Smith et al v. The Ohio State University
Filing
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ORDER granting 7 Motion to Dismiss; granting 22 Motion for Leave to File. Signed by Judge George C. Smith on 6/8/16. (lvw)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
DEANNA SMITH, et al.,
Plaintiffs,
v.
Case No.: 2:15–CV–3030
JUDGE SMITH
Magistrate Judge Deavers
THE OHIO STATE UNIVERSITY,
Defendant.
OPINION AND ORDER
This matter is before the Court upon Defendant’s Motion to Dismiss (Doc. 7). Plaintiffs
responded to Defendant’s motion (Doc. 18) and Defendant replied in support of its motion (Doc.
20).
Also before the Court is Plaintiffs’ Motion for Leave to File a Surreply (Doc. 22).
Defendant opposed Plaintiffs’ Motion (Doc. 23) and Plaintiffs replied in support (Doc. 25). Last,
Defendant filed a notice of Supplemental Authority (Doc. 26). These matters are now ripe for
review. For the following reasons, Defendant’s Motion to Dismiss is GRANTED.
I.
BACKGROUND
This lawsuit arises out of the hiring process of Deanna Smith (“Smith”) and Harmoni
Sauder (“Sauder”) when they applied to work at The Ohio State University (“OSU”). Smith and
Sauder (collectively “Plaintiffs”) assert that OSU violated the Fair Credit Reporting Act
(“FCRA”) when it hired Plaintiffs and others who are allegedly similarly situated. During the
hiring process, OSU asked Plaintiffs for consent to pull credit reports in order to conduct
background checks before making a final hiring decision. (Doc. 3, Compl. at ¶ 32). Plaintiffs
allege that OSU provided a disclosure and authorization to Plaintiffs which improperly included
extraneous information such as a liability release, in violation of the FCRA. (Id.). Ultimately,
Plaintiffs were both hired by OSU but allege that they were injured by having their privacy and
statutory rights violated. (Id. at ¶¶ 30–31). Accordingly, Plaintiffs bring two causes of action
under the FCRA: failure to make proper disclosure and failure to obtain proper authorization
under 15 U.S.C. § 1681b(b)(2)(A)(ii).
II.
DISCUSSION
OSU challenges the jurisdiction of this Court pursuant to Rule 12(b)(1) of the Federal
Rules of Civil Procedure, arguing that both Eleventh Amendment Immunity and a lack of
standing preclude the jurisdiction of this Court. Plaintiffs argue that OSU waived Eleventh
Amendment Immunity and that standing exists. The Court will address each argument in turn.
A.
Eleventh Amendment Immunity
OSU claims that it is immune from Plaintiffs’ FCRA claims under the Eleventh
Amendment. Before addressing the merits of the Eleventh Amendment defense, the Court must
rule on Plaintiffs’ Motion for Leave to file a Surreply. In its reply in support of its motion,
OSU—for the first time—argued that the FCRA does not apply to OSU because the Eleventh
Amendment bars the application of the FCRA to OSU. Although OSU asserts that it made the
same argument in the original Motion, that statement is simply not accurate. The headings alone
clearly show that OSU made a new argument in its reply. OSU’s Motion has a section titled
“Sovereign Immunity Bars Plaintiffs’ Claims against Ohio State, a State Entity.” (Doc. 7, Mot.
at 5). Notably, the headings and the corresponding section do not assert that the Eleventh
Amendment bars the application of the FCRA to OSU. Rather, the next two sections make it
unequivocally clear that OSU’s Motion argued that the FCRA does not abrogate Eleventh
Amendment Immunity, which is an entirely different argument. (See id. at 7–8 (subsections
titled “Congress Lacked Authority to Abrogate State Sovereign Immunity. . . .” and “. . .
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Congress Did Not Make Any Intention to Abrogate Sovereign Immunity ‘Unmistakably
Clear.’”)). Accordingly, Plaintiffs’ Motion for Leave to file a Surreply is GRANTED.
The Eleventh Amendment bars “any suit in law or equity, commenced or prosecuted
against one of the United States.” U.S. Const. amend. XI. “It is well settled that sovereign
immunity applies to ‘state agents and instrumentalities,’ . . . in addition to the states themselves.”
“Sovereign immunity applies not only to the states themselves, but also to ‘state agents and
instrumentalities.’” Beil v. Lake Erie Corr. Records Dep’t, 282 F. App’x 363, 366 (6th Cir.
2008) (quoting Regents of Univ. of Calif. v. Doe, 519 U.S. 425, 429 (1997)). There are three
exceptions to Eleventh Amendment immunity: (1) “Congress may abrogate immunity by
statute;” (2) “suit[s] against a state official seeking prospective injunctive relief . . . ;” and
(3) waiver by the state. Carten v. Kent State Univ., 282 F.3d 391, 398 (6th Cir. 2002) (citing Ex
parte Young, 209 U.S. 123 (1908); Lawson v. Shelby Cnty., 211 F.3d 331 (6th Cir. 2000)).
