MCPHERSON v. CANON BUSINESS SOLUTIONS, INC.
Filing
69
OPINION. Signed by Chief Judge Jerome B. Simandle on 2/20/2014. (tf, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
ANYA McPHERSON, individually
and on behalf of all persons
similarly situated,
Plaintiff,
HONORABLE JEROME B. SIMANDLE
Civil Action
No. 12-7761 (JBS/AMD)
v.
OPINION
CANON BUSINESS SOLUTIONS,
INC.,
Defendant.
APPEARANCES:
Patrick F. Madden, Esq.
Shanon J. Carson, Esq.
Sarah R. Schalman-Bergen, Esq.
BERGER & MONTAGUE PC
1622 Locust Street
Philadelphia PA 19103
Attorneys for Plaintiff
Philip R. Sellinger, Esq.
David E. Sellinger, Esq.
GREENBERG TRAURIG LLP
200 Park Avenue
PO Box 677
Florham Park, NJ 07932
Attorneys for Defendant
SIMANDLE, Chief Judge:
I. Introduction
This putative class action alleges that Defendant Canon
Business Solutions, Inc. (“Canon” or “Defendant”),1 violated the
1
The business entity is now known as Canon Solutions America,
Inc.
Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681, et seq.,
when it terminated employees or denied employment to job
applicants based on information contained in criminal background
reports without first providing the employees or applicants with
proper disclosure or an opportunity to dispute the accuracy of
the information. (Compl. ¶ 1.)
Before the Court is a motion by Defendant Canon for partial
summary judgment or, in the alternative, to strike the class
definition. [Docket Item 48.] At bottom, however, Canon seeks to
prevent Plaintiff from conducting discovery about terminations
and rejections of job applicants that occurred between two and
five years prior to the filing of the Complaint. The FCRA
permits claims to be brought within five years of an alleged
violation, provided that the claimant did not discover the
violation more than two years prior to filing the Complaint.
Here, the Complaint was filed on December 21, 2012, and
Defendant concedes that claims that arose on or after December
21, 2010, are timely, as their viability does not depend on when
a putative class member discovered an alleged violation.
However, it is Defendant’s position that under no circumstances
can the Plaintiff certify a class to include those extra three
years (from December 21, 2007, to December 21, 2010), because
individual issues would predominate over common issues and such
a class would have ascertainability problems; namely, the Court
2
would have to hold mini-trials to determine whether each
putative class member discovered the FCRA violation prior to
December 21, 2010. Plaintiff argues that she deserves a chance
to conduct discovery before class definition issues are decided,
particularly because she has not yet moved to certify a class.
As explained below, it is premature to enter summary
judgment at this time, and, accordingly, Defendant’s motion will
be denied without prejudice. The Court construes the motion as
one to limit discovery under Fed. R. Civ. P. 26(b)(2)(C)(iii),
and the Court will order limited discovery be conducted for the
period from December 21, 2007, to December 21, 2010.
II. Background
The facts of this case are drawn from the Complaint and, at
this stage, are accepted as true. Plaintiff McPherson was hired
as a temporary data entry employee in Burlington, N.J., by Canon
in November 2011. On April 12, 2012, she applied for a permanent
data entry position and authorized Canon to conduct a background
check. On her application form, she indicated she had not been
convicted of a crime within the last seven years.2 Plaintiff
began working as a permanent employee but two weeks later
received a phone call from human resources informing her that
her background check revealed a felony conviction that was more
2
There appears to be some dispute about whether the application
asked Plaintiff to list all past criminal convictions, or just
those in the prior seven years.
3
than a decade old. She was fired the same day. Plaintiff claims
she had applied for executive clemency and was eligible to have
her conviction expunged. She asserts that Canon never provided
her a copy of the report, never described her rights under the
FCRA prior to termination, and never gave her an opportunity to
explain the conviction.
Plaintiff filed this Complaint on December 21, 2012. She
alleges that Defendant willfully violated 15 U.S.C. §
1681b(b)(3) because she was not given “pre-adverse action
disclosure” of a copy of the report obtained from the consumer
reporting agency (“CRA”) or a written description of her rights
under the FCRA, and because she was not given “a pre-adverse
action opportunity to dispute the accuracy of the reported
information . . . .” (Compl. ¶ 18.) She seeks statutory damages
under 15 U.S.C. § 1681n(a)(1)(A) and punitive damages under 15
U.S.C. § 1681n(a)(2), plus attorneys’ fees and costs under 15
U.S.C. §§ 1681n & 1681o. (Id. ¶ 24.)
