Rodriguez v. Equifax Information Services, LLC
Filing
129
MEMORANDUM OPINION. Signed by District Judge Anthony J. Trenga on 07/17/2015. (mpha)
IN THE UNITED STATES DISTJaCT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
MIGUEL A. RODRIGUEZ,
on behalfofhimselfand all others similarly
situated.
Plaintiff,
Civil Action No. 1:14-cv-01142 (AJT/MSN)
v.
EQUIPAX INFORMATION SERVICES,
LLC,
Defendant.
MEMORANDUM OPINION
Plaintiff, Miguel Rodriguez, brings this class action alleging that Defendant, Equifax
Information Services, LLC ("Equifax" or "Defendant') violated the Fair Credit Reporting Act
(FCRA), 15 U.S.C. § 1681. Presently pending before the Court are Plaintiffs Motion for Class
Certification [Doc. No. 70] and Defendant's Motion for Summary Judgment [Doc. No. 80].
Upon consideration of the motions, the memoranda and exhibits in support thereof and in
opposition thereto, the arguments made by counsel at the hearing held on June 26,2015, and for
the reasons stated below, the Court concludes that Plaintiff has failed to present evidence
sufficient to establish that Equifax violated 15 U.S.C. § 1681k or § 1681e(b), or alternatively,
that any violation was negligent or willful. Accordingly, for the reasons stated herein,
Defendant's Motion for Summary Judgment is GRANTED and Plaintiffs Motion for Class
Certification is DENIED as moot.
I. FACTUAL AND PROCEDURAL HISTORY'
Facts related to Equifax-OPM Contract
The facts stated herein are undisputed in the record, except where otherwise indicated.
Defendant Equifax, together with Experian and Trans Union, is one the three largest
"consumer reporting agencies" (CRA), as defined in 15 U.S.C § 1681a(f). ^ Under the FCRA, a
CRA, such as Equifax, has certain obligations when it provides information to an actual or
prospective employer. Specifically, when a CRA "furnishes a consumer report for employment
purposes and which for that purpose compiles and reports items of information on consumers
which are matters of public record and are likely to have an adverse effect upon a consumer's
ability to obtain employment," it shall "(1) at the time such public record information is reported
to the user of such consumer report, notify the consumer of the fact that public record
information is being reported by the consumer reporting agency, together with the name and
address of the person to whom such information is being reported[.]" 15 U.S.C.A. §
1681k(l)(West) (emphasis added). ^
This action centrally concerns whether Equifax timely notified certain consumers whose
information was requested by the U.S. Office of Personnel Management (0PM). Specifically,
between September2012 and May 2013, Equifax prepared and delivered to 0PM customized
^"The term 'consumer reporting agency' means any person which, for monetary fees, dues, or
on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of
assembling or evaluating consumer credit information or other information on consumers for the
purpose of fiimishing consumer reports to third parties, and which uses any means or facility of
interstate commerce for the purpose of preparing or furnishing consumer reports." 15 U.S.C.A. §
1681a (West).
^Alternatively, § 1681k(2) provides that the CRA shall:
(2) maintain strict procedures designed to insure that whenever public record
information which is likely to have an adverse effect on a consumer's ability to
obtain employment is reported it is complete and up to date. For purposes of this
paragraph, items of public record relating to arrests, indictments, convictions,
suits, tax liens, and outstanding judgments shall be considered up to date if the
current public record status of the item at the time of the report is reported.
"tri-merge" reports (containing information from Equifax, Experian and Trans Union) when
requested by 0PM pursuant to the terms of a written contract between Equifax and 0PM,'' Def
Ex. D, Doc. No. 81-4 ("Rivera Decl.") at H4. For this purpose, Equifax used an automated
overnight batching process that operated between midnight and 3:00 a.m. EST. ld\ Rivera Dep.
