certain state law claims (Dkt. 13), which this
Court granted on November 8, 2017 (Dkt. 26). On October 15, 2018, Plaintiff Pitre filed
a Motion for Class Certification (Dkt. 34), and, in light of his health problems, also
moved to add Plaintiffs Wilson and Walters as additional class representatives (Dkt. 33).
The Court granted both motions on January 17, 2019 (Dkt. 47). The Class was defined as
follows:
All of DEFENDANTS’ current, former and prospective applicants
for employment in the United States who applied for a job with
DEFENDANTS at any time during the period for which a
background check was performed beginning five years prior to the
filing of this action and ending on the date that final judgment is
entered in this action.
Dkt. 47 at 3. Named Plaintiffs filed their FAC on March 6, 2019, in which they brought
the following three claims on behalf of themselves and the Class:
(1) failure to make proper disclosure in violation of the FCRA (15 U.S.C.
§ 1681b(b)(2)(A));
(2) failure to give proper summary of rights in violation of the FCRA (15 U.S.C.
§§ 1681d(a)(1), 1681g(c)); and
(3) failure to make proper disclosure in violation of the ICRAA (Cal. Civ. Code
§ 1786 et seq.).
See generally FAC.
On July 24, 2019, Defendant filed the instant MSJ and Motion to Decertify.
Plaintiffs filed the instant MSA on July 25, 2019. Each of the three Motions was followed
by Opposition and Reply briefs, the last of which was submitted on October 1, 2019.4

4

The MSJ Opposition (Dkt. 88) and MSJ Reply (Dkt. 94) were filed on August 21, 2019 and September 11, 2019.
The Decertification Opposition (Dkt. 97) and Decertification Reply (Dkt. 100) were filed on September 24, 2019

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SA CV 17-1281-DOC-DFMx

II.

Date: October 18, 2019
Page 4

Legal Standard
A.

Summary Judgment

Summary judgment is proper if “the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). Summary judgment is to be granted cautiously, with due respect for a
party’s right to have its factually grounded claims and defenses tried to a jury. Celotex
Corp. v. Catrett, 477 U.S. 317, 327 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986). A court must view the facts and draw inferences in the manner most
favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655
(1992); Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1161 (9th Cir. 1992). The moving
party bears the initial burden of demonstrating the absence of a genuine issue of material
fact for trial, but it need not disprove the other party’s case. Celotex, 477 U.S. at 323.
When the non-moving party bears the burden of proving the claim or defense, the moving
party can meet its burden by pointing out that the non-moving party has failed to present
any genuine issue of material fact as to an essential element of its case. See Musick v.
Burke, 913 F.2d 1390, 1394 (9th Cir. 1990).
Once the moving party meets its burden, the burden shifts to the opposing party to
set out specific material facts showing a genuine issue for trial. See Liberty Lobby, 477
U.S. at 248–49. A “material fact” is one which “might affect the outcome of the suit
under the governing law.” Id. at 248. A party cannot create a genuine issue of material
fact simply by making assertions in its legal papers. S.A. Empresa de Viacao Aerea Rio
Grandense v. Walter Kidde & Co., Inc., 690 F.2d 1235, 1238 (9th Cir. 1982). Rather,
there must be specific, admissible evidence identifying the basis for the dispute. See id.
The Court need not “comb the record” looking for other evidence; it is only required to
consider evidence set forth in the moving and opposing papers and the portions of the
record cited therein. Fed. R. Civ. P. 56(c)(3); Carmen v. S.F. Unified Sch. Dist., 237 F.3d
1026, 1029 (9th Cir. 2001). The Supreme Court has held that “[t]he mere existence of a
scintilla of evidence . . . will be insufficient; there must be evidence on which the jury
could reasonably find for [the opposing party].” Liberty Lobby, 477 U.S. at 252.

and October 1, 2019. The MSA Opposition (Dkt. 89) and MSA Reply (Dkt. 95) were filed on August 22, 2019 and
September 12, 2019.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SA CV 17-1281-DOC-DFMx

B.

