Jones v. The Salvation Army
Filing
43
ORDER granting in part and denying in part 10 Motion to Dismiss; denying 26 Joint Motion for Preliminary Approval of Class Action Settlement; denying as moot 38 Motion to Strike. Not later than 12/20/2019, the parties shall file a joint notice recommending how the case should proceed. See Order for details. Signed by Judge Timothy J. Corrigan on 11/15/2019. (JJB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
LASHANNDA JONES, on behalf of
herself and on behalf of all others
similarly situated,
Plaintiff,
v.
Case No. 3:18-cv-804-J-32JRK
THE SALVATION ARMY,
Defendant.
ORDER
In this Fair Credit Reporting Act class action, the Court must determine
whether a prospective employer’s background check disclosure was compliant
with statutory requirements, and if not, whether such violation, without more,
constitutes an injury in fact for Article III standing. Before the Court are the
parties’ Joint Motion for Preliminary Approval of Class Action Settlement, (Doc.
26); the parties’ memorandums on standing, (Docs. 28, 29); Defendant The
Salvation Army’s Motion to Dismiss, (Doc. 10), Plaintiff LaShannda Jones’s
Response, (Doc. 37); and The Salvation Army’s Motion to Strike, (Doc. 38), and
Jones’s Response (Doc. 39). On March 25, 2019, the Court held a hearing, the
record of which is incorporated herein. (Docs. 30, 35).
I. BACKGROUND
A. Class Representative’s Claims
On approximately January 31, 2018, Jones applied for and was hired as
an assistant store manager at The Salvation Army. Complaint, Doc. 9 ¶ 14. As
part of the application process, The Salvation Army gave Jones “several
documents related to the [Fair Credit Reporting Act of 1970 (“FCRA”)], all of
which [were] presented simultaneously . . . .” (Id. ¶ 36). On February 23, 2018,
The Salvation Army fired Jones without notice. (Id. ¶ 15). Confused about why
she was fired, Jones called The Salvation Army’s Georgia office, which informed
her that she was fired because of credit issues identified in her background
report. (Id. ¶ 17). Although Jones does not contest the accuracy of the report,
she wanted to explain the circumstances that caused her credit issues before
being terminated. (Id. ¶ 18).
Jones contends that The Salvation Army routinely violated the FCRA in
its hiring process by providing confusing, noncompliant disclosures. (Id. ¶¶ 38–
39, 47). Further, Jones asserts that the authorization she gave The Salvation
Army to obtain a consumer report was invalid because “[o]ne cannot
meaningfully authorize her employer to take an action if she does not grasp
what the action entails.” (Id. ¶ 89). Jones also claims that The Salvation Army
violated the FCRA when it fired her based on information contained in her
credit report without first providing her with a copy of the report. (Id. ¶ 16).
2
B. Procedural History
Jones filed a class action complaint in Florida’s Fourth Judicial Circuit,
claiming that The Salvation Army’s FCRA violations harmed two classes: a PreAdverse Action Class and a Background Check Class. (Doc. 9 ¶¶ 62–63). The
Salvation Army removed this action, (Doc. 1), and moved to dismiss the
complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of standing
and under Rule 12(b)(6) for failure to state a claim. (Doc. 5). The Salvation Army
argued that Jones lacked standing because her injury was a “bare procedural
violation that, without more, cannot rise to the level of concrete injury needed
for Article III standing.” (Doc. 5 at 19).
Jones then filed an Amended Class Action Complaint, 1 which contends
that The Salvation Army violated the FCRA by failing to provide Jones a copy
of her consumer report before taking an adverse employment action (First Class
Claim for Relief—“pre-adverse action” claim), failing to make a proper
disclosure of Jones’s rights regarding the background check (Second Class
The Amended Complaint is a shotgun pleading. See Paylor v. Hartford
Fire Ins. Co., 748 F.3d 1117, 1126 (11th Cir. 2014) (explaining that a shotgun
pleading is a complaint wherein each count adopts the allegations of all
preceding counts). The Eleventh Circuit has long condemned shotgun
pleadings. See generally Weiland v. Palm Beach Cty. Sheriff’s Office, 792 F.3d
1313, 1320–24 (11th Cir. 2015) (explaining the Eleventh Circuit’s history of
combatting shotgun pleadings). However, because the Second and Third Class
Claims for Relief are to be either remanded or dismissed, this defect no longer
affects the Amended Complaint.
1
3
Claim for Relief—“disclosure” claim), and failing to obtain proper authorization
to conduct the background check (Third Class Claim for Relief – “authorization”
claim). (Doc. 9). Additionally, Jones alleges various injuries she suffered as a
result of The Salvation Army’s alleged FCRA violations. (Doc. 9 ¶¶ 54–61). The
Salvation Army moved to dismiss again under 12(b)(1) and 12(b)(6). (Doc. 10).
In response, Jones moved to remand, arguing that The Salvation Army has the
burden of establishing jurisdiction and thus, the Court should remand if The
Salvation Army believes that Jones lacks Article III standing. (Doc. 11). Jones
further contends:
If Defendant wants to be in this Court and is willing to show a
jurisdictional basis to be here, Plaintiff has no objection. But
Defendant has shown itself unwilling to carry that burden: by
moving to have this case dismissed for lack of subject matter
jurisdiction, Defendant denies the very federal court jurisdiction it
invoked upon removal.
(Doc. 11).
After several motions for extensions of time, the parties moved to stay the
case while they attempted early mediation, (Doc. 17), which the Court granted,
(Doc. 18). The parties settled at mediation, (Doc. 23), and then filed a Joint
Motion for Preliminary Approval of Class Action Settlement, (Doc. 26). The
motion states that the parties have agreed to a settlement and seek the Court’s
preliminary and, ultimately, final approval. (Doc. 26). The settlement consists
of The Salvation Army contributing $500,000 to a fund that would be
4
distributed to two separate classes: The Disclosure and Authorization Class,
which consists of approximately 25,579 members; and the Pre-Adverse Action
Class, which has approximately 1,537 members, all of whom also belong to the
Disclosure and Authorization Class. (Doc. 26 at 7–9).