As Plaintiffs have not made claims against state officials in this case and Plaintiffs agree
that the FCRA did not abrogate OSU’s immunity, the first and second exceptions are not
applicable. Instead, the Court focuses on the Plaintiffs’ assertion that OSU waived its Eleventh
Amendment Immunity. OSU argues that it is substantively immune from suit and has not
waived that immunity by consenting to federal jurisdiction.
A state may waive its Eleventh Amendment Immunity by consenting to suit in three
ways: (1) by expressly consenting to suit in court; (2) by voluntarily appearing in federal court
and defending a case on the merits; and (3) “when the state agrees to administer a federal-state
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program that imposes certain federal standards upon the state.” Lawson, 211 F.3d at 334. Only
the first type of waiver is applicable in this case. 1
OSU argues that it is substantively immune from suit in this case because the Eleventh
Amendment prevents Congress from making laws which could apply to OSU. Plaintiffs argue
that OSU is making an application argument using an abrogation analysis which does not apply.
The Court agrees with Plaintiffs. OSU’s argument for immunity is that Congress “lacked both
the authority and intent to bring the States within the scope of the [FCRA].” (Doc. 20, Reply at
7). However, OSU’s analysis regarding “intent and authority” is just an application of immunity
abrogation law, not substantive application law.
The Eleventh Amendment unequivocally does not cull Congress’ power to create laws
which apply to state institutions, regardless of whether a state institution may ultimately be
immune from suit. The language of the Eleventh Amendment is self-evident in that it bars “any
suit in law or equity, commenced or prosecuted against one of the United States.” U.S. Const.
amend. XI (emphasis added).
It very notably does not bar laws from applying to state
institutions if immunity should not apply for some other reason. OSU essentially argues that if
Congress makes a law that does not abrogate sovereign immunity, then the law cannot ever apply
to OSU. That argument has no merit. Congress may create a law which is intended to apply to
states and their institutions but is not intended to abrogate immunity.
As stated above, there are three exceptions to Eleventh Amendment Immunity—
abrogation, waiver, and Ex parte Young claims. As Plaintiffs correctly assert, if the Eleventh
Amendment required Congress to abrogate immunity in making any law applicable to state
institutions, the other exceptions to Eleventh Amendment Immunity would be superfluous.
1
Plaintiffs do not argue that OSU defended the case on its merits. However, the Court notes that OSU’s argument
that the FCRA “does not apply to the States” could be construed as an attack on the merits of the case.
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Accordingly, any argument that the FCRA does not apply to OSU cannot and does not arise
under the Eleventh Amendment and must be presented in a motion brought under Federal Rule
of Civil Procedure 12(b)(6). Further, the FCRA explicitly applies to OSU as it includes “any . . .
government or governmental subdivision or agency, or other entity.” 15 U.S.C. § 1681a(b).
OSU cannot seriously argue that such a broad definition does not encompass OSU, which OSU
readily admits is “an arm of the state.” (Doc. 7, Mot. at 6). The FCRA applies to OSU if its
Eleventh Amendment Immunity is waived voluntarily.
Plaintiffs argue, and the Court agrees, that Ohio—and OSU in turn—waived its Eleventh
Amendment Immunity from suit in enacting the Ohio Court of Claims Act (“OCCA”). OSU
argues that OCCA cannot create substantive rights which do not otherwise exist. OSU again
argues that Congress lacked the “authority and intent” to apply the FCRA to OSU. (Doc. 20,
Reply at 10). The Court has already dismissed this argument because it improperly relies on the
standards for abrogation in attempting to analyze the application of the FCRA. Further, the
Court found that the FCRA applies to OSU because it is a “government or governmental
subdivision or agency, or other entity.” 15 U.S.C. § 1681a(b).
In enacting OCCA, Ohio “waives its immunity from liability . . . and consents to be sued,
and have its liability determined, in the court of claims created in this chapter in accordance with
the same rules of law applicable to suits between private parties . . . .” Ohio Rev. Code
§ 2743.02(A)(1). It is undisputed that OCCA is a waiver of Ohio’s sovereign immunity and that
it extends to federal causes of actions. Fischer v. Kent State Univ., 459 F. App’x 508, 509 (6th
Cir. 2012) (quoting Ohio Rev. Code § 2743.02(A)(1); Leaman v. Ohio Dep’t of Mental
Retardation & Dev. Disabilities, 825 F.2d 946, 952 (6th Cir. 1987) (en banc)). OSU argues that
OCCA created a quid pro quo for plaintiffs who waive state and federal claims against
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individuals when filing in the Court of Claims, not an “unrestricted prospective waiver.” (Doc.
20, Reply at 11). However, if a plaintiff under OCCA waives state and federal claims, it would
follow that a true quid pro quo—as OSU alleges—would require that Ohio waives its immunity
to state and federal claims. The Court agrees with OSU that OCCA does not create unlimited
liability in all suits alleging federal or state claims because OCCA does not create substantive
rights. However, this merely means that OCCA does not require the state to waive any defenses
it may have to a claim brought in the Court of Claims. As discussed infra, OSU is subject to the
FCRA even though the FCRA did not abrogate OSU’s immunity. Thus, once Ohio enacted
OCCA, OSU became subject to suits under the FCRA in the Ohio Court of Claims.