Date: October 18, 2019
Page 5

Standing

Under Article III of the Constitution, the judicial power of the United States,
vested in the federal courts, extends only to “Cases” and “Controversies.” U.S. Const.
art. III, §§ 1-2. Because the Constitution does not precisely define the reach of this
judicial power, courts have developed the doctrine of standing. While some aspects of
standing doctrine are “merely prudential considerations,” it also contains a “core
component,” the case-or-controversy requirement. Lujan v. Defs. of Wildlife, 504 U.S.
555, 560 (1992). To prevent “federal courts [from] exceed[ing] their authority,” the law
of Article III standing “confines the federal courts to a properly judicial role” by
“limit[ing] the category of litigants empowered to maintain a lawsuit in federal court.”
Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016) (citations omitted).
This “irreducible constitutional minimum” has three requirements. First, the
plaintiff must have suffered a concrete and particularized injury in fact, which must be
actual or imminent, rather than speculative. Second, the injury must be fairly traceable to
the defendant’s alleged conduct. Third, the injury must be likely redressable by a
favorable decision by the court. Lujan, 504 U.S. at 560-61 (1992). These requirements
must be met for each claim the plaintiff brings, and for each remedy sought. Davis v.
FEC, 554 U.S. 724, 734 (2008) (citing DaimlerChrysler Corp. v. Cuno, 547 U.S. 332,
352 (2006)).
The relevant injury, for purposes of Article III standing, can be the violation of a
right defined by statute; that is, Congress can elevate “previously inadequate” injuries “to
the status of legally cognizable injuries.” Lujan, 504 U.S. at 578 (citations omitted).
However, the violation of a statutory right does not automatically constitute an injury in
fact, and may not be sufficient to support standing. Spokeo, 136 S. Ct. at 1549. As the
Supreme Court has explained, “a bare procedural violation, divorced from any concrete
harm,” cannot satisfy the injury-in-fact requirement. Id. A key inquiry, then, is not merely
whether a statutory right was violated, but whether that violation actually harmed (or
posed some risk of harm) to some concrete interest. See id. at 1549-50; see also Frank v.
Gaos, 139 S. Ct. 1041, 1045 (2019) (reaffirming that Spokeo “rejected the premise” that
an injury in fact automatically exists solely because a statute grants the plaintiff a right
and authorizes suits to enforce said right); Summers v. Earth Island Inst., 555 U.S. 488,
496 (2009) (“[D]eprivation of a procedural right without some concrete interest that is
affected by the deprivation . . . is insufficient to create Article III standing”).
The burden of proof for establishing standing, which rests with the party seeking
federal jurisdiction, must be met with adequate support at each stage of the litigation.

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CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SA CV 17-1281-DOC-DFMx

Date: October 18, 2019
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Lujan, 504 U.S. at 561. In particular, at the summary judgment stage, “the plaintiff can
no longer rest on . . . ‘mere allegations,’ but must ‘set forth’ by affidavit or other
evidence ‘specific facts’” to demonstrate standing. Id.
Finally, the requirements of standing apply with equal force to class actions as
they do to individual litigants. Lewis v. Casey, 518 U.S. 343, 349 (1996). To determine
whether a class has standing, courts analyze the standing of the class representatives. NEI
Contracting & Eng’g, Inc. v. Hanson Aggregates Pac. Sw., Inc., 926 F.3d 528, 532 (9th
Cir. 2019). If none of the class representatives can establish standing, then they may not
seek relief in federal court, either for themselves or on behalf of the class. O’Shea v.
Littleton, 414 U.S. 488, 494 (1974). Under Ninth Circuit precedent, when a class has
been certified and all class representatives are later found to lack standing, “the class
should be decertified and the case dismissed.” NEI, 926 F.3d at 532.
III.