After reviewing the Motion for Preliminary Approval, the Court,
concerned about its jurisdiction, directed each party to file a memorandum
discussing whether Jones, the class representative, has Article III standing.
(Doc. 27). The parties filed their respective briefs, (Docs. 28, 29), and the Court
held a hearing on the motion, the record of which is incorporated herein, (Doc.
30). Following the hearing, the Court deferred ruling on the Motion for
Preliminary Approval and directed Jones to respond to The Salvation Army’s
motion to dismiss. (Doc. 34). Jones filed her response, arguing that the parties
want to settle, she has standing, and the complaint states claims for relief. (Doc.
37). The Salvation Army then moved to strike portions of Jones’s response that
referenced settlement discussions, (Doc. 38), to which Jones responded in
opposition, (Doc. 39).
II. DISCUSSION
A. The Fair Credit Reporting Act of 1970, 15 U.S.C. § 1681 et seq.
Before procuring a consumer report on an applicant, the FCRA requires
employers to provide the applicant with “a clear and conspicuous disclosure . . .
in writing . . . in a document that consists solely of the disclosure,” that informs
5
the applicant that a consumer report may be obtained. 15 U.S.C.
§ 1681b(b)(2)(A) (2018) (emphasis added). An employer may not obtain the
consumer report unless the applicant provides written authorization, which
may be obtained on the disclosure. Id. Further, the FCRA requires that an
employer provide the employee with a copy of the report and a written
description of the employee’s rights under the FCRA before taking adverse
action based on information in a consumer report. Id. § 1681b(b)(3)(A).
Any person who negligently fails to comply with the FCRA is liable for
actual damages sustained, attorneys’ fees, and costs. Id. § 1681o(a). Any person
who willfully fails to comply with the FCRA is liable for actual damages or
statutory damages of $100 to $1,000 per violation, attorneys’ fees and costs, and
possibly punitive damages. Id. § 1681n(a). Jones has alleged willful violations.
(Doc. 9 ¶¶ 75, 77, 83, 84, 89, 91).
B. Article III Standing
Although the parties have settled the case, the Court must ensure it has
jurisdiction to provide the requested relief. Frank v. Gaos, 139 S. Ct. 1041, 1046
(2019) (“A court is powerless to approve a proposed class settlement if it lacks
jurisdiction over the dispute, and federal courts lack jurisdiction if no named
plaintiff has standing.”); see A&M Gerber Chiropractic LLC v. GEICO Gen. Ins.
Co., 925 F.3d 1205, 1210 (11th Cir. 2019) (“Standing cannot be waived or
conceded by the parties, and it may be raised (even by the court sua sponte) at
6
any stage of the case.”). If Jones lacks standing, then the Court cannot certify
the two classes and approve the preliminary settlement. See Church v.
Accretive Health, Inc., 654 F. App’x 990, 995 (11th Cir. 2016) (“[S]tanding is a
jurisdictional threshold question which must be addressed prior to and
independent of the merits of a party’s claims.” (quotation marks omitted)
(quoting DiMaio v. Democratic Nat’l Comm., 520 F.3d 1299, 1301 (11th Cir.
2008))).
1. The standard for reviewing a
complaint for lack of standing.
“A district court may dismiss a complaint for lack of subject-matter
jurisdiction based on: (1) the complaint alone; (2) the complaint plus undisputed
facts evidenced in the record; or (3) the complaint plus undisputed facts plus
the court’s resolution of disputed facts.” Butler v. Morgan, 562 F. App’x 832, 834
(11th Cir. 2014) (per curiam) (unpublished) (citing Williamson v. Tucker, 645
F.2d 404, 413 (5th Cir. May 1981)). Here, the Court relies on only the Amended
Complaint and undisputed facts in the record, and therefore it need not hold an
evidentiary hearing. 2 Cf. Bischoff v. Osceola Cty., 222 F.3d 874, 881 (11th Cir.
2000) (requiring an evidentiary hearing in cases “where the evidence relating
Besides the Amended Complaint and attachments thereto, the Court
only relies on Jones’s affidavit and her counsel’s statements at the hearing.
2
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to standing is squarely in contradiction as to central matters and requires
credibility findings . . . .”).
Although a court is generally required to accept the factual allegations of
the complaint as true, Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), it “does not
accept as true unwarranted deductions of fact.” Almanza v. United Airlines,
Inc., 851 F.3d 1060, 1071 (11th Cir. 2017). And, a court is not required to accept
as true conclusory allegations and mere legal conclusions. Iqbal, 556 U.S. at
678. The Court’s “duty to accept the facts in the complaint as true does not
require [it] to ignore specific factual details of the pleading in favor of general
or conclusory allegations. Indeed, when the exhibits contradict the general and
conclusory allegations of the pleading, the exhibits govern.” Griffin Indus., Inc.
v. Irvin, 496 F.3d 1189, 1205–06 (11th Cir. 2007).
“[T]he party asserting federal jurisdiction when it is challenged has the
burden of establishing it.” DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342
n.3 (2006). As the removing party, The Salvation Army had the initial burden
of demonstrating federal jurisdiction. See id. However, after The Salvation
Army moved to dismiss for a lack of standing, Jones filed an amended complaint
that added allegations of injury to combat The Salvation Army’s standing
argument, (Doc. 9 ¶¶ 54–61), and she has argued in her supplemental
memorandum on standing, at oral argument, and in response to The Salvation
Army’s motion to dismiss that she has standing, (Docs. 28, 35, 37). Thus, Jones
8
is now the party asserting jurisdiction, giving her the burden of demonstrating
standing. See Cuno, 547 U.S. at 341–42 (finding that the plaintiff, who had
originally sought to remand the case based on concerns for lack of standing, was
the party asserting federal jurisdiction because it had argued it had standing
in its briefs to the Supreme Court).