Plaintiff also brings claims on behalf of a nationwide
class. She alleges that Canon has “a nationwide policy or
practice” of obtaining CRA reports “and of taking adverse
employment action . . . without providing employees and
applicants with . . . pre-adverse action disclosure . . . and a
pre-adverse action opportunity to dispute the accuracy of the
4
reported information.” (Id. ¶ 21.) Plaintiff proposes a class
defined as:
All employees and applicants of Canon Business
Solutions residing in the United States who, at any
time within five (5) years preceding the filing of
this Complaint until the date of trial, suffered an
adverse
employment
action
based
on
information
contained in consumer reports without receiving: (a)
pre-adverse action disclosure containing a copy of the
employee or applicant’s consumer report obtained from
the CRA and a description in writing of the employee
or applicant’s rights under the FCRA; or (b) a preadverse action opportunity to dispute the accuracy of
the reported information before any adverse action was
taken (the “Class”).
(Id. ¶ 26.) As of this writing, Plaintiff has not filed a motion
to certify the class.
Defendant originally raised the present dispute in the form
of a motion for a protective order, seeking to limit discovery
to the two-year limitations period in the FCRA, 15 U.S.C. §
1681(p)(1). However, Magistrate Judge Donio decided, with the
agreement of the parties, that such a protective order would be
dispositive in effect (because it would necessarily depend on
finding that a class beyond the two-year period could not be
certified) and dismissed the motion without prejudice, directing
the Defendant to file a dispositive motion. [Docket Item 43.]
Upon review of the present motion and in a letter to the
parties, this Court voiced its reluctance “to construe the
motion as one for summary judgment, because Defendant seeks to
amend the class definition and not for the Court to enter a
5
partial, final judgment on the merits of any claims.” [Docket
Item 64.] The Court characterized Defendant’s request as one “to
narrow the class definition and thereby limit discovery.” [Id.]
The Court stated that, to rule in favor of Defendant at this
stage, the Court would have to be “satisfied that no amount of
discovery could yield proof that a class or subclass could be
certified for those members who allegedly suffered injury more
than two years before the Complaint was filed.” [Id.]
The Court requested additional briefing from the parties on
the issue of what discovery Plaintiff reasonably was due. The
Court directed Plaintiff to describe what discovery she seeks
“that could support a finding that the ascertainability and
predominance requirements of Rule 23 could be met for putative
class members who allegedly suffered injury more than two years
before the Complaint was filed.” [Id.] The Court directed
Defendant to articulate or quantify “the burden Defendant
believes it would suffer by responding to Plaintiff’s discovery
request under a five-year period.” [Id.] The parties submitted
supplemental briefing, and the Court heard oral argument on
January 23, 2014.
To date, Defendant has provided discovery largely limited
to individuals whose reports contained information related to
criminal activity for claims arising after December 21, 2010.
Plaintiff has a pending motion before Judge Donio to compel more
6
discovery during the two-year limitations period. Plaintiff
asserts she has not yet had the opportunity to take any
depositions on Defendant’s policies and practices related to
FCRA compliance.
III. Discussion
A. Rule 26 discretion
Defendant’s motion, although styled as a one for partial
summary judgment or to strike the class definition, is properly
re-characterized as a motion to limit discovery. Fed. R. Civ. P.
26(b)(2)(C)(iii) provides that the Court must, on motion or on
its own, limit discovery if it determines that “the burden or
expense of the proposed discovery outweighs its likely benefit,
considering the needs of the case, the amount in controversy,
the parties’ resources, the importance of the issues at stake in
the action, and the importance of the discovery in resolving the
issues.” In other words, the Court has discretion to weigh the
need for discovery against the likely burden or expense to
resolve the present dispute.3
The Advisory Committee Notes to the 2006 Amendment of the
Federal Rules state that the “requesting party has the burden of
3
Plaintiff suggests the motion should be construed as one under
Fed. R. Civ. P. 12(f), but that provision permits a court to
“strike from a pleading an insufficient defense or any
redundant, immaterial, impertinent, or scandalous matter.” The
definition Defendant seeks to change fits none of these
categories.
