GETER v. ADP SCREENING AND SELECTION SERVICES, INC.

Filing 30

OPINION. Signed by Judge William J. Martini on 4/23/15. (gh, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

MYLES GETER, on behalf of himself and all
others similarly situated,
Plaintiff,

Civ. No. 2:14-cv-3225 (WJM)

OPINION

v.
ADP SCREENING AND SELECTION
SERVICES, INC., et al.,
Defendants.

WILLIAM J. MARTINI, U.S.D.J.:
Plaintiff Myles Geter filed this putative class action against Defendants ADP
Screening and Selection Services, Inc. (“ADP”) and Planned Companies, Inc. (“Planned
Companies”). The four-count Amended Complaint asserts claims under the Fair Credit
Reporting Act, 15 U.S.C. § 1681 et seq. (“FCRA”), and the New Jersey Consumer Fraud
Act, N.J. Stat. Ann. § 56:8-1 et seq. (“CFA”). Those claims arise from Planned
Companies’ rejection of Plaintiff’s application for employment following a background
check by ADP.
This matter comes before the Court on (1) ADP’s motion for summary judgment
on Counts One and Three under Federal Rule of Civil Procedure 56, (2) ADP’s motion to
dismiss Count Four1 under Federal Rule of Civil Procedure 12(b)(6), and (3) Planned
Companies’ motion to dismiss Count Two under Rule 12(b)(6). There was no oral
argument. Fed. R. Civ. P. 78(b). For the reasons set forth below, ADP’s motion for
summary judgment is DENIED, ADP’s motion to dismiss is GRANTED, and Planned
Companies’ motion to dismiss is DENIED.
I.

BACKGROUND
A. Legal Framework

The FCRA’s purpose is “to ensure fair and accurate credit reporting, promote
efficiency in the banking system, and protect consumer privacy.” Gelman v. State Farm
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Incorrectly labeled “Count Three.”
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Mut. Auto. Ins. Co., 583 F.3d 187, 191 (3d Cir. 2009) (citation omitted). It contains
provisions governing the use of consumer reports for employment purposes.
Under the FCRA, a “user” of a consumer report who intends to take an “adverse
action” on a job application “based in whole or in part” on information obtained from the
consumer report must provide a copy of the report to the job applicant, along with a
notice of the applicant’s dispute rights under the FCRA, before taking the adverse action
(a “pre-adverse action notice”). 15 U.S.C. § 1681b(b)(3). Additionally, after an adverse
action occurs, the consumer employment applicant must receive a second notice. Id. §
1681m.
Further, under Section 1681i(a)(1)(A), credit reporting agencies must promptly
reinvestigate any information in a consumer’s file that a consumer disputes and either
record the current status of the information in dispute or delete it. Section 1681i sets
forth a fairly specific process for disputing information in a credit report. A consumer
must first inform the credit agency of the dispute. Id. § 1681i(a)(1). The credit reporting
agency must reinvestigate promptly. The agency must then appropriately respond to the
dispute based on the results of its reinvestigation. This includes deleting or modifying
disputed information when appropriate. Id. § 1681i(a)(5). The credit reporting agency
must also notify the consumer promptly of the results of the reinvestigation in writing.
Id. § 1681i(a)(6).
B. Factual Background
The following facts are alleged in the Amended Complaint. Plaintiff is a New
Jersey citizen who applied for a position at Planned Companies. Am. Compl. ¶ 12, 29,
ECF No. 4. Defendant Planned Companies provides janitorial, maintenance,
concierge/front desk and security services to its clients. Am. Compl. ¶ 14. Defendant
ADP provides pre-employment screening reports. Id. ¶ 11.
As part of its employment screening process, Planned Companies employs ADP to
perform background searches of public record information concerning job applicants,
including Plaintiff. Am. Compl. ¶¶ 11, 25, 31. These background searches include the
applicant’s alleged criminal record history. Id. ¶ 17. Planned Companies also employed
ADP to send out FCRA pre- and adverse action notices to consumers who applied for
employment positions with Planned Companies. Id. ¶ 25. Plaintiff alleges that ADP did
more than just conduct background searches and send out notices, however. Id. ¶ 25.
Specifically, Plaintiff maintains that Planned Companies provided ADP in advance with
criteria that ADP used to “adjudicate” whether or not to disqualify an applicant based on
the consumer report ADP generated. Id. ¶ 25.
Regarding Plaintiff’s circumstances, in February 2007, Plaintiff “was falsely
accused of threatening a former classmate over the website MySpace and was arrested on

