Fisher v. Enterprise Holdings, Inc. et al
MEMORANDUM AND ORDER : IT IS HEREBY ORDERED that Defendants motion for judgment on the pleadings with respect to Counts I and II is GRANTED, and Plaintiffs state claim is dismissed without pprejudice. (Doc. No. 27 .) Signed by District Judge Audrey G. Fleissig on 09/07/16. (KCB)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
KEANA FISHER, individually and on behalf )
of all others similarly situated,
ENTERPRISE HOLDINGS, INC., et al.,
Case No. 4:15CV00372 AGF
MEMORANDUM AND ORDER
This putative class action brought under the Fair Credit Reporting Act
(“FCRA”), 15 U.S.C. §§ 1681, et seq., claims that that Defendants, Enterprise Holdings,
Inc., and a related entity, violated the FCRA through its process of obtaining consumer
reports regarding prospective employees. The action is now before the Court on
Defendants’ motion for judgment on the pleadings. Defendants argue that Plaintiff does
not have standing because she failed to plead facts demonstrating that she has suffered a
particularized and concrete injury. For the reasons set forth below, Defendants’ motion
will be granted.
Plaintiff’s amended complaint alleges that in connection with her application for a
job with Defendants in California, Defendants obtained a consumer report about her to
conduct a background check, in accordance with their regular practice. Plaintiff asserts
that Defendants’ disclosure to Plaintiff (and other prospective and current employees)
that Defendants would procure a consumer report failed to comply with the FCRA
because the disclosure was not “clear and conspicuous . . . in a document that consists
solely of the disclosure,” as required by § 1681b(b)(2)(A)(i) of the FCRA. Rather, the
disclosure consisted of (1) two sentences within an online employment application (Doc.
No. 2-1); and (2) after submission of the application, another electronic form, entitled
“AUTHORIZATION FOR RELEASE OF INFORMATION,” that included authorization
for release of other reports as well (Doc. No. 2-2). Plaintiff electronically signed both
Counts I and II of Plaintiff’s amended complaint claims violation of
§ 1681b(b)(2)(A)(i) and (ii) for failing to make a proper disclosure and, as a result, failing
to obtain a proper authorization, respectively. Count III claims that the same conduct
violated the California Unfair Competition Law. With respect to injury and damages,
Plaintiff alleges with respect to Counts I and II that “[a]s a result of Defendants’ wrongful
acts and omissions, Plaintiff and other putative class members have been injured,
including, without limitation, by having their privacy and statutory rights invaded in
violation of the FCRA,” and that she and the putative class members “are entitled to
statutory damages of not less than $100 and not more than $1,000 for each and every one
of these violations, pursuant to 15 U.S.C. § 1681n(a)(1)(A).” (Doc. No. 2 at 3, 16, 17.)
As relief, Plaintiff seeks “statutory damages, punitive damages, costs and attorneys’ fees,
equitable relief, and other appropriate relief for Defendants’ systematic and willful
violations of the FCRA.” Id. at 3.
In support of their motion for judgment on the pleadings, Defendants rely on the
recent decision by the Supreme Court, Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016)
(“Spokeo”), for the proposition that Plaintiff has not pleaded a “concrete injury,” and
therefore, has no standing to bring this case. Plaintiff responds that violations of her
rights to privacy and to receiving information in the manner prescribed by the FCRA are
“concrete” injuries under Spokeo.
A motion for judgment on the pleadings under Federal Rule of Civil Procedure
12(c) is to be considered using the same standard as a motion to dismiss under Rule
12(b)(6). Gallagher v. City of Clayton, 699 F.3d 1013, 1016 (8th Cir. 2012). “To
survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556-70 (2007)).
The reviewing court must accept the plaintiff’s factual allegations as true and construe
them in plaintiff’s favor, but it is not required to accept the legal conclusions the plaintiff
draws from the facts alleged. Id. at 678; Retro Television Network, Inc. v. Luken
Commc’ns, LLC, 696 F.3d 766, 768-69 (8th Cir. 2012).
Article III of the Constitution limits federal courts’ jurisdiction to certain “Cases”
and “Controversies.” U.S. Const. Art. III, § 2. “One element of the case-or-controversy
requirement is that plaintiffs must establish that they have standing to sue.” Clapper v.