Tr. at 52:1-5. As part of the automated process, reports containing information from public
record (PR) files were flagged, which automatically caused the creation of a notice specific to
each individual whose report was flagged. Rivera Dep. Tr. at 69:13-15. As a matter of routine,
at approximately 7:00 a.m. each morning (during the time period relevant to this litigation), an
Equifax employee named Michelle Ambrose downloaded the PR file containing all of the notices
created by the automated process, printed each notice, put them in envelopes, and place them in a
mail bin for pickup that day by the mail vendor with whom Equifax had contracted for that
purpose. ^ Def Ex. F, Doc. No. 81-6 ("Ambrose Decl.") at
3, 5-6. Ambrose did not maintain
a record of when she placed each individual notice into the mail bin. There were concededly
occasions when Ambrose did not deposit the notices into the mail bin until the next business day
after she printed them, although the record reflects only isolated examples of such occasions. Id.
at nil6-7. The record contains no information concerning when the mail vendor actually mailed
the notices that it picked up daily from Equifax pursuant its contract.
Facts related to PlaintiffMiguel Rodriguez
^The contract has been produced under seal atDoc. No. 86-4.
^In May 2013, Equifax switched to a completely automated platform called Persona, which
generates the notices. From May 2013 until July 2014, Equifax would send two notices to
consumers: one through the manual process,and one throughthe automated process. In July
2014, Equifax ceased use of the manual process. Rivera Decl. at 11^ 8-9.
Plaintiff is a consumer who was seeking employment as a federal government contractor
in September 2012; and as part of a security clearance background investigation for that position,
0PM requested from Equifax consumer reports regarding Plaintiff. Equifax provided 0PM with
a "tri-merge" consumer report that contained a reference to a public record listing of a
bankruptcy and a civil judgment, as well as a collection account. ^After Equifax provided this
consumer report to 0PM, an 0PM security clearance investigator asked Plaintiff about the listed
bankruptcy and civil judgment. Plaintiff was "floored" when the investigator asked about the
civil judgment, and told the investigator that he "knew nothing about it." Rodriguez Dep. Tr. at
68:3-4.^ The investigator did not make any follow-up request to Plaintiff after the interview. Id.
at 68:19-24. Approximately two months later, in December 2012, Plaintiffs security clearance
was approved. Id. at 21:2-11.
Plaintiff has asserted two causes of action in his Amended Complaint, Doc. No. 64, filed
on April 27,2015. First, Plaintiff alleges that Equifax provided 0PM with a consumer report
containing public record information that would likely have an adverse effect upon Plaintiffs
^Plaintiff does not contest that he filed for bankruptcy inJanuary 2009, and that Equifax
accurately reported his bankruptcy. Rodriguez Dep. Tr. at 58:12-16. He disputes, however, the
entry of a delinquent Sears credit card account on the grounds that the Sears account was
discharged in bankruptcy and should not have appeared as delinquent. Plaintiffs 0pp., Doc. No.
108 at p.7, H31. Equifax in turn disputes Plaintiffs allegation that the Sears collection was
improperly reported because Equifax reported that Sears account with a zero balance in February
2009, one month after Plaintiff filed for bankruptcy and Sears had sold the account before
Equifax received notice of the bankruptcy. Doc. No. 81 at p. 9, T| 33.
Plaintiff also disputes the $11,338 civil judgment reported by Equifax on the grounds that the
judgment itself reflected that it was against someone with a different name. Plaintiffs 0pp., Doc.
No. 108 at p. 27. The record reflects that the civil judgment (which was listed as having no
outstanding amount) was, in fact, in the name of Rodriquez' brother, not his name.
^To the extent either party has moved to place the cited portions ofPlaintiffs deposition under
seal, that motion is denied.
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ability to obtain employment (the bankruptcy and civil judgment), but failed to provide notice to
him "at the time" it furnished the report to 0PM, as required by 15 U.S.C. § 1681k(a)(l) (the
class claim). Although Plaintiff claims that he never received the required notice, Rodriguez
Dep. Tr. at 97:16-22, he more generally challenges the adequacy of Equifax's then used system
for providing notice to consumers and has moved for class certification on this claim. Second,
Plaintiff alleges, as an individual claim only, that the consumer report on him provided by
Equifax to 0PM containedan objectively incorrect civil judgment under a name other than his
and a "collection amount" that had been discharged in bankruptcy; and for these reasons,
Equifax violated 15 U.S.C. § 1681e(b),® which requires Equifax to establish orto follow
reasonable procedures to assure maximum possible accuracy in the preparation of the consumer
report it furnished to 0PM. Plaintiff seeks statutory damages in connection with his § 1681k
claim (the class claim), actual damages in connection with his § 1681e claim (the individual
claim), and punitive damages, attorneys' fees and costs as to both claims.
