Manuel et al v. Wells Fargo Bank, National Association, No. 3:2014cv00238 - Document 93 (E.D. Va. 2015)
Court Description: MEMORANDUM OPINION. Signed by District Judge Robert E. Payne on 8/19/2015. (jsmi, )
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Manuel et al v. Wells Fargo Bank, National Association Doc. 93 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division TERRELL MANUEL, et al., Plaintiff, v. Civil Action No. 3:14cv238 WELLS FARGO BANK, NATIONAL ASSOCIATION Defendant. MEMORANDUM OPINION This case is before the Court on the Defendant's MOTION FOR SUMMARY JUDGMENT {Docket No. For 5 7) . the reasons set for th below, this motion will be denied. BACKGROUND A. PLAINTIFF'S CLAIMS On April 1, 2014 plaintiffs Terrell Manuel ("Manuel") and Charles White ("White") filed a class action complaint on behalf of and others themselves defendant the Wells all Fargo Fair Credit Bank, similarly N. A. Reporting Act at this time is the Third {"Wells ( "FCRA") . complaint was amended three times, situated Fargo") Docket alleging had No. that violated 1. That and the operative complaint Amended Class Complaint {"TAC") . Docket No. 41. Dockets.Justia.com The TAC alleges violated the Fair two counts Credit claiming Reporting Act alleges a violation of §1681b (b) (2) (A), person may not procure a report to be procured, any consumer, unless: been made that the Defendants ( "FCRA") . Count One which requires that "a consumer report, or cause a consumer for employment purposes with respect to (i) a clear and conspicuous disclosure has in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes; and (ii) the consumer has authorized in writing (which authorization may be made on the document in referred to clause (i)) the procurement Wells Fargo of the report by that person." Count Two alleges §1682b(b) (3) (A) (i) of the that FCRA. violated §1681b (b) (3) (A) {i) requires that "in using a consumer report for employment purposes, before taking report, any adverse action based in whole or in part of the report; the the the person intending to take such adverse action shall provide to the consumer to whom the report relates: of on and consumer (ii) under (i) a copy a description in writing of the rights this subchapter, as presented by the Bureau under section 1681g(c) (3) of this title." Plaintiffs filed the instant Motion for Summary Judgment on April 30, 2015. Docket No. 57. 2 Defendants have opposed the motion. Docket No. 70. Plaintiffs have replied in support. Docket No. 73. B. Factual Background a. Facts Regarding Plaintiff Manuel 1 During February application for Wells Fargo. interview position an of Manuel 2012, open loan document completed an specialist online position at On or about February 24, 2012, Manuel completed an with Wells conditioned background check. Fargo upon personnel the and successful was offered completion the of a He was given an offer letter and signed and returned said offer letter. On February 25, 2012, pursuant to Wells Fargo's instructions, Manuel accessed the First Advantage 2 website and completed two documents: Application" and the initiated a criminal completed on reported two April "Wells Fargo background 3, 2012. convictions the "Wells Fargo Standard Standard screening Manuel's for petit Consent". process which background larceny as This was screening well as a conviction for aggravated assault with serious bodily injury in the second degree. 1 Plaintiffs have agreed that White is not a proper representative for the class, thus the facts particular to his case will not be discussed herein. Docket No. 68. His individual claims have been severed from the instant class action. 2 First Advantage conducts background checks for Wells Fargo. 3 Upon receiving the above information, Wells Fargo coded Manuel as "ineligible" within the First Advantage system. This prompted First Advantage to begin the "adverse action" protocol described below. On April 11 or 12, 2012, Manuel received a letter that referred to itself as a "Pre-Adverse Action Notice" and was dated April 3, That letter included a 2012. copy of Manuel's background report and an FCRA Summary of Rights. Manuel received appeal/dispute the Pre-Adverse process described Action in the written dispute of the contents of his Screening. Notice, letter he After began and the filed a Pre-Employment/Security First Advantage then generated a revised report that still contained the convictions at issue. Wells Fargo contends that only then did it determine "on June 28, 2012 that Manuel was ineligible for employment with Wells Fargo." b. Wells Fargo's Procurement and Use of Consumer Reports The parties have stipulated to the following facts Docket No. 4 3) : 1. Stipulation One: After March 1, 2010, Wells Fargo's standard policy and procedure for using criminal background screenings in regards to current and prospective employees in its Home Mortgage Business Line was as follows: a. Wells Fargo refers indi victuals subject to criminal background screenings to a website operated by First Advantage Background Services Corporation. Such individuals use this website to complete a number of application forms, including 4 {see disclosure and authorization forms related to the criminal background screening. After all application forms are completed First Advantage Background Services Corporation generates the criminal background screening report and provides its findings to Wells Fargo. Specifically, First Advantage enters the criminal background screening report into a database to which both First Advantage and Wells Fargo have access. b. Members of Wells Fargo's Background Screening Compliance Team then review the results to make a determination as to whether the current or prospective employee was ineligible for the relevant employment position in whole or in part because of the content of the criminal background check. If the reviewing members of the Background Screening Compliance Team believe that the individual in question would not meet employment eligibility requirements for the position to which he or she applied based in whole or in part on the contents of his or her criminal background screening report, the reviewing members would then access the database to which both First Advantage and Wells Fargo have access and enter a code or other notation that the applicant would not be eligible for the employment position based in whole or in part on the contents of his or her criminal background screening report. Upon the entry of this coding, First Advantage generates and sends a notice, with the title "PreAdverse Action Notice", which was substantially similar at all relevant times to the ones sent to Plaintiffs Manuel and White, and mails it, along with an FCRA Summary of Rights Notice and a copy of the current or prospective employee's criminal background screening results, to the current or prospective employee. If the current or prospective employee does not appeal or dispute the 5 results of his or her criminal background screening during the next five business days after the first notice is mailed, First Advantage generates and sends the applicant or employee an Adverse Action Notice, which was substantially similar at all relevant times to the ones sent to Plaintiffs Manuel and White. 2. Stipulation Two: During the putative class period, at least 1000 current or prospective employees associated with Wells Fargo's Home Mortgage Business Line were subjected to the process described in Stipulation One. 3. Stipulation Three: During the putative class period, at least 1000 current or prospective employees associated with Wells Fargo's Home Mortgage Business Line were notified by Wells Fargo, either in person or via telephone, communicating that the current or prospective applicant's criminal background screening report contains records that may preclude employment with Wells Fargo before Wells Fargo or First Advantage generated and mailed a Pre-Adverse Action Notice along with an FCRA Summary of Rights Notice and a copy of the applicant's criminal background screening results. 