Elizabeth Larroque v. First Advantage LNS Screening Solutions, Inc.

Filing 32

ORDER TO SHOW CAUSE. Show Cause Response due by 7/13/2016. Order to Show Cause Hearing set for 7/28/2016 at 09:00 AM., Courtroom F, 15th Floor in San Francisco. Signed by Magistrate Judge Jacqueline Scott Corley on 6/21/2016. (ahm, COURT STAFF) (Filed on 6/21/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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ELIZABETH LARROQUE,

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Plaintiff,

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ORDER TO SHOW CAUSE RE:
SUBJECT MATTER JURISDICTION

v.

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FIRST ADVANTAGE LNS SCREENING
SOLUTIONS, INC.,

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United States District Court
Northern District of California

Case No. 15-cv-04684-JSC

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Defendant.

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Plaintiff brings this putative class action against Defendant for alleged violations of the

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Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681. On January 4, 2016, the Court granted

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Defendant’s motion to stay this action pending the United States Supreme Court’s decision in

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Spokeo, Inc. v. Robins. (Dkt. No. 23.1) The Supreme Court issued its opinion in Spokeo on May

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16, 2016. Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), as revised (May 24, 2016). The parties
submitted a joint case management statement on June 9, 2016 (Dkt. No. 28), and the Court held a
further case management conference on June 16, 2016 (Dkt. No. 31). Although the parties agree
in their joint statement that the Court has federal question jurisdiction pursuant to 28 U.S.C.

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§ 1331 (Dkt. No. 28 at 2), the Court has concerns regarding Plaintiff’s standing in light of the

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Supreme Court’s Spokeo decision. Accordingly, the parties are ORDERED TO SHOW CAUSE

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as to whether the Court has subject matter jurisdiction over this action.

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Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the
ECF-generated page numbers at the top of the documents.

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BACKGROUND
On August 11, 2015, Plaintiff Elizabeth Larroque filed the instant case in the San Mateo

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County Superior Court. (Dkt. No. 1-1 at 38, 31-37.) Defendant timely removed the action to this

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Court on October 9, 2015, on the basis of federal question jurisdiction. (Dkt. No. 1.) In the

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complaint, Plaintiff alleges that Defendant furnished a consumer report regarding Plaintiff to

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Pacific Hotel Management, LLC (“Pacific”) without first having Pacific certify that it had

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complied with the disclosure and authorization requirements set forth in Section 1681b(b)(1) of

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the FCRA. (Dkt. No. 1-1 at 33-35.) Plaintiff seeks to represent a class of all persons as to whom

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Defendant furnished consumer reports for employment purposes without first obtaining
certification of the employer’s compliance with Section 1681b(b)(1). (Id. at 35.) She seeks only

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United States District Court
Northern District of California

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statutory and punitive damages. (Id. at 37.) Plaintiff does not allege that either she or any putative

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class member suffered actual harm or actual damages. (See generally id.)

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On November 11, 2015, Defendant moved to stay this action pending the ruling in Spokeo,

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arguing that “[i]f the Supreme Court rules that Article III standing requires a concrete harm,

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Plaintiff will have no standing to proceed and her lawsuit must be dismissed.” (Dkt. No. 8 at 4.)

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Plaintiff opposed, noting that even if Spokeo divests her of Article III standing, FCRA § 1681p

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grants concurrent federal-state jurisdiction over FCRA claims, and therefore the action could be

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remanded to state court pursuant to 28 U.S.C. § 1447(c). (Dkt. No. 9 at 5-6.) The Court granted

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the stay “[b]ecause the Spokeo decision is squarely on point” and “will directly impact whether, as

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a matter of law, Plaintiff has standing to bring this action.” (Dkt. No. 23 at 3.)

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On May 16, 2016, the Supreme Court issued its opinion in Spokeo, 136 S. Ct. at 1540.

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Despite the apparent relevance of Spokeo as argued by Defendant and as noted by the Court,

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neither party addressed Spokeo in their joint case management statement; instead, the parties

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simply agreed that the Court has federal question jurisdiction pursuant to 28 U.S.C. § 1331. (Dkt.

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No. 28 at 2.) The Court raised concerns regarding its subject matter jurisdiction, in light of

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Spokeo, at the June 16, 2016 conference.

