Boergert et al v. Kelly Services, Inc.
Filing
87
ORDER granting 40 Defendant Kelly Services' motion to dismiss. Signed on 11/14/16 by District Judge Nanette K. Laughrey. (Matthes Mitra, Renea)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
CENTRAL DIVISION
SCOTT BOERGERT, individually and on
behalf of all others,
Plaintiffs,
v.
KELLY SERVICES, INC.,
Defendant.
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No. 2:15-cv-04185-NKL
ORDER
Defendant Kelly Services, Inc. moves under Fed. R. Civ. P. 12(b)(1) to dismiss this Fair
Credit Reporting Act case in its entirety for lack of subject matter jurisdiction, based on the
United States Supreme Court’s recent decision in Spokeo v. Robins, 136 S.Ct. 1540 (2016).
Doc. 40. The motion is granted.
I.
Background 1
Kelly Services routinely obtains information contained in consumer reports to conduct
background checks on prospective and current employees, and uses the information in the reports
as the basis for adverse employment action against such persons, such as refusing to hire them or
deciding to fire them.
Plaintiff Scott Boergert applied to work for Kelly Services. During the hiring process, he
signed a form, which Kelly Services then used to obtain his consumer report from another
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The challenge to the Court’s subject matter jurisdiction involves a facial attack on
Boergert’s complaint, Doc. 1, inasmuch as no affidavits or other evidence have been submitted
in connection with Kelly Services’ motion under Rule 12(b)(1). Therefore, the Court applies the
same standards it would apply to a motion to dismiss under Rule 12(b)(6), and accepts as true the
factual allegations contained in the complaint. See Carlson v. GameStop, Inc., 833 F.3d 903, 908
(8th Cir. 2016).
company. Kelly Services hired him and assigned him to work at Kraft. But then Kelly Services
fired him, telling him it was because of information in his consumer report and that he was no
longer eligible for employment with Kelly Services.
Boergert alleges that Kelly Services’ disclosure form violated the FCRA because the
form did not contain “clear and conspicuous disclosure in writing in a document that consisted
solely of the disclosure that a consumer report may be obtained for employment purposes,” and
because it “contained extraneous [and inaccurate] information in violation of the FCRA.”
Doc. 1-1, p. 19 of 35; see also id. at pp. 31-32 of 35 (Count II). Boergert alleges that Kelly
Services further violated the FCRA by failing to give him a copy of the consumer report, and
notice and opportunity to correct any inaccuracy in it, before firing him. Id. at pp. 29-31 of 35
(Count I). He also alleges that Kelly Services’ “multiple violations of the FCRA combined with
its knowledge of the requirement of the FCRA” demonstrate its “violations were willful.” Id. at
p. 26 of 35. Boergert does not claim that the information in the consumer report was inaccurate.
II.
Discussion
Kelly Services argues that Boergert has no standing to pursue an improper disclosure
claim or an adverse action claim because he merely alleges bare procedural or technical
violations of his statutory rights, divorced from any concrete harm. Boergert responds that
Spokeo did not alter constitutional requirements for standing, and that he has alleged two
concrete injuries: violation of his right to privacy and an informational injury.
A.
Spokeo and Standing
In Spokeo, the Supreme Court reaffirmed that to have Article III standing, a 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.” 136 S. Ct. at
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1547 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992)).
Here, it is
undisputed that the alleged statutory violations are traceable to Kelly Services’ conduct, and that
the alleged violations are redressable by statutory damages. Accordingly, the remainder of the
discussion on the standing issue is addressed solely to the requirement of injury in fact.
To establish injury in fact, a plaintiff must have suffered “‘an invasion of a legally
protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural
or hypothetical.’” Id. at 1548 (citing Lujan, 504 U.S. at 560). To be “particularized,” an injury
“‘must affect the plaintiff in a personal and individual way[.]’” Id. (citing Lujan, 504 U.S. at 560
n.1). Here, it is undisputed that Boergert has alleged a particularized injury.
The Supreme Court in Spokeo distilled several “general principles” from its prior cases
with respect to concreteness. Id. at 1549-50. A concrete injury is one that is “‘real,’ and not
‘abstract.’” Id. at 1548 (citing WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 472 (1971),
and RANDOM HOUSE DICTIONARY
OF THE
ENGLISH LANGUAGE 305 (1967)). Tangible injuries
plainly satisfy this requirement. Id. at 1549. “[N]evertheless,” intangible injuries may also “be
concrete.” Id. In evaluating whether an intangible injury satisfies the “concreteness” requirement,
the Spokeo Court identified two important considerations: (1) “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[;]” and (2) the judgment of Congress, which “‘has
the power to define injuries and articulate chains of causation that will give rise to a case or
controversy where none existed before.’” Id. (quoting Lujan, 504 U.S. at 580 (Kennedy, J.,
concurring in part and concurring in judgment)).