4. Stipulation Four: Wells Fargo retains detailed employment and application records related to all individuals who were rejected for employment based in whole or in part on the contents of a criminal background screening obtained from First Advantage Background Services Corporation. In the event that any class is certified in this case, Wells Fargo can identify these current or prospective employees described in Stipulations One, Two, and Three for the relevant time period. The background check process was conducted as follows: all current and prospective employees subject to a background check 6 were asked to visit First Advantage's Once website. website, the individuals filled out several forms. on the One of these forms was a disclosure and authorization form that contained the following First release Advantage permitted by retrieving and law, and/or "You hereby release the Company, language: all from Third any reporting Parties liability to or information the claims full extent arising concerning you from and/or from using the Report for employment purposes." Once the applicant completed the forms, First Advantage generated a background check on the individual and forwarded the results to Wells Fargo by uploading the results into a database that Wells Fargo and First Advantage could both access. of Wells reviewed Fargo's these Background results and Screening determined Compliance whether the Members Team then applicant appeared to be ineligible for employment based on the contents of the background check. That determination was entered into the shared database in the form of a code. refers to this as a "preliminary" Although Wells Fargo determination, Manuel correctly points out that it was the only affirmative step taken by Wells Fargo in the process. According to Manuel, this was a final hiring decision. Once the code was entered into the database, First Advantage would generate and send a notice titled "Pre-Adverse Action Notice", a summary of the consumer's FCRA rights, and the 7 The applicant applicant's background check to that applicant. then had five business dispute the report. Advantage's system days after that notice was mailed If no dispute or appeal was made, automatically generated what it to First called an At that "Adverse Action Notice" and sent it to the applicant. point, the process was complete. The record reflects that the same process was followed by Wells Fargo businesses in as its well. Mortgage Business See 30 (b) (6) Rule Line and its Deposition of other Timothy Brain, 39:16-40:17. C. Other Relevant Laws Wells Fargo's position that bear mention here. relies, in part, on two statutes Their significance will be discussed later. Section 19 of the Financial Institutions Reform, and Enforcement Act of 1989 (FIRREA) Recovery, prohibits "any person who has been convicted of any criminal offense involving dishonesty or a breach of trust or money laundering" from "participat[ing], directly or insured indirectly, depository Additionally, in the conduct institution." 12 of the affairs U.S.C. §1829 of any {a) (1) (A). the insured depository itself "may not permit any person [who has been convicted of any criminal offense involving dishonesty or a breach of trust or money laundering] to continue any conduct or continue any relations prohibited." 8 12 u.s.c. 1829 (a) (1) (B). can be A person or ins ti tut ion that violates this law fined "not more than $1,000,000 for each day such prohibition is violated" or can be "imprisoned for not more than 5 years, or both." 12 U.S.C. §1829(b). The "Helping Family Save Their Homes Act of 2009" Act) established additional Housing Authority lenders ineligibility criteria for and mortgagees. (HFSTH Federal Specifically, the HFSTH Act requires that "a lender or mortgagee shall not have any officer, loan partner, processor, loan director, underwriter, applicant mortgagee who: been convicted of, applicant's responsibilities of convicted pled or (a) is under competence an or approved guilty or related to participation in the industry; or loan originator indictment fitness mortgagee; nolo real the or has to estate meet has (b) to a the been felony or mortgage loan (i) during the 7-year period preceding the date of the preceding such date of application, of of for, contendre application for licensing and registration; or act supervisor, an offense that reflects adversely upon the integrity, of principal, manager, fraud, laundering." dishonesty, or a Docket No. 58 at 3-4. 9 (ii) at any time if such felony involved an breach of trust, or money DISCUSSION I. Standinq In its third argument, Wells Fargo argues that Manuel lacks Article III standing to pursue the § 1681b(b) (2) (A) claim because he has not alleged a legally-cognizable injury-in-fact. This If Manuel argument must be analyzed before all others. does not have jurisdiction and §168lb(b) (2) (A) the standing, can go no Court further Arbaugh v. claim. Y lacks in subject evaluating H Corp., & 3 matter Manuel's 54 6 U.S. 500, 514 (2006). a. Leqal Standard The United States Constitution's "case-or-controversy" requirement limits the jurisdiction of the federal court system. U.S. Const. Art Constitution's jurisdiction, III limits a § 2. and plaintiff In thus suing order the in standing to pursue his or her claim. to federal federal fall within court court the system's must have If a named plaintiff in a putative class action cannot establish that he has standing to pursue a claim or claims, then 3 the entire action must be The Supreme Court of the United States has granted a writ of certiorari in the case of Spokeo, Inc. v. Robins, 742 F.3d 409 (9th Cir. 2014), which it will hear next term. That case asks "whether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute." 10 dismissed as lacking. to the claim or claims as to which standing Doe v. Obama, 631 F.3d 157, 161 (4th Cir. 2011). Over the years, the law of standing has been developed in "First, the such a way that it now consists of three elements. plaintiff must have suffered an of a is legally protected particularized and hypothetical. (b) 'injury-in-fact' interest actual which or is imminent, (a) not - an invasion concrete and conjectural or Second, there must be a causal connection between the asserted injury and the asserted wrongful conduct in that the injury has to be fairly traceable to the challenged action of the defendants and not the result of the independent action of some third party not before the court. 'likely', as opposed to merely Third, 'speculative', will be redressed by a favorable decision." of Wildlife, omitted). 504 The U.S. party 555, 560-61 invoking (1992) federal it must be that the injury Lujan v. Defenders (internal quotations jurisdiction bears the burden of proving that these three requirements are satisfied. Id. at 560; Warth v. Seldin, 42 U.S. 490, 518 (1975). b. Parties' Arguments Wells Fargo argues that the "deprivation [] of statutory rights, standing alone [does] not confer constitutional standing because such violations are not fact." Instead, Id. at 25. 