REARDON v. CLOSETMAID CORPORATION et al

Filing 157

OPINION. Signed by Judge Mark R. Hornak on 12/2/13. (jad)

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

R. CATHY REARDON, on behalf of
herself and all similarly situated
individuals,
Plaintiffs,

v.
CLOSETMAID CORPORATION,
Defendant.

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2:0S-cv-01730
Judge Mark R. Hornak

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OPINION
Mark R. Hornak, United States District Judge

This is a civil action brought pursuant to the Fair Credit Reporting Act, 15 U.S.C. § 1681,
et seq. (the "FCRA"). Plaintiff Cathy Reardon, on behalf of herself and all similarly situated
individuals, alleges that the Defendant, ClosetMaid Corporation ("ClosetMaid"), disqualified
applicants for employment on the basis of consumer reports in a manner violative of the FCRA.
Specifically, Plaintiffs allege that ClosetMaid obtained and relied upon consumer reports without
obtaining the appropriate disclosures specifically required by 15 U.S.C. § 16S1b(b)(2)(A) (the
"Disclosure Claim"). Plaintiffs further allege that ClosetMaid failed to provide applicants for
employment a reasonable amount of time to dispute the infonnation contained in the consumer
reports, and requisite statutory notice of adverse action, prior to refusing to hire them based on
such reports, in violation of 15 U.S.c. § 1681b(b)(3) (the "Pre-Adverse Action Claim").
Plaintiffs seek statutory and punitive damages and attorneys' fees.

This case is currently set for trial beginning January 6, 2014.1 The parties have filed
cross-motions for summary judgment, ECF Nos. 90, 94. In addition, ClosetMaid has moved to
decertify the Pre-Adverse Action Sub-Class, ECF No. 98, and Plaintiffs have moved to strike the
declarations

submitted

by

three

"Declarations"), ECF No. 108.

ClosetMaid

Human

Resource

Representatives

(the

For the following reasons, both the Plaintiffs' Motions for

Summary Judgment and ClosetMaid's Motions will be granted in part and denied in part.
Specifically, with respect to the Disclosure Claim, Plaintiffs' Motion for Summary Judgment as
to liability and willfulness as to certain members of the Disclosure Class is granted and is denied
in all other respects. With respect to the Pre-Adverse Action Claim, ClosetMaid's Motion for
Summary Judgment as to the 22 members of that Sub-Class who experienced no adverse
employment action at all, and as to the 3 members who were provided with pre-adverse action
notices sufficiently in advance of ClosetMaid's adverse action against them to fulfill the
applicable statutory requirements is granted, and is denied in all other respects. ClosetMaid's
Motion to Decertify and Plaintiffs' Motion to Strike are also both denied, but without prejudice.
I.

BACKGROUND
A.

Factual Background

On December 13, 2006, Ms. Reardon applied for a job as a Territory Supervisor for
ClosetMaid. As part of the employment application, ClosetMaid provided Ms. Reardon with a
document entitled, "Authorization to Obtain a Consumer Credit Report and Release of
Information for Employment Purposes" (the "Authorization Form"), as well as a second
document entitled, "Notice of Intent to Obtain a Consumer Credit Report" (the "Notice Form").

1 In this regard, the parties have each filed a swarm of motions in limine, ECF Nos. 140-156 inclusive, a number of
which touch on matters related to these Motions. The Court has examined those filings to see if they impact the
dispositions set out in this Opinion. They do not. This Opinion, however, may impact the necessity for, or direction
of, one or more of those motions in limine. That will be addressed at the pretrial conference set for later this month.

2

See ECF No. 97-6 at 3-9. The Authorization Form provides that "[p]ursuant to [the FCRA], I
hereby authorize ClosetMaid ... to conduct a comprehensive review of my background through
a consumer report and/or investigative consumer report." Id. at 5. The Authorization Form also
contains a waiver of rights provision, which states that "I hereby release ClosetMaid ... from
any and all liability for damages of whatever kind, which may at any time, result to me ...
because of compliance with this authorization and request to release."

Id. The Notice Form

provides that "as a condition of my consideration for employment with ClosetMaid, [. . .]
ClosetMaid may obtain a consumer report." Id. at 3. The Notice Form further provides that
"pursuant to the [FCRA], if any adverse action is to be taken based upon [a] consumer report, a
copy of the report and summary of the consumer's rights will be provided to me if requested."

Id.

Ms. Reardon signed both documents and returned them to ClosetMaid along with her

employment application.
During the time period between Ms. Reardon's application date and July 1, 2009, when
ClosetMaid began using different notice and authorization forms altogether, ClosetMaid
included an Authorization Form as part of every employment application provided to applicants
whom ClosetMaid was interested in pursuing. ECF No. 95; ClosetMaid Concise Statement of
Material Facts ("ClosetMaid SOF") ~ 13. ClosetMaid did not, however, always include a Notice
Form.

ECF No. 93-3 at 16; Reardon Responsive Concise Statement of Material Facts

("Plaintiffs RSOF")

~

13 (citing ECF No. 93-3 (Fed. R. Civ. P. 30(b)(6) Deposition of

ClosetMaid Corporation (Catherine Beal, designated) ("ClosetMaid Dep.")) at 59: 10-18). In
fact, the Notice Form was discontinued at some point for purposes of "simplification." Id.
According to Jennifer Boring, a Human Resources Representative at ClosetMaid,
ClosetMaid's employment application and hiring procedures were position-specific and are "not
necessarily a linear process." ECF No. 93-4 (Deposition of Jennifer Boring ("Boring Dep.")) at

3

51: 17-18.

Catherine Beal, ClosetMaid's Vice President of Human Resources, testified that

ClosetMaid's procurement and review of an applicant's consumer report occurred towards the
end of the recruiting process and only for applicants whom ClosetMaid has "selected to hire."
ECF No. 93-3, ClosetMaid Dep. at 49:10-50:12. However, according to Ms. Beal the review of
an applicant's consumer report was not necessarily the absolutely, positively final step in the
application process. Id. at 66: 19-67:08. For example, ClosetMaid also might have subjected
applicants to some additional pre-hire processes, such as drug testing. ld.
After receiving Ms. Reardon's employment application, ClosetMaid obtained a consumer
report about her from LexisNexis.

That report contained negative information, which Ms.

Reardon contends is incorrect. On December 18, 2006, ClosetMaid sent a letter to Ms. Reardon
enclosing the consumer report and a summary of rights under the FCRA (the "Pre-Adverse
Action Notice"). ECF. No. 97-10 at 2. In that letter, ClosetMaid stated that it would wait "five
business days from the date of this letter before it makes a decision on your application." On
December 22, 2006, four business days later, ClosetMaid sent Ms. Reardon a second letter (the
"Adverse Action Notice") stating that "[t]he Company has now decided not to offer you the
position you applied for based in whole or in part upon" the consumer report. ECF No. 97-11 at
2.

Plaintiffs contend that from December 1, 2006 to June 30, 2009, ClosetMaid obtained
consumer reports as to 1,829 job applicants, 1,494 of whom were hired, and 299 who were not
hired. Plaintiffs RSOF

~

45 (citing Beal Dep. Ex. 9). According to Plaintiffs, ClosetMaid has

sent to only 3 individuals, not including Ms. Reardon, a copy of his or her consumer report and a
summary of rights under the FCRA.

Plaintiffs RSOF

~

44.

In each of those 3 instances,

ClosetMaid sent the pre-adverse action notice on May 1, 2008, and the adverse action notice on
May 13,2008,8 business days later. See ECF. No. 93-11 at Exhibit A.
4

B.

Procedural Background

This action was originally filed on December 19, 2008? In the First Amended Class
Action Complaint ("F AC") filed on April 16, 2009, Ms. Reardon sought to represent individuals
who executed forms permitting ClosetMaid to obtain a consumer report as part of an
employment application (the "Disclosure Class") and, within that class, a sub-class of individuals
whom ClosetMaid did not hire based in whole or in part upon information contained in the
consumer report (the "Pre-Adverse Action Sub-Class"). FAC

~

44, ECF No. 16.

On April 27,

2011, the Court entered an order granting class certification noting that "[i]f it becomes clear that

most [hiring] decisions were not made in a centralized fashion, ClosetMaid should move for
decertification of, at a minimum, the subclass." ECF No. 51 at 17; 2011 WL 1628041 (W.D. Pa.
Apr. 27, 2011). The Disclosure Class purportedly consists of approximately 1,800 individuals
and the Pre-Adverse Action Sub-Class consists of approximately 77 individuals.
On May 24,2013, Plaintiffs filed a Motion for Partial Summary Judgment As to Liability
seeking summary judgment as to (1) all individuals in the Disclosure Class who signed a
disclosure/consent form containing a waiver of rights provision, and (2) all individuals in the
Pre-Adverse Action Sub-Class. Plaintiffs properly excluded from their motion all individuals
who submitted Exclusion Requests pursuant to the September 28, 2012 Notice of Class Action. 3
ECF No. 90 Ex. 1. On the same day, ClosetMaid filed its Motion for Summary Judgment
against Plaintiffs as to all claims, ECF No. 94, and its Motion to Decertify the Pre-Adverse
Action Sub-Class, ECF No. 98.

On June 25, 2013, Plaintiffs filed a Motion to Strike the

2 This action was originally assigned to the late Chief Judge Gary L. Lancaster and, following his untimely death,
was transferred to this member of our Court on May 16,2013. ECF No. 88.

