Tyrone Henderson, et al. v. Corelogic National Background Data, LLC,, No. 3:2012cv00097 - Document 322 (E.D. Va. 2016)

Court Description: MEMORANDUM OPINION. See Opinion for details. Signed by District Judge Robert E. Payne on 09/01/2016. (ccol, )

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Tyrone Henderson, et al. v. Corelogic National Background Data, LLC, IN THE UNITED Doc. 322 STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division TYRONE HENDERSON, et al. , Plaintiffs, Civil Action No.: V. 3:12CV97 CORELOGIC NATIONAL BACKGROUND DATA, LLC, Defendant. MEMORANDUM OPINION This MOTION matter FOR CLASS set forth herein, is before the CERTIFICATION Court on (ECF No. PLAINTIFFS' 281) . For RENEWED the reasons the motion will be denied. BACKGROUND On July 16, and James Hines Second Amended and all National Credit class, Class others Count No. One (collectively, Action similarly Background ECF Plaintiffs Tyrone Henderson ("Hines") Reporting ("SAC"), FCRA. 2015, Data, Act 191). Complaint LLC The alleges, on SAC behalf alleging ("NBD") ("FCRA"). "Plaintiffs") on situated, had alleges of a of themselves that Defendant the Amended two a filed violated (Second behalf ("Henderson") Complaint Counts putative under Fair the nationwide that NBD violated the FCRA by failing to "maintain strict procedures" to ensure that the public records i t provided to its Dockets.Justia.com customers failing to notify consumers when such records were provided about them, in violation were of "complete 15 U.S.C § and up to date" 1681k(a). Count claim on behalf of Henderson and Hines, to use reports, reasonable procedures to and by Two, an individual alleges that NBD failed assure maximum accuracy of its in violation of U.S.C. § 1681e{b). Plaintiffs now seek to certify the following class: All natural persons residing in the United States (a) who were the subject of a report sold by NBD to Verifications, ADP or HR Plus, (b) where NBD's Results Returned database an indicates employment NBD's Results that purpose Returned it was (Code furnished 6), database (c) for where showed that the report contained at least one adverse criminal record "Hit," (d) within five years next preceding the filing of this action and during its pendency...[excluding] any employees, officers, directors of Defendant, any attorney appearing in this case, and any judge assigned to hear this action. (ECF No. 282). Plaintiffs the Civ. foregoing P. 23, also class contend does that, not meet should the the Court requirements find of that Fed. R. the Court should certify one or more of Plaintiffs' three proposed subclasses, SUBCLASS database 1: shows a defined as follows: (i) NBD's criminal Results Returned hit from a record Virginia General District Court; (ii) NBD did not return a SSN to its customers; and (iii) the computer database of the Executive Secretary of the Supreme Court of Virginia contains a SSN or associated with that Drivers License criminal record. number SUBCLASS database 2: (i) shows [Pennsylvania] NBD did not NBD's a Results criminal General return a record District SSN to Returned hit from Court; its (ii) customers; and (iii) the computer database of Pennsylvania Administrative Office Pennsylvania Courts (AOPC) contains a associated with that criminal a the of SSN record. SUBCLASS 3: (i) NEC's Results Returned database show [sic] a criminal record hit from a state Sex Offender Registry; (ii) where the age and/or date of birth provided for that consumer by Verifications, AD? or HR Plus did not match the age and/or date of birth contained in that State's publically accessible Sex Offender Registry. Id. Because some Plaintiffs important failed evidence opportunity to brief that issue. conduct Therefore, prejudice as to provide underlying denied the without to the notice subclasses, the NBD with NBD discovery necessary to Plaintiffs' three of was fully motion will be denied subclasses, and the parties will be given an opportunity to conduct expedited discovery as to set the viability of forth below. the subclasses. Plaintiffs' However, motion will for be the reasons denied with access to prejudice as to the putative nationwide class. FACTUAL BACKGROUND NBD is database a ("The company that Multistate criminal record information. provides Database" its or customers "the Database") a of (Defendant's Memorandum in Support of its Renewed Motion for Partial Summary Judgment on Count I of the Second Amended Undisputed Facts Complaint ("SOF") (EOF 5 18). No. the Multistate Database by way of the responsive returns to the results search Statement NBD's customers, instance are consumer reporting agencies Database then 195), criteria which in this ("CRAs"), pay to