Fields v. Beverly Health and Rehabilitation Services, Inc. et al

Filing 48

MEMORANDUM OPINION AND ORDER. 1. Defendants' Motion to Dismiss for lack of subject matter jurisdiction (Doc. No. 36 ) is GRANTED. 2. Plaintiff's Second Amended Complaint (Doc. No. 31 ) is DISMISSED WITHOUT PREJUDICE. (Written Opinion) Signed by Judge Donovan W. Frank on 3/1/2017. (BJS)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Maxine Fields, on behalf of herself and
others similarly situated,

Civil No. 16-527 (DWF/LIB)

Plaintiff,
MEMORANDUM
OPINION AND ORDER

v.
Beverly Health and Rehabilitation Services,
Inc.; Beverly Enterprises-Minnesota LLC
d/b/a Golden LivingCenter-Hopkins and
Hopkins Care Center; Golden Gate
National Senior Care LLC d/b/a Golden
Living; and GGNSC Administrative
Services, LLC,
Defendants.

Cassie C. Navarro, Esq., Joni M. Thome, Esq., and Shawn J. Wanta, Esq., Baillon Thome
Jozwiak & Wanta LLP, counsel for Plaintiff.
Charles M. Roesch, Esq., and Susan H. Jackson, Esq., Dinsmore & Shohl LLP; and
Katie M. Connolly, Esq., Nilan Johnson Lewis PA, counsel for Defendants.

INTRODUCTION
Plaintiff Maxine Fields (“Fields” or “Plaintiff”) has brought a claim under the Fair
Credit Reporting Act (“FCRA”) 1 against her former employer and its related entities.
Fields alleges that Defendants failed to provide her the necessary disclosures in the
proper form before procuring her consumer report. Fields does not allege that she
1

15 U.S.C. § 1681, et seq.

suffered any actual damages. Instead she seeks statutory damages for an allegedly willful
violation of the FCRA. (Doc. No. 31, Second Am. Compl. (“SAC”) ¶¶ 42-43.)
Defendants have moved to dismiss for lack of subject matter jurisdiction and for failure
to state a claim. For the reasons stated below, the Court grants Defendants’ motion to
dismiss for lack of subject matter jurisdiction and therefore does not reach Defendants’
other motion. 2
BACKGROUND
Defendants operate a number of nursing/assisted living centers. (Id. at ¶ 8.) In
2014, Fields received a conditional offer to work full time with Defendant Golden
LivingCenter-Hopkins in Hopkins, Minnesota. (Id. at ¶ 4.) Fields then met with
Defendants’ human-resources representative to complete a set of forms, including a
Background Check Authorization Form. (Id. at ¶ 18, & Ex. A (“Authorization Form”).)
The Authorization Form required Fields to provide her name, social security
number, date of birth, current address, and any previous addresses for the last five years.
(Authorization Form.) Under the date-of-birth field, the Authorization Form provided
that the birthdate was to be “[u]sed solely for ensuring completion of a criminal record
check” and that employers are prohibited from discriminating based on age for
individuals age 40 or older. (Id.) In addition, Fields had to check “yes” or “no” boxes
regarding whether: (1) she had ever been convicted of a misdemeanor or felony; (2) she
2