Once an individual submits an Exclusion Request and opts out of a class action, she is completely excluded from
the suit, and has no standing to participate or object to any proposed settlement or appeal, but is not bound by the
preclusive effect of the class suit and may pursue her own litigation as she sees fit. See Drelles v. Metropolitan Life
ins. Co., 357 F.3d 344 (3d Cir. 2003).
3

5

Declarations of ClosetMaid Human Resources Representatives Jennifer Boring, Patricia
Dameron, and Merlyn Hernandez-Opio. ECF No. 108.
Oral argument was held on July 19,2013. On August 2,2013, the parties, at the Court's
request, submitted supplemental briefing to address the factual issue of how and when in the
hiring process ClosetMaid used an applicant's consumer report to assess the applicant's
qualifications, and to identify the record evidence relating to this issue. ECF Nos. 125-126.

II.

STANDARD OF REVIEW
A.

Summary Judgment - Federal Rule of Civil Procedure S6

Summary judgment is appropriate when "there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); Celotex

Corp., v, Catrett, 477 U,S. 317, 322-23 (1986), The parties must support their position by
"citing to particular parts of materials in the record, including depositions, documents,
electronically stored information, affidavits or declarations, stipulations (including those made
for purposes of the motion only), admissions, interrogatory answers, or other materials." Fed. R.
Civ. P. 56(c)(1)(A). In other words, summary judgment may be granted only if there exists no
genuine issue of material fact that would permit a reasonable jury to find for the nonmoving
party measured against the standard fixed by the applicable substantive law. See Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).
In reviewing the record evidence submitted, the court is to draw all reasonable inferences
in favor of the non-moving party. See Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133,
150 (2000); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986);

Huston v. Procter & Gamble Paper Prod. Corp., 568 F.3d 100, 104 (3d Cir. 2009) (citations
omitted). It is not the court's role to weigh the disputed evidence and decide which is more
probative, or to make credibility determinations. See Anderson, 477 U.S. at 255; Marino v.
6

Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004); Boyle v. Cnty. ofAllegheny, 139 F.3d 386,
393 (3d Cir. 1998). "Only disputes over facts that might affect the outcome of the suit under the
governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at
247-48. An issue is "genuine" if a reasonable jury could possibly hold in the non-movant's favor
with regard to that issue. See id. "Where the record taken as a whole could not lead a reasonable
trier of fact to find for the nonmoving party, there is no 'genuine issue for trial.'" Matsushita,
475 U.S. at 587; Huston, 568 F.3d at 104.

B.

Motion to Strike - Federal Rule of Civil Procedure 12(0

Federal Rule of Civil Procedure 12(f) permits a court to strike "an insufficient defense or
any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). "The
purpose of a motion to strike is to clean up the pleadings, streamline litigation, and avoid
unnecessary forays into immaterial matters." Craker v. State Farm Mut. Auto. Ins. Co., No. 11­
0225, 2011 WL 1671634, at *5 (W.D. Pa. May 3, 2011) (citation omitted). Motions to strike
under Rule 12(f) are committed to the discretion of the district court, but will usually be denied
unless the allegations have no possible relation to the controversy, will cause unfair prejudice, or
will confuse the issues in the case. Adams v. Cnty. ofErie, 2009 WL 4016636, at * 1 (W.D. Pa.
Nov. 19,2009) (citations omitted).
C.

Motion to Decertifv - Federal Rule of Civil Procedure 23(c)(1)(C)

"An order that grants or denies class certification may be altered or amended before final
judgment." Fed. R. Civ. P. 23(c)(1)(C). Pursuant to this rule, district courts may decertify a
class where appropriate after the case develops. See Barnes v. Am. Tobacco Co., 161 F.3d 127,
140 (3d Cir. 1998). In making the determination of whether to amend or reconsider a class
certification, courts have routinely made such assessments under an analysis that focuses on
whether changed circumstances have arisen in the case. See, e.g., Eisenberg v. Gagnon, 766
7

F .2d 770, 787 (3d Cir. 1985) (noting that "class actions depend on the continuing supervision of
the district court, including reconsideration of the efficacy of class action treatment as the
circumstances change"); In re General Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab.

Litig., 55 F.3d 768,793 n. 14 (3d Cir. 1995) ("Under Rule 23(c)(l), the court retains the
authority to re-define or decertify the class until the entry of final judgment on the merits.").
A district court "retains the discretion to decertify or modify the class so that the class
action encompasses only the issues that are truly common to the class." Baby Neal for & by

Kanter v. Casey, 43 F.3d 48,63 (3d Cir. 1994). See also Fed. R. Civ. P. 23(c)(4); Sullivan v. DB
Investments, Inc., 667 F.3d 273, 322 (3d Cir. 2011) ("[D]istrict court retains the authority to
decertify or modify a class at any time during the litigation if it proves to be unmanageable.")
(citation omitted).

III.

DISCUSSION
A.

Disclosure Claims Under 15 U.S.c. § 1681b(b)(2)(A)

As noted above, Plaintiffs allege that ClosetMaid violated the FCRA by failing to provide
the appropriate disclosures to applicants for employment prior to obtaining their consumer
reports, in violation of section 1681b(b)(2)(A). Specifically, Plaintiffs contend that ClosetMaid's
inclusion of a waiver of rights provision in the Authorization Form contravenes the FCRA's
requirement that a "clear and conspicuous" disclosure appear "in a document that consists solely

of the disclosure." 15 U.S.C. § 1681b(b)(2)(A)(i) (emphasis added). Finally, Plaintiffs argue
that ClosetMaid's violation of the FCRA's disclosure requirement was willful as a matter oflaw,
thereby triggering an award of damages under section 1681n(a)(l)(A).

1.

Sufficiency of the Disclosure

Pursuant to the FCRA, consumer reports may be issued to employers for "employment
purposes."

15 U.S.C. § 1681b(a)(3)(B).

An employment purpose is defined as a purpose
8

relating to the evaluation of "a consumer for employment, promotion, reassignment or retention
as an employee." 15 U.S.c. § 1681a(h). The FCRA requires, in pertinent part, that prior to
procuring a consumer report on an applicant for employment, an employer must: (1) provide a
clear and conspicuous disclosure to each applicant in writing "that a consumer report may be
obtained for employment purposes"; and (2) obtain the applicant's authorization for the report in
writing. 15 U.S.c. § 1681b(b)(2)(A). Section 1681b(b)(2)(A)(i) specifies that the disclosure
must be made in writing "in a document that consists solely of the disclosure."

Section

1681 b(b )(2)(A)(ii) allows for the authorization to be made in the same document as the
disclosure.
The FCRA does not define the term "clear and conspicuous," and there is little case law
interpreting the term as used in section 1681 b.

According to the Court of Appeals for the

Seventh Circuit, "it is appropriate to draw upon the wealth of [Uniform Commercial Code
(,'UCC")] and [Truth in Lending Act ("TILA")] case law in determining the meaning of 'clear
and conspicuous' under the FCRA." See Cole v. US. Capital, 389 F.3d 719, 730 (7th Cir. 2004).
See also Stevenson v. TRW Inc., 987 F .2d 288, 295-96 (5th Cir. 1993) (interpreting "clear and
conspicuous" language used in section 168li(d) of the FCRA with reference to TILA and UCC
cases). Our Court of Appeals has interpreted a "clear and conspicuous" disclosure to mean, in
the context of the TILA, "in a reasonably understandable form and readily noticeable to the
consumer." See Rossman v. Fleet Bank (R.I.) Nat. Ass 'n, 280 F.3d 384, 390 (3d Cir. 2002)
(citing 15 U.S.C. § 1632(a»).

The UCC defines conspicuous as "so written, displayed, or

presented that a reasonable person against which it is to operate ought to have noticed it."
U.c.c. § 1-201(b)(10).

Other courts have regarded a FCRA disclosure as being non-

conspicuous where it was printed in small type, on the back of a document, when it is the same
size and typeface as the terms around it, or when it is not in boldface or capital lettering. See,
9

e.g., Murray v. GMAC Mortg. Corp., 274 Fed. Appx. 489, 490-91 (7th Cir. 2008) (disclosure
was not "conspicuous" within the meaning of FCRA requirements where it appeared on backside
of solicitation flyer and occupied two often paragraphs all in the same size type); Cole, 389 F.3d
at 731 (disclosure not "clear and conspicuous" where it was made in a paragraph at very bottom
of flyer, printed in font size that was no larger than six-point, and that was not set off from
remainder of text in any way); Murray v. Sunrise Chevrolet, Inc., 441 F. Supp. 2d 940, 948 (N.D.
Ill. 2006) (disclosure was not "clear and conspicuous" where notice appeared in a single

paragraph at the bottom of a flyer and was printed in the smallest typeface on the page).
Here, there is no dispute that Ms. Reardon received and signed both the Notice Form and
Authorization Form.

Plaintiffs concede that "[b]oth forms include FCRA disclosures

[describing] the nature and scope of consumer reports to be obtained." ECF No. 100 at 16.
Therefore, to the extent that at least one of the two forms provided applicants with a proper
disclosure under section 1681b(b)(2)(A)(i), Ms. Reardon's disclosure claim, as well as that of
any other Disclosure Class member who received both forms, must fail.
The first sentence of ClosetMaid's Notice Form, a document which contains only two
paragraphs in medium-size typeface, states as follows:

"I understand that as a condition of my consideration for employment with
ClosetMaid, or as a condition of my continued employment with ClosetMaid may
obtain [sic] a consumer report ...."
ECF No. 97-6 at 3. Although the language of the Notice Form may have been inartfully worded,
the disclosure is in a reasonably understandable form, the amount of text on the page is minimal,
and the disclosure appears in the opening sentence of the document such that it is readily
noticeable to the consumer. Accordingly, the disclosure contained in the Notice Form provided
is, for FCRA purposes, a legally sufficiently clear and conspicuous disclosure of ClosetMaid's
intent to procure a consumer report for employment purposes. In addition, the disclosure in the
10

Notice Fonn otherwise complies with the requirements of section 1681 b(b )(2)(A) because it
appears in a document that consists only of the disclosure and authorization, a combination that
is expressly authorized by section 1681 b(b)(2)(A)(ii).
Plaintiffs' argument that the Notice Fonn did not operate as a legally sufficient disclosure
because "it failed to disclose [ClosetMaid's] intention to also obtain an 'investigative consumer
report'" misses the mark. ECF No. 100 at 17. Section 1681d(a)(1) of the FCRA provides that
prior to procuring an investigative consumer report, a disclosure must be provided to the
consumer "that an investigative consumer report including infonnation as to [the consumer's]
character, general reputation, personal characteristics, and mode of living, whichever are
applicable, may be made."