“[A] plaintiff must demonstrate standing for each claim [s]he seeks to
press. . . .” Town of Chester v. Laroe Estates, Inc., 137 S. Ct. 1645, 1650 (2017)
(quotation marks omitted) (quoting Davis v. Fed. Election Comm’n, 554 U.S.
724, 734 (2008)). And, “[i]t is well-settled that ‘if none of the named plaintiffs
purporting to represent a class establishes the requisite of a case or controversy
with the defendants, none may seek relief on behalf of himself or any other
member of the class.’” Gerber Chiropractic, 925 F.3d at 1211 (quoting O’Shea v.
Littleton, 414 U.S. 488, 494 (1974)). Thus, as class representative, Jones must
demonstrate standing for all of her claims. Laroe Estates, 137 S. Ct. at 1650.
2. Injury in fact under Article III.
To satisfy the “‘irreducible constitutional minimum’ of standing,” the
“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.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547
(2016) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)). “To
establish injury in fact, a plaintiff must show that he or she suffered ‘an
9
invasion of a legally protected interest’ that is ‘concrete and particularized’ and
‘actual or imminent, not conjectural or hypothetical.’” Id. at 1548 (quoting
Lujan, 504 U.S. at 560).
Only the injury in fact element is at issue here, and more specifically,
whether Jones alleges a concrete injury. 3 When determining whether a plaintiff
has alleged a concrete injury, courts must look at the “allegations in light of the
statute, [Eleventh Circuit] precedent, history, and the judgment of Congress.”
Salcedo, 936 F.3d at 1173.
“[A]n act of Congress that creates a statutory right and a private right of
action to sue does not automatically create standing; ‘Article III standing
requires a concrete injury even in the context of a statutory violation.’” Id. at
1167 (quoting Spokeo, 136 S. Ct. at 1549). Accordingly, a bare procedural
violation of a statutory requirement, without more, is insufficient to create an
injury in fact. Spokeo, 136 S. Ct. at 1549. “A violation of one of the FCRA’s
procedural requirements may result in no harm. For example, even if a
“An injury in fact must also be particularized, that is, affecting the
plaintiff “in a personal and individual way. . . . As the would-be class
representative, [Jones] must establish [her] own personal, concrete injury
notwithstanding whatever injuries may have been suffered by the other
members of the class.” Salcedo v. Hanna, 936 F.3d 1162, 1167 n.3 (11th Cir.
2019) (citations and quotations omitted) (quoting Spokeo, 136 S. Ct. at 1547 n.6,
1548). Here, Jones’s allegations are of a personal and individual nature.
3
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consumer reporting agency fails to provide the required notice to a user of the
agency’s consumer information, that information regardless may be entirely
accurate.” Id. at 1550. However, the “risk of real harm” can satisfy the concrete
injury requirement, and the violation of a statutory right can be a concrete
injury if it “has a close relationship to a harm that has traditionally been
regarded as providing a basis for a lawsuit in English or American courts.” Id.
at 1549–50 (citing cases that found the violation of a statutory right to receive
information was a concrete injury (citing Fed. Election Comm’n v. Akins, 524
U.S. 11, 20–25 (1998); Public Citizen v. Dep’t of Justice, 491 U.S. 440, 449
(1989))).
The distinction between a “bare procedural violation” and a substantive
one causing concrete injury is not always clear. In a post-Spokeo case, the
Eleventh Circuit, in an unpublished opinion, found that an individual who did
not receive disclosures required under the Fair Debt Collections Practices Act
(“FDCPA”) had suffered a concrete injury, although the individual failed to
allege any damages. Church, 654 F. App’x at 991, 994. The court stated that
“through the FDCPA, Congress has created a new right—the right to receive
the required disclosures in communications governed by the FDCPA—and a
new injury—not receiving such disclosures.” Id. at 994. Although the injury of
not receiving information to which the plaintiff was entitled did not result “in
tangible economic or physical harm that courts often expect, the Supreme Court
11
has made clear an injury need not be tangible to be concrete.” Id. at 995. The
Eleventh Circuit distinguished the “bare procedural violation” discussed in
Spokeo by noting “Congress provided [the plaintiff] with a substantive right to
receive certain disclosures and [the plaintiff] has alleged that [the defendant]
violated that substantive right.” Id. at 995 n.2.
However, a failure to record a certificate of discharge within the required
ninety days, absent a showing of harm caused by such violation, is insufficient
to create a concrete injury. Nicklaw v. Citimortgage, Inc., 839 F.3d 998, 1002
(11th Cir. 2016). In Nicklaw, the plaintiff sued under New York law after the
defendant failed to record the certificate of discharge within the timeframe
required. Id. at 1000. The Eleventh Circuit found no injury in fact because the
certificate of discharge was recorded prior to filing suit (albeit after the ninetyday deadline), and the plaintiff failed to allege a harm or material risk of harm
resulting from the late recording. Id. at 1003.
In determining standing based on the failure to provide the stand-alone
disclosure required by the FCRA, district courts have reached different
conclusions. Compare, e.g., Stacy v. Dollar Tree Stores, Inc., 274 F. Supp. 3d
1355, 1364 (S.D. Fla. 2017) (finding no concrete injury where plaintiff received
and understood the disclosure and knowingly consented to the background
check despite the disclosure not being a standalone document), and LaFollette
v. RoBal, Inc., No. 1:16-CV-2592-WSD, 2017 WL 1174020, at *4 (N.D. Ga. Mar.
12
30, 2017) (finding a lack of standing and stating “[a] statutory right to
information is substantive. A statutory right to receive that information in a
particular format is procedural.” (quoting Landrum v. Blackbird Enters., LLC,
214 F. Supp. 3d 566, 571 (S.D. Tex. 2016)), with Fosbrink v. Area Wide
Protective, Inc., 325 F.R.D. 474, 479 (M.D. Fla. 2018) (compiling cases and
stating, “Plaintiff has established that he was deprived of the statutory right to
receive a stand-alone disclosure.”).