Discussion

Plaintiffs argue that Defendant violated the FCRA and ICRAA by procuring
background checks on Wal-Mart job applicants, without making adequate disclosures or
giving the requisite summaries of rights. In the instant MSJ, Defendant argues it is
entitled to Summary judgment on Plaintiffs’ claims because (1) all three Named Plaintiffs
lack standing; (2) no reasonable fact-finder could conclude that Defendant violated the
FCRAA or ICRAA; and (3) Plaintiffs have failed to prove that Defendant willfully
violated the FCRAA or ICRAA. Defendant accordingly seeks judgment in its favor on all
three of Plaintiffs’ claims. Plaintiffs, by contrast, argue in their MSA that the Court
should enter judgment in their favor as to the first cause of action, because none of
Defendant’s disclosure forms abide by the strictures of the FCRA, and because these
statutory violations were willful.
The Court agrees with Defendant’s argument that Plaintiffs lack standing under
Article III. Therefore, as explained in what follows, the Court must decertify the class
and remand the action to the state court. It is beyond the Court’s constitutional reach to
rule on Defendant’s MSJ or Plaintiffs’ MSA, and the Court prescinds from any further
consideration thereof.
A.

Named Plaintiffs Do Not Satisfy the Article III Standing Requirements

As noted above, whether Named Plaintiffs have standing also determines whether
the Class has standing. See NEI, 926 F.3d at 532. Considering each cause of action in
turn, see Davis, 554 U.S. at 734, the Court finds that Named Plaintiffs lack standing for

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CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SA CV 17-1281-DOC-DFMx

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each claim in the FAC. Consequently, neither Named Plaintiffs nor the Class has
standing under Article III.
1.

The Second Cause of Action

Plaintiffs’ second cause of action alleges that Defendants failed to give a proper
summary of rights, in violation of 15 U.S.C. §§ 1681d(a)(1) and 1681g(c). Pursuant to
§ 1681d(a)(1):
A person may not procure or cause to be prepared an investigative
consumer report on any consumer unless—
(1) it is clearly and accurately disclosed to the consumer that an
investigative consumer report including information as to his
character, general reputation, personal characteristics and mode
of living, whichever are applicable, may be made, and such
disclosure (A) is made in a writing mailed, or otherwise
delivered, to the consumer, not later than three days after the date
on which the report was first requested, and (B) includes a
statement informing the consumer of his right to request the
additional disclosures provided for under subsection (b) of this
section and the written summary of the rights of the consumer
prepared pursuant to [15 U.S.C. § 1681g(c)].
15 U.S.C. § 1681d(a)(1) (2019) (emphasis added). Subsection (b) provides that:
Any person who procures or causes to be prepared an investigative
consumer report on any consumer shall, upon written request made
by the consumer within a reasonable period of time after the receipt
by him of the disclosure required by subsection (a)(1), make a
complete and accurate disclosure of the nature and scope of the
investigation requested. The disclosure shall be made in a writing
mailed, or otherwise delivered, to the consumer not later than five
days after the date on which the request for such disclosure was
received from the consumer or such report was first requested,
whichever is the later.
15 U.S.C. § 1681d(b) (emphasis added). And § 1681g(c), for its part, details the required
contents of the “written summary of rights” referenced in § 1681d(a)(1). See 15 U.S.C.
§ 1681g(c) (2019).

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Plaintiffs allege that Defendant’s disclosures violated § 1681d(a)(1) for three
reasons: first, because they failed to satisfy the written disclosure requirements of
15 U.S.C. § 7001; second, because they failed to inform Plaintiffs of their rights under
§ 1681d(b); and third, because they did not contain the information required by
§ 1681g(c). FAC ¶¶ 41-42, 44-49.
Plaintiffs, however, are not under the aegis of the disclosure requirements of
§ 1681d(a)(1). By its own terms, § 1681d(a)(1) is applicable only when an investigative
consumer report has been “procure[d] or cause[d] to be prepared.” This limitation is fatal
to Plaintiffs’ second cause of action. As mentioned in Footnote 3 above, the FCRA
differentiates between “consumer reports,” defined in § 1681a(d), and “investigative
consumer reports,” defined in §1681a(e). Plaintiffs did originally allege that Defendant
procured “a consumer report and/or investigative consumer report” as part of the hiring
process. FAC ¶ 29. But during discovery, the Named Plaintiffs withdrew this allegation
with respect to investigative consumer reports; in their responses to Defendant’s
interrogatories, each Named Plaintiff stated that “Plaintiff does not contend that
Wal-Mart procured an investigative consumer report.” Pitre Interrog., Dkt. 63-3, Ex. 4 at
4; Wilson Interrog., Dkt. 63-3, Ex. 5 at 8; Walters Interrog., Dkt. 63-3, Ex. 6 at 8.
As such, the disclosure requirements of § 1681d(a)(1) are inapplicable, including
its requirement of a written summary of rights in accordance with § 1681g(c). If
Defendant never procured an investigative consumer report about any of the Named
Plaintiffs, then they cannot claim any injury to their statutory rights under § 1681d(a)(1).
Without an injury in fact, none of the Named Plaintiffs has Article III standing to bring
the second cause of action. And, pursuant to NEI and O’Shea, Named Plaintiffs’ lack of
standing also bars them from bringing the second cause of action on behalf of the Class.
See NEI, 926 F.3d at 532 (citing O’Shea, 414 U.S. at 494).
2.