15 U.S.C. § 168Id(a)(1). Here, there is simply no evidence to

suggest that ClosetMaid procured an "investigative consumer report" for any member of the
Disclosure Class, nor any evidence that ClosetMaid intended to procure such a report.
Therefore, ClosetMaid's mention of "investigative report" in the Authorization Fonn is merely
superfluous and not reflective of a statutory obligation or a violation of such an obligation.
Therefore, any member of the Disclosure Class, including Ms. Reardon, who received a Notice
Fonn in addition to an Authorization Fonn was necessarily provided a legally sufficient fonn of
disclosure via the Notice Form in accordance with section 1681b(b)(2)(A), and summary
judgment is granted in favor of ClosetMaid as to such persons relative to their disclosure claims,4

The resulting failure of Ms. Reardon's "disclosure" claim has no effect on the viability of the entire action. It is
well settled that once a class has been certified, mooting a class representative's claim does not moot the entire
action because the class "acquire[s] a legal status separate from the interest asserted by [the named plaintiff]." See
Weiss v. Regal Collections, 385 F.3d 337, 342 (3d Cir. 2004) (citing Sosna v. Iowa, 419 U.S. 393, 399 (1975)).
"Litigation may continue because the stake of other class members is attributed to the class representative." Brown
v. Phi/a. Hous. Auth., 350 F.3d 338,343 (3d Cir. 2003). To the extent the inadequacy of Ms. Reardon's disclosure
claim is a defect, it is one that Plaintiffs can readily cure with substitution of a new class representative as to that
claim. See, e.g., Carpenter v. Stephen F. Austin State Univ., 706 F.2d 608, 617-18 (5th CiT. 1983) ("[I]f after the
class has been certified and its claims heard and the representatives are found to be inadequate for some reason
during the course of the class claims ..., the appropriate step is appointment of new representatives from the
existing class, not decertification.").
4

11

Turning to the remaining Disclosure Class members who received only the Authorization
Form it is necessary to determine whether, as it contends, ClosetMaid complied with its
disclosure obligations under section 1681 b(b)(2)(A). The title of the Authorization Form states
in capital letters, "AUTHORIZATION TO OBTAIN A CONSUMER CREDIT REPORT AND
RELEASE OF INFORMATION FOR EMPLOYMENT PURPOSES." The first paragraph of
the Authorization Form begins as follows:
Pursuant to the Fair Credit Reporting Act, I hereby authorize ClosetMaid and its
designated agents and representatives to conduct a comprehensive review of my
background through a consumer report and/or investigative consumer report to be
generated for employment, promotion, reassignment or retention as an
employment.
ECF No. 97-6 at 5. The subsequent paragraph of the Authorization Form explains the type of
information that may be included in the consumer report. ld. The third paragraph begins, "I []
authorize the complete release of these records or data pertaining to me which an individual,
company, firm, corporation, or public agency may have." ld. The waiver of rights provision
appears in the fourth paragraph of the Authorization Form and states as follows: "I hereby
release ClosetMaid ... from any and all liability for damages of whatever kind, which may at
any time, result to me ... because of compliance with this authorization and request to release."

ld. Finally, the last paragraph of the Authorization Form states that, "pursuant to the [FCRA], if
any adverse action is to be taken based upon the consumer report, a copy of the report and a
summary of the consumer's rights will be provided to me if requested." ld.
According to Plaintiffs, ClosetMaid's Authorization Form fails to provide a clear and
conspicuous disclosure, in violation of section 1681 b(b )(2)(A)(i). In addition, Plaintiffs contend
that ClosetMaid's inclusion of a waiver of rights provision facially contravenes section
1681 b(b)(2)(A)(ii)'s requirement that the disclosure appear "in a document that consists solely of
the disclosure."

In support of this assertion, Plaintiffs cite to a Federal Trade Commission
12

("FTC") opinion letter from 1998, which addresses the sufficiency of a combined disclosure and
authorization form containing a waiver ofFCRA rights. s The Letter states as follows:
While we believe that you may combine the disclosure and authorization ..., we
note that your draft disclosure includes a waiver by the consumer of his or her
rights under the FCRA. The inclusion of such a waiver in a disclosure form will
violate Section 604(b)(2)(A) of the FCRA, which requires that a disclosure
consist "solely" of the disclosure that a consumer report may be obtained for
employment purposes. Moreover, it is a general principle of law that benefits
provided to citizens by federal statute generally may not be waived by private
agreement unless Congress intended such a result.
Letter from William Haynes, Attorney, Div. of Credit Practices, Fed. Trade Comm'n, to Richard
W. Hauxwell, CEO, Accufax Div. (June 12, 1998), 1998 WL 34323756 (F.T.C.), 1 ("Hauxwell
FTC Letter"). Plaintiffs also cite to an FTC opinion letter from 1997, which provides that even
where an employer includes a disclosure in an employment application, "an employer that
follows this procedure must also clearly and conspicuously disclose in a completely separate
document that a consumer report may be obtained for employment purposes, as required by
[section 1681b(b)(2)(A)]." Letter from William Haynes, Attorney, Div. of Credit Practices, Fed.
Trade Comm'n, to Harold Hawkey, Employers Assoc. of N.J. (Dec. 18, 1997), 1997 WL
33791224 (F.T.C.), 1 ("Hawkey FTC Letter"). The Hawkey FTC Letter further clarifies that
"[n]othing else may appear on the document that detracts from the disclosure required by
[section 1681b(b)(2)(A)]. An employer may elect to obtain the consumer's authorization on that
document, because that would focus the consumer's attention on the disclosure and thus further
the purpose intended by the 'separate document" provision of this section." Id An additional
FTC opinion letter from 1997 provides as follows:
The reason for specifying a stand-alone disclosure was so that consumers will not
be distracted by additional information at the time the disclosure is given. We
5 Although an opinion letter by an agency charged with administering a statute, such as the FTC, is not entitled to
"Chevron deference," Chevron, U.S.A., Inc. v. Natural Res. De! Council, Inc., 467 U.S. 837, 863 (1984), it is well
established that it is entitled to "respect" and is persuasive. Christensen v. Harris Cnty., 529 U.S. 576,587 (2000).

13

believe that including an authorization in the same document with the disclosure .
. . will not distract from the disclosure itself; to the contrary, a consumer who is
required to authorize procurement of the report on the same document will be
more likely to focus on the disclosure. However, such a document should include
nothing more than the disclosure and the authorization for obtaining a consumer
report.
Letter from Cynthia Lamb, Investigator, Div. of Credit Practices, Fed. Trade Comm'n, to
Richard Steer, Jones Hirsch Connors & Bull, P.C. (Oct. 21, 1997),1997 WL 33791227 (F.T.C.),
1 (emphasis added) ("Steer FTC Letter").
In response, ClosetMaid, relying on a case from the Western District of North Carolina,
contends that the proper test for whether inclusion of release language in a disclosure complies
with section 1681 b(b)(2)(A) is whether the release language is "not so great a distraction,,6 as to
discount the effect of the disclosure. Smith v. Waverly Partners, LLC, 3: 1O-CV-00028-RLV,
2012 WL 3645324, at *6 (W.D.N.C. Aug. 23, 2012). ClosetMaid contends that its waiver of
rights provision is narrow in scope and pertains directly to its procurement of the applicant's
authorization, a provision that is allowed to coexist in the same form as a disclosure pursuant to
section 1681b(b)(2)(A)(ii).

In Smith, the court dismissed the plaintiffs FCRA claim on

summary judgment, finding that the waiver of rights language included in the employer's
combined disclosure and authorization form was kept sufficiently distinct from the disclosure
language so as not to render it ineffective. Smith, 2012 WL 3645324 at *6. The court in
Singleton v. Domino's Pizza, No. 11-1823,2012 WL 245965 (D. Md. Jan. 25,2012), however,
came to a different, and the Court believes correct, conclusion with regard to an employer's
inclusion of a waiver of rights provision in a disclosure form.

There, the court denied the

employer's motion to dismiss the plaintiffs section 1681 b(b )(2)(A) claim, finding that "both the

6

A construct not found in the FCRA, the applicable regulations, or in any agency guidance.

14

statutory text and FTC advisory opmlOns indicate that an employer violates the FCRA by
including a liability release in a disclosure document." Singleton, 2012 WL 245965 at *9.
Neither of these cases is binding on this Court; however, the Court agrees with the
analysis in Singleton, given the rather direct statutory language at issue.