7
showing that its need for the discovery outweighs the burdens
and costs of locating, retrieving, and producing the
information.”
B. Statute of limitations & Rule 23 argument
The FCRA permits plaintiffs to bring claims “not later than
the earlier of-- (1) 2 years after the date of discovery by the
plaintiff of the violation that is the basis for such liability;
or (2) 5 years after the date on which the violation that is the
basis for such liability occurs.” 15 U.S.C. § 1681p.
Defendant acknowledges that claims that accrued after
December 21, 2010, are timely, but argues that the five-year
window in the class definition “cannot be squared with the
requirements of Rule 23(b)(3),” Fed. R. Civ. P., because the
application of the wider limitations period will require
individualized inquiries into when class members discovered or
should have discovered Defendant’s alleged misconduct. (Def.
Mot. Br. [Docket Item 48-1] at 3.) Defendant argues that the
Court “cannot certify a class that includes applicants whose
discovery of an alleged violation predates the filing of the
Complaint by more than two years because common issues would not
predominate over individual issues in the determination of who
is in the class.” (Id. at 2.) For each claim arising between
December 21, 2007, and December 21, 2010, Defendant argues, “the
Court would be required to engage in an individual mini-trial,
8
requiring fact-specific proofs, to determine when that person
knew or should have known of his or her alleged FCRA violation.”
(Id. at 2-3.) Put another way, “Plaintiff cannot demonstrate
through common evidence that each and every individual who was
not hired or who was hired and subsequently terminated based on
the results of a criminal background report prior to December
21, 2010 is a member of the putative class.” (Id. at 8.)
The key question for the Court is whether to conduct a Rule
23(a) ascertainability analysis or a Rule 23(b)(3) predominance
analysis at this time, before the parties have completed
discovery and before Plaintiff has submitted a motion for class
certification.
1. Legal precedent
Plaintiff relies primarily on Landsman & Funk PC v.
Skinder-Strauss Assocs., 640 F.3d 72 (3d Cir. 2011),4 for the
proposition that courts generally do not conduct a Rule 23
analysis until after discovery and after the plaintiffs move for
class certification. (Pl. Opp’n at 14-16.) The Landsman court
considered consolidated appeals of multiple class actions under
the Telephone Consumer Protection Act, which provides a cause of
action for individuals who receive unsolicited faxes. One of the
4
The Third Circuit granted rehearing en banc in this case, but
vacated that order after the U.S. Supreme Court decided Mims v.
Arrow Financial Servs., LLC, 132 S. Ct. 740 (2012). Mims did not
discuss Rule 23 analysis and class certification.
9
district courts had dismissed its class action prior to the
class certification stage, because the court lacked subject
matter jurisdiction. Landsman, 640 F.3d at 74 n.2. Diversity
jurisdiction was lacking because certification would be improper
under Rule 23, and, without certification, the plaintiff could
not satisfy the amount-in-controversy requirement. Id. On
appeal, the Third Circuit held that it was premature for the
district court to delve into class certification before the
parties had conducted discovery. Id. at 92-93.
The district court had reasoned that, even with additional
discovery, certification would be denied because the ultimate
issue turned on whether class members consented to receive faxes
or had a prior business relationship with the defendant, and
such questions could not be answered with common, class-wide
evidence. Id. at 93. A divided Third Circuit panel disagreed,
stating that “it is difficult to resolve without discovery
whether there are factual issues regarding class members’
business relationships with defendants or whether they consented
to the receipt of faxes.” Id. at 93-94. The court then cited
Gene & Gene LLC v. BioPay LLC, 541 F.3d 318, 327-28 (5th Cir.
2008), in which the Fifth Circuit declined to rule on class
certification before discovery, because there was a possibility
of a “novel, class-wide means of establishing . . . lack of
consent,” where the question turned on “whether inclusion of the
10
recipients’ fax numbers in a purchased database indicated their
consent to receive faxes.” Landsman, 640 F.3d at 94. The Third
Circuit concluded that the parties should have the opportunity
to develop the record because discovery “is necessary for the
district court to conduct the ‘rigorous analysis’ it is staked
with at this stage . . . .” Id. at 95. The Third Circuit also
discussed “subclassing in lieu of decertification.” Id.