Amnesty Int’l U.S.A., 133 S. Ct. 1138, 1146 (2013) (citation omitted). The “irreducible
constitutional minimum” of standing consists of three elements: “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,136 S. Ct. at 1547 (citation omitted). “The plaintiff, as the party invoking federal
jurisdiction, bears the burden of establishing these elements.” Id. (citation omitted).
Where a case is at the pleading stage, the plaintiff must “clearly . . . allege facts
demonstrating each element.” Id. “To establish injury in fact, a plaintiff must show that
he or she suffered an invasion of a legally protected interest that is concrete and
particularized . . . .” Id. at 1548 (citation omitted). “The elements of standing ‘cannot be
inferred argumentatively from averments in the pleadings, but rather must affirmatively
appear in the record.’” Owner-Operator Indep. Drivers Assoc., Inc. v. United States
Dep’t of Trans., 2016 WL 4087235, at *3 (8th Cir. Aug. 2, 2016) (quoting FW/PBS, Inc.
v. City of Dallas, 493 U.S. 215, 231 (1990)).
Congress passed the FCRA to ensure “that consumer reporting agencies adopt
reasonable procedures for meeting the needs of commerce for consumer credit,
personnel, insurance, and other information in a manner which is fair and equitable to the
consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization
of such information.” 15 U.S.C. § 1681(b). A careful reading of Spokeo is required to
determine whether here, Plaintiff has alleged a concrete injury for standing purposes.
The plaintiff in Spokeo claimed that reports generated by the defendant, an online
consumer reporting agency, and marketed to entities performing background checks,
contained inaccurate information about him. The plaintiff claimed that the defendant
thereby violated various FCRA requirements, including that consumer reporting agencies
“follow reasonable procedures to assure maximum possible accuracy of” consumer
reports, and issue notices to providers and users of information of their responsibilities
under the FCRA. As characterized by the district court, Plaintiff alleged that he was
concerned that his ability to obtain credit, employment, insurance, and the like would be
adversely affected. The district court dismissed the complaint, holding that the plaintiff
had not properly pleaded injury in fact as required by Article III, because his “concern
that he will be adversely affected by Defendant’s website in the future, is an insufficient
injury to confer standing.” Robins v. Spokeo, Inc., No. CV10-05306 ODW (AGRX),
2011 WL 597867, at *1 (C.D. Cal. Jan. 27, 2011).
The Ninth Circuit reversed, holding that the plaintiff’s personal interests in the
handling of his credit information was particularized rather than collective, and therefore,
the alleged violations of his statutory rights were sufficient to satisfy the injury-in-fact
requirement of Article III. Robins v. Spokeo, Inc., 742 F.3d 409, 413-14 (9th Cir. 2014).
The Supreme Court reversed and remanded the case on the basis that the Ninth Circuit’s
analysis was “incomplete” in that it failed to determine whether the defendant’s alleged
violations of the FCRA caused “concrete injury” to the plaintiff. “Particularization is
necessary to establish injury in fact, but it is not sufficient. An injury in fact must also be
‘concrete.’” Spokeo, 136 S. Ct. at 1548.
To give guidance in determining whether a concrete injury had been asserted, the
Supreme Court explained that “concrete” was not “necessarily synonymous with
‘tangible,’” and continued as follows:
In determining whether an intangible harm constitutes injury in fact
. . . [i]t 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. In addition,
because Congress is well positioned to identify intangible harms that meet
minimum Article III requirements, its judgment is also instructive and
* * *
Congress’ role in identifying and elevating intangible harms does
not mean that a plaintiff automatically satisfies the injury-in-fact
requirement whenever a statute grants a person a statutory right and
purports to authorize that person to sue to vindicate that right. Article III
standing requires a concrete injury even in the context of a statutory
violation. For that reason, [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.
This does not mean, however, that the risk of real harm cannot
satisfy the requirement of concreteness. For example, the law has long
permitted recovery by certain tort victims even if their harms may be
difficult to prove or measure [such as in the case of slander per se]. Just as
the common law permitted suit in such instances, 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. See
Federal Election Comm’n v. Akins, 524 U.S. 11, 20-25 (1998) (confirming
that a group of voters’ “inability to obtain information” that Congress had
decided to make public is a sufficient injury in fact to satisfy Article III);
Public Citizen v. Department of Justice, 491 U.S. 440, 449 (1989) (holding
that two advocacy organizations’ failure to obtain information subject to
disclosure under the Federal Advisory Committee Act “constitutes a
sufficiently distinct injury to provide standing to sue”).