11 substitutes Wells for Fargo an injury-in- asserts that a plaintiff must establish an actual injury in fact in order to properly assert constitutional standing. Wells against Fargo notes its interests Information that Solutions, distinguishable in plaintiffs to agencies" injuries." Id. argues but argues and 26. In received too much information (i.e. Dreher both It incorrect. is was of personal information from consumer "cognizable case, 1681b(b) (2) (A) § that Experian because alleged this Dreher v. decided "violations certain thus recently Fargo, Wells alleged receive was in ways, to who Manuel's that at issue district some according statutory rights reporting this Inc., 4 and, distinguishable, involved in this information however, claim Dreher Wells alleges Fargo that he the waiver included in the disclosure) rather than not enough. Second, to Wells Fargo argues that Dreher "gave short shrift long-standing U.S. Supreme Court doctrine mandatory authority; namely Warth v. Seldin." Wells Warth and misapplied Id. Specifically, Fargo argues that the Court in Dreher incorrectly cited "for empowered standing." the to Id. proposition eradicate However, that the Congress requirement is for essentially Article Wells Fargo argues that Warth stated that, "notwithstanding the above-cited passing observation, 4 III 2014 WL 6834867 (E.D. Va. 2014). 12 'the plaintiff still must allege a distinct and palpable injury to himself.'" Id. Manuel have, (quoting Warth, 422 U.S. at 501). responds that he and the putative indeed suffered an injury-in-fact. members are challenging "Wells Fargo's class members He alleges that class failure to provide information in the form of a mandated disclosure ... unencumbered by extraneous information ... that would tend to distract from the mandated disclosure" and that this is an "informational injury." Id. Manuel argues that the "doctrine of informational injury" is well-established within the Fourth Circuit and by the Supreme Court. 156, Long, Id. at 30-31 (citing Salt Institute v. Leavitt, 440 F.3d 159 (4th Cir. 752 F. Supp. 2006); Project Vote/Voting for Am., 2d 697, 703 (E.D. Va. 2010); Inc. v. Public Citizen v. U.S. Dept. of Justice, 491 U.S. 440, 449 (1989)). Next, Manuel distinguishes the only Fourth Circuit opinion that Wells Alphin 5 • Fargo cites in support of its argument - David v. That case was brought under the Employee Retirement Income Security Act of 1974 (ERISA) plan "on behalf of the pension plan." 704 F.3d at 332.) by members of the pension Id. at 32 (citing David, The suing individuals were not permitted to recover individually under ERISA, and thus had nothing at stake by bringing a private enforcement action. Id. Manuel argues that the FCRA is different than ERISA because it "creates both a 5 704 F.3d 327 (4th Cir. 2013). 13 When someone violates cause of action and an individual right. the FCRA with respect to a particular consumer, they are liable to that consumer." Id. (quotation omitted). c. Analysis Manuel has sufficiently alleged an injury-in-fact and thus has standing to pursue his §1681b(b) (2) (A) claim in federal court. 168lb(b) (2) (A) § guarantees consumers a certain kind of disclosure before a person procures a consumer report containing their information. Specifically, clear a disclosure ... made conspicuous it promises in a consumer writing ... before report is procured or caused to be procured, "a the in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes." In this case, Wells Fargo because also provided did not contained Manuel did it Manuel is alleging that the disclosure that a to him was "consist [] statement not "clear solely of of waiver at the a type of information, it was conspicuous" disclosure", the is clearly alleging an informational receive and bottom. injury not [FCRA], from Thus, while he the information that he was entitled to under the FCRA. but type of "Under the consumers have the right to receive certain information consumer reporting agencies", 14 including a clear and conspicuous disclosure. Dreher, at *4. Manuel is alleging that Wells Fargo failed to provide such a disclosure. Those fact and allegations are ·sufficient create standing First, as reasons. to sue explained in to in allege federal Dreher, an injury-in- court "Congress for two created a legal right under the [FCRA], the violation of which constituted an injury sufficient Dreher at *3. a statutory for constitutional standing purposes." It is well-established that "Congress may create right or entitlement the alleged deprivation of which can confer standing to sue even where the plaintiff would have suffered no judicially cognizable injury in the absence of the statute." Warth, 422 U.S. at 514. Congress has clearly created rights on the individual consumer level through the FCRA and has also created a private right of action through which See 15 U.S. C. individual consumers can enforce their rights. §1681n (a) ("Any person who willfully fails to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer ... "). Second, control contrary this case to Wells because Fargo's its holding view, David speaks only does not to the particularities of the ERISA statute and the facts presented in that decision. David, 704 F.3d at 338. In David, plaintiffs were permitted to sue under the ERISA statute, they were "not permitted to recover individually." 15 the but Id. at 332. Instead, "all relief [had to] go to the Plan itself." Id. Thus, the plaintiffs did not have an individual private right of Instead, they could only action to redress the injury alleged. sue to secure addition, redress to another the entity: plan. In the Fourth Circuit clearly stated that the plaintiffs in David had not suffered any injury because it was the plan, and not its mismanagement. members, that would burden the bear of That situation is unlike the one presented here. Manuel is asserting his own rights through a private right of action conferred on consumers and, under a statute that allows consumers to recover damages if they are successful. Also, alleged in facts, David, the the Fourth Plaintiffs' Circuit claim found was that, on speculative. the That simply is not the case here and thus David is inapplicable for that additional reason. Wholly apart from the foregoing, Manuel has demonstrated an injury-in-fact through his allegations that he was deprived of the appropriate type of information under § 1681b(b) (2) (A). It is is well- established that a deprivation of information sufficient to satisfy the injury-in-fact requirement. Election Comrn'n v. FCRA, Manuel and Atkins, other 524 U.S. consumers information at specific times. 11, have 22 (1998). the right See Fed. Under the to specific The allegations that Defendant failed to provide that information, 16 or that they provided the information after it was invasion of a required are sufficient to posit legally protected interest which is and particularized and (b) actual or imminent, Lujan v. or hypothetical." has (a) And, Manuel made a sufficient points. Thus, Manuel satisfies the accurate not conjectural Defenders of Wildlife, 560-61. "an 504 U.S. showing on at those "injury-in-fact" component of the accepted standing calculus. Moreover, Congress is presumed to be aware of the Supreme Court's jurisprudence when it enacts statutes. Langley, 62 F.3d 602, 605 (4th Cir. 1995) United States v. ("Thus, it is proper to consider that Congress acts with knowledge of existing law, and that absent newly-enacted or with existing quotation a clear revised statute law and omitted); 503 Marine Corp., U.S. Chicago, 441 U.S. its see Protection Corp., 498 manifestation 677, 19, 32 a construction.") (internal v. 267-68, (1990); 696-97 intent, harmonious Holmes 258, contrary presumed to be judicial also U.S. is of Securities (1992); Cannon v. (1979). The Investor Miles v. Apex University of law of standing enjoys no exemption from