Had the Court reached Defendants’ other motion to dismiss, the Court would have
likely concluded that Plaintiff had failed to demonstrate a willful violation of the FCRA
consistent with the Court’s decision in Just v. Target Corp., 187 F. Supp. 3d 1064, 106770 (D. Minn. 2016).
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was awaiting prosecution on a misdemeanor or felony; or (3) she had ever pled no contest
to a misdemeanor or felony. (Id.) Fields checked “no” for each box, but if she had
checked “yes,” then she was asked to give additional details. (Id.)
Finally, the Authorization Form required Fields to affirm to the following:
I understand that as part of your procedure for processing my application,
an investigative report about my background may be made which may
include information obtained through personal interviews regarding my
character, general reputation, personal characteristics or mode of living. I
have the right to make a written request, within a reasonable period of time,
for complete disclosure of additional information concerning the nature and
scope of the investigation. I authorize investigation of all statements
contained in this authorization form. ALL representations by me in this
data sheet are to the best of my knowledge and belief true and correct, and I
have not knowingly omitted any related information of an adverse nature.
Inaccurate information may make me ineligible for employment. I also
understand that having a criminal conviction is not an automatic bar for
employment. In the absence of a written contract, employment with the
Company is employment at the will of each party. The employment
relationship may be terminated at any time at the discretion of the employee
or the Company.
(Id.) Fields signed the Authorization Form. (SAC ¶ 18.) After signing the form,
Defendant GGNSC Administrative Services, LLC procured a criminal background check
on behalf of Golden LivingCenter-Hopkins. (See id. at ¶¶ 6, 31.) The background check
showed that Fields had no criminal history. (Doc. No. 36 (Fenner Aff.”) ¶ 6.) Fields
then worked at Golden LivingCenter-Hopkins for fourteen months, until June 5, 2015.
(Id at ¶ 7.)
The FCRA requires that if a person intends to run a consumer report (including a
criminal background check) for employment purposes, that person must: (1) provide a
clear and conspicuous document containing solely the disclosure that a consumer report
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may be obtained for employment purposes; and (2) obtain written authorization for the
procurement of the report by that person. 15 U.S.C. §§ 1681a(d)(1) & 1681b(b)(2)(A).
Under the FCRA, a plaintiff can recover statutory damages even if she has suffered no
actual damages for willful violations of the FCRA. Id. § 1681n.
On March 1, 2016, Plaintiff filed her first Complaint alleging a violation of the
FCRA. (Doc. No. 1.) Plaintiff amended her Complaint twice. (Doc. Nos. 25, 31.) In
her Second Amended Complaint, Plaintiff seeks to represent a class of plaintiffs for
whom Defendants obtained a consumer report in the five years leading up to the filing of
the Complaint. (SAC ¶ 34.) At the heart of her complaint, Plaintiff alleges that
Defendants willfully violated the FCRA by failing to provide a stand-alone disclosure
that clearly and conspicuously stated which type of report was going to be procured and
by whom. (Id. at ¶¶ 20, 28.) As a result of this inadequate disclosure, Plaintiff alleges,
Defendants failed to obtain the requisite authorization before procuring Plaintiff’s
criminal background history. (Id. at ¶ 33.) On December 21, 2016, Defendants moved to
dismiss, arguing that the Court did not have subject matter jurisdiction and that Plaintiff
had failed to allege a willful violation of the FCRA. (Doc. No. 36.) 3

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The Court cites to Defendants’ Memorandum of Law in Support of its Motion to
Dismiss (Doc. No. 37) as “Memo. at __;” Plaintiff’s Opposition (Doc. No. 42) as “Opp.
at __;” and Defendants’ Reply (Doc. No. 44) as “Reply at __.”
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DISCUSSION
I.

Legal Standard
A motion to dismiss under Rule 12(b)(1) challenges the Court’s subject matter

jurisdiction. Fed. R. Civ. P. 12(b)(1). To survive a motion under Rule 12(b)(1), the party
asserting jurisdiction has the burden of proving jurisdiction. V S Ltd. P’ship v. Dep’t of
Hous. & Urban Dev., 235 F.3d 1109, 1112 (8th Cir. 2000). “Subject-matter jurisdiction
is a threshold requirement which must be assured in every federal case.” Kronholm v.
Fed. Deposit Ins. Corp., 915 F.2d 1171, 1174 (8th Cir. 1990).
A Rule 12(b)(1) motion may challenge a plaintiff’s complaint either on its face or
on the factual truthfulness of its averments. Osborn v. United States, 918 F.2d 724, 729
n.6 (8th Cir. 1990). When a defendant brings a facial challenge—that is, even if the
allegations were true, they lack an essential element for jurisdiction—a court reviews the
pleadings alone and assumes the allegations are true. Titus v. Sullivan, 4 F.3d 590, 593
(8th Cir. 1993); accord Osborn, 918 F.2d at 729 n.6. In a factual challenge to
jurisdiction, the court may consider matters outside the pleadings and weigh the accuracy
of the allegations. Titus, 4 F.3d at 593; accord Osborn, 918 F.2d at 729 n.6.
II.

Subject Matter Jurisdiction and Spokeo
Federal courts are courts of limited jurisdiction. Spokeo, Inc. v. Robins, 136 S. Ct.

