Lewis v. Southwest Airlines Co.
MEMORANDUM OPINION AND ORDER: Defendant's 41 Motion for Leave to File Appendix to Reply Brief in Support of Motion for Judgment on the Pleadings is DENIED, and Defendant's 33 Motion for Judgment on the Pleadings is GRANTED in part and D ENIED in part. The Motion for Judgment on the Pleadings is GRANTED with respect to Plaintiff's claims for (i) negligent violation of the FCRA and (ii) violation of the CCCRAA, and those claims are DISMISSED without prejudice. In all other respects, the Motion is DENIED, without prejudice. (Ordered by Chief Judge Barbara M.G. Lynn on 3/6/2017) (ran)
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
JUSTIN LEWIS, on behalf of himself and
all others similarly situated,
SOUTHWEST AIRLINES CO., et al,
Civil Action No. 3:16-cv-1538-M
MEMORANDUM OPINION AND ORDER
Before the Court is a Motion for Judgment on the Pleadings, filed by Defendant
Southwest Airlines Co. For the following reasons, the Motion [ECF #33] is GRANTED in
part, and DENIED in part.
This is a putative class action brought by Plaintiff Justin Lewis against his former
employer for alleged violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §
1681, et seq., the California Investigative Consumer Reporting Agencies Act (“CICRAA”),
California Civil Code § 1780, et seq., and the California Consumer Credit Reporting
Agencies Act (“CCCRAA”), California Civil Code § 1875, et seq. Simply stated, Plaintiff
contends that these consumer protection statutes prohibit employers from conducting
background checks for job applicants, unless the employer provides the applicant with
certain required disclosures in a stand-alone document. In his original Complaint, filed in
California Superior Court, Plaintiff alleges that Defendant violated the FCRA, the CICRAA,
and the CCCRAA when it acquired various investigative consumer reports for him as part of
a pre-employment background check, pursuant to an authorization provision included in an
eight-page “Employment Application” that he filled out when he applied for a job with
Southwest Airlines. 1 See Compl., Rem Not. [ECF #1], Ex.1, at ¶¶26-33, 42-44, 54-57, 73.
Plaintiff alleges that the authorization Defendant used to procure these reports was not made
in a stand-alone document, improperly contained a liability release, and did not include a
proper summary of consumer rights, as required by the FCRA and California law. See id.
Plaintiff further alleges that Defendant’s violations were willful, and that he is thus entitled
to statutory and punitive damages, in addition to actual damages. See id. at ¶¶33-34, 37, 60,
Defendant removed this case from California state court to federal court in the
Northern District of California on the basis of federal question jurisdiction, 28 U.S.C. §1331.
See Rem. Not. at 2, ¶5. Defendant then sought and was granted a transfer of venue to the
Northern District of Texas. See Order [ECF #18]. Defendant has now filed a Motion for
Judgment on the Pleadings under Rule 12(c) of the Federal Rules of Civil Procedure. By its
Motion, Defendant argues that Plaintiff’s FCRA claims should be dismissed because the
original Complaint fails to plead facts that would establish a willful violation of the statute.
According to Defendant, Southwest Airlines procured a background check on Plaintiff
Plaintiff’s state court Complaint is the live pleading in this action.
pursuant to a “Consent to Request Consumer Report & Investigative Consumer Report
Information” form, not his Employment Application. Defendant characterizes the consent
form as a “stand-alone document which discloses that Southwest will obtain an applicant’s
background report for employment purposes and seeks authorization to do so,” in full
compliance with the FCRA and California law. Def. Mot. [ECF #33] at 8. Defendant denies
that the consent form includes a liability release. Defendant also argues that Plaintiff’s claim
for a negligent violation of the FCRA must be dismissed, because Plaintiff failed to plead
that he incurred any actual damages. With respect to Plaintiff’s claims under California law,
Defendant argues that Plaintiff is precluded from seeking relief under the CICRAA for the
same conduct that forms the basis of his federal claims. Defendant also argues that the
consent form satisfies all the requirements of the CCCRAA, and that Plaintiff has failed to
plead facts establishing actual damages, which are the only type of damages available under
the CCCRAA. The Motion has been fully briefed and is ripe for determination.