search Internet. (such as arrest entered of The Multistate records) by NBD's that are customer. Id. The Multistate SafeRent, LLC Database is ("SafeRent") , SafeRent obtains most of Database electronically owned a sister the from and managed by CoreLogic company criminal to record governmental NBD. data sources, Id. in the although approximately ten percent of the data is purchased from a third party vendor. bulk, Id. f formats the 19. SafeRent records it buys purchases criminal so that records they properly incorporated into the Multistate Database, the records SafeRent records in bulk the the response records intervals. criminal Multistate information. rarely, ("SSNs") . in varying purchases identifying in at Id. to if data often For example, SI5 16-17. sometimes Database ever, queries record Id. contain bulk, contain public Social be and updates 20-24. in can in Because the only public limited records purchased Security Numbers Based on the reports generated by NBD regarding also Plaintiffs, lack other it is clear identifying data that such as middle names or addresses. Therefore, the portions Multistate Database the (ECF No. Exs. of the public records often supplied with pertain. are ECF No. 195, SOF not particular consumer to 13, that sufficient to are link whom 14). in the the the data records 5-6. SafeRent oversees all formatting, of the Multistate 196 Database; updating, NBD merely acts between SafeRent and the customer CRAs, to its customers without change. as and maintenance an intermediary and transmits this data The contracts between NBD and its customers obligate the customers independently to verify the records returned in response to their search providing consumer reports to their clients. Henderson Specifically, on and Mines present inaccurate and information supplied by NBD. Brands September of before Id. IS 8-15. factually similar cases. Henderson and Hines were denied employment based allegedly Interstate queries offer background (SAC f of check ("Interstate") 19) . employment, on in and Henderson subsequently from a third party CRA. background process. Id. Verifications history a job at August or Henderson a requested a Interstate made ("Verifications), check criminal Henderson applied for Corporation 2009. conditional incomplete Verifications, 1 21. Inc. As part of the conducted a search the Multistate Database by inputting Henderson's last name, first three letters of his first name, and his date of of the birth. (ECF No. 195, included Henderson's also SOF SI contained belonging to 29) . results criminal several at The history, records, least one of this but the including other search correctly search felony individual who results convictions, had the same first and last name and date of birth as Henderson. (SAC 26) . Interstate, In the background check that Verifications included multiple it provided to criminal records incorrectly attributed to Henderson by NBD. result of the incorrect information, conditional offer of employment. Id. Interstate 24- that 27. S[ were As withdrew a its Id. Hines applied for a position as a physical therapist with CareSouth Homecare Professionals 3 39. in May 2011. Id. As part of its consideration of Hines for that position, CareSouth purchased a Selection Services 41-42. conducted Hines' 195, ("CareSouth") As a first SOF 1 41). correctly ("ADP"), part search and consumer of of last report from ADP Screening and a CRA similar to Verifications. the the names compilation Multistate and his of this Database date of report, by birth. Id. ADP inputting (ECF No. These search results contained criminal records attributed to Hines, but also contained records belonging to at least one other individual with the same first name, last name, indicating that 42-45). and date of birth, Hines was a including an Indiana record registered sex offender. (SAC ISI ADP included this incorrect information in the consumer report that incorrect it provided information, that time. Id. to CareSouth. Hines was not As hired a for result the of the position at SI 5. CLASS CERTIFICATION DISCUSSION To obtain class certification, four requirements of Fed. R. a plaintiff must satisfy the Civ. P. 23(a). Additionally, the proposed class must be consistent with at least one of the types of class meet actions the delineated corresponding in Fed. R. Civ. P. prerequisites 23 (b), for and must certification. However, before the Court undertakes the Rule 23 analysis, there are three threshold disputes to be resolved. A. Standling To begin, Article III (Defendant's Motion NBD for standing Class at 19) . must "establish him sufficient Spokeo V. the to issues any return establish Article of relating the to motion, standing 