3. Jones has standing for her pre-adverse action claim.
The FCRA requires that before taking an adverse employment action
based on a consumer report, the employer provide the job applicant with a copy
of the report and a written description of rights under the FCRA.
§ 1681b(b)(3)(A). Jones has alleged standing for her claim that The Salvation
Army violated this provision by failing to provide her with a copy of her
consumer report before firing her. (Doc. 9 ¶ 16). Jones alleges that she did not
receive the consumer report, and that upon inquiry, Jones was told that she was
fired for adverse credit information contained in her report. (Id. ¶¶ 16–17).
Further, Jones alleges that had she been given a copy of her report before The
Salvation Army took adverse action, she would have been able to explain the
innocuous nature of the unfavorable information. (Id. ¶ 18). These are sufficient
allegations that Jones was fired without being given an opportunity to explain
her report—an intangible injury that is nonetheless concrete. See Spokeo, 136
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S. Ct. at 1549; see also Robertson v. Allied Sols., LLC, 902 F.3d 690, 697 (7th
Cir. 2018) (explaining in an FCRA case that by not being given a copy of her
consumer report before an adverse action, a plaintiff is denied the opportunity
to respond to a potential employer’s concerns).
Relying on Spokeo, The Salvation Army argues that Jones lacks standing
because even though it did not provide Jones with the report before firing her,
the information was accurate. (Doc. 10 at 8). This argument fails for two
reasons. First, despite accurate information, an aggrieved party may
nonetheless have an intangible harm resulting from the statutory violation.
Jones alleges that she was unable to explain the reasons for negative
information in her report, and intangible harm resulted irrespective of the
report’s accuracy. Cf. Long v. Se. Pa. Transp. Auth., 903 F.3d 312, 319 (3d Cir.
2018) (“The meaning of § 1681b(b)(3) is plain: before an employer takes adverse
action based in any part on a consumer report, the consumer has a right to
receive a description of his rights under the FCRA, as well as a copy of his
report, regardless of its accuracy.”). Second, “Spokeo was discussing a different
point in the process—the relationship between an agency and a user (i.e.
employer), not the relationship between the user and the consumer (i.e. the job
applicant). The statutory duties that apply to each of these situations differ in
important respects . . . .” Robertson, 902 F.3d at 697.
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In sum, Jones’s inability to provide context concerning her negative credit
information that could have possibly changed The Salvation Army’s mind is a
concrete injury for her pre-adverse action claim. Id. As the Seventh Circuit
explained: “Providing context may be more valuable than contesting
accuracy. . . . [I]information that seems damning at first glance might not be so
bad in context. A person with a spotted record might convince an employer to
revisit its decision if she can explain what happened.” Id. Had Jones been given
a copy of her report before being fired, she would have been able to explain the
causes of her credit issue. (Doc. 9 ¶ 18). The lack of that opportunity—what the
statute intends to protect—is a concrete injury. See Robertson, 902 F.3d at 697.
4. Jones lacks standing for her
disclosure and authorization claims.
Jones’s disclosure and authorization claims are not as easily resolved.
Jones alleges that when she applied for a job with The Salvation Army, she was
given a job application packet containing several documents. (Doc. 9 ¶ 35).
Jones complains that because the packet contained several documents related
to the FCRA, the documents “cannot possibly be construed as compliant with
the FCRA’s stand-alone disclosure mandate.” (Id. ¶ 36). In this packet, Jones
received The Salvation Army’s “Disclosure Regarding Employment Background
Report”
(“the
Disclosure
Form”),
(Doc.
9-2);
The
Salvation
Army’s
“Authorization to Obtain Employment Background Report” (“the Authorization
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Form”), (Doc. 9-3); the consumer reporting agency, Sterling’s, “Consent to
Request Consumer Report & Investigative Consumer Report Information” (“the
Sterling Form”), (Doc. 9-1); and other normal job application materials, (Doc. 9
¶ 46). On its own piece of paper, the Disclosure Form stated:
In the Amended Complaint, Jones alleges that the Disclosure Form
“misled and confused” her and “distracted her attention away from what was
supposed to be the focus of the document: to alert Plaintiff that a consumer
report was to be procured on her for employment purposes.” (Id. ¶ 42). As for
the Authorization Form, Jones asserts that “[u]nder no set of facts or
16
circumstances can Defendant cogently argue that this document in any way
satisfied 15 U.S.C. § 1681b(b)(2)(i).” (Id. ¶ 45). Further, Jones alleges that she
“was confused by Defendant’s multiple disclosure forms, including as to the
content in each . . . .” 4 (Id. ¶ 47).
Additionally, Jones asserts four other means by which she suffered a
concrete injury. (Id. ¶¶ 54–61). First, she allegedly suffered a “concrete
informational injury because Defendant failed to provide Plaintiff with
information to which she was entitled to by statute, namely a stand-alone FCRA
disclosure form.” (Id. ¶ 54). Second, Jones contends that she has suffered an
invasion of privacy because the alleged ineffective disclosure prevented her
from giving knowing authorization. (Id. ¶ 56). Third, Jones alleges that she
suffered a “risk of harm” that she “would be harmed in precisely the way
Congress was attempting to prevent . . . .” (Id. ¶ 57). Lastly, Jones argues that
she has suffered “a clear de facto injury, i.e., the unlawful disclosure of legally
protected information.” (Id. ¶ 60).
Jones argues that the Sterling Form is The Salvation Army’s attempt
at an FCRA disclosure, and that “courts around the country going back as far
as 2015 have uniformly held is violative of the FCRA’s stand-alone disclosure
requirement. . . .” (Doc. 9 ¶ 38); (Doc. 37 at 13). Although the Sterling Form
would be an improper disclosure, it is not The Salvation Army’s FCRA
disclosure. The Salvation Army provided its own Disclosure Form to comply
with the FCRA. As explained in greater detail below, that The Salvation Army
also provided a form required by the consumer reporting agency does not per se
render the Disclosure Form noncompliant.