Specifically,

ClosetMaid's inclusion of a release provision in the Authorization Fonn, which served as a
combined disclosure and authorization fonn for those Disclosure Class members who did not
receive a Notice Fonn as part of their employment application, facially violates section
1681 b(b )(2)(A)(i). Although the disclosure itself is arguably "clear and conspicuous" given that
the title of the Authorization Fonn appears in bold capital letters and explains that the consumer
report is for employment purposes, the Authorization Fonn simply does not comply with the
FCRA's express requirement that the disclosure appear in a document that consists solely of the
disclosure (or, at most, a disclosure and authorization only). Even if the Court were to accept
ClosetMaid's characterization of the waiver of rights provision as being narrowly tailored to
ClosetMaid's procurement of the applicant's authorization for the consumer report, and not a
"great distraction", the release verbiage still is not an "authorization," which is the only other
provision the FCRA allows in a valid disclosure fonn. To hold otherwise would have the Court
rewrite the applicable provision of the FCRA to include a "not a great distraction" safe harbor for
impennissible language, which, of course, it may not do. If that is to be done, it is a job for
Congress. Therefore, we grant Plaintiffs' Motion for Summary Judgment on the question of
liability as to the members of the Disclosure Class who received only the Authorization Fonn. 7

The Court also rejects, for lack of a statutory or regulatory basis, ClosetMaid's argument that the Authorization
Form is valid because nothing prohibits an "authorization" from including a release, and a "disclosure" may include
an "authorization," and therefore, a "disclosure" which includes an "authorization" which includes a "release"
passes statutory muster. Such a multi-level bootstrapping approach to validating an otherwise invalid "disclosure"
runs counter to the actual statutory language at hand.

7

15

2.

Willful Noncompliance

The FCRA permits a plaintiff to recover damages when a defendant acted either
negligently or willfully in violating the statute's requirements. See 15 U.S.C. § l68lo(a)(l)
(providing that a plaintiff may recover actual damages in cases of negligent noncompliance); id.
§ l68ln(a)(l)-(3) (providing for actual, statutory, and/or punitive damages, along with attorney's
fees in cases of willful noncompliance).

In the absence of negligent or willful misconduct,

however, a plaintiff may not recover at all. See Sa/eeo Ins. Co. v. Burr, 551 U.S. 47 (2007).
A defendant acts willfully under the FCRA by either knowingly or recklessly
disregarding its statutory duty. Sa/eeo, 551 U.S. at 57-60. A defendant's conduct is reckless
only if it was "objectively unreasonable" in light of "legal rules that were 'clearly established' at
the time." Fuges v. Sw. Fin. Servs., Ltd., 707 F.3d 241, 249 (3d Cir. 2012) (citing Sa/eeo, 551
U.S. at 69-70). However, where "the statutory text and relevant court and agency guidance
allow for more than one reasonable interpretation, it would defy history and current thinking to
treat a defendant who merely adopts one such interpretation as a knowing or reckless violator."
Sa/eeo, 551 U.S. at 70 n. 20. Thus, "even when a court disagrees with a party's reading of
FCRA, it may not impose liability for a reckless, and therefore willful, violation of the statute
unless that party's reading is 'objectively unreasonable.'" Fuges, 707 F.3d at 249 (citing Sa/eeo,
551 U.S. at 69). In other words, an employer "cannot be said to have willfully violated FCRA if
the company acted on a reasonable interpretation" of the FCRA. Id. at 248.
In Sa/eeo, the Supreme Court concluded that the defendant's violation of a different
provision of the FCRA "was not objectively unreasonable." Id. at 70. According to the Court,
the defendant's reading of the statute had "a foundation in the statutory text," there were prior
appellate-level interpretations of the statutory provision, and there was a "dearth of [regulatory]
guidance" regarding "the 1ess-than-pellucid statutory text." Id.
16

In Fuges, the Third Circuit applied these same three factors to determine whether a
defendant may benefit from the "safe harbor" of a "reasonable interpretation of FCRA's
coverage." 707 F.3d at 248. Specifically, the court looked to (l) the plain meaning of the
FCRA; (2) whether the defendant's application of the FCRA "had a 'foundation in the statutory
text,'" id. at 252 (quoting Safeco, 551 U.S. at 69-70); and (3) the existence, or lack thereof, of
judicial or agency guidance that could support the defendant's interpretation.

Id. (quoting

Safeco, 551 U.S. at 70). Even in the absence of such guidance, however, a defendant does "not

receive a pass because the issue has never been decided." Id. at 253 n. 21 (quoting Cortez v.
Trans Union, LLC, 617 F.3d 688, 722 (3d Cir. 2010)).

Here, the first and second factors weigh conclusively against ClosetMaid as the language
of section 1681 b(b )(2)(A) is plain and clearly ascertainable.

According to section

1681 b(b )(2)(A), the disclosure must be "clear and conspicuous" and set forth "in a document that
consists solely of the disclosure," with the exception that the required written "authorization may
be made on the [same] document."

15 U.S.C. § 1681b(b)(2)(A)(i)-(ii). ClosetMaid had no

obligation to obtain a waiver of rights from the consumer; in fact, doing so in a disclosure form
directly conflicted with the FCRA's clear prohibition on an employer's inclusion of any
additional provision, excluding the authorization itself, in the disclosure form. Unlike the FCRA
provision at issue in Safeco, which the Court regarded as "less-than-pellucid," 551 U.S. at 70, the
statutory text here is unambiguous and not susceptible of differing interpretations.
As for the second prong, ClosetMaid argues that its Authorization Form derives its
content from the pertinent statutory text. We disagree. There is simply nothing in the statutory
text that would validate ClosetMaid's interpretation that it is proper to include a waiver of rights
provision, even one narrowly tailored to ClosetMaid's procurement of the applicant's

17

authorization for the consumer report, in a disclosure form. The statute itself cuts exactly the
other way.
Finally, we turn to a review of the relevant guidance from judicial and agency sources
that was available at the time the Authorization Form was in use. As discussed previously, the
Hauxwell FTC Letter explicitly advised against including any additional language, specifically, a
waiver of rights provision, in a disclosure form.

The Steer FTC Letter also advised that a

disclosure form "should include nothing more than the disclosure and the authorization for
obtaining a consumer report."

1997 WL 33791227.

Additionally, the Hawkey FTC Letter

provides that "[n]othing else may appear on the document that detracts from the disclosure."
1997 WL 33791224. Considering this agency guidance, all of which was available at the time
the Authorization Form was in use, ClosetMaid's position with regard to its inclusion of a waiver
of rights provision in the Authorization Form is legally insupportable. The Authorization Form
is facially contrary to the statute at hand, and all of the administrative guidance on the questions.
ClosetMaid's only support for its position is having its own position. 8
There is no issue of material fact at issue as to this question. 9

ClosetMaid's

Authorization Form was contrary to the law as Congress enacted it, and it proceeded ahead

8 ClosetMaid has also cited to the Smith case to support its position as being a reasonable application of the relevant
statutory language. Of course, Smith was decided several years after the events at issue here, and as previously
noted, inserting an implied "not a great distraction" safe harbor into the statutory analysis is contrary to the statutory
language. Here the release language was part and parcel of the operative language of the Authorization Form. ECF
No. 97-6. Having it in its own consecutive paragraph of the same string of text on that Form does not make it "not a
great distraction." The Court would observe that the Smith court's invocation of the "not so great a distraction"
rubric is unaccompanied by the citation to any authority for its existence or application, or of any support for a
court's application of such a doctrine in the context of plain text statutory language that goes in the other direction.
See Smith. 20 I 2 WL 3645324, at *6.

In similar cases, where a defendant's actions are so plainly contrary to the provisions of the FCRA, courts have
granted summary judgment for a plaintiff on the issue of willful noncompliance. See Kudlicki v. Farragut Fin.
Corp., 2006 WL 927281 (N.D. Ill. Jan. 20, 2006) (summary judgment for the plaintiff on willful failure to comply
was appropriate when it was "clear from the most cursory glance" at defendant's mailer that it did not comply with
15 U.S.C. § 1681 b(f)(1), allowing the use of a consumer report obtained from a consumer reporting agency, without
the consumer's authorization, only for limited purposes including the extension of a firm offer of credit); Adams v.

9

18

anyway. Under the Safeco definitions of "willful," its conduct was objectively unreasonable as a
matter of law. Accordingly, we grant Plaintiffs' Motion for Summary Judgment as to this issue,
with respect to the members of the Disclosure Class who received only the defective
Authorization Form. The parties shall promptly meet and confer and be prepared to advise the
Court as to their respective positions as to the appropriate mechanism for the calculation and
assessment of the statutorily available damages related to this issue. lo
B.

Pre-Adverse Action Claims Under 15 U.S.C. § 1681b(b)(3)(A)

The FCRA requires that an employer provide an applicant with advance notice of the
employer's intention to take any adverse action on the basis of information contained in the
applicant's consumer report.

15 U.S.CA. § 1681 b(b)(3)(A)(i)-(ii). The employer must also

provide the applicant with a copy of the report and summary of rights under the FCRA. Id.
As to the Pre-Adverse Action Sub-Class, Plaintiffs contend that ClosetMaid violated
section 1681 b(b )(3)(A) by failing to provide pre-adverse action notices to 77 individuals whose
consumer reports contained what they describe as derogatory information that disqualified them
from employment with ClosetMaid. II According to Plaintiffs, ClosetMaid decided not to hire
Plaintiffs based at least in part on their consumer reports without sending them pre-adverse
action notices, which deprived Plaintiffs of an opportunity to review and address any issues in
Berger Chevrolet, lnc., 2001 WL 533811 (W.D. Mich. May 7, 2001) (granting summary judgment for the plaintiff
on willful noncompliance where defendant's employee, in violation offederal criminal law and the FCRA, obtained
credit reports for Plaintiffs and used their credit to secure financing for car sales or leases for applicants with bad
credit histories without Plaintiffs' consent).
10 The Court reaches no conclusion as to whether the Plaintiffs would be able to adduce proof that would support the
award of punitive damages on this record, but only a conclusion that as a statutory matter, they would be available
because ClosetMaid's actions were objectively unreasonable.
II This assessment is based on a review of those files by one of Plaintiffs' counsel and his judgment as to whether
they contain information which is arguably derogatory. ClosetMaid contests those assessments, and seeks to
conclusively resolve that dispute in its favor now. However, the issue is not whether the assessment of Plaintiffs
counsel is correct (or even admissible). If as a matter of fact the report contains negative information, and that
report was obtained on an applicant "selected for hire" and then no hire followed, then there is at least a factual issue
as to whether the report played any role in the decision.

