Kirchner v. Shred-It USA, Inc. et al

Filing 79

MEMORANDUM and ORDER signed by Senior Judge William B. Shubb GRANTING 71 Motion to Dismiss. Plaintiff's first amended Complaint is DISMISSED WITH PREJUDICE. CASE CLOSED. (Jackson, T)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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----oo0oo----

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MICHAEL KIRCHNER, on behalf
of himself and all others
similarly situated,
Plaintiff,

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CIV. NO. 2:14-1437 WBS EFB
MEMORANDUM AND ORDER RE: MOTION
TO DISMISS FIRST AMENDED
COMPLAINT

v.
FIRST ADVANTAGE BACKGROUND
SERVICES CORP. and DOES 1
through 10,
Defendant.

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----oo0oo---Plaintiff Michael Kirchner brought this action against

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defendants Shred-It USA, Inc. (“Shred-It”) and First Advantage

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Background Services Corp. (“First Advantage”) for alleged

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violations of the Fair Credit Reporting Act (“FCRA”).

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Compl. (“FAC”) (Docket No. 17).)

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Shred-It, and First Advantage is the only defendant remaining in

(First Am.

Plaintiff has settled with

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this action.

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first amended Complaint pursuant to Federal Rule of Civil

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Procedure 12(b)(1).

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First Advantage now moves to dismiss plaintiff’s

(First Advantage’s Mot. (Docket No. 71).)

In April 2011, plaintiff applied for a job with Shred-

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It.

(FAC ¶ 14.)

As part of the application process, plaintiff

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completed and signed a one-page form “authoriz[ing] Securit /

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Shred It and First Advantage to conduct a review of [his]

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background through a consumer report.”

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Authorization and Release for a Consumer Report (“Consent

(Id. Ex. 1, USA - Notice,

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Form”).)

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consumer report, the form authorizes defendants to obtain

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information about plaintiff from his former employers, financial

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institutions, and public agencies, and certifies that plaintiff

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provided accurate information on his employment application.

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(See id.)

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In addition to authorizing release of plaintiff’s

Plaintiff alleges that by failing to provide him notice

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of release of his consumer report “in a completely separate

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document,” Shred-It violated section 1681b(b)(2) of the FCRA

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(“(b)(2)”), which requires that such notice be “made . . . in a

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document that consists solely of the [notice].”1

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Plaintiff alleges that First Advantage violated section

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1681b(b)(1) of the FCRA (“(b)(1)”) by failing to obtain

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certification from Shred-It as to its compliance with (b)(2)

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before issuing his report.

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allege that his report included any adverse information, that he

(Id. ¶ 39.)

(Id. ¶ 17.)

Plaintiff does not

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(b)(2) also requires the consumer to “authorize[
release of the report] in writing,” which plaintiff did here.
(Consent Form.)
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was turned down for the job with Shred-It, or that he suffered

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any actual damages from First Advantage’s alleged failure to

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comply with (b)(1).

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First Advantage now moves to dismiss plaintiff’s first

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amended Complaint for lack of standing, and thus subject matter

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jurisdiction, under Rule 12(b)(1).

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(“First Advantage’s Mem.”) at 1-2 (Docket No. 71-1).)

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12(b)(1) motion, “the plaintiff bears the burden of demonstrating

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that the court has jurisdiction.”

(First Advantage’s Mot., Mem.
On a

Boardman v. Shulman, No. 2:12-

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CV-00639 MCE, 2012 WL 6088309, at *2 (E.D. Cal. Dec. 6, 2012).

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defendant may succeed on a 12(b)(1) motion by successfully

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“assert[ing] that the allegations contained in a complaint are

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insufficient on their face to invoke federal jurisdiction” (i.e.,

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a “facial attack”), or “disput[ing] the truth of the allegations”

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(i.e., a “factual attack”).

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362 (9th Cir. 2004).

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the facts alleged in plaintiff’s first amended Complaint, the

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court will treat the Motion as a “facial attack.”

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Wolfe v. Strankman, 392 F.3d 358,

Because defendant’s Motion does not dispute

First Advantage argues that under the United States

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Supreme Court’s decision in Spokeo, Inc. v. Robins, 136 S. Ct.