1540, 1546-47 (2016). Article III of the Constitution limits the courts’ jurisdiction to
“Cases” and “Controversies.” Id. at 1547. “Standing to sue is a doctrine rooted in the
traditional understanding of a case or controversy.” Id. Standing has three elements:
“The plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the
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challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable
judicial decision.” Id. (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61
(1992)).
In Spokeo, the plaintiff sued after he discovered inaccuracies about himself in his
credit report found on Spokeo’s website. Id. at 1544. The plaintiff brought his claim
under the FCRA seeking statutory damages. Id. at 1545. The district court dismissed the
case for lack of standing, but the Ninth Circuit reversed concluding that the violation of
the plaintiff’s statutory rights was enough. Id. at 1546. At issue for the Supreme Court
was whether the plaintiff had suffered an injury in fact. Id. at 1547.
An injury in fact requires that a “plaintiff must show that he or 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 (quoting Lujan, 504 U.S. at 560).
“For an injury to be ‘particularized,’ it ‘must affect the plaintiff in a personal and
individual way.’” Id. A plaintiff can demonstrate a particularized injury by, for example,
showing that her statutory rights were violated and those rights are particular to her. See
id.
A “concrete” injury on the other hand, must be “real” and “not abstract.” Id.
While real injuries are most closely associated with tangible harm, the Court explained
that a concrete injury can also be intangible. Id. at 1549. When faced with a plaintiff
who has allegedly suffered intangible harm, “it is instructive to consider whether an
alleged intangible harm 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.
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Additionally, the Court noted that Congress is well positioned to elevate intangible harms
to concrete injuries. Id. But the Court cautioned against concluding that a plaintiff will
automatically demonstrate an injury in fact merely by showing that a statute authorized
her to sue. Id. Thus, the Court concluded, a plaintiff does not satisfy Article III standing
by alleging a “bare procedural violation.” Id. at 1550.
Here, Defendants argue that Plaintiff’s injuries are not concrete. Plaintiff counters
that she suffered concrete injuries in the form of an informational injury and an invasion
of privacy.
III.

Informational Injury
In her opposition, Plaintiff points to three purported informational injuries. First,

Plaintiff claims that she was deprived of information regarding who was going to run the
background check. (Opp. at 36-37.) Second, Plaintiff claims that she was not informed
that Defendants would be procuring a criminal background check. (See id.) And third,
Plaintiff claims that she was denied a clear and conspicuous stand-alone disclosure as
required by the FCRA. (Opp. at 37-38.) The Court in Spokeo explained that “the
violation of a procedural right granted by statute can be sufficient in some circumstances
to constitute injury in fact. In other words, a plaintiff in such a case need not allege any
additional harm beyond the one Congress has identified.” Id. at 1549 (citing Fed.
Election Comm’n v. Akins, 524 U.S. 11, 20-25 (1998); Pub. Citizen v. Dep’t of Justice,
491 U.S. 440, 449 (1989)). Plaintiff points to this portion of Spokeo for support to
establish her informational injury, arguing that she was injured when Defendants