1540 the Mem. says NBD, of ^concrete' Ct. to ("Def. her 136 S. absent Opposition specifically, that Robins, merits in "Plaintiffs the Certification More or that for Memorandum 296) caused contends establish class members." Plaintiffs' in III because ECF records by ^particularized' standing." (2016)). Court 0pp.," Renewed No. every class member incomplete and Court's subject matter jurisdiction. cannot Id. NBD harm (citing Before proceeding to must first resolve any that issue affects the The Court members' need standing misapprehends that is, a delve here, the action context. not role into however, of the issue because NBD's constitutional the Court. Harris v. argument in That Evans, and is Bush, that simply the controversy all between that Article 70 F. App'x 84, 20 F.3d 1118, therefore, class III 87 1121 the parties requires. (4th Cir. (11th Cir. there is before See, 2003) 1994)) the parties before the court have e.g., (quoting (observing that the "'central purpose of the standing requirement ensure class There is no dispute that the named plaintiffs— case ProEnqlish v. absent standing Henderson and Hines—have standing; justiciable of a [is] to concrete interest in the outcome of the proceedings such that they can be expected to frame the issues properly.'") Thus, standing, the given Henderson and Hines NBD's argument concerning whether, absent class characterized named that (emphasis added). as in presents issues predominance, have identifying plaintiffs' members: members claims other and words, that are typicality, suffered perceived the Civ. P. of the standing to and adequacy of must be analyzed under Fed. R. is differences pertinent have and to what extent, harm claims NBD's indisputably more between absent argument the aptly class really questions representation, the of which 23. The leading class action treatise has succinctly explained this distinction, noting that, 8 although the constitutional requirement of standing and the statutory prerequisites of Rule 23(a) "appear related as property party litigation," is they both aim to measure whether the before "whether the or not court to the tender named the issues plaintiff who for meets individual standing requirements may assert the rights of absent class members is neither a standing issue nor an Article III case or controversy but depends on meeting the prerequisites of Rule 23 governing class actions." Newberg on Class "Newberg § is the because, ") . "while requirements are relationship § 2:6 {5th ed. 2013) (hereafter Therefore, Rule 23, rather than Article III, appropriate ensuring that a the Actions Alba Conte & Herbert Newberg, rubric standing real for evaluating doctrine is these primarily concerned case or controversy exists, designed precisely between the address Id. thereof) to analysis, concerns about and the i t is addressed in more detail below. class members of Plaintiffs' brief to relevant (or lack Rule the 23 in support of their motion for certification is premised on the position that they need not show that class members' to is injury Incompleteness is a Required Element of Plaintiffs' Claim. Much class absent to the extent that with Rule 23(a)'s representative[s] class." B. Accordingly, class to differences successfully notwithstanding pursue the recent reports were incomplete or outdated their claim holding to under the § contrary 1681k(a), in the Memorandum Opinion See Henderson v. 1574048 the (E.D. analysis denying NBD's motion CoreLogic Nat^l Va. of Apr. all of 18, summary Background Data, 2016). the for Rule Because 23 LLC, 2016 WL issue this factors, judgment. affects and because the parties did not bring this issue to the fore when NBD's summary judgment motion was briefed, it is helpful here to explain the reasoning behind that conclusion in more depth. The have few courts unanimously information also concluded obtained incomplete...[a] Haro v. Farmer v. by that, [a plaintiff's Shilo Inn, 2001) issue in any detail "absent defendant claim a CRA] under 2009 WL 2252105 Phillips Agency, 2012); Obabueki v. 396 {S.D.N.Y. to have addressed this {D. Inc., was § Or. showing that inaccurate 1681k must July 27, or fail." 2009); see (N.D. Ga. 285 F.R.D. 688 Corp., Int'l Bus. Mach. the 145 F. Supp. 2d 371, (noting that "the logical starting point for an analysis of Section 1681k is whether the information provided was complete and up to date. If this is so, then an inquiry into the agency's procedures is unnecessary."). Indeed, several courts have required a plaintiff claiming a § 1681k violation to allege sufficient facts to support an inference that the subject reports were incomplete or not up to plausibility pleading requirements of Fed. E.g., Or. Speers