Accordingly, OSU is not immune from suit because Ohio waived its sovereign immunity from
suits under the FCRA when it enacted OCCA.
B.
Standing
The Court’s analysis does not end with a finding that OSU is not immune from suit in
this case. OSU also asserts that Plaintiffs lack Article III standing in this case because they have
not suffered a cognizable injury-in-fact. Plaintiffs argue that the FCRA created legal rights for
the Plaintiffs which were violated by OSU’s conduct, and thus, that the violation is an injury
sufficient to provide standing.
Pursuant to Article III of the United States Constitution, federal jurisdiction is limited to
“cases” and “controversies,” and standing is “an essential and unchanging part of” this
requirement. U.S. Const. art. III, § 2; Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).
A federal court must not go “beyond the bounds of authorized judicial action and thus offend[]
fundamental principles of separation of powers.” Steel Co. v. Citizens for a Better Env’t, 523
U.S. 83, 94 (1998). If the plaintiff lacks standing, the federal court lacks jurisdiction. Thus,
standing is “the threshold question in every federal case.” Warth v. Seldin, 422 U.S. 490, 498
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(1975). “In essence the question of standing is whether the litigant is entitled to have the court
decide the merits of the dispute or of particular issues.” Id.
Standing under Article III has three elements. “First, the plaintiff must have suffered an
‘injury in fact’-an invasion of a legally protected interest which is (a) concrete and particularized,
and (b) actual or imminent, not conjectural or hypothetical.” Lujan, 504 U.S. at 560 (internal
citations and quotation marks omitted). Second, the injury must be “fairly traceable to the
challenged action of the defendant.” Id. (Internal alterations omitted). Third, it must be likely
that the injury will be “redressed by a favorable decision.” Id. at 561. The burden is on the party
invoking federal jurisdiction to demonstrate Article III standing.
Healthcare, 517 F.3d 911, 916 (6th Cir. 2008).
Stalley v. Methodist
Last, each element of standing must be
supported with the “manner and degree of evidence required at the successive stages of
litigation.” Lujan, 504 U.S. at 561.
For an injury to be cognizable under current standing doctrine, it must be particularized
meaning it “affect[s] the plaintiff in a personal and individual way.” Spokeo, Inc. v. Robins, 578
U. S. ____, 7, 136 S.Ct. 1540 (2016) (internal quotations omitted). Additionally, the injury must
be concrete, meaning it must actually exist and must be real and not abstract. Id. at 8 (quoting
Webster’s Third New Int’l Dictionary 472 (1971); Random House Dictionary of the English
Language 305 (1967)). However, the injury need not necessarily be tangible. Id. at 8–9 (citing
Pleasant Grove City v. Summum, 555 U.S. 460 (2009) (free speech); Church of Lukumi Babalu
Aye, Inc. v. Hialeah, 508 U.S. 520 (1993) (free exercise)). Congress may “elevat[e] to the status
of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.”
Id. at 9 (quoting Lujan, 504 U.S., at 578). However, this “does not mean that a plaintiff
automatically satisfies the injury-in-fact requirement whenever a statute grants a person a
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statutory right and purports to authorize that person to sue to vindicate that right.”
Id.
Specifically, a plaintiff cannot “allege a bare procedural violation, divorced from any concrete
harm, and satisfy the injury-in-fact requirement of Article III.” Id. at 9–10.
In determining whether Congress has elevated FCRA breaches to the status of legally
cognizable injuries, the Supreme Court held that “[a] violation of one of the FCRA’s procedural
requirements may result in no harm.” (Id. at 10). In this case, Plaintiffs allege they suffered
harm when their “privacy was invaded and they were misled as to the their rights under the
FCRA.” (Doc. 18, Mem. Opp. at 14). However, Plaintiffs admitted that they did not suffer a
concrete consequential damage as a result of OSU’s alleged breach of the FCRA.
(Id.).
Accordingly, the Court cannot find that Plaintiffs have suffered an injury-in-fact from OSU’s
alleged breach of the FCRA. Without a concrete and particularized injury-in-fact, there is no
Article III standing in this Court. Because the Plaintiffs do not have standing in this Court, the
Court lacks subject-matter jurisdiction and must remand the case back to the Ohio Court of
Claims for further adjudication. Coyne v. Am. Tobacco Co., 183 F.3d 488, 496 (6th Cir. 1999)
(citing 28 U.S.C. § 1447(c)).
III.
CONCLUSION
Based on the foregoing, Defendant’s Motion to Dismiss is GRANTED and Plaintiffs’
Motion for Leave to file a surreply is GRANTED. The Clerk shall REMOVE Documents 7 and
22 from the Court’s pending motions list. The Clerk shall enter final judgment in favor of
Defendant and REMAND this case to the Ohio Court of Claims. The Clerk shall REMOVE
this case from the Court’s pending cases list.
IT IS SO ORDERED.
__/s/ George C. Smith
GEORGE C. SMITH, JUDGE
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UNITED STATES DISTRICT COURT
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