II. Legal Standard
Summary judgment is appropriate only if the record shows that "there is no genuine
issue as to any material fact and that the moving party is entitled to a judgment as a matter of
law." Fed. R. Civ. P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242,247-48
(1986); Evans v. Techs. Apps. & Serv. Co., 80 F.3d 954,958-59 (4th Cir.1996). The party
^15 U.S.C. § 168le(b) provides:
(b) Accuracy of report
Whenever a consumer reporting agency prepares a consumer report it shall follow
reasonable procedures to assure maximum possible accuracy of the information
concerning the individual about whom the report relates.
seeking summaryjudgment has the initial burden to show the absence of a genuine issue of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). A genuine issue of material
fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving
party." Anderson, 477 U.S. at 248. Once a motion for summaryjudgment is properly made and
supported, the opposing party has the burden of showing that a genuine dispute exists.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). The facts shall
be viewed, and all reasonable inferences drawn, in the light most favorable to the non-moving
party. Anderson, All U.S. at 255; see also Lettieri v. Equant Inc., 478 F.3d 640,642 (4th
Cir.2007). To defeat a properly supported motion for summary judgment, the non-moving party
"must set forth specific facts showing that there is a genuine issue for trial." Id. at 248. Whether
a fact is considered "material" is determined by the substantive law, and "[o]nly disputes over
facts that might affect the outcome of the suit under the governing law will properly preclude the
entry of summary judgment." Id.
"Before harnessing [class action] economies, Rule 23(a) demands that four prerequisites
be met: '(1) the class is so numerous that joinder of all members is impracticable; (2) there are
questions of law or fact common to the class; (3) the representative's claims or defenses are
typical of those of the class; and (4) the representative will fairly and adequately represent the
interests of the class.'" Soutter v. Equifax Info. Servs., LLC, No. 3:10CV107, 2015 WL
1787236, at *4 (E.D. Va. Apr, 15, 2015) (quoting Broussardv. Meineke Disc. MufflerShops,
Inc., 155 F.3d 331, 337 (4th Cir. 1998)). "In addition, putative classes must satisfy one of the
Rule 23(b) tests. Where, as here, the plaintiff seeks certification under Rule 23(b)(3), the Court
must ensure that 'questions of law or fact common to class members predominate over any
questions affecting only individual members, and that a class action is superior to other available
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methods for fairly and efficiently adjudicating the controversy.' Because adjudication by class is
an exception to the normalrules of litigation, the Court must perform a "rigorous analysis"of
each class certification factor," Id. (quoting Fed.R.Civ.P. 23(b)(3)).^
III. ANALYSIS
"The FCRA provides a private cause of action for those damaged by violations of the
statute. See 15 U.S.C.A. §§ 168In, 1681o. A successful plaintiff can recover both actual and
punitive damages for willful violations of the FCRA, id. § 1681n(a),and actual damages for
negligent violations, id. § 1681o(a). Actual damages may include not only economic damages,
but also damages for humiliation and mental distress." Shane v. Equifax Info. Servs., LLC, 510
F.3d 495, 500 (4th Cir. 2007). "FCRA does not impose strict liability on consumer reporting
agencies for inaccuracies in reporting. Instead, FCRA imposes liability for negligent
noncompliance with the Act, and it allows for enhanced penalties for willful violations." Dalton
V. Capital Associated Indus., Inc., 257 F.3d 409,417 (4th Cir. 2001).
A. Section 1681k(a)(l)
Reflecting his theory of liability under Section 1681k(a)(l), Plaintiffs proposed class
includes all those person who (a) were the subject of a consumer report furnished to 0PM, (b)
for employment purposes, (c) that contained at least one record of a civil lien, bankruptcy or civil
judgment, (d) on or after September 5,2012 and on or before May 28,2013and (e) to whom
^Plaintiffs Amended Complaint also alleges that injunctive relief is appropriate for the class
pursuant to Fed. R. Civ. P. 23(b)(2). Doc. No. 64 at 30-36. However, Plaintiff appears to have
abandoned this argument in its class certification briefing. Doc. No. 71 at p. 20-25.