For additional support, Plaintiff cites, among others,
Myers v. MedQuist, Inc., No. 05-4608, 2006 WL 3751210 (D.N.J.
Dec. 20, 2006), which states that “dismissal of class
allegations at this stage should be done rarely and that the
better course is to deny such a motion because ‘the shape and
form of a class action evolves only through the process of
discovery.’” Id. at *4 (quoting Gutierrez v. Johnson & Johnson,
Inc., No. 01-5302, 2002 U.S. Dist. LEXIS 15418, *16 (D.N.J.
2002)).
Defendant’s strongest citations in response are Molina v.
Roskam Baking Co., No. 09-475, 2011 WL 5979087, at *5-*6 (W.D.
Mich. Nov. 29, 2011) (denying class certification of FCRA claims
on the independent, sufficient ground that a five-year
limitations period would raise individual questions that would
predominate over common questions), and Holman v. Experian Info.
Solutions, Inc., No. 11-180, 2012 WL 1496203, at *15 (N.D. Cal.
Apr. 27, 2012) (limiting the class period to two years prior to
11
the filing of the complaint, because a larger class period would
require individual determinations that would predominate over
common issues). Both of those cases were decided after a period
of reasonable discovery and thus do not bear directly on the
issue in this motion, but they are worth some consideration when
analyzing the likely benefit of more discovery. At oral
argument, Defendant’s counsel asserted that the parties had been
unable to find a single decision certifying an FCRA class for
the full five-year period.
In sum, the Third Circuit and district court decisions
counsel caution when deciding Rule 23 issues before a motion for
certification, except where it is clear that the plaintiff could
not meet class certification requirements. While the class as
currently defined ultimately may fail to meet the requirements
of Rule 23, as in Holman and Molina, the Court would be
premature in so ruling at this time.
Here, claims arising within five years of the complaint are
timely under the FCRA, except if the injured party had knowledge
of the violation more than two years prior to the filing of the
Complaint. In other words, all claims within the proposed fiveyear definition are potentially timely. At this stage, the
record does not foreclose the possibility that evidence may
demonstrate a corporate policy of concealment, or at least lack
of notice to the affected individuals that negative criminal
12
background information had surfaced in the CRA reports, and
could permit an inference that the putative class members, or a
subclass of members, did not have knowledge of alleged
violations before December 21, 2010. Further discovery may well
shed light on a scheme to use and conceal CRA reports, or may
buttress Defendant’s position that putative class members were
aware of Canon’s use of background checks before December 21,
2010. Because “it is not clear that, as a matter of law,”
Plaintiff’s class allegations must fail, the “parties should
have the opportunity to develop the record on this issue.”
Landsman, 640 F.3d at 94. This Court must perform a “‘rigorous
analysis’” at the class certification stage and may need to
“‘delve beyond the pleadings to determine whether the
requirements for class certification are satisfied.’” Id. at 93
(quoting In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305,
309, 316 (3d Cir. 2008)). Therefore, the Court, exercising its
discretion, holds that Defendant’s motion for partial summary
judgment or to strike the class definition is premature, and
Plaintiff is entitled to reasonable discovery to support her
class claims. Defendant’s motion is denied without prejudice.
At the same time, Plaintiff’s right to discovery is not
plenary. Rule 26 dictates that “the court must limit the
frequency or extent of discovery” if the discovery is not
proportional to the likely benefit of the evidence sought and
13
the burden imposed on Defendant. Fed. R. Civ. P.
26(b)(2)(C)(iii) (emphasis added); see also Goodman v.
Burlington Coat Factory Warehouse Corp., 292 F.R.D. 230, 232
(D.N.J. 2013) (discussing the “rule of proportionality” inherent
in Rule 26). The remaining inquiry for the Court is how much
discovery Plaintiff is due. To make this determination, the
Court will balance the likely benefit of the information sought
against the burden imposed on the Defendant, considering the
circumstances of this case.
2. Plaintiff’s discovery requests & “likely benefit”
In her supplemental brief, Plaintiff explains that she
seeks evidence that “demonstrates that Defendant’s class-wide
practice was to conceal from class members that the adverse
action was taken against them based on information contained in
their consumer report . . . .” (Pl. Supp. Br. at 2.)
Specifically, she seeks electronic data and hard copy discovery,
and to take Fed. R. Civ. P. 30(b)(6) depositions.