that presumption. It would be passing strange for Congress to have created the FCRA, a rather extensive set of private rights the violation of which gives rise to damages that are available to individual consumers and also to rely on the so-called "private attorneygeneral concept" for enforcement 17 of the statutory rights, but leave the holders them. Indeed, of those Congress rights without did no such standing to enforce thing provides for actual and punitive damages. because the FCRA The concept that even award of nominal actual damages can support an award of punitive damages is no stranger Beaufort, Inc. v. (4th Cir. 1992) to the Aetna Cas. Insurance law. And Sur. Co., in some circumstances, punitive damages.") And, injury F.2d 847, of 853 ("The district court should also consider that nominal damages can, an 966 Services even if the support an award of the deprivation of a injury is slight right is itself or nominal. That certainly is true of the rights at issue in Counts One and Two of the FAC. Congress limited struck a statutory balance in damages FCRA cases by also allowing because often injury from deprivation of an FCRA right often can be hard to prove. Harris Cir. v. Mexican 2009) Specialty ("This court Foods, has Inc., 564 recognized F.3d that See 1301 even the (11th though statutory damages may be used in cases where no actual damages were incurred, they are also often employed where damages difficult or impossible to calculate.") ; Corp., 434 [under the example,] that F.3d 948, a 953 (7th Cir. if modest leak out 18 likely and GMAC Mortg. (" [I]ndividual losses concern about privacy would are 2006) FCRA], information any, Murray v. are to lead be [or] to small a [for slight chance identity theft. [Because the] actual loss and small is to hard qualify ... statutes such as the Fair Credit Reporting Act provide for modest damages without proof of injury."); Sons, Law of Fin. Privacy S. ("It (2014) 1.09(2) A. Pratt often & is difficult for a plaintiff to establish actual damages under the FCRA, and the failure to recover any monetary award can also preclude a plaintiff from recovering court costs and attorney's fees, even if the plaintiff can establish a negligent violation of the FCRA. As a result, plaintiffs frequently will allege willful violations of the FCRA in an effort to secure minimum statutory damages and the possibility of punitive damages, and thereby to qualify for court costs and attorney's fees.") Congress afforded relief from violation of the statutory right and an incentive for CRA's to obey the law as because they risk the imposition of damages and the prospect of paying a (even though not always great) plaintiff's attorneys' fees for depriving consumers of rights to which they are entitled under the FCRA. If individual redress violations of the consumers did not have standing to FCRA where damages are difficult to prove, the purposes of the FCRA would be frustrated. II. Summary Judgment Standard Under rendered Fed. R. forthwith interrogatories, Civ. if and the P. 56, summary pleadings, admissions 19 on judgment depositions, file, together "shall be answers to with the affidavits, if any, any material judgment fact as a and that matter of Celotex Corp. 56 (c) show that there is no genuine issue as to requires the moving Fed. law." Catrett 6 , v. the party is Civ. P. R. entitled to In f6(c). the Supreme Court stated that Rule entry of summary judgment "after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an essential element to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322. In order to enter summary judgment "there can be no genuine issue as to any material fact, since a complete failure to proof concerning an essential elements of the nonmoving party's case renders all other facts immaterial." Id. at 323. When reviewing a motion for summary judgment, a court must interpret the light most Elec. (1986); and any inferences drawn therefrom in the favorable Indus. Co. to v. the 418 motion See Matsushita Radio U.S. Ltd. V. (4th Cir. 2004). for demonstrate nonmoving party. Zenith Seabulk Offshore, F.3d 408, a facts summary to the Am. Home. that the there 6 Inc., 477 U.S. 477 U.S. 242, 574, 587 Assurance Co., 377 250 317 (1986). 20 nonmoving are would create a genuine issue for trial. Lobby, 475 In order to successfully oppose judgment, court Corp., (1986). specific party must facts that See Anderson v. Liberty "Where ... the record taken as a whole could not lead a rational trier of fact to find for the non-moving appropriate." party, disposition United States v. Lee, by summary judgment 943 F.2d 366, 368 is (4th Cir. 1991) . III. § 1681b(b) (3) (A) - Adverse Action Argument Wells Fargo argues that it is entitled to summary judgment on Manuel's § 168lb(b) (3) (A) claim in Count Two because the action of sending notice to First Advantage that a candidate was likely ineligible and thus needed to receive the two adverse action letters does not qualify as an "adverse action" under the FCRA. Docket No. 58 at 10. a. Legal Standard 168lb(b) (3) (A) § requires that, for employment purposes, "in using a consumer report before taking any adverse action based in whole or in part on that report, the person intending to take such adverse action shall provide to the consumer to whom the report relates (i) a copy of the report; and (ii) a description in writing of the rights of the consumer under this subchapter." An "adverse action" must be taken in order for a violation of the statute to occur. The FCRA has several definitions of the term "adverse action." §1681a(k) (1) (B). There are two that are important for the purposes of this motion. defines other an "adverse decision for action" employment as "denial purposes 21 First, of employment that adversely the FCRA or any affects any current or §1681a (k) (1) (B) (ii). "an action or with consumer ... and u.s.c. 15 Second, it defines an "adverse action" as taken connection employee." prospective determination an application that (I) is was that made in by ... any made adverse to the interests of the consumer." (II) §1681a(k) (1) (A) (iv). a. Parties' Arguments Wells Fargo has moved for summary judgment on the argument that §1681b (b) (3) (A) "expressly allows for the formation of an intent to take adverse action before complying to §1681b (b) (3) because it states that action must Docket No. Corp., 145 F. 58 original). take an provide at Thus, adverse the 10 Supp. 'the person intending to take' report (quoting 2d 371, does description Obabueki 392 says Wells action and v. (S.D.N.Y. Fargo, not Int'l 2001)) of adverse rights." Bus. Machs. (emphasis in a preliminary decision to trigger the FCRA, and "an adverse action occurs when the decision is carried out, when it is communicated [to the applicant or employee] or actually takes effect, steps and an actor has until that time to take the necessary to comply with the FCRA' s requirements." Id. at 11 (quoting Moore v. Rite Aid Hdqrts Corp., 33 F. Supp. 3d 569, 574 ( E • D. Penn . 