In the context of this particular case, these general principles tell us
two things: On the one hand, Congress plainly sought to curb the
dissemination of false information by adopting procedures designed to
decrease that risk. On the other hand, [Plaintiff] cannot satisfy the demands
of Article III by alleging a bare procedural violation. A violation of one of
the FCRA’s procedural requirements may result in no harm. For example,
even if a 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. In addition, not all inaccuracies cause harm or present
any material risk of harm. An example that comes readily to mind is an
incorrect zip code.
Id. at 1549-50 (citations omitted).
The Court believes that following these guidelines and principles leads to the
conclusion that Plaintiff here has not pleaded a concrete injury. All Plaintiff alleges is
that the format and conspicuousness of Defendants’ disclosure that they would procure a
consumer report did not comply with the statute at issue. Plaintiff did not allege that she
did not, in fact, see the disclosure, or that the language of the disclosure was poorly
drafted, or otherwise incomprehensible. Nor did she allege that her authorization was not
Plaintiff refers the Court to a recent decision by the Eleventh Circuit applying
Spokeo to a claim under the Fair Debt Collection Practices Act (“FDCPA”), Church v.
Accretive Health, Inc., No. 15-15708, 2016 WL 3611543 (11th Cir. July 6, 2016). In
Church, the Eleventh Circuit held that a plaintiff who sued a debt collector for failure to
include statutorily- required disclosures in a collection letter (such as that the debt
collector is attempting to collect a debt and that any information obtained will be used for
that purpose) had standing to bring her claims, because failing to receive information
which she was statutorily entitled to receive was a concrete injury “that Congress has
elevated to the status of a legally cognizable injury through the FDCPA.” Id. at *3. The
Eleventh Circuit reasoned that the plaintiff did not allege a “bare procedural violation,”
but rather that “Congress provided [Plaintiff] with a substantive right to receive certain
disclosures and [Plaintiff] has alleged that [Defendant] violated that substantive right. Id.
*4 n.2; see also Lane v. Bayview Loan Servicing, LLC, No. 15 C 10446, 2016 WL
3671467, at *3-4 (N.D. Ill. July 11, 2016) (“The information-access cases cited by
Spokeo suggest that, in this case, [Plaintiff] has alleged a sufficiently concrete injury
because he alleges that [Defendant] denied him the right to information due to him under
Church is distinguishable from the present case, not only because it involves a
different statute, but because the nature of the statutory violation is different. In Church,
the plaintiff alleged that she did not receive certain information she was entitled to
receive, whereas here, as noted above, all Plaintiff alleges is that the format and
conspicuousness of a disclosure did not comply with the statute at issue. The Court
believes that under these circumstances, the statutory violation alleged by Plaintiff does
not establish her standing to bring this action.
Another post-Spokeo case relied upon by Plaintiff, Hawkins v. S2Verify, No. C 1503502 WHA, 2016 WL 3999458 (N.D. Cal. July 26, 2016), is also unavailing. In that
case, the plaintiff alleged that the defendant consumer reporting agency violated the
FCRA by listing in a consumer report about him that was “sent . . . into the world” his
prior convictions that were older than seven years, something the FCRA prohibits. The
district court held that the plaintiff had satisfied the concreteness requirement for standing
as the defendant had disclosed records of convictions “that Congress has protected from
disclosure, thereby intruding upon the plaintiff’s privacy interest.” Id. at 5. The situation
here is quite different. For similar reasons, the other cases cited by Plaintiff are of no
avail to her.
Although a close question is presented, the Court concludes that Plaintiff has
failed to plead facts demonstrating that she has suffered any injury in fact. Therefore,
Plaintiff lacks standing to bring her federal claims. The Court declines to exercise
supplemental jurisdiction over Plaintiff’s state law claim, pursuant to 28 U.S.C.
IT IS HEREBY ORDERED that Defendants’ motion for judgment on the
pleadings with respect to Counts I and II is GRANTED, and Plaintiff’s state claim is
dismissed without pprejudice. (Doc. No. 27.)
A separate Judgment shall accompany this Memorandum and Order.
AUDRERY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 7th day of September, 2016.
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