v. May 13, Pre-Employ.com, 2014); Haley v. Inc., R. to Civ. satisfy P. 2014 WL 2611259, TalentWise, 10 date Inc., 9 F. the 12(b)(6). at *6 (D. Supp. 3d 1188, 1194 dismiss (W.D. a § alleged that plaintiff course, 1681k 2014) claim she did not alleged opinions authority; Wash. that of because receive § her (1) the plaintiff 1681k(a) (1) consumer other however, persuasive, (denying the defendant's motion to report district reasoning notice, was courts of sufficiently and (2) outdated). are not those Of binding opinions is for several reasons. First, the demonstrates second sentence that whether the of § information 1681k(a)(2) in a clearly record is up to date is crucial for proving a violation of that section. That sentence provides that: [f]or 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. 15 U.S.C. for § showing 1681k(a)(2). when "This information purposes of this subsection. a standard would be CRA to reading furnish advanced Farmer, Id. of statutory construction that a be so construed that, if § "would And, it 11 a precise up 285 F.R.D. reports," Plaintiffs 1681k(a)(2) meaningless." to 'considered necessary only if up-to-date by is establishes to render date'" at 696. 1681k(a) (2) because standard the over for "Such required a alternate 50% of § it is "a cardinal principal statute ought, can be upon the whole, prevented, no clause, sentence, Alaska n.l3 or word shall be superfluous, Pep" t of Conservation v. EPA, or insignificant." 540 U.S. 461, 489 (2004). Second, the Envtl. void, this interpretation is supported by commentary from Federal Trade Commission guidance to the Court. Supp. 3d letters 425, are binding). 431 ("FTC"), Milbourne v. (E.D. persuasive Va. which provides persuasive JRK Residential Am., 2015) (noting authority, even that though FTC they 92 F. opinion are not The FTC has stated in a staff opinion letter that § 1681k(a) (2) "require[s]... that and up to date. each For example, item reported be complete if the CRA reports an indictment, it must also report any dismissal or acquittal available on the public record as of the date of the report." Staff Opinion Letter, 1999 WL 33932137, (emphasis in original). we read Section at Fed. Trade Comm'n *1 (Dec. The FTC went on to say that, [1681k(a) (2)] as being current and up public reported." to date' record in the status sense each "[b]ecause that [sic] it report includes individual is the item Id. Third, the language and the alternative structure 1681k make clear that the ultimate harm that Congress prevent was damage to consumers' reporting 1999) item-specific... we believe the CRA complies with that provision if its 'complete 16, of incomplete or § sought to employment prospects caused by out-of-date 12 of public records. To further that objective. could either: (1) reporting of alert they "maintain strict procedures" to minimize the consumer the Congress offered CRAs two options; incomplete to or the out-of-date existence of public the records; report so or (2) that the consumer himself could remedy any mistakes in the report before adverse employment action occurred. Thus, the CRA is required to provide notice to the consumer only if it does not take its own steps to ensure the completeness and currency of the public records it furnishes. The fact that this CRA to choose whether i t will review the subsection records allows the i t s e l f or alert the consumer to the existence of the report to allow him or her the opportunity to review it reveals that transmission of complete and up-to-date public records is the ultimate goal of this subsection.^ This history reading of § is further 1681k(a). That underscored section by arose the out legislative of Congress' concern that: Most credit bureaus systematically compile public record information such as records of suits, tax liens, arrests, indictments, convictions, bankruptcies, judgments and the like. a This person's information report is when then he included applies on for credit, or in some cases when he applies for employment. Unfortunately, the information ^ That self-regulatory structure is, as Plaintiffs point out, an impediment to the effectuation of the Congressional goal. But that is a matter for Congress to address, and is not redressable by judicial decision. 