Plaintiff originally requested that the class period end in July 2014. He subsequently conceded
in his Reply Memorandum in Support of his Motion for Class Certification, Doc. No. 97 at p. 18,
that he cannot represent the post-May 2013 class.
Equifax never sent the required notice "at the time" it sent the reports to 0PM. He also contends
that the content of the standard notice sent did not satisfy the statutory requirement that a notice
identify "the consumer reporting agency [providing the notice], together with the name and
address of the person to whom such information is being reported." 15 U.S.C. § 1681k(a)(l).
See Doc. No. 71 atp.2.^'
Plaintiffs views concerning the meaning of "at the time" have changed somewhat over
the course of the litigation. Initially, he alleged that Equifax violated Section 1681k when it did
not mail the notices "on the day they furnished any part of the report" to 0PM. See Complaint,
Doc. No. 1 at H24. He later alleged in his Amended Complaint that Equifax violated Section
1681k because it did not mail the notices "at the same time." Doc. No. 64 at ^ 22. He has since
disclaimed that Section 1681k requires that a consumer report be sent to the consumer "at the
exact moment" that it is sent to 0PM; and currently appears to have adopted the view that in
order to be compliant with §1681k(a)(l), Equifax was required to send the notice letter "together
with" or "in the same process" as the consumer report to 0PM. See Doc. No. 71 at p. 4-5; Doc.
No. 108 at p. 22. He essentially contends that Equifax was required to have a system of
notification that allowed it to actually send to the affected consumer the required notice before or
at the same time the consumer report is sent to 0PM, not afterwards, essentially the system that
Equifax currently has in place. Based on the record before the Court, the Court concludes that
^' Plaintiff testified inhis deposition that Equifax "never sent [him] the notification letter."
Rodriguez Dep. Tr. at 97:16-22. However, there is no dispute that any notice Plaintiff would
have received would have identified Equifax and 0PM as reflected in Exhibit Ito the Amended
Complaint, Doc. No. 64-1. See also Exhibit 3 to Plaintiffs Motion for Class Certification, Doc.
No. 71-3.
Plaintiff has failed to present evidence sufficient to establish either that Equifax violated Section
1681k between September, 2012 and May, 2013 or that any such violation was willful.
The requirement that Equifax provide notice "at the time" that it delivers the consumer
report to 0PM is ambiguous, that is, there is more than one reasonable interpretation of what that
requirement means, as evidenced by Plaintiffs own shifting positions. Given that ambiguity, the
system established by Equifax was consistent with a reasonable interpretation of that
requirement. Under the system of notification then in place, a notice to a consumer was
triggered and created internally at the same time a report to 0PM was generated internally. That
notice was then actually printed and mailed to the consumer as part of a continuous process that
was designed to be completed on the same day as 0PM received the consumer report. Congress
did not impose a "same time" requirement with respect to the receipt of notice; and in 2000, the
Federal Trade Commission interpreted the "at the time" requirement to permit the mailing of §
1681k(a)(l) notices. Doc. No. 81 at p. 15, n.3 and Doc. No. 108 at p. 23. Plaintiff contends that
Equifax's decision to automate its delivery system to 0PM required it to similarly update and
automate its notice process to consumers. But the Court cannot conclude that the text of the
statute requires such technological symmetry during periods of technological innovation so long
as the system initiated, at the same time a report to 0PM was initiated, a process that was
designed to deliver notice to the consumer accordingto a reasonable, standard and accepted
method of delivery.
Plaintiff claims that Equifax's system of notification is so flawed that he "has
affirmatively discovered from Equifax that, in fact, it has no procedure to actually get these
notices from computer to the U.S. Postal Service on the same day of the report." Doc. No. 97 at
p.6. The Court finds no evidence in the record sufficient to support that contention. Equifax's
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system has been described in detail. Michelle Ambrose, the Equifax employee responsible for
printing the notices, testified that her schedule followed "the same repetitious thing every day,"
beginning at 7:00 am, and "immediately, the first thing I do is download ... the PR letters," and
"print them out on the printer and [] take out the envelopes and [] fold them and put them in the
envelope, and [] put them in a box and then [] stick them in the mail drop," which was located
approximately "5 or 6 cubicles ahead of hers. Ambrose Dep. Tr. at 14:24-25; 15:1-4; 16:14-19.
