Goldberg v. Uber Technologies, Inc. et al

Filing 42

Judge Richard G. Stearns: ORDER entered granting 28 Motion for Judgment on the Pleadings. "For the foregoing reasons, Uber and Rasier's motion for judgment on the pleadings is ALLOWED. The Clerk is directed to enter judgment for the defendants and close this case." (RGS, int2)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 14-14264-RGS
MARK GOLDBERG,
on behalf of himself and others similarly situated
v.
UBER TECHNOLOGIES, INC.; RASIER, LLC; & HIREASE, LLC
MEMORANDUM AND ORDER
ON UBER TECHNOLOGIES, INC.AND RASIER LLC’S MOTION
FOR JUDGMENT ON THE PLEADINGS
April 6, 2015
STEARNS, D.J.
In July of 2014, Mark Goldberg applied, through defendant Rasier,
LLC, to be a driver for defendant Uber Technology, Inc. 1 The first step of
the online application process required Goldberg to “[c]omplete the FREE
online background check.” Am. Compl. ¶ 18. Goldberg encountered a text
box entitled “Background Check Terms” with the first three lines visible.
The lines read:
Rasier, LLC, the entity that contracts with drivers who provide
peer-to-peer transportation requested through the Uber app, is
committed to safety. As part of that commitment, Raiser uses a
third-party vendor to conduct criminal background check,

Uber operates a mobile-app crowd-sourced private transportation
network.
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motor vehicle record check, and other checks. Please review the
below disclosure/authorization and release.
Opp’n at 6. Goldberg electronically accepted the Background Check Terms
and completed the application.
On July 29, 2014, Rasier emailed Goldberg two background reports
compiled by defendant Hirease, LLC. On August 4, 2014, Rasier emailed a
third report to Goldberg. The third report included a Fair Credit Reporting
Act (FCRA) “Summary of Rights.” The cover email stated: “[t]his consumer
report was used only for purposes of determining your eligibility as an
independent contractor,” and that “[c]urrently, a decision is pending
regarding your proposal. The contents of the enclosed report are under
review and are being considered with regard to your proposal.” Am. Compl.
¶¶ 28-29. The August 4 report disclosed that Goldberg faced a pending
federal indictment for “conspiracy to manufacture, possess with intent to
distribute and to distribute marijuana.” Id. Ex. C at 2. Goldberg emailed
Uber the following day (August 5, 2014), explaining that he had never been
convicted of any crimes. Uber responded that it “will certainly take the
information [Goldberg] provided into consideration.” Id. ¶ 35.
On August 12, 2014, Rasier notified Goldberg that his application had
been rejected, “in part [because] of information obtained through the
Consumer Reporting Agency identified below.” Id. ¶ 36.
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Goldberg

immediately asked Uber to reconsider and received two responses, one of
which stated: “Uber does not employ drivers or own any vehicles. Our
background checks are meant to ensure that we are connecting riders with
the safest rides on the road. If at any time your circumstances change and
you would like us to re-run your background check, please let us know.” Id.
¶ 42.
Goldberg filed this putative class action in Suffolk Superior Court on
October 30, 2014. His Amended Complaint alleges willful or negligent
violation of § 1681b(b)(3)(A) of the FCRA (Count I), violation of the
Massachusetts Consumer Credit Reporting Act (MCCRA), Mass. Gen. Laws
ch. 93, §§ 50 et seq. (Count II), and violations of the Massachusetts
Criminal Offender Record Information (CORI) law, Mass. Gen. Laws ch. 6,
§§ 167-178B (Count III). Uber and Raiser removed the case to the federal
district court on federal question grounds, and on March 6, 2015, moved
for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c).
DISCUSSION
The standard for a motion for judgment on the pleadings is the same
as that for a Rule 12(b)(6) motion to dismiss for failure to state a claim
upon which relief can be granted.
“Because [a Rule 12(c)] motion calls for an assessment of the
merits of the case at an embryonic stage, the court must view
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the facts contained in the pleadings in the light most favorable
to the nonmovant and draw all reasonable inferences
therefrom . . . .” R.G. Fin. Corp. v. Vergara-Nunez, 446 F.3d
178, 182 (1st Cir.2006). Under Bell Atlantic v. Twombly, 550
U.S. 544, [555] (2007), to survive a Rule 12(b)(6) motion (and,
by extension, a Rule 12(c) motion) a complaint must contain
factual allegations that “raise a right to relief above the
speculative level, on the assumption that all the allegations in
the complaint are true . . . .”
Perez-Acevedo v. Rivero-Cubano, 520 F.3d 26, 29 (1st Cir. 2008).
Count I – FCRA
Defendants first contend that Goldberg lacks Article III standing to
bring a FCRA negligence claim because he has no actual damages. See
Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 53 (2007) (“If a violation is
negligent, the affected consumer is entitled to actual damages.”). Although
Goldberg claims the loss of the opportunity to become a driver for Uber,
compliance with the FCRA does not guarantee a right to employment,
particularly where the information given to Uber (and on which it relied)
was accurate. While Goldberg provided Uber with information that he
believed to be mitigating (because it was more complete), nothing in the
FCRA required Uber to change its hiring policies as a result.
As a fallback, Goldberg argues that he need not plead actual harm to
establish a claim of a willful violation of the FCRA.

Id.