2014 ) ) . Wells preliminary Fargo further argues determination ... that 22 that an its action of applicant or "making a team member does not appear eligible for employment and communicating that preliminary determination to First Advantage for the purpose of notifying First Advantage disclosures" does FCRA. (emphasis Id. not of the qualify in need as an to send adverse If original) . out the FCRA action under it did, Wells the Fargo argues, "it would be impossible to send a meaningful pre-adverse action notice, as required by the FCRA, without first forming on [sic] intent to take adverse action." Id. Wells Fargo relies heavily on the Obabueki 7 case out of the Southern Obabeuki, District the of New York plaintiff in argued making that the this argument. defendant In took an adverse action against him when its human resources department originally reviewed his application and decided to withdraw his offer. Because that notice was sent, occurred before the pre-adverse he argued that this violated § action 1681b(b) (3) (A). The court there held that "[a]n internal decision to rescind an offer is not an adverse action" and thus did not qualify as an adverse action. court effect noted Id. that until at 391. the his In reaching that conclusion, "plaintiff off er [officially] withdrawn" "effectively allow of and every did suffer conditional stated employee 7 not to who hold any adverse employment otherwise suffers an the was would adverse Obabueki v. Int'l Bus. Machs. Corp., 145 F. Supp. 2d 371, 392 (S.D.N.Y. 2001). 23 employment action following a credit agency report to file an FCRA claim asserting that sending of the intent the decision was made prior to the letter, on the ground that the letter reflects that a decision has already been made." 392, 392 The court also reasoned that n.31. intent Id. at the plaintiff's "opportunity to discuss and dispute the report to exactly the scenario envisioned by the FCRA" and thus did not violate the statute. In Id. response, determines that Manuel the argues applicant consumer report ... [and] is when that, not eligible because sends a message to Fargo "Wells of the First Advantage to code the consumer's file at First Advantage as 'ineligible'", it has committed an adverse action under the Id. FCRA. Manuel argues several points in support of his position. he notes found that in the "catch all" §1681a{k) {1) {B) {iv) definition of is not "adverse limited "only at 14. First, action" to the ultimate communication of a denial of employment to the consumer applicant." action" Docket No. 70 at 15. as "an action taken Instead, it defines "adverse or determination that made ... [that is] adverse to the interests of the consumer." This is a very broad definition that, according to is Id. Manuel, encompasses Wells Fargo's actions. Second, Manuel argues that "the facts in this case do not suggest [that the alleged adverse 24 action was] an 'internal' decision." Id. qualification Rather, "Wells Fargo affirmatively and without communicated party ... thereby setting in its motion decision an to third a automated process to electronically bar the Plaintiffs from employment and to send a staggered set of rejection notices to the consumer." 16. Id. at 15- Third, Wells Fargo notes that the entry of the code was the only action taken by Wells Fargo during this process, it cannot qualify as a "preliminary" action. Manuel relies in part on Goode v. Analytics Grp., and thus Id. at 16. LexisNexis Risk & Info. Inc., 848 F. Supp. 2d. 532, 538 (E. D. that rejected the reasoning advanced by Wells Fargo. 8 Pa. 2012) In Goode, the court held that the defendant, a consumer reporting agency, had taken an "adverse action" under the FCRA when it provided a report to an employer and also adjudicated eligibility on behalf of the employer, evaluation decision that for the Court employment subjects' sending the employers an considered purposes" the because "quite literally, "there was no a real opportunity for plaintiffs to contest the adjudication or change 8 Manuel also cites to Beverly v. Wal-Mart Stores, Inc., 2008 WL 149032 (E.D. Va. 2008) in support of his argument. However, the facts of that case are not analogous to those in this case. In Beverly, the defendant argued that both the pre-adverse action and the adverse action notices were not "adverse actions" under the FCRA because the Defendant subsequently rescinded its rejection and offered the Plaintiff a position. Beverly, 2008 WL 149032, at *3. The Court rejected that argument, holding that an adverse action was taken when the defendant sent Plaintiff a final adverse action noticed because the letter indicated "a firm decision to deny plaintiff employment." Id. 25 its outcome thereafter" and because there was no evidence that "employers ever adjudications." 848 F. Supp. 2d at 539-40. the disputed plaintiff [if] learned In distinguishing Obabueki, the court noted that the "employers in this case [did] not conduct any analysis or engage in any decision-making after defendant adjudicates the employee or prospective employee." Id. at 540. Manuel criminal argues that,"[w]hen background First Advantage, Docket No . 7 0 at it reports is 17 . Wells and Fargo 'adjudicates' communicates engaging its the decision in decision-making to activity." He states that the process of deciding whether the employee is ineligible is not "preliminary" as Wells Fargo labels it, evident when one but instead is final. considers that the This finality "is Id. single act of coding an applicant as ineligible for employment serves as the basis for First Advantage sending both its so-called notice and its Adverse Action Notice." Pre-Adverse Action Id. a. Analysis "The FCRA 'expressly allows for the formation of an intent to take adverse action because it states that before complying with § 1681b(b) (3) 'the person intending to take' adverse action must provide the report and description of rights' prior to taking the adverse action." Javid v. SOS Interational, LTD, 2013 WL 2286046 at *4 2013) (E.D. Va. 26 (quoting Obabueki, 145 F. Supp. "The formation of such intent, 2d at 392.). cannot be the adverse action itself." Id. therefore, The question in this instance is whether a reasonable jury could determine that Wells Fargo took an "adverse action" against Manuel and other class members when it entered Advantage's system, the "ineligibility" code into First thus triggering the sending of the two FCRA letters. Whether or not a reasonable jury could determine that Wells Fargo's act of coding an applicant as ineligible was an adverse action under the FCRA is a fact question. There is evidence In Wells Fargo's favor, that weighs in favor of either side. the case law seems to clearly establish that a company can, indeed must, form an intent to take an adverse and action before notifying an applicant that it may take such an adverse action. It would be impossible for a company to notify a consumer of a potential adverse action without first determining consumer likely does not qualify for a position based, that said in part, on a consumer report. The language in the letter titled "Pre-Adverse Action Notice" states that a "decision is currently pending concerning your application for employment or continued employment at Wells Fargo." he Docket No. "should report 70-15 at 3. contact contains any First It notifies the recipient that Advantage information 27 immediately ... [ i] f that is inaccurate this or incomplete ... so that the corrected information can be reviewed prior to an employment decision being made." Action Notification", Fargo regrets hiring inform criteria, further Id. to for at 2. an sent five days later, they [the are employment recipient] unable to The "Adverse Id. states that "Wells that based consider opportunity with [the its on their recipient] organization." The letter makes it clear that the decision not to hire is final, as opposed to the "pending" decision not to hire referenced in the Pre-Adverse Action Notice. Additionally, recipients of the letter had a meaningful opportunity to dispute the consumer report after the pre-adverse action letter was did, in fact, pre-adverse decision was investigate sent, as evidenced by the fact that Manuel initiate such a challenge after he received the action not any letter. final This because background indicates Wells checks Fargo