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allegedly failed to inform her of who was going to run which type of report in a clear and
conspicuous stand-alone document. (Opp. at 34.)
In applying Spokeo to informational injuries, most courts have allowed two types
of claims to proceed: (1) allegations that the plaintiff was confused by the disclosure; or
(2) allegations that the plaintiff was deprived statutorily required information. See, e.g.,
Shoots v. iQor Holdings US Inc., Civ. No. 15-563, 2016 WL 6090723, at *4 (D. Minn.
Oct. 18, 2016) (concluding the court lacked jurisdiction absent allegations that the
disclosure lacked information or that the plaintiff was confused by it); Boergert v. Kelly
Servs., Inc., Civ. No. 15-4185, 2017 WL 440272, at *3 (W.D. Mo. Feb. 1, 2017)
(allowing a claim to proceed based on allegations that the plaintiff was confused by the
disclosure); Woods v. Caremark, L.L.C., Civ. No. 15-535, 2016 WL 6908108, at *4
(W.D. Mo. July 28, 2016) (concluding that the plaintiff did not allege an informational
injury when the disclosure did not lack any necessary information).
In contrast, Plaintiff argues the FCRA’s disclosure requirements are a substantive
right, the violation of which is sufficient to confer standing. See Syed v. M-I, LLC, 846
F.3d 1034, 1040 (9th Cir. 2017); Thomas v. FTS USA, LLC, 193 F. Supp. 3d 623, 634
(E.D. Va. 2016). In Thomas, for example, the court concluded that § 1681b(b)(2) creates
“a legally cognizable right to receive a disclosure that is clear, conspicuous, and
unencumbered by extraneous information.” Thomas, 846 F. Supp. 3d at 634. Thus, the
court in Thomas found that a plaintiff’s allegations that a disclosure was not clear or was
not a stand-alone document was sufficient to demonstrate a concrete injury. Id.
(“Thomas has alleged a concrete informational injury: that is, Thomas has alleged that he
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was deprived of a clear disclosure stating that Defendants sought to procure a consumer
report before the report was obtained.”); see also Syed, 846 F.3d at 1040 (“The disclosure
requirement at issue, 15 U.S.C. § 1681b(b)(2)(A)(i), creates a right to information by
requiring prospective employers to inform job applicants that they intend to procure their
consumer reports as part of the employment application process.”).
Here, the Court concludes that consumers have a substantive right to the
statutorily required information provided in a non-confusing manner. See Shoots, 2016
WL 6090723, at *7. However, the Court will not go as far as the Thomas Court and the
Ninth Circuit in Syed to declare that the form of the disclosure is a substantive right. The
Supreme Court in Spokeo explicitly noted that a violation of a notice provision of the
FCRA might not constitute a concrete injury. See Spokeo, 136 S. Ct. at 1550. Thus, if
the consumer’s only complaint is that the information was not provided clearly and
conspicuously in a stand-alone document, then the consumer’s informational injury is
really over the manner of the disclosure. This is not a sufficiently concrete injury to
confer standing.
Here, Plaintiff has not alleged that she was confused by the disclosure. Instead,
Plaintiff alleges that the disclosure did not inform her of (1) who was running (2) which
type of report (3) in a clear and conspicuous stand-alone document.
First, Plaintiff has failed to demonstrate that Defendants were required to disclose
who was running the background report. Golden LivingCenter-Hopkins contracted with
GGNSC Administrative Services to perform some of its HR services, including running
background checks. (SAC ¶ 6.) In her opposition brief, Plaintiff argues that
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§ 1681b(b)(2)(A) required that she authorize the particular entity who procured the
report, in this case GGNSC Administrative Services. (Opp. at 17.)
Section 1681b(b)(2)(A) provides that “a person may not procure a consumer report, or
cause a consumer report to be procured, for employment purposes with respect to any
consumer, unless . . . the consumer authorized in writing . . . the procurement of the
report by that person.” 15 U.S.C. § 1681b(b)(2)(A)(i)-(ii) (emphasis added). “Person”
under § 1681b(b)(2)(A)(ii) refers to the entity either procuring the report or causing the
report to be procured. See Id. § 1681b(b)(2)(A)(i)-(ii). Thus, under the FCRA an entity
can cause a third party to procure a consumer report if the consumer authorizes the entity
using the third party. Nothing in the statute explicitly requires the consumer to authorize
the third party to procure the consumer report, and nothing in the statute explicitly
requires the entity to disclose that they are using a third party.
Plaintiff provides no support other than a reference to the language of the statute
for her argument that Defendants must disclose the use of a third party. (See Opp. at
36-37.) While Defendants did not disclose that GGNSC Administrative Services was
procuring the background check, Plaintiff has not shown that she was statutorily entitled
to that information under the FCRA. Thus, Defendants’ failure to disclose that GGNSC
Administrative Services was procuring the consumer report did not cause Plaintiff a
concrete informational injury.
Second, Plaintiff has failed to demonstrate that she was not informed about which
type of report Defendants were procuring. Plaintiff argues that the Authorization Form
discloses only that Defendants would perform an investigative report consisting of
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personal interviews and not that Defendants would be running a criminal background
check. (Opp. at 14-15.) But the Authorization Form notes in two different places that a
criminal background check would be performed. Specifically, the Authorization Form
requests that the applicant provide her birthdate “for ensuring completion of a criminal
record check”; and, as part of signing the Authorization Form, the applicant affirms that
she “also understand[s] that having a criminal conviction is not an automatic bar for
employment.” (Authorization Form.)
Plaintiff also alleges that because the Authorization Form failed to state that a
“consumer report” would be procured, Plaintiff was therefore deprived of information
provided for under the FCRA. Plaintiff argues that Defendants engaged in a “bait and
switch”: Defendants told Plaintiff that they would procure an investigative report by
performing personal interviews when in reality Defendants procured a consumer report
from a credit reporting agency. (See Opp. at 2.) While on its face this appears to be a
concrete injury, the Second Amended Complaint makes no such allegations. Instead, the
Second Amended Complaint alleges that Defendants obtained a “criminal background
check.” (SAC ¶ 32.) The Authorization Form discloses that a criminal background
check would be performed. (Authorization Form.) What is more, Plaintiff does not
allege that she did not know that Defendants would be procuring a criminal background
check after signing the “Background Authorization Form.” Thus, Plaintiff has failed to
demonstrate that she suffered a concrete informational injury.
Finally, Plaintiff alleges that she suffered a concrete injury from Defendants’
failure to provide a stand-alone disclosure that was clear and conspicuous. As noted
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above, absent Plaintiff alleging that she was confused by the disclosure or was deprived
information, Plaintiff cannot demonstrate a concrete injury merely by alleging that the
form of the disclosure violates the FCRA. See, e.g., Shoots, 2016 WL 6090723, at *4
(concluding the court lack jurisdiction absent allegations that the disclosure lacked
information or that the plaintiff was confused by it); Boergert, 2017 WL 440272, at *3
(allowing a claim to proceed based on allegations that the plaintiff was confused by the
disclosure); Woods v. Caremark, L.L.C., 2016 WL 6908108, at *4 (concluding that the
plaintiff did not allege an informational injury when the disclosure did not lack any
necessary information). Because Plaintiff does not allege that she was confused or was
deprived statutorily required information, Plaintiff fails to demonstrate that she suffered a
concrete informational injury based on the form of the disclosure.
IV.