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1540 (2016), plaintiff has not alleged a “concrete” injury giving

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rise to Article III standing.

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Spokeo, the Supreme Court clarified that only “concrete”

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injuries--injuries that are “‘real,’ and not ‘abstract’”--give

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rise to Article III standing.2

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(First Advantage’s Mem. at 1.)

Spokeo, 136 S. Ct. at 1548.

In

“[A]

In order to have Article III standing, “a plaintiff
must show that he or she suffered ‘an invasion of a legally
protected interest’ that is ‘concrete and particularized.’”
Spokeo, 136 S. Ct. at 1548 (internal citation omitted). Prior to
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bare procedural violation, divorced from any concrete harm [does

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not] satisfy the injury-in-fact requirement of Article III.”

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at 1549.

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“intangible harm” to the status of a “concrete” injury, “a

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plaintiff [does not] automatically satisf[y] the injury-in-fact

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requirement whenever a statute grants a person a statutory right

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and purports to authorize that person to sue.”

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standing requires a concrete injury even in the context of a

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statutory violation.”

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Id.

While Congress may “identify[] and elevate[e]” an

Id.

“Article III

Id.

The Spokeo Court specifically noted that “violation of

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one of the FCRA’s procedural requirements may result in no harm.”

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Id. at 1550.

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zip code” on a consumer report, the Court cited as an example,

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“[i]t is difficult to imagine how the dissemination of [that] zip

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code, without more, could work any concrete harm.”

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consumer reporting agency fails to provide [a] required notice to

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a user of the agency’s consumer information,” the Court cited as

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a second example, “that information regardless may be entirely

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accurate” and thus fail to give rise to a “concrete” injury.

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Where a reporting agency provides the “incorrect

Id.

Where “a

Id.

At least one federal court in this circuit has held

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that failure to comply with (b)(1)’s certification requirement

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does not give rise to a “concrete” injury.

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Advantage LNS Screening Sols., Inc., No. 15-CV-04684 JSC, 2016 WL

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4577257, at *5 (N.D. Cal. Sept. 2, 2016).

See Larroque v. First

A federal court in the

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Spokeo, federal courts had been reading the “concrete”
requirement to be subsumed under the “particularized”
requirement. See, e.g., Robins v. Spokeo, Inc., 742 F.3d 409,
413 (9th Cir. 2014). Spokeo clarified that “concrete” is a
separate inquiry in itself. See Spokeo, 136 S. Ct. at 1548.
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Sixth Circuit has held the same.

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Records, Inc., No. 1:16 CV 1697, 2016 WL 5405258, at *3 (N.D.

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Ohio Sept. 27, 2016) (failure to comply with (b)(1)’s

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certification requirement does not give rise to Article III

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standing).

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of any case, holding that failure to comply with (b)(1) results

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in a “concrete” injury.

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See Disalvo v. Intellicorp

Plaintiff cites no case, and the court is not aware

In light of the above-cited authorities, the court
finds that plaintiff has not alleged that First Advantage caused

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him a “concrete” injury in this case.

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not indicate that First Advantage’s failure to obtain

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certification from Shred-It prior to issuing plaintiff’s report

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resulted in any adverse consequences to plaintiff.

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that First Advantage’s failure to obtain certification caused

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Shred-It’s failure to follow (b)(2)’s ‘separate document’ rule,

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the lack of a separate document here did not result in any

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unauthorized invasion of plaintiff’s privacy.

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plaintiff consented in writing to release his consumer report to

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defendants.

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clear, partially bolded notice in the second paragraph stating

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that he was agreeing to release his consumer report to

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defendants.

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to see or understand the notice.

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claim amounts to “a bare procedural violation, divorced from any

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concrete harm,” the court must dismiss his amended Complaint for

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lack of standing as to First Advantage.

(Consent Form.)

(See id.)