Plaintiff seeks electronic data discovery from Defendant’s
applicant-tracking and HR databases and data from the two CRAs
that supplied background reports to Canon for the entire fiveyear period. (Id. at 3.) She states that this data “will assist
plaintiff in ascertaining which individuals were terminated or
had their conditional offer withdrawn as a result of adverse
information contained in their consumer report.” (Id. at 4.) She
14
states that “[a]dditional discovery regarding this data may
demonstrate that Defendant’s policies or practices were to
conceal the reasons for the adverse action from the application
or employee.” (Id.) She does not describe what form “additional
discovery” might take. Plaintiff also requests hard copies of
employee and applicant files, which might indicate whether
copies of pre-adverse or adverse action notices were sent. (Id.)
Finally, Plaintiff intends to take Rule 30(b)(6)
depositions “regarding Defendant’s policies and procedures for
hiring, termination, and FCRA compliance, and will take
depositions of employees with relevant information regarding the
hiring process, including employees in Human Resources.” (Id. at
5.) Plaintiff asserts that these depositions may reveal “whether
there is evidence of a class-wide policy or practice to conceal
from class members the reason for their termination or
withdrawal of conditional offer of employment, such that class
members would have no reason to know of the facts underlying the
FCRA violation . . . .” (Id.)
Defendant counters that discovery already produced
establishes “that during the entire 5-year limitations period,
Canon’s policy was to furnish applicants with pre-adverse action
and adverse action letters.” (Def. Supp. Br. at 2.) Defendant
attaches internal legal memoranda from 2002 and 2012 that
describe the procedures required to comply with the FCRA. (Def.
15
Supp. Br. Ex. A [Docket Item 66-1].) Defendant also attaches 28
redacted letters sent to 14 employees or job applicants -- all
from 2011 or later -- that notify the recipients of an adverse
employment action or that the company is reviewing a consumer
credit report and providing a summary of rights under the FCRA.
(Def. Supp. Br. Ex. B [Docket Item 66-2].) Defendant also notes
that the facts of Plaintiff’s own termination are consistent
with Defendant being “transparent” with employees or candidates,
because Plaintiff was informed that her background check
revealed an undisclosed felony conviction. (Def. Supp. Br. at
2.)
Defendant further argues that the discovery sought would
not enable certification under Rule 23, because even if the
discovery yielded information to identify class members, no
evidence would yield answers to the statute of limitations
question on a class-wide basis. Defendant asserts that the CRA
data does not indicate whether an employee or applicant was
terminated, and the electronic HR database “is insufficient as a
source for that information on a class-wide basis.” (Id. at 5.)
Defendant asserts that the only way “to determine who on the CRA
databases was not hired or, if hired, was terminated” is “to
search the database for only those names,” and the only way to
determine the reason for the adverse action is to review the
hard copy files. (Id.) “Thus, absent an immense amount of
16
individualized applicant-by-applicant review and ultimately
depositions of each and every applicant, expanding the scope of
discovery to 5-years does nothing to advance the necessary SOL
inquiry of whether individuals whose claims arose during the
prior three years were aware of their claim.” (Id.)
The only discovery that Plaintiff describes that might
provide class-wide evidence of wrongdoing is deposition
testimony about company policies and practices. While databases
and files may aid in identifying which employees or applicants
were terminated or not hired by Defendant, and which individuals
had criminal hits on their background checks, Plaintiff does not
explain how this information would answer the question of when
each individual had knowledge that a background check was
responsible, at least in part, for each termination or denial of
employment. Plaintiff speculates that depositions could yield
revelations that the company systematically deprived employees
and applicants of their rights under the FCRA.
Rule 26 directs the Court to consider the “likely benefit”
of this discovery, and, here, the likelihood that discovery
would uncover evidence of a policy or scheme of concealing
background checks to employees is low, in light of what is
already known. At this time, the record does not contain any
evidence that Canon did or did not give proper notices to
employees or applicants between 2007 and 2010. At oral argument,
17
Plaintiff’s counsel admitted that, to date, she has not
identified any individual who claims that Canon violated his or
her rights prior to December 21, 2010; McPherson herself is not
such a person, and Plaintiff’s counsel stated that her basis for
alleging the existence of an illegal company policy or practice
is Plaintiff’s own experience. The record does contain FCRA
notice letters from 2011 and later, and two legal memoranda from
2002 and 2012 distributed to Canon’s human resource managers
detailing how to comply with FCRA procedures. While these
documents are not conclusive against Plaintiff at this stage,
they decrease the likelihood that class-wide evidence of a
concealment policy exists in a manner that would vitiate the
need for individualized inquiries about knowledge of the use CRA
criminal background information and permit certification of a
five-year, as opposed to two-year, class.