or that was the hiring willing applications that to a consumer believed were incorrect or unfair. However, as Manuel contends, Wells Fargo's use of the ineligibility code was the only communication that Wells Fargo made to First Advantage about the applicant unless the applicant disputed the background check after he received the "pre-adverse action notice." A reasonable jury could find that Wells Fargo's adverse hiring decision was final when it was first relayed to First Advantage because Wells Fargo was comfortable adhering to 28 that decision without reviewing it if the individual did not file a dispute. Because reasonable there jury's is sufficient finding that to evidence Wells Fargo's a support actions were "adverse actions," and the issue is one for the finder of the fact. Therefore, the motion for summary judgment on Count Two will be denied. IV. Consumer Report Requirement Wells Fargo next argues that it did not procure "consumer reports" within background the checks meaning were not of the subject FCRA to and the thus FCRA that its requirements. Therefore, Wells Fargo seeks summary judgment on Counts One and Two. a. Legal Standard The § applicability 1681b(b) (3) See § of both § 1681b (b) (2) (A) and is limited to actions involving consumer reports. 168 lb (b) ( 3) purposes ... "); § (" ... in using a consumer report for employment 1681b (b) (2) (A) (" ... a person may not procure a consumer report, or cause a consumer report to be procured ... "). "The term 'consumer report' means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit capacity, credit character, worthiness, general credit standing, reputation, personal characteristics, or mode of living which is used or expected to 29 be used or collected in whole serving as a for: (A) family, or in part for the purpose of factor in establishing the consumer's eligibility credit or insurance to be sued primarily for personal, or household purposes; employment purposes; (B) (C) title." any other purpose authorized under §168 lb of this or 15 U.S.C. § 1681a(d) (1). § 1681a (d) (2) definition a of §1681a (d) (2) (D) this motion. report' excludes certain background checks is the That does subsection "consumer (o) include ... a (x) (d) (2) (D), this section by Pub. 2010, 124 Stat. the purposes " ... the term of 'consumer in described communication (x) FCRA. the The Editor's Notes of this section, referred was re-designated subsection (y) of L. 111-203, Title X, §1088(a) (1), July 21, 2086." that for of this subsection." for §1681a state that "Subsection to in subsection section section states that not or pertinent under report" from the " ... the Thus, term the subsection interpreted as 'consumer include ... a communication described in subsection should report' (o) does be not or [(y)] the FCRA of this subsection." § 1681a (y} excludes certain reports from definition of a consumer report and reads as follows: 1) Communications described in this subsection.- A communication is described in this subsection if- 30 (A) but for subsection (d) (2) (D) of this be a section, the corrununication would consumer report; the communication is made to an employer in connection with an investigation of(B) relating to ( i) suspected misconduct employment; or (ii) compliance with Federal, State, or local laws and regulations, the rules of a self-regulatory organization, or any preexisting written policies of the employer; the corrununication is not made for the purpose of investigating a consumer's credit worthiness, credit standing, or credit capacity; and (C) (D) the communication is not provided to any person except(i) to the employer employer; (ii) to any Federal or State officer, agency, or department, or any officer, agency, or department of a unit of general local government; (iii) to any self-regulatory organization with regulatory authority over the activities of the employer or employee; {iv) as otherwise required by law; or (v) pursuant title. to or an agent section 31 1681f of the of this b. Parties' Arguments Wells procured Fargo during § 1681a(y) argues the and that the employment thus are background application excluded from checks process the that fall it under definition of a Both the FIRREA and "consumer report" under § 1681a(d) (2) (D). the HFSH Act place restrictions on the type of individuals who may be employed by banking Wells institutions. Fargo argues that "any background check reports obtained by Wells Fargo were by definition obtained 'in connection with an investigation of' the applicant or current team member's current Federal, State ensuring Wells or local Fargo's laws and regulations,' Background plaintiff Fargo did not relies that First those case as in on making had brought Advantage claims qualify heavily Corp 9 Services in and dismiss Fargo and the on the grounds a as well as compliance with the aforementioned laws and its reasonable inquiry obligation." Wells 'compliance with "consumer Id. Martin its v. First argument. FCRA claims defendants that report" Advantage Id. The against Wells had moved to the background check under §1681a (y). On defendants' motion for surrunary judgment, the Court held that the 9 Wells Fargo has cited to, and primarily quoted, the Martin court's 2012 opinion, the Martin court actually denied Wells Fargo's motion to dismiss on the "consumer report" argument because it held that the issue was proper, instead, for surrunary judgment. 877 F. Supp. 2d 754 (D. Minn. 2012). Surrunary judgment was granted by the court in 2014. 2014 WL 1260392 (D. Minn. 2014). 32 "FCRA [did] not apply ... because FCRA pursuant to 15 U.S.C. the Report Id. §168la(y) ." that the "evidence adequately show[ed] [was] from It stated at *6. that the Report was made in an effort to comply with federal law [and] exemption from the FCRA applie[d] ." exempt [a]ccordingly, the Id. Finally, Wells Fargo argues that the fact that the summary reports it received were labeled "consumer reports" should not impact the analysis. on the ignore Court's the It argues that any impact of those words analysis venerable "would exalt principal that form over the legal document cannot be determined by labels alone." Manuel opposes Wells arguments against it. of § 1681a {y) independent that the connection of an that "there communication" communication with position, effect and of a Id. making four main First, he argues that the plain language requires the Fargo's substance must be because be investigation." "made an the to investigation statute an Docket states employer No. 70 at in 19. Second, Manuel argues that § 168la(y) applies only to a certain type of investigation one "of compliance" namely, and the different than one meant Third, Manuel argues that that the investigation must be investigations here "to ensure compliance." the "documents at issue are Id. and process at 22. used by Wells Fargo admits to FCRA governance" and that § 1681a (y) does not apply because Wells Fargo has ad.mi tted to "providing copies 33 of routine background reports to applicants and employees before taking adverse action." Id. at 23. Wells is Fargo's position regulatory history. Finally, Manuel argues that inconsistent with legislative and Id. Manuel also contends that the decision in Martin is of no force here because the Martin case "is devoid of any analysis of the statute's text", particularly the investigation" language. "in connection with an Id. Manuel then points the Court to Newton v. Bank of America, N.A., 2015 U.S. Dist. LEXIS 62930 (C.D. Cal. 2015), in which the court evaluated and rejected the 1681a(y) § Newton, the court analyzed the text of that the "text of the Exclusion 'investigation' ... [which] ordinary meaning." Id. is § [was] limited by the term according to its The court then held that the defendant's practice of requiring all applicants background check was "not an In 1681a(y) and concluded interpreted at *12. argument. 