19

their reports. Plaintiffs argue that once a consumer report is "part of the mix" of information
being used to determine the prospective employee's eligibility for employment, the pre-adverse
action notices required under section 1681 b(b)(3) must be made. Plaintiffs rely on the testimony
of Ms. Beal, ClosetMaid's Rule 30(b)(6) corporate designee, to demonstrate that it was
ClosetMaid's policy and practice to procure a consumer report only after an applicant was
deemed qualitied and "selected for hire" and, therefore, as a matter of ClosetMaid's own
practice, the consumer report was necessarily part of the information being used to assess the
applicant's qualitications and make the final hiring decision. Specifically, Ms. Beal testified that
an applicant's consumer report is obtained "pretty far dO\\>TI in the process of getting ready to
potentially hire someone." ECF No. 93-3, ClosetMaid Dep. at 66:3-23, 67:3-8. Plaintiffs thus
contend that ClosetMaid violated section 1681b(b)(3)(A) by not providing notice to each of the
sub-class members and that such violation was willful.
In response, ClosetMaid contends that Plaintiffs have failed to adduce evidence sufficient
to demonstrate that all but a handful of Sub-Class members were even entitled to pre-adverse
action notices or that they did not receive such notices as required. In support of this contention,
ClosetMaid divides the sub-class members into three groups: (1) those who did not experience an
adverse employment action at all and, thus, were not entitled to a pre-adverse action notice (22
individuals); (2) those who actually received pre-adverse action notices (approximately 5
individuals); and (3) those whose consumer reports were not factually relied upon, in whole or in
part, as a basis for ClosetMaid's adverse action and, thus, who were not entitled to a pre-adverse
action notice (50 individuals).12

12 There appear to be some discrepancies regarding how many of the Sub-Class members fall into each of these three
categories. For example, ClosetMaid contends that there are 6 individuals, including Ms. Reardon, who received
pre-adverse action notices, whereas Plaintiffs state that the total number is 4, including Ms. Reardon. Because the

20

The Court will address each of these arguments separately, keeping in mind that to the
extent that any of the claims raised by Plaintiffs require engaging in overarching and
fundamentally individualized determinations, "the [C]ourt retains the discretion to decertify or
modify the class so that the class action encompasses only the issues that are truly common to
the class." Casey, 43 F.3d at 63.
1.

A Group of 22 Individuals Who Did Not Experience Any Adverse
Action

ClosetMaid contends that, of the 77 individuals comprising the Pre-Adverse Action SubClass, 22 of them have not actually experienced an adverse employment action. For example,
Courtney M. declined an offer of employment, Steven M. failed to appear for his interview, and
Richard O. told ClosetMaid that he was not interested in a position. ClosetMaid SOF ~ 29.
In the employment context, an adverse action is "a denial of employment or any other
decision for employment purposes that adversely affects any current or prospective employee."
ld. § 1681 a(k)(1 )(B)(ii). The FCRA definition of adverse action also includes a catch-all clause:
any action taken or determination that is (i) made in connection with an application that was
made by, or a transaction that was initiated by, any consumer, ...; and (ii) adverse to the
interests of the consumer. ld. § 1681 a(k)(1 )(B)(iv).

In the circumstances here, Plaintiffs

contention, made at oral argument, that ClosetMaid's procurement of the consumer report in and
of itself constitutes an "adverse action," misses the mark since the Court can discern no basis to
conclude that an applicant was treated "adversely" by the simple act of ClosetMaid obtaining a
consumer report about them. Those individuals who, one way or the other, removed themselves
from ClosetMaid's hiring process simply did not experience an adverse employment action as

parties are in the best position to resolve this question, we leave it to them to provide the Court, at the appropriate
time, with the exact number of sub-class members that fall into each of these three categories.

21

contemplated by the FCRA. 13

Accordingly, ClosetMaid' s contention that they were not

statutorily entitled to receive a FCRA pre-adverse action notice from ClosetMaid is correct.
Summary judgment is granted in favor of ClosetMaid as to these individuals, thereby eliminating
them from the Sub-Class.

2.

A Group of Individuals Who Actually Received Pre-Adverse Action
Notices

Of the remaining 55 individuals in the Sub-Class, ClosetMaid contends that it used
consumer reports as a basis to reject only 5 applicants other than Ms. Reardon, and provided
each of those individuals with a pre-adverse action notice at least 5 days in advance prior to
taking any adverse action. ClosetMaid SOF

~

26. According to both Plaintiffs and the record

evidence, ClosetMaid has provided pre-adverse action notices to only 3 individuals since 2006,
other than Ms. Reardon. See ECF No. 93-11 at Exhibit A.
ClosetMaid correctly notes that the FCRA is silent as to the precise amount of time an
employer is required to provide an applicant prior to refusing to hire her on the basis of
derogatory information in a consumer report. However, Congress has made clear the "employer
must [] provide the consumer with a reasonable period to respond to any information in the
report that the consumer disputes[,] and with written notice and the opportunity and time period
to respond." H.R. REP. 103-486 at 40 (1994). See also Kelchner v. Sycamore Manor Health

13 Several district courts have analyzed the meaning of "adverse action" in the employment context of the FCRA. In
Goode v. LexisNexis Risk & Info. Ana/ytics Grp., Inc., 848 F. Supp. 2d 532, 535 (E.D. Pa. 2012), our sister court
addressed whether the defendant, a credit reporting agency, violated section 1681b(b)(3) of the FCRA by
adjudicating prospective employees as "non-competitive" based on their consumer reports, prior to providing the
employees with a pre-adverse action letter. There, the court held that the adjudication of employees as "non­
competitive" constituted an "adverse action" that triggering the pre-adverse action notice requirement. Id. at 538­
42. In Obabueki v. Int" Bus. Machines Corp., 145 F. Supp. 2d 371,376 (S.D.N.Y. 2001), plaintiff applied for ajob
with defendant and was hired contingent on the outcome of a background check. After the background check
revealed a prior criminal conviction, members of defendant's human resources department met and decided to
withdraw plaintiffs conditional offer. Id. at 377. The defendant subsequently sent plaintiff a pre-adverse action
letter. Id. The court ultimately rejected the plaintiffs argument that defendant was obligated to send the pre­
adverse action letter prior to when the human resources department met to review the background check, finding
that an internal decision to rescind an offer is not an adverse action. Id. at 391.

22

Ctr., 305 F. Supp. 2d 429, 436 (M.D. Pa. 2004) affd, 135 F. App'x 499 (3d Cir. 2005). Further,

a "reasonable period for the employee to respond to disputed information is not required to
exceed 5 business days following the consumer's receipt of the consumer report from the
employer." H.R. REP. 103-486 at 40.
Here, there is no dispute that ClosetMaid mailed to Ms. Reardon a letter dated December
18, 2006, notifying her that there was derogatory information in her credit report and that it was
considering refusing to hire her on that basis. There is no dispute that ClosetMaid then sent to
Ms. Reardon a letter informing her that it had not selected her for employment on December 22,
2006, exactly 4 business days later. Within the facts presented here, the Court concludes that a
jury could find that Ms. Reardon was not given a "reasonable" time to dispute the derogatory
information in her credit report, especially where the pre-adverse action notice itself explicitly
provides that ClosetMaid would "wait five business days from the date of this letter before it
makes a final decision on [her] application," and then did not do so. ECF No. 97-10 at 2. As a
result, we deny ClosetMaid's Motion for Summary Judgment as to Ms. Reardon.
With respect to the remaining individuals who actually received pre-adverse action
notices, the record evidence establishes that ClosetMaid complied with its obligations under
section 1681 b(b)(3 )(A). According to the record evidence, ClosetMaid mailed the pre-adverse
action notice for all three such individuals on May 1, 2008. See ECF No. 93-11 at Exhibit A.
Subsequently, ClosetMaid mailed the adverse action notice on May 13, 2008, 8 business days
later. Id. Thus, as a matter of law, these individuals were afforded a "reasonable" amount of
time to address or respond to negative information in their consumer reports, in compliance with
section 1681b(b)(3)(A). Accordingly, summary judgment as to these individuals is granted in
favor of ClosetMaid and they are eliminated from the Sub-Class.

23

3.

The Remaining Group of 50 Sub-Class Members

As to the remaining 50 Sub-Class members 14 who experienced an adverse employment
action, based on its affidavits, ClosetMaid contends that all but a handful of them were not hired
for reasons totally unrelated to their consumer reports.

ClosetMaid SOF

'r~

27-30.

These

reasons include failing a drug test (2 applicants), falsifying information on their application (10
applicants), the applicant's work history (2 applicants), the candidate was not the "best qualified"
(26 applicants), the applicant's references (5 applicants), and the fact that there were no open
positions at the time of the application (5 applicants). ECF No. 97 at Exs. 13-15. 15 According to
ClosetMaid, the procurement of an applicant's consumer report is not necessarily the final step in
the review process such that an adverse decision made at that point is necessarily related to a
degree to the consumer report. Ms. Beal testified that there are "other things that take place"
after the procurement of an applicant's consumer report, such as drug testing. ClosetMaid Dep.
at 66:21-23.
The question is whether a factfinder could conclude that ClosetMaid's decision not to
hire these 50 Sub-Class members violated ClosetMaid's obligations under section 1681b(b)(3).
Section 1681b(b)(3)(A) provides that "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" the consumer report and summary of rights.