The First Cause of Action

Plaintiffs’ first cause of action alleges that Defendants failed to make the FCRA
disclosures required under § 1681b(b)(2)(A), which provides that:
Except as provided in subparagraph (B), a person may not procure a
consumer report, or cause a consumer report to be procured, for
employment purposes with respect to any consumer, unless—
(i) a clear and conspicuous disclosure has been made in writing to
the consumer at any time before the report is procured or caused

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to be procured, in a document that consists solely of the
disclosure, that a consumer report may be obtained for
employment purposes; and
(ii) the consumer has authorized in writing (which authorization may
be made on the document referred to in clause (i)) the
procurement of the report by that person.
15 U.S.C. § 1681b(b)(2)(A) (2019). Plaintiffs allege that Defendant’s disclosure
forms, in violation of these strictures, are not standalone documents and contain
extraneous information, FAC ¶¶ 30-31, and that their “privacy and statutory rights
[were] invaded” as a result of these defective disclosures, FAC ¶ 36.
Even assuming, arguendo, that Defendant’s written disclosures were inadequate
under the FCRA, Named Plaintiffs have failed to identify an injury stemming from this
statutory violation that can suffice to support Article III standing. The Supreme Court’s
decision in Spokeo—and the law of standing it expounds vis-à-vis statutory injuries—is
illuminating and dispositive.
Spokeo, as explained above, clarified that a violation of a statutory right does not
necessarily give rise to an injury in fact, even when the statute also confers a concomitant
right of action. 136 S. Ct. at 1549. To give rise to standing, the statutory violation must
also be accompanied by a “concrete injury”—either a de facto, actually existing injury, or
“the risk of real harm.” Id. at 1548-49. And the Supreme Court held, in unambiguous
terms, that “[a] violation of one of the FCRA’s procedural requirements may result in no
harm.” Id. at 1550. There, the plaintiff, Mr. Robins, alleged that a consumer reporting
agency had willfully failed to comply with FCRA procedural safeguards and had
generated a profile on him containing a significant amount of misinformation. Id. at
1545-46. But these allegations were insufficient to support standing. Although “Congress
plainly sought to curb the dissemination of false information by adopting procedures
designed to decrease that risk”—the precise injury and procedural violation Mr. Robins
alleged—the Court refused to find standing on the basis of a “bare procedural violation,”
and remanded to the Ninth Circuit to determine whether Mr. Robins had alleged a
concrete injury in fact. Id. at 1549-50.
But Named Plaintiffs, like Mr. Robins, have alleged only a “bare procedural
violation” in their first cause of action. Mr. Robins, in fact, may have had a more
plausible basis for standing; as the Spokeo dissent persuasively argued, the
misinformation in Mr. Robins’s profile posed a concrete risk of harm to his employment
and romantic prospects. See id. at 1556 (Ginsburg, J., dissenting). Named Plaintiffs,