13 cannot always be kept up to date because i t is costly or because the correct information is simply not available...Because public record information is reported to employers as well as creditors, a consumer's future employment career could be jeopardized because of an incomplete credit report. S. Rep. No. 91-517 at 4. Therefore, contemplated strict where by § procedures consumer's report a consumer 1681k(a)(l), as does and a by not receive CRA does § required notice not as maintain 1681k{a)(2), but the contains only complete and up-to-date public records, the injury that this section is designed to prevent has not occurred. In other words, the purpose of § 1681k(a) "is not furthered unless a plaintiff suffers the harm the procedures are meant to prevent." F.3d 263, plead, 267 and Washington v. (5th Cir. to prove, 2000). that outdated to prevail on a the intent of Congress, their CSC Credit Servs., Thus, Inc., 199 requiring plaintiffs reports claim under this were incomplete to or section best serves as evidenced by the structure and text of the statute itself as well as its legislative history. Fourth, § and relatedly, 1681k(a)(2) "[wjhenever report it possible closely parallels § a consumer shall follow accuracy of about whom the as numerous courts have recognized, report reporting 1681e{b) agency which requires prepares reasonable procedures the to 14 See, e.g., consumer assure maximum information concerning the relates." a that individual Dalton v. Capital Assoc. Indus., Inc., 257 F.3d Obabueki, 145 F. Supp. at 396. 1681e(b), it is well-settled that element of the claim 2d 409, because the 417 And, in V. Trans See, e.g., Union Credit 1995)); Washington, Corp., Dalton, Info. harm the Co., 45 964 (3d Cir. 1996); Henson v. F.3d 280, 284 (7th Cir. 1994); Cahlin v. 1151, Coast Credit Servs., 2002). of § basis Inc., (11th 214 F. Cir. Supp. § necessary envisions is not the mere risk of (citing Guimond 1333 (9th Cir. Trans Union CSC Credit Servs., Gen. 92 29 Motors Acceptance 1991); Thomas 2d 1228, 1233 v. Gulf (M.D. Ala. These cases read the "reasonable procedures" requirement 1681e(b) attach 1156 of 1996); Spence v. TRW, Inc., (6th Cir. F.2d a Philbin v. 382 936 2001); context FCRA F.Sd 1329, F.3d 380, Corp., Cir. is 257 F.Sd at 415 199 F.3d at 267 n.3; 101 F.3d 957, the inaccuracy actual inaccurate or improper disclosures, inaccuracy. (4th for for as a limit inaccurate a claim. on liability reports, See, that rather Henson, e.g., than 29 as might an F.3d at otherwise affirmative 284 ("[T]he credit reporting agency is not automatically liable even if the consumer the proves FCRA does that not all inaccuracies. it make information accuracy,' in the reporting an inaccurate agencies report strictly because liable for A credit reporting agency is not liable under the FCRA if it followed possible prepared ''reasonable procedures to assure maximum but nonetheless consumer's credit 15 reported report.") inaccurate (quotations and citation omitted); context of harm the risk of related FCRA § are not 199 F.3d at subsection envisions improper procedures' sum, Washington, is § 1681e(a) improper disclosure followed (holding that "the disclosure, that and 267 arises not reasons is set intended forth to prevent above, the without some showing that a out-of-date public record, has same CRA has not is the mere ^reasonable are made."). in the absence of some showing of inaccuracy, 1681e(b) actionable when disclosures in the the harm that occurred. true In of § For the 1681k(a): furnished an incomplete or the harm that § 1681k(a) is intended to prevent has not occurred. Plaintiffs argue that the Court should reject the reasoning of every other court to have decided this issue and forge its own path. In the absence of any judicial or authority to lend support to their position. administrative Plaintiffs simply state that it "makes no sense" to "impose an implied requirement that a challenged because the section report must shares provision that also uses a itself be comparable the word incomplete... merely objective 'procedures.'" with another (Plaintiffs' Memorandum in Support of Renewed Motion for Class Certification ("PI. Mem.," ECF No. 282) unpersuasive. Moreover, several have correctly far deeper 1681k (a) courts runs as at set 3). forth drawn than 16 That above, between the ipse the § presence dixit analogy 1681e{b) of the is that and § word ''procedures;" as set forth above, the linkage between a valid the basis for that analogy is claim and the harm that those the words respective sections were intended to prevent. Plaintiffs also argue that Congress' use of "maintain" and "ensure" implies that § 1681k(a) (2) is primarily concerned it provides with a CRA's complete procedures, or up-to-date not whether reports. (PI. Mem. actually at 2-3). And, relatedly, Plaintiffs contend that "§ 1681k(a){2) cannot be read as ends-determined because it imposes a CRA [sic] before issuing 1681k(a) (1) the report notice." whether (Pi. Mem. at it needs 5). As to an to decide send the § initial matter, the latter premise is simply not true; the § 1681k(a) (1} notice must be provided "at