The Supreme Court then elaborated on the connection between statutory standing and
concrete injury. First, the Court explained that “Article III standing requires a concrete injury
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even in the context of a statutory violation[.]” Id. (citing Summers v. Earth Island Institute, 555
U.S. 488, 496 (2009) (“[D]eprivation of a procedural right without some concrete interest that is
affected by the deprivation...is insufficient to create Article III standing”)). Therefore, “[a
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.” Id.
At the same time, the Court observed, in cases where “harms may be difficult to prove or
measure[,]” “the violation of a procedural right granted by statute can be sufficient... [and] a
plaintiff in such a case need not allege any additional harm beyond the one Congress has
identified.” Id. at 1549 (citing Federal Election Comm’n v. Akins, 524 U.S. 11, 20–25 (1998),
and Public Citizen v. Department of Justice, 491 U.S. 440, 449 (1989)). The Supreme Court
noted that although one of the FCRA’s purposes is to protect against inaccurate credit reporting,
“not all inaccuracies cause harm or present any risk of harm[.]” Id. at 1550.
B.
The FCRA
As relevant here, the FCRA provides that the employer must, in advance, provide the
consumer with a clear and conspicuous written disclosure, and obtain the consumer’s consent to
obtain a consumer report:
[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: (i) a clear and conspicuous
disclosure has been made in writing to the consumer at any time
before the report is procured or caused to be procured, in a
document that consists solely of the disclosure, that a consumer
report may be obtained for employment purposes; and (ii) the
consumer has authorized in writing (which authorization may be
made on the document referred to in clause (i)) the procurement of
the report by that person.
§ 1681b(b)(2). The consumer is also provided the right to review and discuss the content of a
report with the prospective employer, before adverse action is taken against him or her based on
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the report:
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 presented by the Bureau under Section 1681g(c)(3)
of this title.
§ 1681b(b)(3).
The purpose of these and other provisions of the FCRA is to ensure fair and accurate
credit reporting, protect consumer privacy, and promote efficiency in the banking system.
See Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007), and 15 U.S.C. § 1681 (Congressional
findings and statement of purpose). For a thorough discussion of the FCRA’s legislative history,
see Thomas v. FTS USA, LLC, 2016 WL 3653878 (E.D. Va. June 30, 2016).
C.
Count II—Improper Disclosure
Count II, for improper disclosure, is based on §1681b(b)(2), which forbids a person from
procuring a consumer report without obtaining the consumer’s express written consent in
advance. Furthermore, the consumer’s consent must be made on a single document that contains
only required information that is “clear and conspicuous.” Boergert alleges Kelly Services
violated §1681b(b)(2) by giving him a document that contained extraneous information, some of
which is inaccurate. He claims he was therefore harmed because his privacy was invaded and he
sustained an informational injury.
1.
Right to privacy
Boergert is correct that he has a substantive right to keep his consumer report private.
Only if he consents can a consumer report be released. But Boergert did sign a consent form
authorizing the release of his consumer report to Kelly Services. He tries to invalidate his
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consent by arguing it is not in the form mandated by Congress because the consent form contains
incorrect information and extraneous information. Nonetheless, he does not allege that he or a
reasonable person would be confused by the extraneous information. Nor does he allege that he
would not have signed it had he known some information was inaccurate. Instead, the crux of
his complaint is that the consent form did not technically comply with the requirements of the
FCRA. This is the kind of bare procedural violation that the Supreme Court described in Spokeo.
See also Shoots, et al. v. iQor Holdings US Inc., 2016 WL 6090723, at *5 (D. Minn. Oct. 18,
2016) (same); Larroque v. First Advantage LNS Screening Sols., Inc., 2016 WL 4577257 (N.D.
Cal. Sept. 2, 2016) (same); Groshek v. Time Warner Cable, Inc., 2016 WL 4203506 (E.D. Wis.
Aug. 9, 2016) (same); and Smith v. Ohio State Univ., 2016 WL 3182675 (S.D. Ohio June 8,
2016) (same). Therefore, on this record, Boergert’s right to privacy argument fails.
2.
Informational injury
Boergert’s alleged informational injury is also based on the consent form containing
inaccurate and extraneous information. In support of his informational injury claim, Boergert
relies on Federal Election Comm’n v. Akins, 524 U.S. 11 (1998), and Public Citizen v. Dep’t of
Justice, 491 U.S. 440 (1989). Both of these cases were cited by the U.S. Supreme Court in
Spokeo as examples of a concrete harm being suffered when information authorized by statute
was not supplied. In Public Citizen, the harm was the inability of the plaintiff to monitor the
judiciary because the ABA refused to release documents that Congressional statutes made open
records. In Akins, the statutorily required information involved the American Israel Public
Affairs Commission.