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a variety of improper criminal charges.” Am. Compl. ¶ 27. The charges against Plaintiff
were eventually dropped due to a lack of evidence. Id. ¶ 28.
On February 25, 2013, Plaintiff applied for a position as a concierge at Planned
Companies. Am. Compl. ¶ 29. He was immediately offered an interview, which took
place on February 27, 2013. Id. ¶ 30. That same day, Planned Companies employed
ADP to perform a background check on Plaintiff. Id. ¶ 31. ADP prepared and delivered
a consumer report concerning Plaintiff to Planned Companies on March 5, 2013, which
included adverse criminal record information relating to the false accusations from 2007.
Id. ¶ 33.
On March 8, 2013, Plaintiff contacted Planned Companies to follow up on his
interview. Am. Compl. ¶ 34. He was informed that his consumer report contained a
criminal record and that “an adverse action had already been ordered” denying his
application for employment based on the contents of the ADP report. Id. Planned
Companies then sent Plaintiff a digital copy of a computer-generated form pre-adverse
action notice, dated March 7, 2013, from ADP to Plaintiff (the “Pre-Adverse Action
Notice”). Id. ¶ 35. That same day, Plaintiff contacted ADP to dispute the completeness
and accuracy of ADP’s consumer report. Id. ¶ 37. ADP allegedly refused to process
Plaintiff’s dispute or initiate a reinvestigation of the disputed information. Id. ¶ 38.
Plaintiff alleges that at the time Defendants sent the Pre-Adverse Action Notice to
him – and in conformity with Defendants’ customary practices – an employment decision
regarding his application had already been made. Am. Compl. ¶ 36. Plaintiff thus argues
that he was deprived of the opportunity to address ADP’s inaccurate reporting with
Planned Companies before adverse action was taken, in violation of the FCRA.
II.

LEGAL STANDARD
A. Summary Judgment

Federal Rule of Civil Procedure 56 provides for summary judgment “if the
pleadings, the discovery [including, depositions, answers to interrogatories, and
admissions on file] and disclosure materials on file, and any affidavits show that there is
no genuine issue as to any material fact and that the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56; see also Celotex Corp. v. Catrett, 477 U.S. 317, 32223 (1986); Turner v. Schering-Plough Corp., 901 F.2d 335, 340 (3d Cir. 1990). A factual
dispute is genuine if a reasonable jury could find for the non-moving party, and is
material if it will affect the outcome of the trial under governing substantive law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Court considers all
evidence and inferences drawn therefrom in the light most favorable to the non-moving
party. Andreoli v. Gates, 482 F.3d 641, 647 (3d Cir. 2007).

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Initially, the moving party has the burden of demonstrating the absence of a
genuine issue of material fact. Celotex Corp., 477 U.S. at 323. Once the moving party
has met this burden, the nonmoving party must identify, by affidavits or otherwise,
specific facts showing that there is a genuine issue for trial. Id. The opposing party must
do more than just rest upon mere allegations, general denials, or vague statements.
Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001). Rather, to withstand a proper
motion for summary judgment, the nonmoving party must identify specific facts and
affirmative evidence that contradict those offered by the moving party. Anderson, 477
U.S. at 256-57.
B. Motion to Dismiss
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint,
in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted.
The moving party bears the burden of showing that no claim has been stated. Hedges v.
United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion to dismiss under
Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in
the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975);
Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir.
1998).
Although a complaint need not contain detailed factual allegations, “a plaintiff’s
obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels
and conclusions, and a formulaic recitation of the elements of a cause of action will not
do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the factual allegations
must be sufficient to raise a plaintiff’s right to relief above a speculative level, such that it
is “plausible on its face.” See id. at 570; see also Umland v. PLANCO Fin. Serv., Inc.,
542 F.3d 59, 64 (3d Cir. 2008). A claim has “facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 556). While “[t]he plausibility standard is not akin to a
‘probability requirement’ . . . it asks for more than a sheer possibility.” Id.
III.

DISCUSSION

The Amended Complaint asserts the following claims:
(1) Count One: Violation of FRCA Section 1681b(b)(3) against ADP;
(2) Count Two: Violation of FRCA Section 1681b(b)(3) against Planned
Companies;
(3) Count Three: Violation of FRCA Section 1681i(a) against ADP; and
(4) Count Four: Violation of the CFA against ADP.