15 U.S.C.

§ I 681b(b)(3)(A) (emphasis added).
Plaintiffs' reading of the statute as requiring pre-adverse action notices to be provided to
an applicant for employment anytime an employer "might" use information from a consumer
14 A sufficiently large enough group to fulfill Rule 23(a)'s numerosity requirement. Stewart v. Abraham, 275 F.3d
220,226-7 (3d Cir. 200 I), cert. denied, 536 U.S. 458 (2002).
15 It would appear that of this group a total of only 7, those that failed a drug test and those as to whom there was no
open position, would involve reasons that were essentially objective, rather than engaging rationales that necessarily
involved the subjective judgment of ClosetMaid's hiring managers.

24

report to disqualify the applicant, e.g. upon the employer's acquisition of the consumer report is
without statutory support. Such an interpretation is contrary to the language of the FCRA itself.
As the Supreme Court stated in Sa/eco, "[i]fthe statute has any claim to lucidity, not all 'adverse
actions' require notice, only those 'based ... on' information in a credit report. 551 U.S. at 63.
Nonetheless, under the peculiar facts here, Plaintiffs have presented sufficient evidence to
demonstrate that ClosetMaid's policy and practice during the relevant time period was to procure
consumer reports only after a prospective employee was deemed qualified and "selected to hire."
ECF No. 93-3, ClosetMaid Dep. 49:22-50:4. This evidence therefore raises an inference that any
decision on the part of ClosetMaid not to hire an applicant once his or her consumer report has
been procured was based, at least in part, on the contents of the report. 16
To refute Plaintiffs' allegations, ClosetMaid relies on sworn Declarations from three (3)
members of its Human Resources department, Patricia Dameron, Merlyn Hernandez-Opio, and
Jennifer Boring (the "Declarants,,).17 Each Declaration attaches an Exhibit A, which purports to
list in summary fashion the reasons a given applicant was not hired, and states that "each of the
individuals identified on Exhibit A [attached to the Declaration] were not subject to an adverse
employment action that was based on, whether in whole or in part, the results of any financial or
criminal background check (i.e., any consumer report)." ECF No. 97 Exs. 13-15

~

3. According

to ClosetMaid's argument, the Declarants personally participated in the hiring process for the

16 This inference is not unlike that which results from a plaintiffs fulfillment of the "prima facie" case phase in an
employment discrimination case litigated using the "shifting burdens" analysis of McDonnell-Douglas v. Green, 411
U.S. 792, 802 (1973). Under that analytical construct, that inference alone, unless rebutted, would support but not
require a finder of fact's verdict that the consumer report was at least in part the basis of the declination of hire by
ClosetMaid.

17 The fact that ClosetMaid contends that three (3) managers have sufficient personal knowledge among themselves
as to the hiring decisions involving fifty (50) applicants would seem to belie any argument that such decisions were
not to a very substantial degree "centralized." Presumably, at trial, ClosetMaid would need to rely on no more than
these three (3) affiants as fact witnesses to explain the hiring rationale as to all of those fifty (50) applicants.

25

individuals listed in their respective Exhibits A. ECF No. 112 at 4. To prepare the involved
Exhibits A, the Declarants apparently reviewed each individual's application file to determine
what the file ret1ected as to the reason that particular applicant was not hired. !d.; see also ECF
No. 112-2, at 13-17. 18
Plaintiffs assert that the Declarations submitted by ClosetMaid in support of its Motion
for Summary Judgment should be stricken because they are based on "retrospective guess work"
rather than personal knowledge and, therefore, fail to comply with Federal Rule of Civil
Procedure 56(c). Rule 56(c) allows the use of affidavits in connection with a summary judgment
motion when the affidavit is "made on personal knowledge, set[s] out facts that would be
admissible in evidence, and show[s] that the affiant is competent to testify on the matters stated."
Fed. R. Civ. P. 56(c)(4). See also Petruzzi's IGA Supermarkets, Inc., v. Darling-Delaware Co.,
998 F .2d 1224, 1234 n. 9 (3d Cir. 1993) (observing that evidence introduced at summary
judgment stage must be "capable of being admissible at trial"). A party opposing a summary
judgment motion must set forth specific facts that reveal a genuine issue of material fact, and
"conclusory, self-serving affidavits are insufficient to withstand a motion for summary
judgment." Gonzalez v. Sec'y ofthe Dep't of Homeland Sec., 678 F.3d 254,263 (3d Cir. 2012)
(citing Kirleis v. Dickie, McCamey & Chilcote, 560 F.3d 156, 161 (3d Cir. 2009). Hearsay
declarations in affidavits may be considered in the summary judgment context if the declarant

18 As noted, ClosetMaid argues that each declarant has personal knowledge of the basis for declination of hire of
certain specific applicants, but an examination of the involved declarations, which mirror each other in phrasing,
reveals that they do not make that specific recitation of only personal knowledge, but also speak of "information
provided" and "information in records." The Court simply cannot be certain whether on this point ClosetMaid's
position is simply unintentional fuzziness in drafting, or is intentionally cagey. ClosetMaid argues at one point that
each of the three declarants has first hand knowledge based on their "particular involvement in the hiring decisions
related to each of the applicants at issue," ECF No. 112 at 2. Then, on the same page of its Memorandum, it says
that its "Human Resources Staff' personally reviewed the application files of each Sub-Class member to "determine
the reason why each and every one of those individuals was not hired by ClosetMaid." !d. On the next page of that
Memorandum, ClosetMaid cuts the issue very close to the corner by advising the Court that each declarant also
considered such file content, and then applied their "knowledge and experience." First-hand knowledge? General
knowledge? The Court cannot at this point divine that answer.

26

would be available for trial and the declaration as set forth in the affidavit would be admissible if
it were made by the declarant in open court. J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d
1524, 1542 (3d Cir. 1990).
Here, for purposes of summary judgment, ClosetMaid has set forth sufficient evidence to
establish that Declarants Boring, Dameron, and Hernandez-Opio possessed the requisite personal
knowledge regarding the matters set forth in their Declarations, but barely. Specifically, Ms.
Boring, ClosetMaid's current Human Resources Director, testified that even though each
declaration does not say so specifically, in preparing l9 the Declarations, each of the Declarants
reviewed the applicant files for the members of the Pre-Adverse Action Sub-Class as to which
that particular Declarant actually participated in the hiring process. ECF No. 112-2 at 67:23­
71 :01. Each Declarant then confirmed the file content as to the hiring decisions identified in
their respective Declarations, as set forth in Exhibit A to the involved Declaration. At trial, each
Declarant will have the opportunity (and obligation) to present admissible testimony consistent
with their Declaration. Nonetheless, to the extent that each respective Exhibit A was created by
Ms. Boring in preparation for this phase of the litigation, rather than contemporaneously with
ClosetMaid's hiring decisions for each of the individuals listed, we would observe that the
evidence is substantially self-serving and does not in and of itself obviate the permissible
inference that the consumer report procured at the latest stages of the hiring process played some
role in the hiring decisions. That inference is generated by the combination of the timing of the
reports' procurement within that process, the "selected for hire" standard, and the adverse action
taken soon thereafter.

19 It is pretty clear that no Declarant actually prepared or even drafted their own Declaration. ClosetMaid counsel
and Ms. Boring did that. Nonetheless, each Declarant has put their own credibility on the line by executing their
Declarations subject to the penalties for perjury. For these purposes, that is good enough.

27

Thus, for each of these 50 Sub-Class members, the Declarations are sufficient to support
the existence of a genuine issue of material fact with respect to whether ClosetMaid's hiring
decisions were driven, in whole or in part, by those individuals' consumer reports, or whether
ClosetMaid relied, as it claims (and as it must), solely on other disqualifying information, much
of which is highly subjective.
Plaintiffs present a compelling argument based on the testimony of ClosetMaid officials
that no consumer report is even obtained until the involved applicant has been "selected for
hire," and that the fifty (50) remaining Sub-Class members were then not hired after the reports
were obtained. On the other hand, ClosetMaid contends that as to each such Sub-Class member,
it can demonstrate that the content of the consumer report had literally nothing to do with the
decision not to hire. While the timing involved in ClosetMaid's processes and its use of the term
"selected for hire" may make prevailing with that argument tough sledding, ClosetMaid can

·
. 1
make It at tna. 20

It is for the factfinder to decide whether ClosetMaid violated section

1681 b(b )(3) with respect to these 50 members of the Pre-Adverse Action Sub-Class and, if so,
whether such a violation was willful. Accordingly, summary judgment as to liability (at the
behest of either party) is not warranted as to these Plaintiffs.

In this regard, Closet Maid is in a position akin to that of a defendant in a "pattern and practice" case brought
under Title VII of the Civil Rights Act. See Teamsters v. United States. 431 U.S. 324 (1977). In those cases, where
the plaintiff demonstrates the existence and general application of an unlawful employment practice, the burden
shifts to the defendant to prove that the improper practice did not, at all, animate the employment decision as to a
particular applicant. Here, if ClosetMaid were to not offer any proof, a fact finder would be permitted to find from
the facts that no credit reports were obtained until an applicant had been "selected for hire," and that the declination
of hire decision was made only after the reports were obtained, that they played at least some role in that declination
decision. Given that it is uncontroverted that no timely "adverse action" notices were given to such applicants, the
statutory violation would be made out. Then, it would fall to ClosetMaid to prove that as to a particular applicant,
the report played no role at all. At least two courts of appeals have held that such pattern and practice actions are
not distinct substantive claims, but instead relate solely to the method of proof available (at least when the plaintiff
is not the Government), and that the "pattern and practice" phraseology in the context of private plaintiffs is simply
a variation on the McDonnell-Douglas theme. Parisi v. Goldman. Sachs. 710 F.3d 483 (2d Cir. 2013); Celestine v.
Petroleos de Venezuella SA. 266 F.3d 343 (5th Cir. 2001), abrogated on other grounds by Nat'/ R.R. Passenger
Corp. v. Morgan, 536 U.S. 101 (2002). As this case proceeds to trial, the Court expects that the parties will more
precisely define the method of proof they propose to use as to liability issues relative to this Sub-Class.
20

28

C.