A Rule 12(c) motion is governed by the same standards that apply to a Rule 12(b)(6)
motion to dismiss. See Ackerson v. Bean Dredging, LLC, 589 F.3d 196, 209 (5th Cir. 2009).
To avoid dismissal under Rule 12(b)(6), a plaintiff must plead “enough facts to state a claim
to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
“A claim has facial plausibility when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). “The
plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a
sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at
556). The “[f]actual allegations must be enough to raise a right to relief above the speculative
level, on the assumption that all the allegations in the complaint are true (even if doubtful in
fact)[.]” Twombly, 550 U.S. at 555 (internal citations omitted).
As a preliminary matter, the Court must determine the extent of the materials upon
which it will base its decision. Defendant seeks to have the Court consider not only
Plaintiff’s Complaint and Defendant’s Answer, but also (1) the consent form allegedly
executed by Plaintiff, and (2) the background check Defendant allegedly procured on
The gravamen of Defendant’s argument that it is entitled to judgment on the
pleadings is that the Employment Application described in Plaintiff’s Complaint is not the
instrument Southwest Airlines used to procure a background check on Plaintiff. Defendant
contends instead that it procured the background check on Plaintiff pursuant to the consent
form, which complies with federal and California law. Defendant suggests that Plaintiff
deliberately ignored the consent form and alleged facts solely related to the Employment
Application in an apparent “sleight of hand” intended to divert the Court’s attention away
from fatal flaws in Plaintiff’s claims. See Def. Mot. at 1. Defendant attaches to its Motion a
copy of the consent form allegedly executed by Plaintiff and asks the Court to consider the
consent form in evaluating its arguments.
When considering a motion to dismiss, courts are generally “limited to the complaint,
any documents attached to the complaint, and any documents attached to the motion to
dismiss that are central to the claim and referenced by the complaint.” Lone Star Fund V
(U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010) (citing Collins v.
Morgan Stanley Dean Witter, 224 F.3d 496, 498–99 (5th Cir.2000)). When a party presents
“matters outside the pleadings” with a motion to dismiss, the Court has complete discretion
to either accept or exclude the evidence for purposes of the motion to dismiss. Isquith v.
Middle South Utilities, Inc., 847 F.2d 186, 194 n. 3 (5th Cir. 1988). If “matters outside the
pleading are presented to and not excluded by the court, the motion shall be treated as one for
summary judgment.” Fed. R. Civ. P. 12(b).
Here, the Court determines that the consent form constitutes a matter outside the
pleadings. The consent form is not central to Plaintiff’s FCRA claim, as pleaded in the
Complaint. Rather, Plaintiff’s claim is based solely on the Employment Application, which
he alleges is the instrument Defendant used to procure a background check. The Court
cannot, on the record as it stands, find that Plaintiff deliberately ignored the consent form in a
duplicitous attempt to avoid early dismissal, because Plaintiff alleges that he requested his
personnel file from Defendant prior to filing this lawsuit, and that the materials Southwest
Airlines produced in response did not include a copy of the consent form. Pl. Resp. Br. [ECF
#40] at 1, n.1. Defendant does not challenge Plaintiff’s assertion that it did not provide the
consent form to Plaintiff in response to his request. Thus, the Court, in its discretion, declines
to now consider the consent form.
Plaintiff also argues that the consent form, which appears to have been executed
almost three weeks after Plaintiff submitted his Employment Application, does not
conclusively establish that Defendant procured the background check on Plaintiff pursuant to
the consent form rather than the Employment Application because there is no evidence that
establishes the date on which Defendant procured the background check. In response to this
assertion, Defendant seeks leave to file an appendix with its reply brief that contains a copy
of a “Background Report” allegedly obtained in connection with Plaintiff’s application for
employment with Southwest Airlines, as well as a declaration intended to authenticate the
report. See Motion for Leave to File Appendix to Reply Brief in Support of Motion for
Judgment on the Pleadings [ECF #41]. Defendant argues that this evidence would clarify the
“undisputed” date Defendant ordered the background check.