the time" that the adverse public record information arguments report is reported, miss has the not before. point: issued, been if no even More importantly, incomplete if the or CRA both out-of-date lacks "strict procedures" designed to ensure completeness, there is no harm to the consumer. standing In that scenario, to bring 2016 WL 4424955, suit. the consumer does not even have See Witt at *8-*10 (E.D. v. Va. CoreLogic SafeRent Aug. 18, 2016). LLC, The Court agrees with Plaintiffs that "strict procedures" are an "ex ante" requirement place at advantage insofar the of time § as that a CRA it 1681k(a)(2); must sends have an however, 17 strict erroneous it does procedures report not to in take necessarily follow, as Plaintiffs required to would have it, show that the report was that a plaintiff is not incomplete or out-of-date to pursue a claim under this subsection. Thus, previous for the reasons above and as set forth in the Court's Memorandum Opinion, Plaintiffs are required to show that NBD's reports are incomplete or not up to date in order to prove liability under § 1681k(a)(2). C. 1681k(a) applies to reports furnished for all "employment purposes." Much of NBD's brief also suffers from a structural misconception concerning the elements that the statute requires. NBD takes the employment are view that screenings" triggered because only with process of initial employment," must limited be 'obtaining were initial employment. is that those in termination. any other class members with an initial employment Id. 18 26). furnished application purpose, 1681k(a) in class background because for such The for as the seeking proposed impossible it at pre- application is that § are whose narrowing an to who Plaintiffs' 0pp. purposes" opposed of to consumers in reports to i.e., Mem. unaware which of the related limited consumers connection (Def. such to therefore is requirements employment,' to procured 1681k(a) "the respect and only reports however, ^'Section for catch, NBD is "employment employment as promotion or The analysis begins with the text of the statute. true that, as a references NBD consumer's However, NBD's Section 1681k (a) furnishes for a points argument out, preamble "ability takes begins: consumer the to that report for consumers..." 15 U.S.C. § 1681k(a) 1681k(a) employment." out reporting employment that purpose compiles and reports § obtain phrase "A consumer to It is of context. agency which purposes and which items of information on (emphasis added). The FCRA defines the term "employment purposes" when used in connection with a consumer report as "a report used for the purpose of evaluating a consumer for employment, promotion, reassignment or retention course, as an "[w]hen employee." 15 statute includes a must follow that definition, ordinary (2000) meaning." U.S.C. an § 1681a{h). explicit And, of definition, we even if it varies from that term's Stenberg v. Carhart, (internal citations omitted). 530 U.S. 914, 942 The use of the statutorily defined term "employment purposes" in the opening sentence of § 1681k makes clear that Congress intended § 1681k to apply to any consumer reporting agency which furnishes consumer reports "for the purpose of evaluating a consumer for employment, reassignment or retention as an employee." promotion, Conversely, had Congress meant to limit the application of § 1681k(a) to initial applications for employment, it would not statutorily defined term "employment purposes." 19 have used the The reference to the consumer's "ability to obtain employment" later in the preamble of § 1681k does not alter this result. The adverse effect merely restrictive on describes consumers" reported with for a clause the nature which § are likely to ability consumer's "which to obtain employment" of the 1681k(a) "employment is purposes." "items of information concerned 15 U.S.C. have when § they 1681k(a). an on are A consumer reporting agency may sell an item of information that is of the consumer's sort that ability is to "likely to have an adverse effect on a obtain employment" for any employment purpose, and § 1681k(a) would still apply.