Mitchell v. Winco Foods LLC
MEMORANDUM DECISION & ORDER Defendant's Motion to Dismiss Plaintiff's First Amended Complaint or in the Alternative to Stay (Dkt. 12 ) is DEEMED MOOT. Defendant's Motion to Dismiss [Article III Standing] is GRANTED. Signed by Judge B. Lynn Winmill. (jp)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
Case No. 1:16-cv-00076-BLW
WINCO FOODS, LLC,
MEMORANDUM DECISION AND
The Court has before it two motions to dismiss (Dkts. 12 and 20). One motion
relates to Article III standing, and the other is a Rule 12 Iqbal/Twombly motion. The
Court heard oral argument on the motions on October 18, 2016, and now issues the
Mitchell applied for a job at Winco in April 2015 using Winco’s online
application. The online application provided her with an FCRA disclosure informing her
that WinCo would conduct a background check in connection with her application for
Mitchell alleges that she was presented another from entitled “Authorization for
Background Check” at the same time she reviewed the disclosure. She was subsequently
hired by Winco, but she alleges, on behalf of herself and a class, that the disclosure
MEMORANDUM DECISION AND ORDER - 1
violated the FCRA because Winco failed to provide a “stand-alone” disclosure regarding
the background check.
Article III Standing
The Supreme Court recently addressed standing in an FCRA case similar to this
one. See Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016). The Supreme Court reiterated the
long-held standard that a plaintiff invoking federal jurisdiction must establish: (1) an
injury in fact; (2) fairly traceable to the challenged conduct of the defendant; and (3)
likely to be redressed by a favorable judicial decision. Id. at 1547. Winco argues that
Mitchell has not established the first element – an injury in fact.
The injury in fact element requires a plaintiff to show that she suffered “an
invasion of a legally protected interest” that is “concrete and particularized” and “actual
or imminent, not conjectural or hypothetical.” Id. at 1548. For an injury to be
particularized, it “must affect the plaintiff in a personal and individual way.” Id. To be
concrete, an injury must be “de facto” – that is, it must be real; it must actually exist. Id.
But intangible injuries can be concrete. Id. at 1549. However, a bare procedural violation
of something like the FCRA does not satisfy the “concrete” element for Article III
standing because a violation of the FCRA’s procedural requirements may result in no
harm. Id. at 1550. The real question here is whether Mitchell has alleged a “concrete”
Mitchell suggests she has met her burden by alleging that Winco provided her
with an FCRA disclosure and authorization at approximately the same time, and that the
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disclosure contains extraneous information in violation the Act’s requirement that the
disclosure be essentially a stand-alone disclosure pursuant to 15 U.S.C. § 1681b. Mitchell
suggests that failing to provide her with the stand-alone disclosure was a concrete harm
because it caused her “informational harm” and “invaded her privacy.” But there is no
allegation that Mitchell was harmed in any other way, such as Winco obtaining or
distributing false information about her. And she received the very job she applied for at
Two district courts have addressed standing in an FCRA case following the
decision in Spokeo with mixed results. In the first, the Southern District of Ohio recently
addressed a case with almost identical facts to this one. Smith v. Ohio State University,
191 F.Supp.3d 750 (S.D.Ohio 2016). In that case, the plaintiffs applied to work at Ohio
State University and were hired. They alleged that OSU violated the FCRA when it
provided a disclosure and authorization to them which improperly included extraneous
information during the hiring process. In a somewhat conclusory finding, the district
court relied heavily upon plaintiffs’ admission that they did not suffer a concrete
consequential damage as a result of OSU’s alleged breach of the FCRA. Id. at *4. Thus,
the court concluded there was no concrete and particularized injury in fact, and therefore
no Article III standing. Id.
In the second, Thomas v. FTS USA, LLC, 193 F.Supp.3d 623 (E.D.Va. 2016), the
court addressed the issue with a more extensive factual record, and provided a much
more detailed analysis of Article III standing in an FCRA case. In Thomas, an applicant
for employment sued the prospective employer for violating the FCRA by (1) not
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providing a disclosure and written consent before obtaining the applicant’s consumer
report for employment purposes under 15 U.S.C. § 1681b(b)(2), and (2) by taking
adverse employment action based on his consumer report before he received a copy of
the consumer report and summary of rights under the FCRA at 15 U.S.C. § 1681b(b)(3).
The court found that the plaintiff had standing.