The amended Complaint does

Even assuming

To the contrary,

The form he signed contained a

Plaintiff does not allege that he failed
Because plaintiff’s (b)(1)

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Arguing on the assumption that First Advantage caused

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Shred-It’s failure to comply with (b)(2), plaintiff directs the
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court’s attention to Thomas v. FTS USA, LLC, No. 3:13-CV-825,

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2016 WL 3653878 (E.D. Va. June 30, 2016), which found that (b)(2)

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creates two rights which, when violated, each give rise to

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“concrete” injuries: (1) “a right to privacy in one’s consumer

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report,” and (2) “a right to specific information in the form of

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a clear and conspicuous” notice that one’s consumer report would

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be released.3

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Id. at * 19.

With respect to (1), the court again notes that there
was no unauthorized invasion of privacy here.

Whereas Thomas

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involved a plaintiff who was never provided notice of or

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opportunity to consent to release of his consumer report, see id.

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at *3, plaintiff was provided such notice and opportunity here,

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(see FAC ¶ 14).

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that defendants’ consent form contained a clear, partially bolded

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notice stating that plaintiff was agreeing to “authorize Securit

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/ Shred It and First Advantage to conduct a review of [his]

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background through a consumer report.”

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the notice was not given “in a document that consists solely of

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the [notice]” as required by (b)(2), there is no allegation that

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plaintiff failed to see or understand the notice.

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assuming that (b)(2) creates a “concrete” right to “a clear and

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conspicuous” notice, First Advantage did not violate that right.

With respect to (2), the court similarly notes

(Consent Form.)

While

Thus, even

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Thomas extracted these rights from (b)(2) by analyzing
“the common law . . . right to personal privacy” and “Congress’
legislative judgment.” Thomas, 2016 WL 3653878, at *10. The
conducting of such an analysis is appropriate under Spokeo.
Spokeo, 136 S. Ct. at 1549 (“In determining whether an intangible
harm constitutes injury in fact, both history and the judgment of
Congress play important roles.”).
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To the extent Thomas and other unpublished cases4 after

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Spokeo have gone so far as to hold that inclusion of ‘extraneous’

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information on a (b)(2) notice is itself a “concrete” injury, the

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court must join with numerous other courts in respectfully

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disagreeing with such authorities.

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States Postal Service, No. 15-CV-1467, 2016 WL 6108942, at *6

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(E.D. Wis. Oct. 19, 2016) (inclusion of extraneous information on

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(b)(2) notice is not a “concrete” injury); Nokchan v. Lyft, Inc.,

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No. 15-CV-03008 JCS, 2016 WL 5815287, at *9 (N.D. Cal. Oct. 5,

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2016) (holding the same); Fisher v. Enter. Holdings, Inc., No.

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4:15-CV-00372 AGF, 2016 WL 4665899, at *1 (E.D. Mo. Sept. 7,

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2016) (holding the same); Smith v. Ohio State Univ., No. 2:15-CV-

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3030, 2016 WL 3182675, at *1, 4 (S.D. Ohio June 8, 2016) (holding

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the same).

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See, e.g., Tyus, v. United

Because plaintiff has not alleged a “concrete” injury

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in this case, and because the court cannot conceive of a

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“concrete” injury that might have resulted from First Advantage’s

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alleged failure to comply with (b)(1), the court must dismiss

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plaintiff’s first amended Complaint with prejudice.

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Calderon, 59 F.3d 815, 845 (9th Cir. 1995) (“Futility of

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amendment can, by itself, justify the denial of a motion for

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leave to amend.”).

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See Bonin v.

IT IS THEREFORE ORDERED that First Advantage Background
Services’ Motion to dismiss plaintiff’s first amended Complaint

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See Moody v. Ascenda USA Inc., No. 16-CV-60364 WPD,
2016 WL 5900216 (S.D. Fla. Oct. 5, 2016); and Meza v. Verizon
Commc’ns, Inc., No. 1:16-CV-0739 AWI MJS, 2016 WL 4721475 (E.D.
Cal. Sept. 9, 2016). The Ninth Circuit has not ruled on the
issue.
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be, and the same hereby is, GRANTED.

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Complaint is DISMISSED WITH PREJUDICE.

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Dated:

November 10, 2016

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Plaintiff’s first amended