4
17
As a threshold matter, Jones conflates the FCRA’s requirement—“a
document that consists solely of the disclosure”—with the notion that the
disclosure cannot be provided in conjunction with other documents. At the
hearing, Jones’s counsel stated that to be compliant, the disclosure would have
to be “completely apart” from all other documents. (Doc. 35 at 18–19). When
pressed by the Court to explain this position, Jones’s counsel went so far as to
state that a disclosure would need to be presented at the opposite end of a desk
from any other document to satisfy the FCRA’s requirement that an applicant
be given “a document that consists solely of the disclosure.” § 1681b(b)(2)(A);
(Doc. 35 at 18–19). This misconception is key: although “the violation of a
procedural right granted by statute” may pose the “risk of real harm” to a
concrete interest, Spokeo, 136 S. Ct. at 1549, Jones has misconstrued the
procedural right granted by the FCRA.
The FCRA requires that the disclosure be made in “a document that
consists solely of the disclosure,” or a document containing the disclosure and
the authorization. § 1681b(b)(2). The word “solely” modifies “the disclosure,”
meaning that the document that contains the disclosure can have only the
disclosure on it. The FCRA does not further require that the document
containing only the disclosure be provided “apart” from other documents. 5 Such
The Court is not alone in reaching this determination. See Luna v.
Hansen & Adkins Auto Transp., Inc., 313 F. Supp. 3d 1151, 1159 (C.D. Cal.
5
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a requirement, which is not mandated by the FCRA, would make it impossible
for employers to provide the disclosure to applicants along with other
application documents. The Salvation Army provided Jones with a packet
containing separately titled documents. (Docs. 9-1, 9-2, 9-3, 9-4). That the
packet contained multiple documents does not mean the separately titled
Disclosure Form—that was printed on its own piece of paper—was not “a
document that consists solely of the disclosure . . . .” § 1681b(b)(2)(A)(i). Thus,
Jones has not alleged a violation of a procedural right for which any risk of harm
provides standing.
2018) (“[T]he Court refuses to impose a requirement that is absent from the
clear statutory language, that is, a requirement that employers provide
an FCRA disclosure not only in a separate document, but also separate in time
from any other documents.”); Walker v. Fred Meyer, Inc., No. 3:17-CV-01791YY, 2018 WL 2455915, at *5 (D. Or. May 7, 2018) (“[P]resenting the statutorily
sufficient Disclosure with other employment documents, i.e., the Offer
Acceptance and the Authorization, did not destroy its stand-alone
character.”), report and recommendation adopted in part, No. 3:17-CV-1791YY, 2018 WL 3090199 (D. Or. June 21, 2018) (adopting court’s holding
regarding the disclosure); Cooper v. Acad. Mortg. Corp. (UT), No. 1:16-cv-1546LMM-CMS, 2017 WL 2060004, at *5 (N.D. Ga. Mar. 24, 2017) (“That the
separate packets were provided to Plaintiff at the same time does not make
them the same document. To require otherwise would import a temporal
limitation on Defendant which has no statutory basis.”); Newton v. Bank of Am.,
No. 2:14-cv-03714-CBM-MRWx, 2015 WL 10435907, at *8 (C.D. Cal. May 12,
2015) (“The FCRA does not prohibit an employer from providing an FCRA
disclosure as part of the employer’s job application process. Nor does the FCRA
prohibit an employer from providing an FCRA disclosure at the same time the
employer provides other employment documents.”).
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Although the Amended Complaint also appears to attack the contents of
the Disclosure Form (as opposed to the manner in which it was provided), Jones
merely relies on conclusory and contradictory allegations that she was confused.
(Doc. 9 ¶¶ 41–42); see Iqbal, 556 U.S. at 678 (“[A] complaint [does not] suffice if
it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’”)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007)). Jones’s
allegation that the Disclosure Form “distracted her attention away from . . .
alert[ing her] that a consumer report was to be procured on her for employment
purposes,” (Doc. 9 ¶ 42), contradicts her previous allegation explaining the
exact types of documents and reports that the Disclosure Form states would be
procured, (Doc. 9 ¶ 41). Further, the conclusory allegation that Jones was
confused by the Disclosure Form is contradicted by the form itself, which clearly
and conspicuously explains what information The Salvation Army may obtain.
(Doc. 9-2).
Moreover, while Jones generally alleges that the Disclosure and
Authorization Forms confused her, she specifically alleges and avers that it was
the combination of documents she found confusing. Decl. of LaShannda Jones,
Doc. 26-4 (“I was provided with the ‘Sterling disclosure,’ . . . as well as other
FCRA-related documents . . . and was confused by this combination of forms.”);
Doc. 9 ¶ 47 (“Plaintiff was confused by Defendant’s multiple disclosure forms
. . . .”). And Jones’s counsel stated at the hearing: “The disclosure—if that were
20
presented by itself, we would not have a problem—we would not be here.” 6 (Doc.
35 at 19). The Court need not accept as true contradictory, conclusory
allegations which attempt to allege a statutory violation where none exists.
Griffin Indus., 496 F.3d at 1205–06 (“Our duty to accept the facts in the
complaint as true does not require us to ignore specific factual details of the
pleading in favor of general or conclusory allegations. Indeed, when the exhibits
contradict the general and conclusory allegations of the pleading, the exhibits
govern.”).
In her response to the motion to dismiss, Jones raises for the first time a
new issue with the Disclosure and Authorization Forms—that they disclose and
authorize both a consumer report and an investigative consumer report. (Doc.