The Court agrees that the deprivation of statutorily mandated information can cause an
intangible but concrete harm, if that harm is of the type Congress sought to prevent. Boergert,
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however, has not alleged that Kelly Services’ disclosure form did not contain the information
required by the FCRA. Rather, he claims it was not in the format required by the statute. It
contained too much information. Further, although it permitted Kelly Services to obtain
consumer report information after employment terminated, it appears this would not be a
sufficiently concrete injury given Braitberg v. Charter Commc’ns, Inc., 836 F.3d 925, 930-31
(8th Cir. 2016), which found an analogous allegation to be a “bare procedural violation.” Absent
some additional allegation of harm, the Court cannot find an informational injury based on the
current record.
D.
Count I—Adverse Action
Count I, the adverse action claim, is based on § 1681b(b)(3), which provides a consumer
the right to receive a copy of the report, and review and discuss its content with the prospective
employer, before adverse action is taken against him or her based on the report. Boergert alleges
he was fired without receiving notice and the opportunity to discuss the content of the report with
Kelly Services. Kelly Services argues that the violation of the FCRA is merely technical,
inasmuch as Boergert does not claim the information contained in the report was untrue, and that
he therefore lacks standing to pursue the adverse action claim. Boergert responds that he
suffered a concrete, informational injury and therefore he has standing.
While Boergert has been deprived of statutorily required information, he has not shown
any injury beyond the lack of access to the required information. He has not even alleged that he
had a basis for challenging the information in the consumer report, which is the type of harm
Congress was intending to prevent. See Spokeo, 136 S.Ct. at 1550 (“Congress plainly sought to
curb the dissemination of false information by adopting procedures designed to decrease that
risk.”)
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Further, the Eighth Circuit in Braitberg seemed to suggest that Article III standing
required something more than a procedural violation, superseding Hammer v. Sam’s East Inc.,
754 F.3d 492 (8th Cir. 2014), and Charvat v. Mut. First Fed. Credit Union, 725 F.3d 819 (8th Cir.
2013), two cases this Court has previously relied on to find subject matter jurisdiction in these
types of cases. Therefore, the Court is reluctant to find that this informational injury is sufficient
to show a concrete injury sufficient to establish subject matter jurisdiction.
Boergert additionally suggests that he suffered an injury sufficient to establish standing
under the adverse action count because he would have been able to continue working for at least
some amount of time had Kelly Services allowed him time to dispute the accuracy of the report
before terminating him. Doc. 44, p. 22 of 26, n.8. In the complaint, he alleges that Kelly
Services “violated the FCRA by not providing [him] with proper notice prior to the adverse
action” and “a reasonable time to cure any inaccuracies within the consumer report[]….”
Doc. 1-1, pp. 25 and 30 of 35. But as noted above, Boergert does not claim that the information
in the consumer report was inaccurate. Nor does Boergert claim that Kelly Services would have
reached a different decision had it given him a reasonable amount of time before taking the
adverse action.
Absent any allegation that the information in the consumer report was
inaccurate, or that compliance with the FCRA’s pre-adverse action notice requirement would
have resulted in Kelly Services reaching a different conclusion about his qualification for
employment, any loss he suffered could not have resulted from Kelly Services’ failure to give
him a reasonable amount of time to address what was revealed in his criminal background report.
See Tyus v. United States Postal Serv., 2016 WL 6108942, at *7 (E.D. Wis. Oct. 19, 2016)
(plaintiff claimed financial and other injury under the FRCA due to lack of pre-adverse action
notice, but he did not allege the consumer report was inaccurate or that the employer would have
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reached a different decision had he been given notice; plaintiff therefore lacked standing); Union
v. Interstate Commerce Comm'n, 891 F.2d 908, 919 (D.C. Cir. 1989) (plaintiff lacked standing to
pursue a claim regarding an alleged procedural irregularity in the adoption of a rule; the alleged
procedural irregularity was “too tenuously connected to a potential substantive injury, in that
there was no reason to believe the outcome would have been different even if” the procedure had
been correctly followed). Accordingly, the Court cannot find an injury sufficient to establish
standing under the adverse action count based on the current record.
III.
Conclusion
Defendant Kelly Services’ motion to dismiss, Doc. 40, is granted.
s/ Nanette K. Laughrey
NANETTE K. LAUGHREY
United States District Judge
Dated: November 14, 2016
Jefferson City, Missouri
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