The Court now will consider the burden Defendant faces in
fulfilling these discovery requests.
3. Defendant’s burden
Defendant asserts that the review of databases and
individual files for the two-year limitations period “required
months of work costing hundreds of thousands of dollars” and the
“same level of effort would be necessary to review data for the
prior three years.” (Def. Supp. Br. at 5-6.)
18
Defendant describes the file-by-file research required to
cross-check individuals in the CRA databases with HR records,
and then the necessity to locate physical files to see if there
is evidence that those individuals received proper FCRA notice.
(Id. at 4.) The CRA and HR databases do not uniformly record the
reasons for termination or withdrawal of a conditional offer of
employment; some database entries may have such information in a
“notes field” or equivalent field, but such information may not
exist for other entries. (Pl. Supp. Br. Ex. B. [Docket Item 652] at 8; Ex. A. [Docket Item 65-1] at 1.) Therefore, according
to Defendant, merely identifying which employees or applicants
were not hired or not retained might require manual searches of
files.
Defendant contends the depositions would be burdensome
because “the deponent or deponents would have to become educated
as to practices for the 5-year period, requiring review of the
above-described records and interviews with other company
personnel -- essentially the same level of review as necessary
for production of the underlying documents.” (Def. Supp. Br. at
6.) Defendant further asserts that “employment decisions are
made by individual HR heads in the regional offices,” and thus a
deponent “would have to be debriefed” about the individual
managers’ practices during the additional three-year period.
19
(Id.) Defendant asserts that the preparation needed for
depositions “would be extremely burdensome.” (Id.)
Plaintiff replies that Defendant “vastly overstates the
burden of producing the additional electronic data.” (Pl. Supp.
Reply at 3.) Plaintiff argues that Defendant previously stated
it could retrieve discovery related to the two-year period
within two weeks. (Id., citing Pl. Ex. B. [Docket Item 65-2] at
5-6, 10-11.) At oral argument, Defendant’s counsel stated that
the projections underestimated the amount of time and effort
required to sift through the data, and that the actual cost and
burden involved weeks of time and a six-figure outlay of costs.
Plaintiff maintains that the Court should deny Defendant’s
motion as premature or, at the very least, permit Plaintiff to
take only her 30(b)(6) deposition regarding the entire time
period. (Id.)
Taking Rule 30(b)(6) depositions on corporate policies and
practices of FCRA compliance would not have to be as burdensome
as Defendant suggests. One or more Canon representatives from
the relevant period may be able to speak to the existence or
nonexistence of corporate policies to disclose or to conceal the
role criminal background checks played in terminations or
applicant rejections, during the five-year period or what
guidance Canon headquarters provided to the regional HR managers
-- all without the deponent conducting the exhaustive research
20
into all managers’ individual hiring practices, as Defendant
describes.
Limited discovery could be conducted without placing an
unreasonable burden on Defendant while providing Plaintiff a
reasonable opportunity to pursue her class allegations.
Accordingly, because Plaintiff seeks evidence of a corporate
policy to support her class allegations, the Court will permit
Rule 30(b)(6) depositions of Canon representatives to explore
whether Canon had corporate policies of concealing or revealing
the role of criminal background checks in terminations or
applicant rejections, or otherwise had a policy of promoting or
ignoring compliance with the FCRA. Rule 30(b)(6) depositions may
cover the existence of policies (including the legal memoranda
of January 23, 2002, and December 31, 2012) related to FCRA
compliance, how those policies were communicated to personnel
heads, and whether Canon made efforts to determine if hiring
managers operated in compliance with those policies. Rule
30(b)(6) representatives may testify to their knowledge of
corporate policies, and would not need to be educated as to
every hiring manager’s individual practices. Plaintiff would not
be permitted to inquire about individual hiring decisions in the
2007-2010 period.