Although counsel and the Court focused a great deal of attention on these two
cases during oral argument, neither case is controlling, and neither case is similar enough
to the facts of this case to be persuasive. Ohio State is conclusory and lacks any real
substantive analysis of the standing issue. Thomas contains an in depth analysis of the
standing issue (much of which this Court agrees with), but the facts of that case are
different enough from this case to warrant a different result. For example, only section
1681b(b)(2) is at issue in this case – section 1681b(b)(3) adverse action allegations are
not at issue here as they were in Thomas.
Turning to the concrete injury analysis here, Spokeo requires district courts to look
to the common law and to the judgment of Congress, as reflected in the FCRA, to
determine whether alleged violations of the statute constitute concrete injuries. Thus, the
Court must first review the statutory text of the FCRA to determine the substantive
protections that Congress intended to create when it enacted section 1681b(b)(2). That
section of the FCRA protects consumers from having their private information disclosed
through a consumer report, unless two conditions are satisfied: (1) the consumer must be
provided with a clear and conspicuous disclosure that the report will be obtained; and (2)
the consumer must have provided their written consent. The statue requires that the
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disclosure be made in “a document that consists solely of the disclosure” so that it is clear
The historical framework of the FCRA shows that Congress was concerned about
fair and accurate credit reporting. The Congressional findings and statement of purpose
for the FCRA states that the banking system is dependent upon such reporting. 15 U.S.C.
§ 1681a(1). It further explains that consumer reporting agencies play a vital role in that
process, but notes that “[t]here is a need to insure that consumer reporting agencies
exercise their grave responsibilities with fairness, impartiality, and a respect for the
consumer’s right to privacy.” 15 U.S.C. § 1681(a)(4).
With this framework in mind, the Court recognizes that Spokeo makes clear that a
“violation of a procedural right granted by statute can be sufficient in some circumstances
to constitute injury in fact, [and] a plaintiff . . . need not allege any additional harm
beyond the one Congress had identified.” Spokeo, 136 S.ct at 1549 (Italics in original).
The Supreme Court reached this conclusion by referencing the holdings in Federal
Election Comm'n v. Akins, 524 U.S. 11 (1998) and Public Citizen v. Department of
Justice, 491 U.S. 440 (1989) that there is standing where plaintiffs seek to obtain, and
were denied, information that was subject to public disclosure under the Federal Election
Campaign Act and the Federal Advisory Committee Act, respectively.
But just because a violation of a procedural right can be sufficient to create a
concrete injury in some circumstances, does not mean that it will be sufficient in all
circumstances. Here, there is no allegation that Winco received or disseminated any
negative or wrong information about Mitchell. And Mitchell received the job she applied
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for at Winco. As noted by the court in Thomas, the injury required by Article III may
exist solely by virtue of “statutes creating legal rights, the invasion of which creates
standing,” but this proposition survives Spokeo “subject to qualification, depending on
the facts of each case” and the considerations addressed in Spokeo. Thomas, 193
F.Supp.3d 623, 631 (E.D.Va 2016).
The problem for Mitchell is that consideration of the specific facts of this case,
coupled with Justice Alito’s conclusions in the last two paragraphs of Spokeo, leave her
without a concrete injury. In Spokeo, Justice Alito explained that on the one hand,
Congress plainly sought to curb the dissemination of false information by adopting
procedures designed to decrease that risk when it drafted the FCRA. Spokeo, 136 S.Ct. at
1550. On the other hand, a plaintiff cannot satisfy the demands of Article III by alleging a
bare procedural violation because “a violation of one of the FCRA’s procedural
requirements may result in no harm.” Id. Justice Alito provided as an example of a bare
procedural violation that does not create Article III standing, a situation where a
consumer reporting agency fails to provide the required notice to a user of the agency’s
consumer information, but the information is entirely accurate. Id. He further noted that
not all inaccuracies cause harm or present any material risk of harm. An incorrect zip
code in a disclosure would be inaccurate, but not present any real risk of harm.
Based on the allegations of the Amended Complaint, this case fits squarely within
the “entirely accurate” or “no material risk of harm” categories identified by Justice Alito
as not constituting the type of harm which provides Article III standing. Accordingly,
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Mitchell has not alleged a concrete and particularized injury, and therefore lacks
IT IS ORDERED:
1. Defendant’s Motion to Dismiss Plaintiff’s First Amended Complaint or in the
Alternative to Stay (Dkt. 12) is DEEMED MOOT.
2. Defendant’s Motion to Dismiss [Article III Standing] is GRANTED.
3. The Court will enter a separate judgment as required by Fed. R. Civ. P. 58.
DATED: March 7, 2017
B. Lynn Winmill
United States District Court
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