37 at 15 (citing Mitchell v. Winco Foods, LLC, 379 F. Supp. 3d 1093, 1098–99
(D. Idaho 2019), appeal filed, 19-35802 (9th Cir. Sept. 18, 2019))). Mitchell held
that an employer violates the FCRA’s separate disclosure requirement if “[i]t
simultaneously provides applicants with notice that that [sic] [the employer]
will obtain both a consumer report (as it is defined by the FCRA at section
Despite stating this unequivocally at the hearing, in a footnote in the
response to the motion to dismiss, Jones’s counsel states that “[t]hat was an
incorrect statement by the undersigned [Jones’s counsel] for the reasons set
forth herein, and for the reasons set forth in the Amended Complaint . . . .” (Doc.
37 at 15 n.5). However, despite this effort at backtracking, the reasons in the
Amended Complaint and in the response to the motion to dismiss, as stated
here, are unpersuasive.
6
21
1681a(d)(1)) and an investigative consumer report (as it is defined by the FCRA
at section 1681d(a)).” Mitchell, 379 F. Supp. 3d at 1098–99. The Mitchell court
acknowledged two other district court cases from within the Ninth Circuit
“which found that [such] a combined disclosure does not violate the statutory
requirement.” Id. at 1099 1 (citing Walker, 2018 WL 2455915, at *5 (D. Or. May
7, 2018) and Coleman v. Kohl’s Dep’t Stores, Inc., No. 15-CV-02588-JCS, 2015
WL 5782352 (N.D. Cal. Oct. 5, 2015)). In discussing these cases, the Mitchell
court stated: “In terms of the policy reasons underlying the statutory
requirement, the Court finds those cases [Walker and Coleman] persuasive.
However, the Court concludes that they are inconsistent with the unambiguous
decisions of the Ninth Circuit. . . .” Id. The court further stated:
As suggested in this decision, I agree with my colleagues in the
Walker and Coleman cases that combining the consumer report
and investigative consumer report is wholly consistent with the
purpose and intent of the FCRA. Unfortunately, it is not consistent
with the statutory language. It is my understanding that the
Walker decision is currently on appeal before the Ninth Circuit.
Thus, the Circuit will soon have the opportunity to address the
precise issue presented here. If the Walker decision is affirmed –
as I hope it is – WINCO can, and should, file a motion to reconsider
my decision here.
Id. at 1099 n.1.
That Mitchell found that a similar disclosure form violates the FCRA does
not save Jones’s claim. First, Mitchell is not binding on this Court. Second, even
if the inclusion of “and/or an investigative consumer report” results in the
22
Disclosure Form violating the FCRA, Jones has not alleged any harm caused by
that violation. Spokeo, 136 S. C. at 1549 (“Article III standing requires a
concrete injury even in the context of a statutory violation. For that reason, [the
plaintiff] could not, for example, allege a bare procedural violation, divorced
from any concrete harm, and satisfy the injury-in-fact requirement of Article
III.”). Nowhere in the Amended Complaint does Jones mention “investigative
consumer report” in relation to the Disclosure Form, much less that its inclusion
in the Disclosure Form somehow injured her. (Doc. 9).
Jones also argues that she suffered a concrete injury for her authorization
claim because she would not have signed the Authorization Form had she
known it and the Disclosure Form were not compliant with the FCRA. (Doc. 9
¶ 48). This circular argument lacks merit. See Spokeo, 136 S. Ct. at 1547. To
have a concrete injury, Jones would need to have alleged that some FCRA
violation caused her to not understand what was being disclosed or what she
was authorizing. See Stone v. U.S. Sec. Assocs., Inc., No. 1:16-CV-0371-MLBJSA, 2018 WL 3745051, at *11–14 (N.D. Ga. May 31, 2018) (compiling cases
and explaining that to show a concrete injury a plaintiff must allege that she
misunderstood the consent being given or what she was authorizing).
Jones’s other arguments that she suffered a concrete injury also fail. “[A]
constitutionally cognizable informational injury requires that a person lack
access to information to which [s]he is legally entitled and that the denial of
23
that information creates a ‘real’ harm with an adverse effect.” Stacy, 274 F.
Supp. 3d at 1363 (quotation marks omitted) (quoting Dreher v. Experian Info.
Sols., Inc., 856 F.3d 337, 345 (4th Cir. 2017)). But here, Jones received the
information to which she was entitled: a clear, conspicuous, and separate
disclosure explaining what information The Salvation Army would obtain. (Doc.
9-2). Because she received the statutorily required information, she did not
suffer an informational injury.
Contrary to Jones’s assertion, Church does not compel the opposite result.
654 F. App’x at 995. In Church, the plaintiff “sufficiently alleged that she has
sustained a concrete—i.e., ‘real’—injury because she did not receive the
allegedly required disclosures.” Id. Distinguishing Spokeo, the Eleventh Circuit
explained that the plaintiffs had not suffered a bare procedural violation
because the right to receive information was substantive. Church, 654 F. App’x
at 995 n.2. Here, Jones received the required information via the Disclosure
Form; she incorrectly alleges it was not in the correct format, which would have
been a procedural violation. Cf. id.
Jones’s contention that she suffered injuries in the form of an invasion of
privacy and “a clear de facto injury, i.e., the unlawful disclosure of legally
protected information,” (Id. ¶ 60), also fail because she gave knowing consent,
(Doc. 9-3). That she allegedly would not have consented had she known the
Disclosure Form suffered from a bare procedural violation is not a concrete
24
injury. Jones received the information required under the FCRA and then
authorized The Salvation Army to procure a consumer report for employment
purposes. (Doc. 9-3). In the absence of allegations that Jones did not understand
what she was authorizing because of an FCRA violation, the Court accepts
Jones’s signature on the Authorization Form as valid consent. See Walker v.
REALHome Servs. & Sols., Inc., No. 1:18-cv-03044-WMR-WEJ, 2019 WL
1225211, at *6–7 (N.D. Ga. Jan. 28, 2019) (explaining that a concrete injury
would require the plaintiff to allege that he was unaware of what he was signing
or that did not realize he was authorizing a background check because of the
alleged procedural violation).
Lastly, Jones has failed to allege any specific heightened risk of harm.