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however, have not met their burden at the summary judgment stage to establish a
concrete injury or risk thereof.
The procedural safeguards in § 1681b(b)(2)(A) are ostensibly aimed at ensuring
that consumer reports, “for employment purposes,” are only procured with the subject’s
prior clearly informed authorization. See § 1681b(b)(2)(A); see also 15 U.S.C. § 1681
(2019) (listing consumer privacy as a congressional purpose in enacting the FCRA). In
their depositions, however, each Named Plaintiff essentially testified that they understood
that Wal-Mart might conduct a background check (i.e., a consumer report), and did not
object thereto. Plaintiff Pitre answered that he understood “that [Wal-Mart] may do a
background check,” and that this was “okay with [him].” Pitre Dep., Dkt. 63-3, Ex. 1 at
D 007. Plaintiff Wilson affirmed that she “understood that a background check may be
needed,” and was “okay with” such a background check—in fact, that she wanted WalMart to conduct a background check so she could get hired. Wilson Dep., Dkt. 63-3,
Ex. 2 at D 013-015. And Plaintiff Walters testified that she understood, at least “a little
bit,” that Defendant might run a background check, and that, in any case, she wanted the
job and “would have signed any form that was put in front of [her].” Walters Dep.,
Dkt. 63-3, Ex. 3 at D 023.
It appears on this record—indeed, from their own admissions—that Named
Plaintiffs had the understanding, and gave the consent, that § 1681b(b)(2)(A) was
intended to secure. Moreover, the only injury Plaintiffs identify is that, as a result of
Defendant’s deficient disclosure forms, they “have been injured including, but not limited
to, having their privacy and statutory rights invaded in violation of the FCRA,” FCA
¶ 36—or, put differently, that Defendant “obtained Plaintiffs’ personal information in
violation of their statutorily protected rights,” MSJ Opp. 5. If, as the Supreme Court has
established, there is a category of “bare procedural violation,” then it must certainly
encompass the wrongdoing alleged in Plaintiffs’ first cause of action.
Similar cases in the Ninth Circuit, while not binding on this Court, reinforce this
conclusion. The Ninth Circuit, for example, recently affirmed the dismissal of an FCRA
case on standing grounds, holding that the “pleadings claim only that WinCo’s job
application forms failed to comply with the FCRA, but do not explain how those alleged
violations harmed, or presented a material risk of harm to, the interests safeguarded by
the statute.” Mitchell v. WinCo Foods, LLC, 743 F. App’x 889, 889 (9th Cir. 2018).
Because there was no adequate showing of an actual harm, like confusion, the district
court’s dismissal for lack of standing was proper. Id. And cases in the Northern District
of California have followed similar reasoning. When job applicants have not claimed
(1) that the disclosure forms had impaired their understanding, or (2) that, had the

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disclosure complied with the FCRA, they would not have authorized the background
check, courts have determined that the alleged injury, per Spokeo, did not exceed a bare
procedural violation, and did not support standing. See, e.g., Williams v. Nichols Demos,
Inc., No. 5:17-cv-7101-EJD, 2018 WL 3046507, at *5 (N.D. Cal. June 20, 2018); Lee v.
Hertz Corp., No. 15-cv-04562-BLF, 2016 WL 7034060, at *5 (N.D. Cal. Dec. 2, 2016).
Plaintiffs disagree, citing Patel v. Facebook, Inc., 932 F.3d 1264 (9th Cir. 2019),
to argue that they have alleged more than a bare procedural violation. MSJ Opp. 5-6. This
reliance is misplaced. In that case, the Ninth Circuit considered whether Facebook’s use
of facial recognition technology violated the Illinois Biometric Information Privacy Act
(BIPA), which, in relevant part, creates “various obligations regarding the collection,
retention, disclosure, and destruction of biometric identifiers and biometric information.”
932 F.3d at 1269 (quoting Rosenbach v. Six Flags Entm’t Corp., 129 N.E.3d 1197, 1203
(Ill. 2019)). The Ninth Circuit found that the alleged statutory violation—viz., “the
collection, use, and storage of biometric identifiers without a written release . . . and the
failure to maintain a retention schedule or guidelines for destroying biometric
identifiers”—was not merely procedural, but would necessarily violate the underlying
substantive privacy interests. Id. at 1274-75.
The Patel court continued by specifically distinguishing its result from the
example of an FCRA violation that breaches the terms of the statute without harming the
substantive interest the FCRA was created to protect. Id. And the injury Named Plaintiffs
have alleged is just of this sort. As they explained in their depositions, Named Plaintiffs
understood that they might be subject to a background check—and, because they wanted
to work at Wal-Mart, they consented to said background checks. Furthermore, there is no
suggestion that they would have withheld their consent, had Defendant’s disclosure forms
been FCRA-compliant. Unlike the plaintiffs in Patel, then, Named Plaintiffs have failed
to set forth evidence of any injury beyond a bare procedural violation.
Plaintiffs’ appeal to Syed v. M-I, LLC, 853 F.3d 492 (9th Cir. 2017), is similarly
mistaken. In that case, critically, Mr. Syed was surprised to learn that he was subjected to
a background check while he was reviewing his personnel file, i.e., well after he had
signed the disclosure and authorization form. 853 F.3d at 497-98, 499. The Ninth Circuit
held that this belated discovery justified a reasonable inference that Mr. Syed was
confused by the disclosure form, did not understand that he was authorizing a background
check, and would not have authorized a background check had the forms at issue been
FCRA-compliant. Id. at 499-500. Named Plaintiffs, however, understood that Defendant
might run a background check, and because they wanted Defendant to hire them, they