'investigation' to undergo a within the plain language of the Exclusion" because said background checks were conducted pursuant to a written policy establishing a background check as a mandatory condition for employment, investigation" inquiry into which it defined [Defendant's] written policies." as "a compliance Id. at *12-14. 34 rather than an systematic with or federal official laws and a. Analysis It is clear from the plain language of §1681a {y) background check must be procured "in connection that with a an investigation" in order to fall within the statute's exception. More particularly, investigation, While there the background check itself cannot be the but must rather be a part of a larger inquiry. is no precedent purposes of §1681a (y), defining "investigation" for the the Fourth Circuit has spoken about the def ini ti on of "investigation" within the FCRA as a whole. Johnson v. MBNA America Bank, NA, In the Fourth Circuit determined that the term "investigation" was "unambiguous" and thus must be defined according to the plain meaning of the term. Id. at 430. It held that, because "investigation ... is defined as 'a detailed inquiry or systematic examination' ... the plain meaning of 'investigation' clearly requires some degree of careful inquiry by creditors." Id. "In determine {internal citations omitted) . 10 interpreting whether a the statute, language at [the issue must Court] has a first plain and unambiguous meaning with regard to the particular dispute in the case ... The plainness or ambiguity 10 of statutory language is The statutory language at issue in Johnson stated that "[a]fter receiving notice ... of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency, the person shall ... conduct an investigation with respect to the disputed information." 15 U.S.C. §1681s-2 (b) (1) {A). 35 determined by reference to the language context in which that language is used, of the statute as a whole." Co., 519 U.S. 337, 340 Id. (1997)). itself, the and the broader context (citing Robinson v. Here, specific Shell Oil there is nothing in the statutory language that indicates that "investigation" is being used in an ambiguous or confusing manner. Thus the language is "plain and unambiguous" and must be construed according to its ordinary meaning. Therefore, the Fourth Circuit's definition, which requires an investigation to have "some degree of careful inquiry" applies. Wells Fargo's background check process does not fall within the definition of "an investigation" as that terms is defined in the Fourth Circuit. On an individual level, the only inquiry in which engages Wells Fargo respecting whether an individual qualifies for employment under the banking regulations involves requesting the actual background check from First Advantage and looking at that background check. inquiry" into the individual's There is no greater "careful criminal history that would qualify the process as an "investigation" under§ 1681a(y). Wells Fargo's response to the Fourth Circuit's definition is that the Court cannot consider the process on an individual level, but rather must consider the background checks as a part of "its laws." enterprise-wide compliance Docket No. 73 at 9. with a number of federal That argument has no merit because, 36 under Wells Fargo's view, no employer would have to comply with the FCRA as long as some part of the background checking process helped them to comply with a federal law. For example, the banking industry would never be subject to the FCRA when using a background check for employment purposes because Thus, every requirements of the FIRREA apply to all employees. background would, check conducted on every applicant the and employee under Wells Fargo's rationale, be exempted from the FCRA because it convictions. cannot employ Thereupon, people with certain kinds the exception would swallow the of rule with respect to employment uses of background checks under the FCRA, because there are a laws excluding certain number of federal, individuals from state, certain and local types of employment. There is further evidence supporting a finding that Wells Fargo's background checks qualify as consumer reports under the FCRA. First, Wells Fargo does not limit its background check process to those convictions that would disqualify an applicant or employee for a particular position. Wells Fargo's consent form indicates that the report that is produced "could include information about achievement, verification, [the applicant's] employment character, history, general characteristics, and mode of living." 37 criminal history, Social Security reputation, Docket No. 70-8. academic Number personal Such a broad-reaching background check would not have been necessary for any "investigation" into Wells Fargo's compliance with the FIRREA or FHSTA. This further supports the conclusion that the background at check issue here is a "consumer report" as contemplated by the FCRA. Second, although Wells Fargo is correct in asserting that the titles of forms and contracts are not binding, the contents The facts thereof can be informative. between First Advantage and Wells show that the contract Fargo was executed with the expectation that any report produced would be used "solely for employment purposes and for no other purpose." 5. Docket No. 70 at That document further elaborates that Wells Fargo would be required to comply with the FCRA for each requested report. at 5-6. Id. Further, the standard consent form used by Wells Fargo informed the applicant that "Wells Fargo ... intend[ed] to procure an investigative consumer report on their background" provided a brief explanation of the individual's the "Pre-Adverse FCRA. "Adverse recipients evidence produced, Docket Action" rights shows No. letters under that, even Wells at 70-2. The also the the referenced law. time Docket these Fargo perceived that the rights was consumer report that fell under the FCRA's umbrella. 38 and 70-15. records it under Action" FCRA No. and were and the That being procuring a The court Finally, the Martin decision is not persuasive. in Martin conducted no statutory analysis summarily declared that the "FCRA [did] Report [was] exempt from [the] comply with the SAFE Act." and instead only not apply ... because the FCRA [because] ... it was made to Martin, 2014 WL 1260392, at *6. The district court did not analyze the different requirements of the statute and did not seen to note that an "investigation" was Further, required in conj unction with the background report. the facts in Martin indicate that the background check conducted in that case was different than those conducted by Wells Fargo here. In the summary of facts, the court indicated that the plaintiff "was told that he had to submit to a background check in order for Wells Fargo to comply with the SAFE Act." *2. Id. at The court also noted that the background report "was made to comply with the SAFE Act, as evidenced by Plaintiff and Wells Fargo employees." Id. at *6. Thus, it appears that the background check was used only for the purpose of complying with the SAFE Act eligibility for {as opposed employment to in the purpose general), and of determining may have been limited to the convictions of concern for that statute. II. Willfulness Wells Fargo's final argument in favor of summary judgment is that Manuel cannot prove that 39 its behavior constituted a willful violation of the FCRA and, because Manuel's complaint only alleges a willful violation, summary judgment is proper. a. Legal Standard A defendant knowingly or Singleton, acts 2012 Burr, willfully recklessly 551 U.S. WL disregarding 245965, 47, under 57-60 at *4 the by either statutory its FCRA duty." (citing Safeco (2007)). Ins. risk of harm that either known or so obvious that it should be known.'" 