Jutta Rivera, Equifax Project Manager who managed Equifax's relationship with 0PM, testified
that during the relevant time period "we do have procedures that we have documented in the
0PM manual processing'^ that we adhere to every day." Rivera Dep. Tr. at 70: 20-22. This
uncontroverted testimony establishes as a matter of law that during the time period relevant to
this litigation, namely, fi-om September 2012 to May 2013, Equifax had a policy and seamless
practice beginning with the automated generation of the report and PR files fi-om midnight to
3:00-4:00 a.m., see id. at 52: 1-5, printing the notices beginning at approximately 7:00 a.m., and
sending them out by U.S. mail that same business day. Plaintiff argues that Equifax has not
established that its mailing vendor, in fact, mailed the notices on the same business day the report
was delivered to 0PM, but the record contains uncontroverted evidence that the system was
designed for that purpose, Equifax contracted for that service and the vendor, in fact, as a matter
of routine, picked up notices daily; and Plaintiff has presented no evidence that the mailing
vendor did not discharge its contractual duties. Likewise, evidence in the record of isolated
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Equifax produced a document under seal titled "Instructions for Processing the Daily 0PM
Public Record Letters." Doc. No. 108-7. Plaintiff challengesthat Equifax's "so-called OPM
Manual" evidences its compliance with §1681k(a)(l) because the document "does not provide
any information as to ... when the subject TR letter file' was generated or ... whether or not
the PR letters printed on any given day correspond to the exact same consumer reports that
Equifax fiimished to an employer on that same day." See Doc, No. 119 at p. 2-3.
10
instances when a notice was not mailed on the same business day does not establish that Equifax
violated Section 1681k by virtue of the overall system used to provide notice.
With respect to the content of the notice letters sent between September 2012 and May
2013, the Court concludes that the record is insufficient as a matter of law to establish that the
letters sent during the class period did not satisfy the criteria of § 1681k(a)(l). The notice
identified the sender as Equifax, with an address at Equifax-Maildrop J42-H, P.O. Box 74006 in
Alpharetta, Georgia, listed "0PM (Office of Personnel Management)" as the entity receiving the
information, together with a city, state and zipcode for 0PM, as well as the sources of the
information provided to 0PM.
The Court alternatively concludes that the evidence is insufficient as a matter of law to
establish that Equifax willfully violated § 1681k(a)(l). "[T]o prove willfulness, [the plaintiff
must show] only that the defendant knowingly and intentionally committed an act in conscious
disregard for the rights of the consumer." Soutter v. Equifax Info. Servs., LLC, supra, 2015 WL
1787236, at *2. See also Hill v. Equifax Info. Servs., LLC, 974 F. Supp. 2d 865, 876-77
(M.D.N.C. 2013) (no willful FCRA violation where plaintiff "presented evidence of numerous
mistakes by Equifax"). "[A] company subject to FCRA does not act in reckless disregard of it
unless the action is not only a violation under a reasonable reading of the statute's terms, but
shows that the company ran a risk of violating the law substantially greater than the risk
associated with a reading that was merely careless." Safeco Ins. Co. ofAm. v. Burr, 551 U.S. 47,
69 (2007). As discussed above, Equifax had in place a policy and system to send notices on the
same business day, and even were that system in violation of Section 1681k, either as to the
timeliness or content of the required notice, the evidence is insufficient as a matter of law to
establish that Equifax engaged in conduct that constituted a willful violation of Section 1681k,
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particularly since its conduct does not reflect a conscious or reckless disregard of an obvious and
unjustifiably high risk of harm the statute was intended to protect against.