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consented to the potential background checks. See Pitre Dep., Dkt. 63-3, Ex. 1 at D 007;
Wilson Dep., Dkt. 63-3, Ex. 2 at D 013-015; Walters Dep., Dkt. 63-3, Ex. 3 at D 023.
Plaintiffs’ reference to Thomas v. FTS USA, LLC, 193 F. Supp. 3d 623 (E.D. Va.
2016)—cited approvingly by the Syed court—is also inapposite. In Thomas, the plaintiff
alleged that the defendants violated his right to confidentiality by procuring a consumer
report “without first providing the required disclosure or obtaining his written consent.”
193 F. Supp. 3d at 636. The Thomas court held that this violation of “the statutory right to
privacy” constituted a concrete injury and supported Article III standing. Id. Again,
however, Named Plaintiffs have not adduced any evidence that their substantive rights
were violated; unlike the plaintiff in Thomas, Named Plaintiffs were given disclosure
forms, understood that Defendant might procure a background check, and consented to
the background check process. The violations they allege are bare procedural violations,
and Spokeo has held that such injuries cannot establish standing.
Because Named Plaintiffs have not alleged a sufficiently concrete injury, they lack
Article III standing to bring the first cause of action. As such, they are also disqualified
from bringing the first cause of action on behalf of the Class. See NEI, 926 F.3d at 532
(citing O’Shea, 414 U.S. at 494).
3.

The Third Cause of Action

Plaintiffs’ third cause of action alleges that Defendants failed to make the
disclosures required under the ICRAA, Cal. Civ. Code § 1786 et seq. In relevant part,
Section 1786.16 provides that consumer reports “for employment purposes” can only be
procured if “a clear and conspicuous disclosure” is provided to the consumer in writing
“in a document that consists solely of the disclosure.” Civ. § 1786.16(a)(2)(B).
Plaintiffs allege that Defendant’s disclosure forms did not consist solely of the
disclosure, and thus contained extraneous information and were not clear and
conspicuous. FAC ¶¶ 58-61. These, however, are the same violations alleged under the
FCRA in the first cause of action, and they remain bare procedural violations under
California law. While the California State Legislature can establish procedural safeguards
on background checks, it cannot, any more than the U.S. Congress, allow plaintiffs to sue
in federal court, in violation of Article III, on the basis of procedural violations
unaccompanied by concrete injury. As such, for the reasons discussed with respect to the
first cause of action above, Named Plaintiffs lack standing to bring the third cause of
action in federal court—and, consequently, neither can they bring this claim on behalf of
the Class. See NEI, 926 F.3d at 532 (citing O’Shea, 414 U.S. at 494).

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SA CV 17-1281-DOC-DFMx

4.

