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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1 2 3 4 5 UNITED STATES DISTRICT COURT 6 NORTHERN DISTRICT OF CALIFORNIA 7 ELIZABETH LARROQUE, 8 Plaintiff, 9 ORDER TO SHOW CAUSE RE: SUBJECT MATTER JURISDICTION v. 10 FIRST ADVANTAGE LNS SCREENING SOLUTIONS, INC., 11 United States District Court Northern District of California Case No. 15-cv-04684-JSC 12 Defendant. 13 14 Plaintiff brings this putative class action against Defendant for alleged violations of the 15 Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681. On January 4, 2016, the Court granted 16 Defendant’s motion to stay this action pending the United States Supreme Court’s decision in 17 Spokeo, Inc. v. Robins. (Dkt. No. 23.1) The Supreme Court issued its opinion in Spokeo on May 18 19 20 21 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. 22 § 1331 (Dkt. No. 28 at 2), the Court has concerns regarding Plaintiff’s standing in light of the 23 Supreme Court’s Spokeo decision. Accordingly, the parties are ORDERED TO SHOW CAUSE 24 as to whether the Court has subject matter jurisdiction over this action. 25 26 27 28 1 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. 1 2 BACKGROUND On August 11, 2015, Plaintiff Elizabeth Larroque filed the instant case in the San Mateo 3 County Superior Court. (Dkt. No. 1-1 at 38, 31-37.) Defendant timely removed the action to this 4 Court on October 9, 2015, on the basis of federal question jurisdiction. (Dkt. No. 1.) In the 5 complaint, Plaintiff alleges that Defendant furnished a consumer report regarding Plaintiff to 6 Pacific Hotel Management, LLC (“Pacific”) without first having Pacific certify that it had 7 complied with the disclosure and authorization requirements set forth in Section 1681b(b)(1) of 8 the FCRA. (Dkt. No. 1-1 at 33-35.) Plaintiff seeks to represent a class of all persons as to whom 9 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 11 United States District Court Northern District of California 10 statutory and punitive damages. (Id. at 37.) Plaintiff does not allege that either she or any putative 12 class member suffered actual harm or actual damages. (See generally id.) 13 On November 11, 2015, Defendant moved to stay this action pending the ruling in Spokeo, 14 arguing that “[i]f the Supreme Court rules that Article III standing requires a concrete harm, 15 Plaintiff will have no standing to proceed and her lawsuit must be dismissed.” (Dkt. No. 8 at 4.) 16 Plaintiff opposed, noting that even if Spokeo divests her of Article III standing, FCRA § 1681p 17 grants concurrent federal-state jurisdiction over FCRA claims, and therefore the action could be 18 remanded to state court pursuant to 28 U.S.C. § 1447(c). (Dkt. No. 9 at 5-6.) The Court granted 19 the stay “[b]ecause the Spokeo decision is squarely on point” and “will directly impact whether, as 20 a matter of law, Plaintiff has standing to bring this action.” (Dkt. No. 23 at 3.) 21 On May 16, 2016, the Supreme Court issued its opinion in Spokeo, 136 S. Ct. at 1540. 22 Despite the apparent relevance of Spokeo as argued by Defendant and as noted by the Court, 23 neither party addressed Spokeo in their joint case management statement; instead, the parties 24 simply agreed that the Court has federal question jurisdiction pursuant to 28 U.S.C. § 1331. (Dkt. 25 No. 28 at 2.) The Court raised concerns regarding its subject matter jurisdiction, in light of 26 Spokeo, at the June 16, 2016 conference. 27 28 2 DISCUSSION 1 2 Even in the absence of a challenge by the parties, “federal courts are under an independent 3 obligation to examine their own jurisdiction, and standing ‘is perhaps the most important of [the 4 jurisdictional] doctrines.’” Alabama Legislative Black Caucus v. Alabama, 135 S. Ct. 1257, 1276 5 (2015) (citation omitted); see also Bernhardt v. Cty. of Los Angeles, 279 F.3d 862, 868 (9th Cir. 6 2002) (“The district court had both the power and the duty to raise the adequacy of [plaintiff’s] 7 standing sua sponte.”). 8 9 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.” 11 United States District Court Northern District of California 10 Spokeo, 136 S. Ct. at 1547. “To establish injury in fact, a plaintiff must show that he or she 12 suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and 13 ‘actual or imminent, not conjectural or hypothetical.’” Id. at 1548 (citing Lujan v. Defs. of 14 Wildlife, 504 U.S. 555, 560 (1992)). The party invoking federal jurisdiction bears the burden of 15 establishing these standing requirements. Lujan, 504 U.S. at 561. 16 In Spokeo, the plaintiff filed a class action complaint against a consumer reporting agency 17 for alleged violations of FCRA § 1681. 136 S. Ct. at 1545. The plaintiff alleged that Spokeo 18 violated the FCRA by providing inaccurate information about him in a generated credit report. Id. 19 at 1546. The district court dismissed the complaint for lack of standing, but the Ninth Circuit 20 reversed, finding that the plaintiff had adequately alleged an injury-in-fact for the statutory 21 violation. Id. at 1544-45. On review, the Supreme Court vacated the decision because the Ninth 22 Circuit’s standing analysis was incomplete; while the Ninth Circuit found that the plaintiff had 23 adequately alleged a “particularized” injury—the statutory violation of the FCRA—the Ninth 24 Circuit did not properly consider the “concreteness” requirement for an injury-in-fact. Id. at 1545. 25 As the Supreme Court noted, “Article III standing requires a concrete injury even in the context of 26 a statutory violation”; a plaintiff cannot satisfy Article III’s injury-in-fact requirement by 27 “alleg[ing] a bare procedural violation, divorced from any concrete harm.” Id. at 1549. Moreover, 28 “a plaintiff [does not] automatically satisf[y] the injury-in-fact requirement whenever a statute 3 1 grants a person a statutory right and purports to authorize that person to sue to vindicate that 2 right.” Id. Rather, “[a] violation of one of the FCRA’s procedural requirements may result in no 3 harm. For example, even if a consumer reporting agency fails to provide the required notice to a 4 user of the agency’s consumer information, that information regardless may be entirely accurate.” 5 Id. at 1550. The Supreme Court thus remanded the case to the Ninth Circuit to consider both 6 aspects of the injury-in-fact requirement. Id. at 1545. 7 Here, Plaintiff alleges that Defendant violated the procedural requirements of Section 8 1681b(b)(1), but does not allege that she or any members of the putative class suffered any actual 9 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 11 United States District Court Northern District of California 10 matter jurisdiction, the Court is concerned that Plaintiff has not suffered a concrete injury that 12 would establish standing to proceed in federal court. 13 Accordingly, the parties are ORDERED TO SHOW CAUSE as to whether the Court has 14 subject matter jurisdiction to preside over this action. The parties shall meet and confer as to 15 whether they agree that Plaintiff does not have standing, especially in light of Defendant’s earlier 16 representation that “[i]f the Supreme Court rules that Article III standing requires a concrete harm, 17 Plaintiff will have no standing to proceed and her lawsuit must be dismissed.” (Dkt. No. 8 at 4.) 18 If they do not agree as to the lack of standing, the parties shall each file a response to this Order by 19 July 13, 2016. The Court will address this issue at a hearing on July 28, 2016 at 9:00 a.m. in 20 Courtroom F, 450 Golden Gate Avenue, San Francisco, California. 21 IT IS SO ORDERED. 22 23 Dated: June 21, 2016 24 JACQUELINE SCOTT CORLEY United States Magistrate Judge 25 26 27 28 4

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