Motion to Strike

With respect to Plaintiffs' Motion to Strike the Declarations, it is denied for the same
reasons as stated above, i. e., ClosetMaid has established, but not by much, that for summary
judgment purposes, the Declarants possessed the requisite baseline personal knowledge and were
competent to testify regarding the matters addressed in their respective Declarations. 21 Although
ClosetMaid has yet to lay the predicate foundation for introduction of each Declaration's Exhibit
A as a business record, see Fed. R. Evid. 803(6), this is a curable defect at trial if there are
business records supporting the summary which is Exhibit A.

See Fed. R. Evid. 1006.

Accordingly, Plaintiffs' Motion to Strike is denied without prejudice to their ability to challenge
the testimony and evidence that may be offered on these points at trial.
D.

Motion to Decertify

As detailed above, the Pre-Adverse Action Sub-Class is narrowed to a group consisting
of 50 members. Accordingly, the focus is on the arguments ClosetMaid advances in its Motion
to Decertify as to these 50 Sub-Class members only. With respect to these remaining Sub-Class
members, ClosetMaid contends that the requirements of typicality under Rule 23(a) and
predominance and superiority under Rule 23(b)(3) are not satisfied and, thus, the Sub-Class
should be decertified. ECF No. 99 at 5. As to typicality, ClosetMaid asserts that because Ms.
Reardon received a pre-adverse action letter and experienced an adverse employment action
based on her consumer report, her claims are not typical of those of the Sub-Class she currently
represents. Because the core of Ms. Reardon's pre-adverse action claim - that ClosetMaid took
adverse action against her based on her consumer report before timely providing her with the
required disclosures under FCRA - is the same as that for all of the remaining members of the
21 This evidence, to be admissible at trial, will require ClosetMaid to produce for testimony persons who have actual
personal knowledge as to the basis of decision as to each "selected for hire" applicant who was not hired, or proof of
its decisional process and conclusion otherwise admissible under Fed. R. Evid. 803.

29

Sub-Class, that requirement is met. As to predominance and superiority, ClosetMaid contends
that the individual factual issues affecting the Sub-Class predominate over common issues
because ClosetMaid made its hiring decisions on an individual basis and, thus, a class action
poses an inferior method for resolving this action.
Because Plaintiffs request monetary damages, they properly sought to certify the Pre­
Adverse Action Sub-Class pursuant to Rule 23(b)(3). ECF No. 34 at 1. See Wal-Mart Stores,
Inc. v. Dukes, 131 S.Ct. 2541,2558-59 (2011) (holding that a class requesting individualized
monetary relief must be certified under Rule 23(b)(3)). Certification of any class or sub-class
has four threshold requirements under Rule 23(a): (1) the class is so numerous that joinder of all
members is impracticable [numerosity]; (2) there are questions of law or fact common to the
class [commonality]; (3) the claims or defenses of the representative parties are typical of the
claims or defenses of the class [typicality]; and (4) the representative parties will fairly and
adequately protect the interests of the class [adequacy]. Fed. R. Civ. P. 23(a).
For certification under Rule 23(b)(3), a class or sub-class must meet two additional
requirements: (1) the questions oflaw or fact common to class members must predominate over
any questions affecting only individual members, and (2) a class action must be superior to other
available methods for fairly and efficiently adjudicating the controversy.

Fed. R. Civ. P.

23(b)(3). The party requesting certification must affirmatively demonstrate its compliance with
all of these requirements.

Dukes, 131 S.Ct. at 2551-52.

A court must conduct a "rigorous

analysis" in determining whether the prerequisites of Rule 23 have been satisfied. Comcast
Corp. v. Behrend, 133 S.Ct. 1426, 1432 (2013) (quoting Dukes and applying the "rigorous
analysis" standard to Rule 23(b)). This analysis often requires "overlap with the merits of the
plaintiffs underlying claim." Dukes, 131 S.Ct. at 2551.

30

The Third Circuit has held that courts should "consider the Rule 23(a) commonality
requirement to be incorporated into the more stringent Rule 23(b)(3) predominance requirement,
and therefore deem it appropriate to 'analyze the two factors together, with particular focus on
the predominance requirement.'" Sullivan, 667 F.3d at 297 (citing In re Ins. Brokerage Antitrust

Litig., 579 F.3d 241, 266 (3d Cir. 2009).

This predominance requirement "tests whether

proposed classes are sufficiently cohesive to warrant adjudication by representation." Marcus v.

Bll1W olN. Am., 687 F.3d 583, 600 (3d Cir. 2012) (citing Amchem Prods., Inc. v. Windsor, 521
U.S. 591,623 (1997)). It is "a standard 'far more demanding' than the commonality requirement
of Rule 23(a) ... 'requiring more than a common claim.'"

In re Hydrogen Peroxide Antitrust

Litig., 552 F.3d 305, 311 (3d Cir. 2008) (quoting Amchem, 521 U.S. at 623-24, and Newton v.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 187 (3d Cir. 2001)). Rather, the
plaintiff must "demonstrate that the element of [the legal claim] is capable of proof at trial
through evidence that is common to the class rather than individual to its members." Id. at 311­
12. This calls for the district court to rigorously assess "the available evidence and method or
methods by which plaintiffs propose to use the evidence" at trial. !d. at 312.
The requirements of predominance and commonality appear to be satisfied in this case.
To the extent ClosetMaid asserts that predominance or commonality requirements cannot be met
because there were individual decisions "finally" made to the remaining Sub-Class members,
such argument has been rejected by the Third Circuit. See Sullivan, 667 F.3d at 298-99 (stating
that predominance requirement is satisfied where proof of liability for defendant's conduct
depends on the conduct of defendant, not on the conduct of the individual class members)
(citation omitted); Baby Neal, 43 F.3d at 57 ("Even where individual facts and circumstances do
become important to the resolution, class treatment is not precluded.").

31

The fact that ClosetMaid may raise distinct factual defenses as to some members of this
Sub-Class

based on the different reasons for which ClosetMaid allegedly declined to hire

different Sub-Class members

is not fatal to the predominance requirement's fulfillment. Rule

23(b )(3) does not require that all issues be common to the class, but only that common issues
predominate. 22 In re Prudential Ins. Co. of Am. Sales Practices Litig., 148 F.3d 283,315 (3d
Cir. 1993). "Where there are sufficient material common questions, '[c]ourts traditionally have
been reluctant to deny class action status under Rule 23(b)(3) simply because affirmative
defenses may be available against individual members. '" Demmick v. Cel/co P'Ship, 2010 WL
3636216, at *12 (D.N.J. Sept. 8, 20l0) (quoting Smilow v. Sw. Bell Mobile Sys., Inc., 323 F.3d
32,39 (1st Cir. 2003), citing Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912, 924 (3d Cir.
1992».

Courts are even more reticent to disallow class action treatment on the basis of

individualized liability issues "where the plaintiff points to a specific company-wide policy or
practice that allegedly gives rise to consistent liability." Kurihara v. Best Buy Co., Inc., 2007
WL 2501698, at *10 (N.D. Cal. Aug. 30, 2007).
Plaintiffs' allegations that ClosetMaid failed to timely provide Ms. Reardon and other
applicants with the required section 1681 b(b )(3) disclosures suggest proof will be adduced of a
broad-based, systemic deficiency within ClosetMaid's hiring system, namely the generalized
procurement of consumer reports at a point in time at which the hiring decisions had advanced to
the point where applicants had been "selected for hire" and then were not hired, at least raising
the inference that the contents of the consumer report played at least some role in the ultimate

22 The commonality requirement is met if there is at least one common issue which centered to the validity of the
claims asserted. Dukes, 131 S. Ct. at 2556.

32

decision. 23 This provides "sufficient evidence of a class-wide practice that gives rise to liability"
that gets the Plaintiffs through the class action door. Cornn v. United Parcel Serv., No. C03­
2001,2005 WL 2072091, at *2 (N.D. Cal. Aug. 26, 2005). This is also the type of issue where
the claims related to a class's challenge to a company-wide policy or practice predominate over
potential individualized liability issues such as fact-based defenses, and therefore lend
themselves to resolution by class action suit.
The Sub-Class also satisfies the superiority requirement of Rule 23(b )(3), under which "a
class action must represent the best 'available method [] for the fair and efficient adjudication of
the controversy." Newton, 259 F.3d at 191 (quoting Fed. R. Civ. P. 23(b)(3)). Rule 23(b)
provides four factors to help guide courts in determining whether a class action is superior to
other methods of resolution: (A) the class members' interests in individually controlling the
prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning
the controversy already begun by or against class members; (C) the desirability or undesirability
of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties
in managing a class action. Fed. R. Civ. P 23(b)(3).
We find no problems presented by the first three factors in this case, and ClosetMaid does
not direct us to any.

Instead, it argues that a class action here would present serious

manageability problems due to the individualized inquiries a court and a factfinder would need to
make as to the reasons ClosetMaid declined to hire each class member and as to any awardable
monetary damages. While this issue is a closer call, on the record now before the Court, we
disagree for the following reasons.

2, Thus, this case presents a situation different from that in Rodriguez v. Nat'! City Bank, 726 FJd 372 (3d Cir.
20 \3) in that here, there is a specific, discrete challenged employment practice applicable on a subclass-wide basis
that would have affected all subclass members in a common way. fd. at 383. The process for procuring, and using
the involved consumer reports on those "selected for hire" (and the resulting inference that the contents affected the
hiring decision in at least some fashion) is conduct common to all Sub-Class members. fd. at 384-85.