Date: October 18, 2019
Page 13

The “Law of the Case” Is Inapposite

Finally, Plaintiffs argue that “the law of the case” doctrine precludes this Court
from reconsidering the question of standing, citing Thomas v. Bible, 983 F.2d 152, 154
(9th Cir. 1993), for the proposition that “a court is generally precluded from
reconsidering an issue that has already been decided by the same court, or a higher court
in the identical case.” Application of this doctrine is entirely inappropriate to the present
Article III standing analysis.
As the Supreme Court has repeatedly held, “[w]e have an obligation to assure
ourselves of litigants’ standing under Article III.” Frank, 139 S. Ct. at 1046 (quoting
DaimlerChrysler, 547 U.S. at 340). The importance of this mandate is self-evident. Were
we to ignore the question of standing, or to blindly follow “the law of the case,” we
would run the risk of deciding cases ultra vires. Plaintiffs’ argument, at bottom, invites us
to stray from the case-or-controversy requirement of Article III—to adjudicate a case in
violation of a constitutional bedrock—merely because this Court had found standing at an
earlier stage of the litigation. The Court declines, obviously, to reach an absurd and
unconstitutional result, and accordingly rejects Plaintiffs’ contention that the law of the
case is determinative of their Article III standing.
In sum, Named Plaintiffs lack standing for all three causes of action; so too, then,
does the Class. See NEI, 926 F.3d at 532 (citing O’Shea, 414 U.S. at 494). Ninth Circuit
precedent therefore requires that the Class be decertified. NEI, 926 F.3d at 532. As such,
the Court hereby GRANTS Defendant’s Motion to Decertify.
B.

The Court Must Remand the Case for Further Proceedings

The remaining issue is whether the Court should remand the case or enter
judgment in Defendant’s favor. Plaintiffs argue that remand is the correct result when a
plaintiff is found to lack standing after removal from state court, pursuant to Polo v.
Innoventions International, LLC, 833 F.3d 1193 (9th Cir. 2016). Defendants, by contrast,
argue that remand is inappropriate when it “would be futile,” citing Bell v. City of
Kellogg, 922 F.2d 1418, 1424-25 (9th Cir. 1991). Defendants also point to the academic
distinction between justiciability and jurisdiction; suggest that Plaintiffs would also lack
standing in California state courts; and argue that a remand would be nonsensical.
As far as established black-letter law goes, Plaintiffs undoubtedly have the
stronger argument. NEI does provide that, when a class has been certified and all class

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SA CV 17-1281-DOC-DFMx

Date: October 18, 2019
Page 14

representatives are later found to lack standing, “the class should be decertified and the
case dismissed.” NEI, 926 F.3d at 532. But, as Plaintiffs correctly observe, NEI, unlike
the instant action, originated in federal court; remand was thus unavailable as a
procedural option.
Under 28 U.S.C. § 1447, by contrast, if a case is removed and it later “appears that
the district court lacks subject matter jurisdiction, the case shall be remanded.” As the
Ninth Circuit explained in Polo, this remand—consistent with the statute’s use of shall—
is generally mandatory. 833 F.3d at 1196. And the Polo court was unequivocal in its
reasoning: “Remand is the correct remedy because a failure of federal subject-matter
jurisdiction means only that the federal courts have no power to adjudicate the matter.
State courts are not bound by the constraints of Article III.” Id. (citing ASARCO Inc. v.
Kadish, 490 U.S. 605, 617 (1989)).
Defendant attempts to avoid this outcome by highlighting the academic distinction
between “justiciability” and “subject matter jurisdiction.” At the outset, it should be noted
that courts, including the Supreme Court, frequently elide this distinction. See, e.g.,
ASARCO, 490 U.S. at 612 (“The second jurisdictional issue is . . . whether, under federal
standards, the case was nonjusticiable at its outset because the original plaintiffs lacked
standing to sue . . . .” (emphasis added)); Polo, 833 F.3d at 1196 (“[A] removed case in
which the plaintiff lacks Article III standing must be remanded to state court under
§ 1447(c) . . . .”); Moore v. United Parcel Serv., Inc., No. 18-cv-07600-VC, 2019 WL
2172706, at *2 (N.D. Cal. May 13, 2019) (remanding for lack of subject matter
jurisdiction after finding plaintiff lacked standing); Miranda v. Magic Mountain LLC,
No. CV 17-07483 SJO (SS), 2018 WL 571914, at *3 (C.D. Cal. Jan. 25, 2018) (same);
U.S. House of Representatives v. Burwell, 130 F. Supp. 3d. 53, 64-65 (D.D.C. 2015)
(treating standing as a “jurisdictional requirement[] of Article III,” and justiciability as
“the advisability of hearing the case”).
Furthermore, the distinction is without a functional difference in the instant case.
Whether categorized as a failure of justiciability or of subject matter jurisdiction, the lack
of Article III standing necessitates the same conclusion—namely, that this Court has no
authority to further adjudicate this action. As such, the Court would have to cross its
constitutional boundaries to enter summary judgment in favor of Defendant. The proper
course of action is instead to remand to a court with the power to hear this case.
Nor would remand be “futile,” as Defendants suggest, pursuant to Bell v. City of
Kellogg. As the Polo court observed, some twenty-five years after Bell, “the Bell rule has
been questioned, and may no longer be good law.” 833 F.3d at 1197. Even assuming Bell