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ADP moves for summary judgment on Counts One and Three and to dismiss
Count Four. Planned Companies moves to dismiss Count Two.
A. ADP’s Motion for Summary Judgment is Premature
ADP moves for summary judgment pre-discovery and attaches evidence in
support of its motion. Plaintiff argues that ADP’s motion is premature, citing Federal
Rule of Civil Procedure 56(d).
Rule 56(d) states:
If a nonmovant shows by affidavit or declaration that, for specified reasons,
it cannot present facts essential to justify its opposition, the court may: (1)
defer considering the motion or deny it; (2) allow time to obtain affidavits
or declarations or to take discovery; or (3) issue any other appropriate
order.
The Third Circuit has long interpreted this rule to require that “a party seeking further
discovery in response to a summary judgment motion submit an affidavit specifying, for
example, what particular information is sought; how, if uncovered, it would preclude
summary judgment; and why it has not previously been obtained.” Dowling v. City of
Philadelphia, 855 F.2d 136, 140-41 (3d Cir. 1988). Vague or general statements of what
a party hopes to gain through a delay for discovery under Rule 56(d) are insufficient.
Hancock Indus. v. Schaeffer, 811 F.2d 225, 230 (3d Cir. 1987). However, if a party
opposing summary judgment files an affidavit that addresses these three requirements
with specificity, the Third Circuit has held that “a continuance of a motion for summary
judgment for purposes of discovery should be granted almost as a matter of course.”
Sames v. Gable, 732 F.2d 49, 51 (3d Cir. 1984). This is especially true when particular
information, necessary to the successful opposition to summary judgment, is in the sole
possession of the moving party. Id.
The parties have not yet conducted any discovery in this matter. See Reed v.
Staniero, No. 06-3496, 2007 WL 3430935, at *7 (D.N.J. Nov.13, 2007) (distinguishing
between cases where “further discovery is sought” and cases “where no meaningful
discovery has taken place”; in the later Dowling is less strictly applied). And Plaintiff
submitted an affidavit setting forth the information he will seek in discovery, how that
information would preclude summary judgment, and why he has not previously obtained
that evidence. For instance, regarding his Section 1681(b)(3) claim, Plaintiff will seek
information regarding the particular process actually followed by ADP and Planned
Companies when providing notices under the FCRA. And regarding his Section 1681i(a)
claim, Plaintiff will seek information on ADP’s policies, procedures, and training on
identifying consumer disputes and conducting FCRA reinvestigations of disputed items.

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An argument that Plaintiff has failed to produce evidence supporting its claim is
unconvincing where – as here – Plaintiff has not yet been afforded the opportunity to
conduct discovery and much of the relevant evidence is in the sole possession of the
moving party. ADP’s summary judgment motion will be denied without prejudice as
premature.
B. Motions to Dismiss
The Court now turns to Defendants’ motions to dismiss. The Court finds that
Count Two adequately alleges a FCRA claim against Planned Companies and will deny
Planned Companies’ motion. However, Count Four does not allege a CFA claim against
ADP. The Court will thus grant ADP’s motion and dismiss Count Four with prejudice.
i. Planned Companies Motion to Dismiss Count Two
Count Two asserts a claim against Planned Companies under FCRA Section
1681(b)(3), based on Planned Companies alleged failure to provide Plaintiff with the PreAdverse Action Notice before taking an adverse action against him. Planned Companies
first argues that the Court should dismiss Count Two, because the contract between ADP
and Planned Companies indicates that ADP did not automatically disqualify candidates
based on pre-set criteria. The contract to which Planned Companies refers is extrinsic to
the pleadings. Further, it is not “integral to or explicitly relied upon” in the Amended
Complaint, which focuses on the actual process followed by ADP and Planned
Companies when providing pre-adverse action notices. In re Burlington Coat Factory
Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (quotations omitted) (emphasis in
original). The Court will not consider it in this procedural context.
Planned Companies next argues that even if ADP did adjudicate Plaintiff’s
candidacy, Plaintiff has not alleged that Planned Companies took any adverse action
against Plaintiff prior to sending the Pre-Adverse Action Notice. The Court disagrees.
FCRA section 1681b(b)(3) imposes obligations on any “person” who “[uses] a
consumer report for employment purposes.” 15 U.S.C. § 1681b(b)(3)(A). Such a person,
before taking any adverse action based in whole or in part on the report, . . .
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.
Id. “The clear purpose of this section is to afford employees time to discuss reports with
employers or otherwise respond before adverse action is taken.” Goode v. LexisNexis