Invasion of Privacy
Plaintiff also alleges that she was injured because Defendants invaded her privacy

by failing to obtain her informed authorization. (SAC ¶ 33.) Plaintiff argues that the
FCRA protects a consumer’s privacy by prohibiting consumer reports unless the FCRA’s
requirements are strictly followed. (Opp. at 31.) Some courts have concluded that such
allegations fail to demonstrate a concrete injury. See, e.g., Shoots, 2016 WL 6090723, at
*4 (“By contending that non-compliance with one provision of the FCRA automatically
renders a defendant’s subsequent actions an invasion of privacy, [the plaintiff] would
raise every technical violation of any statute to the realm of a major substantive harm.”);
Groshek v. Time Warner Cable, Inc., Civ. No. 15-157, 2016 WL 4203506, at*2 (E.D. Wis.

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Aug. 9, 2016). 4 And other courts have found that such injuries are sufficiently concrete.
Syed, 846 F.3d at 1040 (concluding that § 1681b(b)(2)(A)(ii) provides a substantive right
to privacy); Thomas, 193 F. Supp. 3d at 636 (concluding that obtaining a credit report
without a proper disclosure and authorization constituted a privacy injury, which
Congress regularly has sought to protect (citing statutory schemes for Right to Financial
Privacy Act, 5 Video Privacy Protection Act, 6 and the Telephone Consumer Protection
Act 7)).
Here, however, the Court need not resolve whether the FCRA’s consumer-report
procedures must be strictly followed because Plaintiff has failed to demonstrate that her
privacy has been invaded. As part of the Authorization Form, Plaintiff disclosed she had
no criminal history. Additionally, the criminal background check showed that Plaintiff
had no criminal history. The Court simply cannot conclude that a consumer who freely
disclosed her criminal history—which was that she had no criminal history—has
4

Defendants also rely on Braitberg v. Charter Communications, Inc., 836 F.3d 925
(8th Cir. 2016). In that case, the consumer sued a cable company after it retained
consumer information for too long in violation of a federal statute. In concluding that the
consumer did not suffer a concrete injury, the court of appeals noted that the plaintiff had
not shown that that the cable company disclosed the information, an outside party
accessed the information, the cable company used the data, or that there was an increase
in risk of harm from the retention of the data. Id. at 930. That case, however, is
distinguishable because it was premised on the cable company legally obtaining the
information in the first place. See id. Here, instead, Plaintiff’s claim is premised on
Defendants alleged improper access to her consumer report.
5

12 U.S.C § 3401, et seq.

6

18 U.S.C. §2710.

7

47 U.S.C. § 227.
13

sufficiently alleged that she suffered a real injury from her employer procuring an
unauthorized criminal background check that also showed that she had no criminal
history. Thus, Plaintiff has failed to show a concrete injury stemming from an invasion
of privacy.
CONCLUSION
For the reasons outlined above, Plaintiff has failed to meet her burden of
demonstrating that she suffered an injury in fact sufficient to confer this Court with
subject matter jurisdiction. Thus, the Court grants Defendants’ Motion to Dismiss.
ORDER
Based on the files, record, and proceedings herein, IT IS HEREBY ORDERED
that:
1.

Defendants’ Motion to Dismiss for lack of subject matter jurisdiction (Doc.

No. [36]) is GRANTED.
2.

Plaintiff’s Second Amended Complaint (Doc. No. [31]) is DISMISSED

WITHOUT PREJUDICE.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: March 1, 2017

s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge

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