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SA CV 17-1281-DOC-DFMx

Date: October 18, 2019
Page 15

has some remaining vitality, however, it does not require the Court to enter judgement for
Defendants instead of remanding the case. For the Bell rule to apply, “a district court
must have ‘absolute certainty’ that a state court would ‘simply dismiss[] the action on
remand.’” Polo, 833 F.3d at 1198 (alteration in original) (quoting Bell, 922 F.2d at 1425).
The Court does not find that the outcome of Plaintiffs’ case in state court “is so clear as to
be foreordained”; the proper procedural result is therefore remand, rather than the grant
of Defendant’s MSJ. See id.; see also Nichols Demos, Inc., 2018 WL 3046507, at *6
(finding remand was not futile because Article III standing doctrine is not binding on
state courts). The Court will accordingly allow the state court—in the exercise of its
proper parallel jurisdiction—to determine whether Plaintiffs have standing under
California law.
Finally, Defendant makes passing reference to a law review comment to suggest
that remanding the case would be nonsensical. To the extent Defendant believes that state
courts should not be allowed to enforce federal statutes when federal courts cannot do so,
Defendant has misunderstood the nature of our federalist system. In general, “state courts
may assume subject-matter jurisdiction over a federal cause of action absent provision by
Congress to the contrary or disabling incompatibility between the federal claim and the
state-court adjudication.” Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 477-78
(1981). In the instant case, there is no such contrary provision or incompatibility afoot;
indeed, Congress authorized individuals to sue under the FCRA in both state and federal
court. See 15 U.S.C. § 1681p (2019) (“An action to enforce any liability created under
this title may be brought in any appropriate United States district court . . . or in any other
court of competent jurisdiction . . . .”). And as the Polo court made eminently clear,
“[s]tate courts are not bound by the constraints of Article III,” even when federal courts
may not constitutionally hear a case. 833 F.3d at 1196 (citing ASARCO, 490 U.S. at 617).
Given the federalist structure of our government, it is therefore entirely sensible for the
Court to remand the case and allow Plaintiffs a chance to adjudicate their claims under
the parallel jurisdiction of the California state courts.
Because it is required to do so by federal statute and Ninth Circuit precedent, the
Court hereby REMANDS the case to the state court. The Court takes no position as to
Plaintiffs’ ability, on remand, to establish standing or certify a class under the relevant
standards of California law.
IV.

Disposition

For the reasons set forth above, the Court GRANTS Defendant’s Motion to
Decertify and REMANDS the instant action to the state court. Defendant’s Motion for

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SA CV 17-1281-DOC-DFMx

Date: October 18, 2019
Page 16

Summary Judgment and Plaintiffs’ Motion for Summary Adjudication are therefore both
DENIED AS MOOT.
The Clerk shall serve this minute order on the parties.

MINUTES FORM 11
CIVIL-GEN

Initials of Deputy Clerk: djl