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DISCUSSION

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Even in the absence of a challenge by the parties, “federal courts are under an independent

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obligation to examine their own jurisdiction, and standing ‘is perhaps the most important of [the

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jurisdictional] doctrines.’” Alabama Legislative Black Caucus v. Alabama, 135 S. Ct. 1257, 1276

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(2015) (citation omitted); see also Bernhardt v. Cty. of Los Angeles, 279 F.3d 862, 868 (9th Cir.

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2002) (“The district court had both the power and the duty to raise the adequacy of [plaintiff’s]

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standing sua sponte.”).

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Article III standing consists of three “irreducible constitutional minimum” requirements:
“[t]he 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.”

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United States District Court
Northern District of California

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Spokeo, 136 S. Ct. at 1547. “To establish injury in fact, a plaintiff must show that he or she

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suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and

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‘actual or imminent, not conjectural or hypothetical.’” Id. at 1548 (citing Lujan v. Defs. of

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Wildlife, 504 U.S. 555, 560 (1992)). The party invoking federal jurisdiction bears the burden of

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establishing these standing requirements. Lujan, 504 U.S. at 561.

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In Spokeo, the plaintiff filed a class action complaint against a consumer reporting agency

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for alleged violations of FCRA § 1681. 136 S. Ct. at 1545. The plaintiff alleged that Spokeo

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violated the FCRA by providing inaccurate information about him in a generated credit report. Id.

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at 1546. The district court dismissed the complaint for lack of standing, but the Ninth Circuit

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reversed, finding that the plaintiff had adequately alleged an injury-in-fact for the statutory

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violation. Id. at 1544-45. On review, the Supreme Court vacated the decision because the Ninth

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Circuit’s standing analysis was incomplete; while the Ninth Circuit found that the plaintiff had

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adequately alleged a “particularized” injury—the statutory violation of the FCRA—the Ninth

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Circuit did not properly consider the “concreteness” requirement for an injury-in-fact. Id. at 1545.

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As the Supreme Court noted, “Article III standing requires a concrete injury even in the context of

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a statutory violation”; a plaintiff cannot satisfy Article III’s injury-in-fact requirement by

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“alleg[ing] a bare procedural violation, divorced from any concrete harm.” Id. at 1549. Moreover,

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“a plaintiff [does not] automatically satisf[y] the injury-in-fact requirement whenever a statute
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grants a person a statutory right and purports to authorize that person to sue to vindicate that

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right.” Id. Rather, “[a] violation of one of the FCRA’s procedural requirements may result in no

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harm. For example, even if a consumer reporting agency fails to provide the required notice to a

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user of the agency’s consumer information, that information regardless may be entirely accurate.”

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Id. at 1550. The Supreme Court thus remanded the case to the Ninth Circuit to consider both

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aspects of the injury-in-fact requirement. Id. at 1545.

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Here, Plaintiff alleges that Defendant violated the procedural requirements of Section

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1681b(b)(1), but does not allege that she or any members of the putative class suffered any actual

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injury or harm as a result of Defendant’s purported statutory violations. Given the factual
similarities between Spokeo and this action and the Court’s continuing duty to examine its subject

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United States District Court
Northern District of California

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matter jurisdiction, the Court is concerned that Plaintiff has not suffered a concrete injury that

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would establish standing to proceed in federal court.

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Accordingly, the parties are ORDERED TO SHOW CAUSE as to whether the Court has

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subject matter jurisdiction to preside over this action. The parties shall meet and confer as to

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whether they agree that Plaintiff does not have standing, especially in light of Defendant’s earlier

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representation that “[i]f the Supreme Court rules that Article III standing requires a concrete harm,

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Plaintiff will have no standing to proceed and her lawsuit must be dismissed.” (Dkt. No. 8 at 4.)

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If they do not agree as to the lack of standing, the parties shall each file a response to this Order by

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July 13, 2016. The Court will address this issue at a hearing on July 28, 2016 at 9:00 a.m. in

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Courtroom F, 450 Golden Gate Avenue, San Francisco, California.

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IT IS SO ORDERED.

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Dated: June 21, 2016

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JACQUELINE SCOTT CORLEY
United States Magistrate Judge

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