It is generally improper for a party to introduce new evidence at the reply stage of a
motion proceeding. See N.D. Tex. L. Civ. R .7.2(e) (appendix may accompany a motion or
response); Tovar v. United States, 2000 WL 425170, at *4, n. 8 (N.D. Tex. Apr. 18, 2000),
aff’d, 244 F.3d 135 (5th Cir. 2000). This is because the purpose of a reply brief is to rebut the
nonmovant’s response, not to introduce new evidence. Further, “a reply brief that presents
dispositive evidence by way of new affidavits and exhibits deprives the nonmovant of a
meaningful opportunity to respond.” Springs Indus., Inc., v. Am. Motorists Ins. Co., 137
F.R.D. 238, 239 (N.D. Tex. 1991). Accordingly, leave to file new evidence in support of a
reply will be granted only in limited circumstances. See Dethrow v. Parkland Health Hosp.
System, 204 F.R.D. 102, 104 (N.D. Tex. 2001).
Plaintiff alleges that Defendant deliberately withheld the Background Report from
him despite his pre-suit request for a copy of his personnel file and a specific request from
his attorney for copies of all background checks and consumer reports obtained in connection
with his employment application. Defendant does not contend that it previously provided a
copy of the Background Report to Plaintiff. Defendant has not shown good cause to
supplement the record at this stage in the proceedings with additional evidence that Plaintiff
claims was withheld from him. Accordingly, the Court DENIES Defendant’s request to file
new evidence with its reply brief.
The Court determines that it will not consider the contents of the consent form or the
Background Report in ruling on Defendant’s Rule 12(c) Motion. To the extent this Motion is
not granted, the Court anticipates Defendant will seek summary judgment on the same basis.
The FCRA requires employers to provide notice to job applicants prior to obtaining a
consumer report for employment purposes. 15 U.S.C. § 1681b(b)(2). The notice must be
made in a stand-alone document “that consists solely of the disclosure[ ] that a consumer
report may be obtained for employment purposes.” 15 U.S.C. § 1681b(b)(2)(A)(i) (emphasis
added). The FCRA provides a private right of action against businesses that use consumer
reports but fail to comply with the notice requirements of the Act. See 15 U.S.C. §§ 1681n,
1681o; Safeco Ins. Co. of America v. Burr, 551 U.S. 47, 53 (2007). If the violation is
negligent, the plaintiff is entitled to actual damages; if the violation is willful, the plaintiff
may also be entitled to statutory damages—ranging from $100 to $1,000—and punitive
damages. 15 U.S.C. §1681n(a). A defendant acts willfully under the FCRA by either
knowingly or recklessly disregarding its statutory duty. Safeco, 551 U.S. at 57-60. Conduct is
considered reckless if it was objectively unreasonable in light of legal rules that were clearly
established at the time. See id. at 69-70.
Defendant argues that Plaintiff’s FCRA claims fail because he failed to plead any
facts regarding Defendant’s consent form or show that the text contained in that form
violated clearly established law at the time Plaintiff signed it. Because the Court has
determined that the consent form is not properly to be considered in the context of
Defendant’s Motion for Judgment on the Pleadings, the Court’s review is limited to
Plaintiff’s Complaint, which is directed to the Employment Application. See Compl., ¶26.
Plaintiff’s Complaint alleges that Defendant violated the FCRA by allegedly procuring credit
and background reports for Plaintiff pursuant to the Employment Application, wherein the
required disclosures “are embedded with extraneous information, and are not clear and
unambiguous disclosures in stand-alone documents.” Compl., ¶28.