See Spokeo, 136 S. Ct. at 1549; (Doc. 9 ¶¶ 57–59). Jones alleges that The
Salvation Army’s “violations created a risk of harm that Plaintiff and the
putative Background Check class members would be harmed in precisely the
way Congress was attempting to prevent when it mandated what disclosures
employers must make to applicants.” (Doc. 9 ¶ 57). However, she fails to allege
what harm she faced and how the alleged violations increased the risk of that
harm. 7 See Spokeo, 136 S. Ct. at 1549. It is unclear if Jones is claiming harm
In asserting this point, Jones relies on Muransky v. Godiva Chocolatier,
Inc., 922 F.3d 1175, 1188 (11th Cir. 2019). (Doc. 37 at 10–11). In that case, the
Eleventh Circuit concluded that an individual who alleged he suffered a
heightened risk of identity theft because a retailer printed more than the last
7
25
because she was confused about how to correct erroneous information in a
consumer report. (Doc. 9 ¶ 57). Even if the Court assumes as much, Jones lacks
a concrete injury because her information was correct, and any confusion about
how to correct the information would be an injury corresponding to her preadverse action claim not her disclosure and authorization claims. See Laroe
Estates, 137 S. Ct. at 1650 (stating that standing must be demonstrated for
each claim asserted). 8
five digits of his credit card number on a receipt—a violation of the Fair and
Accurate Credit Transaction Act (“FACTA”)—alleged a concrete injury.
Muransky, 922 F.3d at 1188. Recently, the Eleventh Circuit vacated the opinion
and decided to rehear the case en banc. Muransky v. Godiva Chocolatier, Inc.,
No. 16-16486, 2019 WL 4891989, at *1 (11th Cir. Oct. 4, 2019). However, even
if the opinion had not been vacated, the Court’s decision here would not change
because Jones has not alleged that “‘the violation of a procedural right granted
by statute’ poses a ‘risk of real harm’ to a concrete interest.” Muransky, 922
F.3d at 1186 (quoting Spokeo, 136 S. Ct. at 1549).
Jones also filed two notices of supplemental authority to support her
argument that she has standing. (Docs. 40, 42). However, neither of the cases
support the argument that Jones suffered a concrete injury. The first case,
Dukes v. Air Canada, No. 8:18-cv-2176-T17JSS (M.D. Fla. Sept. 26, 2019),
which was a report and recommendation and the district judge’s adoption of it,
was ruling on a motion to preliminarily approve a class action settlement and
did not address whether the plaintiff had alleged a concrete injury. The second
case, Harake v. Trace Staffing Sols., LLC, No. 8:19-cv-243-T-36CPT (M.D. Fla.
Nov. 6, 2019), did address whether the plaintiff had suffered a concrete injury
in a similar FCRA case. However, the employer in Harake failed to provide a
stand-alone disclosure because its disclosure “contained extraneous information
that confused Plaintiff about his rights and was written in tiny writing.” Id. at
2. As explained, The Salvation Army’s Disclosure Form was compliant. Thus,
Harake is inapposite.
8
26
In sum, as a matter of law, Jones did not suffer a concrete injury related
to her disclosure and authorization claims. She received a clear and conspicuous
disclosure in a form consisting solely of the disclosure, see § 1681b(b)(2)(A), and
her authorization was knowing and voluntary. As class representative, she fails
to bring an actual case or controversy under Article III for her disclosure and
authorization claims (Second and Third Class Claims for Relief), and therefore
those claims shall be remanded or dismissed.
C. Rule 12(b)(6) Motion to Dismiss
The Salvation Army also filed a motion to dismiss Jones’s claims as failing
to state claims under Rule 12(b)(6). (Doc. 10). Because of the Court’s finding
that Jones lacks standing to bring her disclosure and authorization claims, the
Court need not examine The Salvation Army’s motion under Rule 12(b)(6).
However, because the Court has determined that Jones has not alleged a FCRA
violation as to the disclosure and authorization claims, it also effectively finds
that those claims fail to state a cause of action. 9
Standing pertaining to alleged violations of statutory rights creates an
interesting overlap of standing and the merits of a claim. For example, an
individual has standing if she alleges that a violation of a procedural right poses
an increased risk of real harm. Spokeo, 136 S. Ct. at 1549–50. This necessarily
requires a court to determine if the complaint alleges a violation of a procedural
right. Here, Jones has failed to allege the violation of a statutory right.
9
27
1. Willfulness
The Salvation Army asserts that Jones’s pre-adverse action claim should
be dismissed for failing to allege a willful violation. Under the FCRA, an entity
that “willfully fails to comply with any requirement [of the FCRA] with respect
to any consumer is liable to that consumer” for “any actual damages sustained
by the consumer as a result of the failure or damages of not less than $100 and
not more than $1,000,” punitive damages, and reasonable attorneys’ fees and
costs. § 1681n(a). Whether a violation is “willful” is important because a
negligent violation only allows for the recovery of actual damages and
reasonable attorneys’ fees and costs. § 1681o(a). And in scenarios like Jones’s,
quantifying actual damages caused by the violation can be difficult.
To allege that The Salvation Army willfully failed to comply with
§ 1681b(b)(3)(A), Jones must allege that The Salvation Army either knowingly
or recklessly violated that section. See Pedro v. Equifax, Inc., 868 F.3d 1275,
1280 (11th Cir. 2017). A company acts in reckless disregard of the FCRA if its
“action is not only a violation under a reasonable reading of the statute’s terms,
but shows that the company ran a risk of violating the law substantially greater
than the risk associated with a reading that was merely careless.” Safeco Ins.
Co. of Am. v. Burr, 551 U.S. 47, 69 (2007). Although willfulness is commonly a
question for the jury, “[d]istrict courts may, and often do, determine on the
pleadings that a plaintiff failed to plead willfulness when the interpretation of
28
the relevant statute by the consumer reporting agency was not objectively
unreasonable.” Pedro, 868 F.3d at 1282.