Plaintiff also is entitled to limited discovery of
information from the various databases that have already been
21
subject to discovery for the two-year limitations period. The
parties represented to the Court that they have agreed to
queries and data fields to limit the amount of data produced for
the two-year period. The Court will permit Plaintiff to seek the
equivalent information for the full five-year period, but using
a sampling protocol as described below to reduce the burden for
the 2007-2010 period. Such a data exchange shall be limited to
individuals who were terminated or not hired as a result of
criminal activity appearing on their background checks.5
To date, Canon has produced no evidence of written FCRA
notices given to terminated employees or unsuccessful applicants
for whom criminal background information in a CRA report was
utilized during the period from December 21, 2007, to December
21, 2010. On the other hand, Plaintiff McPherson has proffered
no particular support for her allegation that Canon violated the
5
Plaintiff argues that the FCRA does not distinguish among type
of information in the report (i.e., criminal, bankruptcy,
consumer credit). However, Plaintiff’s stated basis for class
allegations through December 21, 2007, is Plaintiff’s own
experience, which involved the use of criminal background
information from a CRA in denying Plaintiff permanent
employment. It would be disproportionate to the scope of matters
in dispute to open discovery to all reasons for non-hiring or
termination beyond the use of criminal background information in
a CRA report. Plaintiff currently has no knowledge of any FCRA
violation involving termination or rejection based on noncriminal information in a background report, let alone a class
representative who experienced such adverse employment action.
Therefore, any data discovery for the period between December
21, 2007, and December 21, 2010, will be limited to employment
actions related to criminal information in CRA reports.
22
FCRA in this regard. Plaintiff’s proposal for wide-ranging
discovery of Canon’s files for the pre-December 21, 2010 period
is unjustifiable by the present facts. For purposes of pre-class
certification discovery, Plaintiff’s showing with regard to this
earlier three-year period is weak6 and the burdens placed on
Canon would be great, as described above. Therefore, only a
small random sample of such files need be searched for the
existence of FCRA compliance letters giving FCRA notice to the
affected employee or applicant on criminal record grounds. A
sampling protocol that (1) uses the methodology and keywords to
search the databases to identify files that the parties have
agreed to for the 2010-present files, then (2) limits the sample
to criminal background CRA circumstances, and (3) further limits
the manual search of such files to a fraction of such files,
e.g., ten percent (10%) of the otherwise eligible names, would
seem to strike the proper balance between Plaintiff’s rather
weak need for this information versus the Defendant’s burden of
identifying such files, searching for their whereabouts,
manually inspecting them, and producing FCRA-compliant notices
(or ascertaining lack of such notices) therein.
6
As noted, Plaintiff herself does not have this issue since she
is not in the pre-December 21, 2010 group, nor does Plaintiff
proffer evidence that anyone in that group actually experienced
an FCRA violation in their termination or non-hiring.
23
This random ten-percent sample for purposes of class
certification discovery is calculated to be a reasonable proxy
for the whole and to reveal whether there is any probative
reason to believe that the first three-year class members were
uniformly not given their FCRA notices. If the two-year search
returned between 100 and 125 relevant files, as Defendant
represents, a three-year search could be expected to return
between 150 and 190 files; a ten-percent sampling of that yield
would require physical search of between 15 and 19 files.
Chances are that such a sample group will either disclose a
uniform pattern of non-compliance (in which case the eventual
commonality and ascertainability criteria might be satisfied),
or of non-uniform compliance (in which case it becomes likely
that individual questions of class-members’ knowledge of an FCRA
violation would predominate over common questions and ready
ascertainability of class membership for the period would be
doubtful), or of uniform compliance (in which case Plaintiff
would lack a basis to proceed further for the pre-December 21,
2010 period). If, due to the practicalities of the search, this
method is not producing a roughly representative sample or, on
the other hand, is creating an excessive burden, the parties may
agree to alter the scope of the search appropriately. The
Defendant may employ any reasonable random method for selecting
the ten-percent sample. The parties shall coordinate the
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deadlines for this discovery with Judge Donio, in conjunction
with other discovery disputes.
IV. Conclusion
Defendant’s motion for partial summary judgment or to
strike the class definition is premature and will be denied
without prejudice. Limited discovery on the additional threeyear period between December 21, 2007, and December 21, 2010,
will be permitted consistent with this Opinion. An accompanying
Order will be entered.
February 20, 2014
s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge
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