Defendant does not argue that the Employment Application constitutes an FCRAcompliant, stand-alone disclosure. Instead, Defendant acknowledges that the Employment
Application is eight pages long and “seeks detailed information about the applicant,
including employment with Southwest or other airlines, military history, educational history,
and provides information about employment at Southwest.” Def. Mot. at 10. Defendant
tacitly concedes that the provision in the Employment Application authorizing Southwest
Airlines to procure background/consumer reports is contained in the same paragraph as an
agreement to sign a release permitting Defendant to obtain records under the federal Drug
and Alcohol Testing regulations, and a release of liability for “any damage that may result
from this investigation.” Compl. at ¶27. Defendant also does not argue that the Employment
Application provides the summary of rights required by the FCRA. Instead, Defendant looks
past the Employment Application and attempts to prove its entitlement to dismissal of
Plaintiff’s claims based on the consent form. Without suggesting whether dismissal of
Plaintiff’s FCRA claims based on the consent form would be proper in another procedural
context, such as a motion for summary judgment, the Court concludes that Plaintiff has
pleaded sufficient facts to avoid dismissal of his FCRA claims at this stage of the litigation.
Defendant also argues that Plaintiff cannot establish a willful violation of the FCRA
based on his allegation that the Employment Application includes a liability release because
the law on that issue is not clearly established. Even if the Court were to accept Defendant’s
conclusions regarding the state of the law, the liability release is only one example of
extraneous information Plaintiff alleges Defendant included in the Employment Application.
Numerous courts have found that a plaintiff states a plausible claim where his or her
complaint alleges that an FCRA-required disclosure included a liability release, and other
extraneous information. See, e.g., Shoots v. iQor Holdings US Inc., 183 F. Supp. 3d 950, 954
(D. Minn. 2016) (collecting cases). The Court finds that, as this stage of the proceedings,
Defendant is not entitled to dismissal of Plaintiff’s FCRA claims. The Court therefore
DENIES Defendant’s Motion for Judgment on the Pleadings with respect to Plaintiff’s
claims for a willful violation of the FCRA.
Defendant next argues that Plaintiff’s claims for violations of the CICRAA and the
CCCRAA should be dismissed because the consent form contradicts his allegation that
Defendant failed to provide required information regarding the investigative consumer
reporting agency. As set forth above, the consent form is not properly before the Court in the
context of Defendant’s Motion for Judgment on the Pleadings. The Court thus DENIES
Defendant’s Motion for Judgment on the Pleadings with respect to Plaintiff’s claims for
violations of the CICRAA and the CCCRAA. The Court does not address whether dismissal
of these claims would be proper in another procedural context.
Defendant also argues that Plaintiff’s claims for violations of the CICRAA should be
dismissed because they are duplicative of his claims under the FCRA, and California law
prohibits a plaintiff from seeking relief under both statutes at the same time. Defendant relies
on Section 1786.52 of the CICRAA, which provides: “[a]ny investigative consumer
reporting agency or user of information against whom an action brought pursuant to Section
1681n or 1681o of Title 15 of the United States Code is pending shall not be subject to suit
for the same act or omission under Section 1786.50.” Cal. Civ. Code § 1786.52(a). However,
the California Supreme Court has not addressed whether this language precludes
simultaneous claims under both statutes, as opposed to duplicative claims in successive
actions, and other- courts are split on the issue. Compare Coleman v. Kohl’s Dep’t Stores,
Inc., 2015 WL 5782352, at *7 n.7 (N.D. Cal. Oct. 5, 2015) (stating that to the “extent
plaintiffs submit a second amended complaint that alleges both FCRA and CICRAA claims
stemming from the same act or omission, §1786.52 bars those [C]ICRAA claims”) with
Burnthorne-Martinez v. Sephora USA, Inc., 2016 WL 6892721, at *6-7 (N.D. Cal. Nov. 23,
2016) (concluding that §1786.52 does not bar claims under the CICRAA that are duplicative
of claims under the FCRA). The only California Court of Appeals decision to address the
issue has held that identical language under the CCCRAA bars only subsequent suits, not
simultaneous claims, involving duplicative FCRA and CCCRAA claims. See Cisneros v. UD
Registry, Inc., 39 Cal. App. 4th 548, 581 (1995). In the absence of authority suggesting that
the California Supreme Court would interpret the CICRAA differently, the Court declines to
find that Plaintiff’s CICRAA claims are barred as a matter of law. Accordingly, the Court
DENIES Defendant’s Motion for Judgment on the Pleadings with respect to Plaintiff’s claim
for a violation of the CICRAA. See Burnthorne-Martinez, 2016 WL 6892721, at *7.