Jones alleges that The Salvation Army’s “foregoing violations were
willful. Defendant acted in deliberate or reckless disregard of its obligations and
the rights of Plaintiff and other Pre-Adverse Action Class members under 15
U.S.C. § 1681b(b)(3)(A).” (Doc. 9 ¶ 75). Jones further avers that The Salvation
Army knew or should have known about its legal obligations, the statute is
clear, and it had legal counsel and written materials available to it. (Id. ¶¶ 76–
77).
Section 1681b(b)(3)(A) states:
Except as provided in subparagraph (B), in using a consumer
report for employment purposes, before taking any adverse action
based in whole or in part on the report, the person intending to
take such adverse action shall provide to the consumer to whom
the report relates—
(i) a copy of the report; and
(ii) a description in writing of the rights of the consumer under this
subchapter, as prescribed by the Bureau under section 1681g(c)(3)
of this title.
This mandate is clear: before taking adverse action, an employer must provide
a copy of the report and a statement of rights to the applicant. The Salvation
Army does not offer an alternative reading of the statute. Instead, it argues that
Sterling was responsible for providing the pre-adverse action notice, and for
Jones, Sterling mailed the notice but to the incorrect apartment. (Doc. 10 at 20–
29
21). However, these facts appear nowhere in the Amended Complaint. 10 Thus,
Jones has sufficiently alleged that The Salvation Army willfully violated
§ 1681b(b)(3)(A).
2. Class Claims
The Salvation Army also moves to dismiss the class claims for several
reasons. It argues that the pre-adverse action claim for the class contains only
conclusory allegations, and that individualized issues would predominate, thus
dooming class certification. Jones does not address this argument, but instead
states that the class members have already been identified and that class
certification is more appropriate at a later stage. (Doc. 37 at 21). “[P]recedent
. . . counsels that the parties’ pleadings alone are often not sufficient to establish
whether class certification is proper, and the [Court] will need to go beyond the
pleadings and permit some discovery and/or an evidentiary hearing to
determine whether a class may be certified.” Mills v. Foremost Ins. Co., 511
F.3d 1300, 1309 (11th Cir. 2008) (citing Gen. Tel. Co. of Sw. v. Falcon, 457 U.S.
147, 160 (1982)). Thus, the Court will deny The Salvation Army’s Motion to
Dismiss on this basis without prejudice.
The Salvation Army cites paragraphs 23 and 24 in the Amended
Complaint for its contention that Sterling provided the pre-adverse action
letters. (Doc. 10 at 20). But those paragraphs do not support that Sterling was
responsible for mailing pre-adverse action letters on The Salvation Army’s
behalf or that Sterling mailed a letter to Jones but listed the wrong apartment.
10
30
D. Motion to Strike
The Salvation Army has moved to strike portions of Jones’s response in
opposition to the motion to dismiss because it includes settlement discussions
in violation of Federal Rule of Evidence 408 and the Middle District of Florida’s
discovery rules. In her response to the motion to dismiss, Jones quoted a
significant portion of an email from defense counsel concerning the Joint Motion
for Preliminary Approval, and she attached the email to the motion. (Doc. 37 at
2, Ex. A). Jones included the email, which has the subject line “Jones v. TSA:
Draft Settlement Documents,” to support her argument that “[f]rom a practical
standpoint Defendant’s Motion to Dismiss (Doc. 10) should be denied because
Defendant agreed to settle this case.” (Doc. 37 at 2).
The Court need not determine whether the inclusion of the email was
proper because it did not consider it in resolving the motion to dismiss. Further,
contrary to Jones’s assertion, whether The Salvation Army agreed to settle has
no bearing on the Court’s jurisdiction to approve the settlement. Gaos, 139 S.
Ct. at 1046; Gerber Chiropractic, 925 F.3d at 1210. Thus, The Salvation Army’s
motion is moot.
E. Motion to Approve the Settlement
“A settlement should not be approved unless it is fair, adequate, and
reasonable, and the determination of fairness of the settlement is left to the
sound discretion of the district court.” In re HealthSouth Corp. Sec. Litig., 572
31
F.3d 854, 859 (11th Cir. 2009). The parties’ Joint Motion for Preliminary
Approval of Class Action Settlement, (Doc. 26), contemplates two classes, one
with 28,579 members (Disclosure and Authorization Class), and another with
1,537 members (Pre-Adverse Action Class, who are also members of the other
class). As part of the proposed settlement, The Salvation Army agreed to set
aside $500,000 to be distributed pro rata among the members of both classes.
However, given that Jones lacks standing to bring the Disclosure and
Authorization Class claims, only the Pre-Adverse Action Class remains.
Because the Court cannot approve a settlement pertaining to the
disclosure and authorization claims, Gaos, 139 S. Ct. at 1046 (holding that
courts are powerless to approve a class action settlement where the named
plaintiff lacks standing), and the parties’ settlement is a single, commingled
fund that did not contemplate one class representing roughly 5% of the original
claims, the Joint Motion for Preliminary Approval of Class Action Settlement,
(Doc. 26), must be denied. However, at the parties’ request, the Court would be
willing to consider a motion for preliminary approval for settlement of the PreAdverse Action Class’s claim.
Accordingly, it is hereby
ORDERED:
1.
The parties’ Joint Motion for Preliminary Approval of Class Action
Settlement, (Doc. 26), is DENIED.
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2.
The Salvation Army’s Motion to Dismiss, (Doc. 10), is GRANTED
in part and DENIED in part. The motion is granted in that Plaintiff
Lashannda Jones lacks Article III standing for her Second and Third Class
Claims for Relief. The motion is otherwise denied.
3.
The Salvation Army’s Motion to Strike, (Doc. 38), is DENIED as
moot.
4.
Not later than December 20, 2019, the parties shall file a joint
notice recommending how the case should proceed.
DONE AND ORDERED in Jacksonville, Florida this 15th day of
November, 2019.
TIMOTHY J. CORRIGAN
United States District Judge
jb
Copies to:
Counsel of record
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