33

This is not a situation like that in Newton, where "the need for individualized inquiry into
actual injury" caused by hundreds of millions of stock trades presented "a mind-boggling
undertaking." 259 FJd at 191. Nor is it a case like Georgine v. Amchem Products, Inc., where
our Circuit determined that there were "simply too many uncommon issues, and the number of
class members [was] surely too large." 83 F.3d 610, 632-33 (3d Cir. 1996). There are 50
plaintiffs in the remaining Sub-Class, and ClosetMaid's entire basis for decertification is one
potential uncommon issue

that it will assert different non-report related reasons for not hiring

different members of the Sub-Class as its defense. Since we have already held that the common
issues in this case predominate over concerns related to ClosetMaid's individual hiring decisions,
this is not a proper basis for decertification on the superiority requirement. See In re Plastics
Additives Antitrust Litig., 2006 WL 6172035, at *13 (E.D. Pa. Aug. 31, 2006) ("[D]enying
certification on the sole ground of the unmanageability of the action, at least in the class
certification stage, is 'disfavored.') (quoting In re Visa CheckiMastermoney Antitrust Litig., 280
F.3d 124, 140 (2d Cir. 2001».
The 50 remaining Sub-Class Plaintiffs allege that ClosetMaid engaged in activities
violative of section 1681 b(b )(3) by failing to provide prospective employees who had been
"selected for hire" with the required pre-adverse action notice (either timely or at all) before
taking adverse action against them based, in whole or in part, on information contained in their
consumer reports. Evidence for the resolution of this legal question would entail generalized
common proof as to ClosetMaid's hiring processes, the timing of its procurement of consumer
reports within the hiring process, what "selected for hire" means, the finalized identification of
those applicants who are within this Sub-Class, and ClosetMaid's ultimate use of the involved
consumer reports.

34

The Court has some concern as to how the jury will methodically deal with the parsing of
the reasons for ClosetMaid's non-hire decisions, and whether the involved reports played any
role at all in each discrete decision. That concern would appear to be counterbalanced by
ClosetMaid's method of advancing the evidence that it asserts will carry the day for it. That is, it
contends that the three (3) Human Resources Declarants, and admissible business records, will
be able to address, together, these issues for the remaining Sub-Class members. If this is in fact
so, then the development of the record in these regards will present some trial management
issues, but not insurmountable ones, given the rather limited number of necessary witnesses on
this point. Having three (3) witnesses testify from their personal knowledge about such matters
relative to fifty (50) people is not by any measure a "mind-boggling undertaking," and with the
Court's use of proper jury instructions and special verdict form, and the parties' use of
evidentiary summaries as permitted by Fed. R. Evid. 1006, a jury can surely handle the task at
hand. 24
Plaintiffs damage claims as pled also complicate this point. The principal thrust of the
Plaintiffs' claims in these regards is that ClosetMaid's conduct as to this Sub-Class was willful,
which would support the award of actual, statutory and punitive damages, along with equitable
relief.

ECF No. 16 at

~

65.

Apparently as a back-up position, Plaintiffs then claimed at

24 The Court will require the parties to advise the Court as to the methodology of proof of liability and the defense
against it that they will use at trial, as the briefing to date does not squarely address that topic. For instance, if the
Plaintiffs use the McDonnell-Douglas formulation, the record appears to demonstrate that they will rather easily
carry the light burden of making out a prima facie case by showing that each Sub-Class member was "selected for
hire," a consumer report was then procured as to each of them, and then shortly thereafter they were not hired.
ClosetMaid can then seemingly carry its relatively light burden of production of a legitimate reason for non-hire
wholly unrelated to the consumer report. Then, Plaintiffs will have to show that the reasons advanced are pretextual.
Alternatively, if the Teamsters mode of proof applies, Plaintiffs would show the uniform application of a single
employment practice in which the applicants are first "selected for hire," and then a consumer report is procured
resulting in certain non-hires. Then, the defendant must come forward with proof sufficient to rebut the presumption
created that the consumer report played some role in the hiring decision. If the former methodology would apply,
continuing certification of this Sub-Class may become substantially more problematic, as the specter of fifty "mini­
trials" becomes more real. If the latter, that is much Jess of a risk, as there is a presumption in existence that may
streamline the proof. Or, perhaps, the parties have in mind one or more other methods.

35

paragraph 66 of the First Amended Complaint that ClosetMaid's approach was at least negligent,
which would support only actual damages.

Now, in their Pretrial Statements, both parties

concede that only statutory and punitive, but not actual, damages are being sought. ECF No. 138
at 15-17, ECF No. 139 at 9. If the remedial component of the case is limited to the former
methodology only, and then only as to statutory and/or punitive damages, then the predominance
and superiority concerns attendant to Rule 23(b)(3) actions regarding the individualized
determination of the entitlement to, and amount of, money damages are minimal, since both
statutory and punitive damages can, on the facts alleged, be calculated and assessed principally
on a class-wide basis and would not overtake the advantages of class action treatment. 25 If on
the other hand, the Plaintiffs were trying their case on a theory that requires as to each Sub-Class
member a discrete individualized assessment of actual damages, or if they seek actual damages
flowing from claims of willful misconduct on ClosetMaid' s part, then the case takes on an
overriding individualized cast, both as to the defense against liability by ClosetMaid, and the
assessment of actual damages on behalf of each Sub-Class member. The Court would then be
compelled to revisit its assessment of predominance and superiority and continued class
certification. 26

25 The Court does not read the Plaintiffs' papers as contending that they will demonstrate at trial any degree of
uniqueness to the statutory or punitive damages claim of any particular member of this Sub-Class. Instead, the
thrust of their position is that the amounts of such damages, if any at all, would be the same based on ClosetMaid's
actions, and not any special characteristics ofthe situation of one or more particular Sub-Class members. Of course,
this will be an issue to be resolved with precision prior to trial. See Kurihara v. Best Buy Co., Inc., 2007 WL
2501698, at *9-11 (N.D. Ca. Aug. 30, 2007) (Individualized inquiries as to damages, as opposed to liability, do not
defeat predominance).
26 The Court cannot readily discern from the multitude of filings when and how the Plaintiffs first stated their
abandonment of all claims for actual damages. This may matter. If Plaintiffs, as a class, end up foregoing any effort
to recover actual damages, this could compromise the interests of individual class members who believe that they
were actually harmed by non-compliance by ClosetMaid with the adverse action notice obligations. This reality
could necessitate the Court's revisiting certification, or requiring, upon revised class notice, an opportunity for such
Sub-Class members to opt out of the Sub-Class to pursue their actual damages claims on their own. The Court
believes at this juncture the better course is to allow the parties to consider that question in the context of the Court's
Opinion, and advise the Court of their position as to such matters. From where the Court sits, the issues surrounding

36

Because a Jury could reasonably find that Plaintiffs' contentions, if true, reflect a
systemic deficiency within ClosetMaid's hiring process that advances applicants to the "selected
for hire" stage when a consumer report is procured, and a "final" decision is made thereafter, we
conclude that this common issue predominates over individualized inquiries as to the 50 SubClass members (at least as to the quest for statutory and punitive damages), and therefore class
action certification as a method of resolution of these claims is sufficiently superior to the
altemative. 27 Accordingly, the requirements of Rule 23(b) continue to be met, and we deny
ClosetMaid's Motion to Decertify on the record now before the Court. The Court will revisit that
inquiry as is appropriate, based on its consideration of the positions of the parties as to the
methodology that will be used to prove and defend against a liability finding, and whether actual
damages will be an issue at trial.
IV.

CONCLUSION

For the foregoing reasons, Plaintiffs' Motion for Summary Judgment (ECF No. 90) is
granted in part and denied in part, and Defendant's Motion for Summary Judgment (ECF No. 94)
is granted in part and denied in part. Specifically, with respect to the Disclosure Claim, we grant
Plaintiffs' Motion for Summary Judgment as to liability and willfulness as to the members of the
Disclosure Class who received only the defective Disclosure Form, and deny it in all other
the calculation of individual actual damages generate ClosetMaid's best argument relative to the continued efficacy
of class action treatment, but it is not one that is at all fully developed in the record. ECF No. 99 at 14-15. It also
appears that the Plaintiffs have not directly addressed it. ECF No. 103. Before this case can proceed to trial, they
will have to do so. See Williams v. Telespectrum, Inc.. 2007 WL 6787411 (E.D. Va. June 1,2007) (denying class
treatment due to the need to calculate actual damages in order to test the constitutionality ratio of any award of
punitive damages).
27 The one that comes to the Court's mind is fifty (50) separate trials, all of which would have identical predicate
proof as to the ClosetMaid hiring process, acquisition of reports, declaration of "selected for hire" status, and then a
single unique issue, namely whether that previously procured report had any role at all in the ultimate non-hire
decision. In the Court's judgment, a single trial with one pathway of proof on all of the predicate and foundational
facts, followed by the testimony from only three (3) Human Resources witnesses as to the basis of each non-hire
decision, is "superior" to that. Neale v. Volvo Cars olN. Am. LLC, 2:1O-cv-4407, 2013 WL 1223354, *12 (D.N.J.
Mar. 26, 2013); Kurihara v. Best Buy, Inc., No. C-01884 MHP, 2007 WL 2501698, at *9-11 (N.D. Cal. Aug. 30,
2007).

37

respects. With respect to the Pre-Adverse Action Claim, we grant ClosetMaid's Motion for
Summary Judgment as to the 22 members of the Sub-Class who experienced no adverse
employment action, and as to the 3 members who were provided with pre-adverse action notices
sufficiently in advance of ClosetMaid's adverse action against them, and deny it in all other
respects.

ClosetMaid's Motion to Decertify (ECF No. 98) and Plaintiffs' Motion to Strike

Declarations (ECF No. 108) are both denied without prejudice to their being revisited
conformity with the matters set forth in this Opinion.

n appropriate Order follows.

Mark R. Hornak
United States District Judge
Dated: December 2, 2013
cc: All counsel of record

38

In