The Court comes to the opposite conclusion with respect to Plaintiff’s claims for a
negligent violation of the FCRA and violations of the CCCRAA. Defendant argues that
Plaintiff fails to state a claim for negligent violation of the FCRA or a violation of the
CCCRAA because he fails to allege any actual damages, which are a required element of
both claims. Hyde v. Hibernia Nat’l Bank, 861 F.2d 446, 448 (5th Cir. 1988) (stating actual
damages are a component of an FCRA cause of action based on negligence); see also Banga
v. First USA, NA, 29 F. Supp. 3d 1270, 1279 (N.D. Cal. 2014) (citing Trujillo v. First
American Registry, Inc., 157 Cal.App.4th 628, 637–639, 68 Cal. Rptr. 3d 732 (2007)))
(noting that, absent actual damages, a CCCRAA claim fails as a matter of law). In his
response to Defendant’s Motion, Plaintiff fails to address this contention and does not point
the Court to any alleged facts that would establish actual damages. The Court therefore
concludes that Plaintiff has abandoned his claims for negligent violation of the FCRA and
violation of the CCCRAA. Black v. North Panola Sch. Dist., 461 F.3d 584, 588 n. 1 (5th Cir.
2006) (holding that a claim is considered abandoned when the plaintiff fails to defend it in
response to motion to dismiss). Accordingly, the Court GRANTS Defendant’s Motion for
Judgment on the Pleadings with respect to Plaintiff’s claims for a negligent violation of the
FCRA and violation of the CCCRAA.
Finally, Defendant conclusorily asserts that Plaintiff’s claim for statutory damages
under the CICRAA should be dismissed because the law does not allow for statutory
damages in class actions. See Cal. Civ. Code §1786.50(a)(1) (defendant who fails to comply
with requirements regarding investigative consumer report is liable to the consumer who is
the subject of the report in an amount equal to the sum of “[a]ny actual damages sustained by
the consumer as a result of the failure or, except in the case of class actions, ten thousand
dollars ($10,000), whichever sum is greater.”). Plaintiff responds that, under the Supreme
Court’s decision in Shady Grove Orthopedic Assoc. v. Allstate Ins. Co., 559 U.S. 393 (2010),
his claim for statutory damages is not precluded merely because he seeks to proceed with the
case as a class action. However, neither party’s argument is adequately briefed to permit the
Court to resolve the issue. The Court further determines that resolution of whether Plaintiff
might be entitled to statutory damages if the case proceeds as a class action is premature at
this early stage in the proceedings. Therefore, the Court DENIES Defendant’s Motion for
Judgment on the Pleadings with respect to Plaintiff’s claims for statutory damages under the
Defendant’s Motion for Leave to File Appendix to Reply Brief in Support of Motion
for Judgment on the Pleadings [ECF #41] is DENIED, and Defendant’s Motion for Judgment
on the Pleadings [ECF #33] is GRANTED in part and DENIED in part.
The Motion for Judgment on the Pleadings is GRANTED with respect to Plaintiff’s
claims for (i) negligent violation of the FCRA and (ii) violation of the CCCRAA, and those
claims are DISMISSED without prejudice. In all other respects, the Motion is DENIED,
without prejudice to Defendant filing a motion for summary judgment based on the consent
form. Plaintiff, having now become aware of the existence of the consent form, is
admonished that, unless he contests its authenticity, he must analyze whether he may now
proceed in good faith on his claims.
March 6, 2017.
BARBARA M. G. LYNN
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