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Risk & Info. Analytics Grp., Inc., 848 F. Supp. 2d 532, 537 (E.D. Pa. 2012) (citations and
quotations omitted).
The denial of employment is an adverse action under the FCRA. 15 U.S.C. §
1681a(k)(1)(B)(ii). Adverse employment action under the FCRA “occurs when the
decision is carried out, when it is communicated or actually takes effect….” Goode, 848
F. Supp. 2d at 540.
In support of its motion, Planned Companies relies heavily on a decision from the
Eastern District of Pennsylvania – Moore v. Rite Aid Hdqtrs Corp., 33 F.Supp.3d 569
(E.D. Pa. 2014). In Moore, the plaintiff argued that “Rite Aid’s employment decision
actually took effect upon the completion of a LexisNexis adjudication and that the
opportunity thereafter to provide information was a mere formality designed to satisfy §
1681b(b)(3).” Id. at 574. The court granted Rite Aid’s motion to dismiss, because that
argument was not supported by allegations in the complaint. See id. (“If such an
argument was supported by the allegations in the Complaint, and it is not, plaintiff would
state a claim upon which relief could be granted on this ground.”).
Unlike Moore, here the Amended Complaint sufficiently alleges that Planned
Companies’ employment decision actually took effect upon completion of ADP’s
adjudication and that the opportunity to provide information was a mere formality to
satisfy Planned Companies’ FCRA obligations. It states “the date of the adverse
employment action against [Plaintiff] was the date that ADP created and instantly
‘adjudicated’ his application. No further discretionary action was taken by Planned
Companies after that moment.” Am. Compl. ¶ 32. It further provides that ADP’s
consumer report regarding Plaintiff is dated March, 5, 2013. Id. ¶ 33. And it alleges that,
on March 8, 2015, Plaintiff called Planned Companies to follow up on his application.
Id. ¶ 34. In response, a representative told him that “his background report contained a
criminal record and that an adverse action had already been ordered denying him
employment with Planned Companies because of the contents of the ADP report.” Id. ¶
34. Read in the light most favorable to Plaintiff, these allegations support a claim under
FCRA Section 1681b(b)(3) against Planned Companies. The Court will thus deny
Planned Companies’ motion to dismiss Count Two.
Finally, in its motion to dismiss, Planned Companies argues that the Court should
deny class certification, because Plaintiff is not a member of the class he seeks to
represent. First, no class certification motion is currently pending before this Court.
Further, this action is not a “rare case[] where the complaint itself demonstrates that the
requirements for maintaining a class action cannot be met.” Clark v. McDonald’s Corp.,
213 F.R.D 198, 205 n.3 (D.N.J. 2003) (citing Miller v. Motorola, Inc., 76 F.R.D. 516
(N.D. Ill. 1977). Planned Companies’ argument is thus premature, and the Court will not
consider it at this time. Planned Companies may renew this argument following
discovery.

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ii. ADP’s Motion to Dismiss Count Four
In Count Four, Plaintiff asserts a claim against ADP under the CFA for knowingly
failing to provide complete information in its consumer report regarding Plaintiff. Am.
Compl. ¶ 9. ADP argues that the FCRA preempts this state law claim and, alternatively,
that Plaintiff is not a “consumer” under the CFA. Because the Court finds that Plaintiff is
not a “consumer” under the CFA, the Court need not reach ADP’s preemption argument.
The CFA prohibits the use of unconscionable commercial practices or fraud “in
connection with the sale” of merchandise or real estate. N.J. Stat. Ann. § 56:8-2. To
state a CFA claim, a plaintiff must show three things: “1) unlawful conduct by defendant;
2) an ascertainable loss by plaintiff; and 3) a causal relationship between the unlawful
conduct and the ascertainable loss.” Bosland v. Warnock Dodge, Inc., 964 A.2d 741, 749
(N.J. 2009). A plaintiff must also show that he is a “consumer” and that he purchased
“merchandise.” Viking Yacht Co. v. Composites One LLC, 496 F.Supp.2d 462, 473
(D.N.J. 2007).
Plaintiff’s CFA claim fails because he did not purchase anything from ADP. See
Huertas v. Galaxy Asset Mgmt., 641 F.3d 28, 35 (3d Cir. 2011) (“[Plaintiff] has failed to
state a claim under the NJCFA because his complaint is not based on [defendants’]
marketing or sale of merchandise or services to him.”); Boyko v. Am. Int’l Grp., Inc., No.
08-2214, 2009 WL 5194431, at *3 (D.N.J. Dec. 23, 2009) (dismissing a CFA claim
because the plaintiff did not buy anything from the defendant). The allegation that
Planned Companies bought an inaccurate consumer report concerning Plaintiff from
ADP does not provide Plaintiff with a cause of action against ADP under the CFA. Thus,
the Court will dismiss Count Four. Further, because the Court finds that amendment of
Count Four would be futile, the Court will dismiss Count Four with prejudice.
IV.

CONCLUSION

For the above reasons, ADP’s motion for summary judgment is DENIED, ADP’s
motion to dismiss is GRANTED, and Count Four is DISMISSED WITH
PREJUDICE. Further, Planned Companies’ motion to dismiss is DENIED. An
appropriate order follows.

/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
Date: April 23, 2015

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