Willfulness

connotes reckless disregard, and its test combines an objective component
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of reasonableness, and a subjective component of intent. The Supreme
Court has offered the following by way of explication of the test:
a company subject to FCRA does not act in reckless disregard of
it unless the 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.
Id. at 69. Goldberg conjures up the suggestion that defendants willfully
violated the FCRA by (1) failing to make a “clear and conspicuous
disclosure . . . in a document that consist solely of the disclosure” in
obtaining his authorization of a background check (quoting FCRA §
1681b(b)(2)(A)); and (2) failing to inform him of their intent to act
adversely on his application before acting adversely on his application. An
explanation of these tortured arguments is required.
Goldberg first argues that the request for an authorization to conduct
a background check was not “clear and conspicuous” because the text box
on the screen had to be scrolled to be seen in full. Moreover, the text did
not limit itself “solely” to the disclosure because the preamble iterated
Uber’s commitment to passenger safety. Goldberg, however, concedes in
his pleadings that the document was (conspicuously) entitled “Background
Check Terms,” and that the visible (three) lines of text informed the reader
of the full scope of the background checks that would be conducted,
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including a criminal background check. See Opp’n at 6. That is all that
section 1681b(b)(2)(A) requires, and the inclusion of a few sensible words
explaining the reason for the background check could hardly qualify as an
“objectively unreasonable” act.
Goldberg’s second theory that the FCRA requires advance notice of
the intent to take an adverse action is based on section 1681b(b)(3)(A) of
the FCRA, which provides:
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.
As the language of the statute makes clear,
[t]he FCRA only requires an employer to provide a copy of the
consumer report and a written description of the person’s rights
under the statute prior to any adverse action. . . . It does not
require employers prior to taking any adverse action to advise
applicants that the employer might take adverse employment
action based on the consumer report . . . .
Reinke v. Cargill, Inc., 2011 WL 2471739, at *4 (E.D. Wis. June 21, 2011).

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Count II – MCCRA
The allegations of violations of the MCRAA stumble out of the gate on
Goldberg’s recognition that the FCRA expressly preempts the relevant state
law. See FCRA § 1681t(b)(1)(C) (preempting “any subject matter regulated
under – . . . subsections (a) and (b) of section 1681m of this title, relating to
the duties of a person who takes any adverse action with respect to a
consumer”). In a feat of contortion, Goldberg argues that a “consumer
report” as defined by the FCRA differs from an “investigative consumer
report” as defined under the MCCRA, thereby defeating federal
preemption.
The MCCRA defines an “investigative consumer report” as
a consumer report or portion thereof in which information on a
consumer’s
character,
general
reputation,
personal
characteristics, or mode of living is obtained through personal
interviews with neighbors, friends, or associates of the
consumer reported on or with others with whom he is
acquainted or who may have knowledge concerning any such
items of information.
Mass. Gen. Laws Ann. ch. 93, § 50. Goldberg speculates that the reports
compiled by Hirease for Uber and Rasier might actually be “investigative
consumer reports” and not the more industry friendly “consumer reports”
that figure in the FCRA. Mere speculation, however, does not survive the
motion to dismiss standard. As the Supreme Court has emphasized, factual
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allegations must “possess enough heft” “to raise a right to relief above the
speculative level.”

Twombly, 550 U.S. at 555, 557.

The Amended

Complaint contains no factual allegations to support a plausible inference
that Hirease obtained information about Goldberg through “personal
interviews with neighbors, friends, or associates.”
Count III – Massachusetts CORI law
The Amended Complaint faults defendants for failing to comply with
the notice provisions of the CORI law. See Mass. Gen. Laws ch. 6, § 171A.
The CORI law defines “criminal offense record information” as
records and data in any communicable form compiled by a
Massachusetts criminal justice agency which concern an
identifiable individual and relate to the nature or disposition of
a criminal charge, an arrest, a pre-trial proceeding, other
judicial proceedings, sentencing, incarceration, rehabilitation,
or release. Such information shall be restricted to that recorded
as the result of the initiation of criminal proceedings or any
consequent proceedings related thereto.
Mass. Gen. Laws ch. 6, § 167 (emphasis added). Goldberg does not allege
that he has a Massachusetts criminal record, and therefore there are no
circumstances in which the CORI law would apply to his case. Moreover,
failure to comply with the CORI law’s notice requirements does not provide
Goldberg with a private right of action. Mass. Gen. Laws ch. 6, § 171A
(“Failure to provide such criminal history information to an applicant
pursuant to this section may subject the offending person to investigation,
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hearing and sanctions by the board.

Nothing in this section shall be

construed to prohibit a person from making an adverse decision on the
basis of an individual’s criminal history or to provide or permit a claim of
an unlawful practice under chapter 151B or an independent cause of action
in a court of civil jurisdiction for a claim arising out of an adverse decision
based on criminal history except as otherwise provided under chapter
151B.”).2
ORDER
For the foregoing reasons, Uber and Rasier’s motion for judgment on
the pleadings is ALLOWED. The Clerk is directed to enter judgment for the
defendants and close this case.
SO ORDERED.
/s/ Richard G. Stearns
__________________________
UNITED STATES DISTRICT JUDGE

Nor, as is the case with the FCRA, would a failure to strictly observe
the CORI law’s notice provisions require a company to change its hiring
policies, particularly in circumstances where public safety is at issue.
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