551 U.S. at 49) . v. "Recklessness ... consists of 'action entailing an unjustifiably high M-I LLC, 2014 WL 4344746, at *2 Co. (E.D. Ca. 2014) "In other words, is Syed v. (quoting Safeco, 'a company subject to the FCRA does not act in reckless disregard of it unless the action is not only statute a violation terms, but under shows that a reasonable the company reading ran a of risk the of violating the law substantially greater than the risk associated with a reading that was merely careless.'" 551 U.S. at 50). violation of understanding instead, a the of (quoting Safeco, The Supreme Court has "held that a defendant's FCRA its plaintiff is not reckless statutory must simply obligations allege, defendant's reading of the FCRA is Id. Id. at is minimum, because its 'erroneous'; that the 'objectively unreasonable.'" (citing Safeco, 551 U.S. at 69). Summary judgment is very rarely appropriate on the issue of defendant's willfulness. However, 40 when the plaintiffs have produced no evidence speaking to defendant's willfulness, appropriate to consider granting defendant's motion. v. Capital Assoc. Indus. (Granting summary Inc., 257 F.3d 409, 418 judgment 'seldom appropriate' noting on whether a LLC, lacking."); 560 appeal F. 3d on 235, the willfulness Robinson 241 entry because of 974 F.Supp. 2d presented 865, 876-77 evidence judgment Information Cir.) summary was wholly lacking."); Hill v. "summary Equifax (4th "evidence (4th Cir. 2001) (rejecting judgment on that[Defendant] Services, Plaintiff's the issue acted (M.D.N.C. of 2013) LLC, ("Plaintiff failed to present evidence of willful conduct as required by 168ln. has by mistakes numerous has of willfully Equifax Information Servs., Defendant ... However ... Plaintiff is [defendant] acted willfully is v. n. 3 See Dalton party possessed a particular state of mind [but] evidence that wholly that it is any Plaintiff's speculation is not sufficient to rebut sworn testimony directed at the actual procedures employed in the interactions between Plaintiff and [Defendant]." b. Parties' Arguments Wells Fargo § 1681b (b) (3) (A), objective argues § that 1681b (b) (2) (A), unreasonably and thus interpretations its and that § any 1681a (y) violation of were not was not willful. With reference to§ 168lb(b) (3) (A), Wells Fargo argues that interpretation its "was not 41 objectively unreasonable in light of Obabueki and its progeny ... which held, facts, under analogous that the employer did not engage in adverse action before it sent the plaintiff a pre-adverse action notice." 58 at 29. Docket No. It argues this was a "plausible" interpretation under the law. As to § 1681b(b) (2) (A), interpretation prior cases "was not Wells objectively holding ... that Fargo argues unreasonable disclosure and that in light authorization liability was waiver (W.D.N.C. 2012), within ineffective an 2014 WL 4344746, but at in which the court held that a FCRA requirements, and its progeny. LLC, Id. Wells Fargo is referring to Smith v. Waverly Partners, 2012 WL 3645324 form of forms may contain liability waivers without violating the FCRA." at 30. its *3 disclosure not and violative of authorization the FCRA's Further it cites to Syed v. M-I (E.D.C.A. 2014), which held that "[t]he inability of district courts around the country to agree on whether a combined disclosure and liability release violates the FCRA suggests that the statute is 'less than pellucid.'" Manuel argues that the issue of Wells Fargo's willfulness is not a proper one for summary judgment. First, Manuel §168lb(b) (2) (A) argues that "ignores the Docket No. 70 at 34. Wells Fargo's plain statutory approach text" under of the section and states that "there is nothing ambiguous or confusing about §1681b(b) (2) (A) (1) ." Id. at 37. 42 Thus, any interpretation by Wells Fargo that permitted it to include a waiver of rights within the per se further FCRA disclosure, unreasonable points and out that under Manuel's argument, thus a willful "both the would be Manuel violations. courts and the FTC have recognized that the inclusion of a waiver of rights provision in the § FCRA mandated 168lb (b) (2) (A)" and Disclosure/Consent that such violates form consensus bolsters his case. Id. Manuel § next 168 lb (b) ( 3) argues is that Wells Fargo's interpretation also objectively unreasonable, its behavior willful under the FCRA. Id. at 38. thus of rendering Manuel argues that the Obabueki and Javid cases that Wells Fargo relies upon are "factually distinguishable" from the case at bar and thus it was "objectively them. Id. Finally, interpretation stating that unreasonable" of a § Manuel 1681a(y) "reading and two phrases - of compliance.'" Wells argues was [§ of understanding of two words - for Fargo that objectively 1681a(y)] to rely Wells upon Fargo's unreasonable, requires only an 'communication' and 'investigation' 'in connection with' and 'an investigation Id. a. Analysis Whether 168lb(b) (2) (A) Wells and reserved for a jury. Fargo § acted 1681b(b) (3) As to § willfully is a with question respect of fact 168 lb (b) ( 2) (A) , there is, 43 to § best indeed, conflicting precedent on the issue of whether inclusion of wavier in a § 168lb(b) (2) (A) disclosure violates the FCRA. suggests that, to some extent, a This the statutory language is "less than pellucid" in light of the judicial interpretations thereof and thus that a violation thereof was not willful. However, while Wells Fargo has pointed to several cases that support its position, there is no evidence that anyone at Wells Fargo ever relied upon those opinions in drafting its disclosure and waiver form. Additionally, there is no information in the record establishing when Wells Fargo began using the form at issue. If it began using the form at issue before any of the conflicting cases were decided, a reasonable jury likely could determine that an inclusion of a wavier clause was a willful violation of the § FCRA. This Court has recently analyzed the language of 1681b(b) (2) (A) in Milbourne, and found it to be quite clear in its requirement waiver clause. that a FCRA disclosure should 2015 WL 1120284 at *5-8. Thus, not contain a if Wells Fargo was relying only on the language of the statute in drafting its FCRA disclosure form had not yet been {because, decided), for example, the inclusion would be considered "unreasonable." the operative cases of a waiver likely The record is insufficient to allow a contrary conclusion and it is Wells Fargo's burden to 44 make such a record. It did not do so and that forecloses summary judgment. As to several § cases 1681b(b) (3), that while support Wells Fargo its position, it has has pointed to presented no evidence establishing when its practices began and whether or not it knew of the cases on point when drafting its guidelines. Wells Fargo's § 1681(y} argument fails for similar reasons. Thus, Wells Fargo has failed to establish that it is entitled to summary judgment as a matter of law on the issue of willfulness, and its motion therefore must be denied. CONCLUSION For the reasons set forth above, Defendants' MOTION SUMMARY JUDGMENT (Docket No. 57) will be denied. It is so ORDERED. Isl Robert E. Payne Senior United States District Judge Richmond, Virginia Date: August _f!/_, 2015 45 FOR
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