B. Section 1681e(b)
Plaintiffs individual claim is that Equifax violated § 1681e(b) because the consumer
report it furnished to 0PM contained an objectively determinable inapplicable civil judgment,
viz., a judgment against a person with a different name, and a collection amount that had been
discharged in bankruptcy. "[A] consumer reporting agency violates § 1681e(b) if (1) the
consumer report contains inaccurate information and (2) the reporting agency did not follow
reasonable procedures to assure maximum possible accuracy." Dalton, supra, 257 F.3d at 415.
Plaintiff seeks actual damages for Equifax's alleged violation of § 1681e(b), and in the
alternative, statutory and punitive damages. Am. Cmpl. at
41-42. In order to recover actual
damages, Plaintiff must establish at least a negligent violation of Section 1681e(b); and in order
to recover statutory or punitive damages, a willful violation. Compare 15 U.S.C.A. §
1681n(a)(l)(A) with § 1681o(a)(l).
The Court concludes that there is insufficient evidence in the record for a reasonable
factfmder to find that Plaintiff suffered any cognizableactual damages or that Equifax enagegd
in either a negligent or willful violation of Section 1681e(b). According to his own deposition
testimony, he did not incur any economic damages by the report or his failure to receive notice of
the report. Rodriguez Dep. Tr. at 100:3-24. He obtained the security clearance and the desired
job. Id. at 21:10-19; his 2009 bankruptcy was accurately reported and he knew that the
bankruptcy would affect his ability to apply for credit. Id. at 58:12-24; 124:14-18; 138:5-9. He
experienced emotional distress but self treated with over the counter medications and did not
obtain any treatment from any health care provider, /i/. at 131:19-132:22; 112:25-113:4. He also
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attributed some of that distress to matters other than the Equifax report to 0PM, including "a lot
of frustration at home" and and an "on-going argument" with his brother, Id. at 112:13-24;and
he could not specifically attribute "the times when [he] took [] over-the-counter medications"
specifically to Equifax's conduct, as opposed to conduct attributable to the other CRAs. Id. at
132:17-22. Cf. Shane v. Equifax, supra, 510 F.3d at 503 (plaintiff "offered considerable
objective verification of her emotional distress, chronic anxiety, and frustration during the
twenty-one months that she attempted to correct Equifax's errors" including "sufficiently
articulated descriptions of her protracted anxiety through detailed testimony of specific events
and the humiliation and anger she experienced as a result of each occurrence").
Altematively, even if Plaintiff could establish that he suffered a cognizable injury, the
record is wholly insufficient to establish that Equifax's violation of § 1681e(b) was willful or
negligent when it included in Plaintiff's report to 0PM the civil judgment, obtained fi*om
Experian's database, or the collection account, obtained from Trans Union's database. See 0PM
Report, under seal Doc. No, 87-11, at p. 5,19. See Jianqing Wu v. Trans Union, 2006 WL
4729755 at *7 (D. Md. May 2,2006), ajfd, 219 F. App'x 320 (4*^ Cir. 2007) ("To make Equifax
liable under the FCRA for relying on the records of businesses, which Equifax has identified as
trustworthy, would vitiate one of the purposes of the FCRA, to facilitate commerce. Under the
system Plaintiffproposes, the economic costs of investigation would render it economically
infeasible for CRAs to fiinction. Nothing in the FCRA or its implementing regulations evinces
the intent to place such heavy burdens on CRAs."); Smith v. Auto Mashers, Inc., 85 F. Supp. 2d
638, 641 (W.D, Va. 2000) ("Absent some prior indication that the information is inaccurate, it is
reasonable and cost efficient to report information without independent verification.") (citing
Henson v. CSC Credit Servs., 29 F.3d 280, 285 (7th Cir.1994)).
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IV.
CONCLUSION
For the above reasons, the Court finds and concludes that there is insufficient evidence in
the record for a reasonable factfmder to conclude that Equifax violated either Section 1691k or
1681e(b), or alternatively, that any violation of Section 1691k was "willful" or that any violation
of Section 168Ie(b) was either negligent or willful. Defendant is therefore entitled to judgment
as a matter of law as to Plaintiffs claims. Accordingly, Defendant's motion for summary
judgment will be GRANTED; and Plaintiffs motion for class certification will be DENIED.
An appropriate Order will issue.
Anthony J. Tre
United States Ki^trTct Judge
July 17, 2015
Alexandria, Virginia
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