^ That reading is confirmed by administrative guidance. FTC's "[a] informal commentary on the FCRA explicitly states The that CRA that furnishes public record information for employment purposes must comply with either subsection § 1681k(a) . Federal Trade Comm'n, (a)(1) or (a)(2)" of 40 Years of Experience with the Fair ^ NBD claims that this result is "incongruous" because under this reading, the statute would apply "to pre and post-employment screenings, but only for the types of information that would be ^likely adverse' in a pre-employment context." (Def. Mem. in 0pp. at 27) . NBD does not specify why or how it believes that information that is "'^likely adverse' in a pre-employment context" would not also qualify as "likely adverse" in any other employment context, nor does it cite any authority to support its argument that this distinction actually carries with i t any meaningful difference. That is unsurprising, because no court has recognized this distinction and, in fact, this Court has already applied § 1681k in the context of post-employment background screenings. See Williams v. LexisNexis Risk Mgmt., Inc., 2007 WL 2439463 (E.D. Va. Aug. 23, 2007). 20 Credit Reporting Act: (2011) An FTC Staff Report with Summary of Interpretations 81 (hereafter "40 Years Staff Report ") (emphasis added). Similarly, the FTC has repeatedly advised inquiring parties that § 1681k{a) "imposes agencies...that obligations include public on consumer record reporting information in the consumer reports they make to clients for employment purposes." Fed. 12, Trade Comm'n Staff Opinion Letter, 1998) (emphasis added); see also Opinion Letter, 1999 WL 33932137 1998 WL 34323738 Fed. Trade Comm'n (Dec. 16, 1999) the FTC's commentary underscores that § 1681k(a) employment purposes, not only the initial (same). (June Staff Thus, applies to all application for employment. For consumer the foregoing reporting reasons, agency § furnishes 1681k a applies consumer whenever report for a any employment purpose that contains adverse public records, and it is not limited only to consumers seeking to "obtain employment." Therefore, the fact that "NBD is not made aware of the specific employment purpose for which a report is sought," Def. Mem. in 0pp. at 27, does not affect the analysis herein. Having resolved those threshold issues, the question conditions D. whether Plaintiffs' set forth in Fed. R. proposed Civ. Rule 23 21 P. 23. the Court turns to class satisfies the A proposed class must satisfy the four requirements of Fed. R. Civ. P. 23(a). Those requirements are that: (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; the (3) representative's claims or defenses are typical of those of the class; and (4) the representative will represent the interests of the class. Disc. Muffler Shops, Inc., 155 To secure class certification, 255 F.3d 138, 146 and adequately See Broussard v. F.3d 331, 337 Meineke (4th Cir. 1998). the plaintiff bears the burden of proving all requirements of Rule 23. Inc., fairly (4th Cir. Lienhart v. Dryvit Sys., 2001). Additionally, the proposed class must be consistent with at least one of the types of class actions Civ. P. 23(b), Here, Rule 23(b)(3). members finds of only superior to Plaintiffs move for certification Certification under Rule 23(b)(3) where the Court affecting R. and must meet the corresponding prerequisites for certification. the delineated in Fed. the that questions of class individual other members, available methods and for is appropriate law or fact predominate over that the a any class fair under common to questions action is and efficient adjudication of the controversy. As the Fourth Circuit has explained, courts are not required "to accept plaintiffs' pleadings when assessing whether a Gariety class should be certified." 22 v. Grant Thornton, LLP, 368 F.3d 356, must take 365 a (4th Cir. ^close 2004). look' at Rather, the "the district court facts relevant to the certification question and, if necessary, make specific findings on the propriety of certification." Life Ins. Gariety, Co., 445 F.3d 311, 368 F.3d at 365). Thorn v. 319 {4th Jefferson-Pilot Cir. 2006) (quoting "Such findings can be necessary even if the issues tend to overlap into the merits of the underlying case," but "[t]he likelihood of the plaintiffs' merits...is not is proper." Id. The relevant to the issue of success on the whether certification (internal citations omitted). Supreme Court recently elaborated further upon the factual determinations at the class certification stage in Wal- Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011). In Dukes, the Supreme Court explained: Rule 23 does not standard. set A forth mere pleading seeking party certification must a class affirmatively demonstrate his compliance with the Rule - that must be prepared to prove that there fact sufficiently numerous parties, questions of law or fact, etc. recognized in Falcon that 'sometimes be necessary for the court to prove the pleadings before coming to rest certification certification court is analysis, 23(a) 147, is satisfied, that the and if 'the after a prerequisites that trial rigorous of Rule have been satisfied.' 131 S. Ct. at 2551 U.S. question,' proper only is, he are ^ common We it may behind on the 160-61 (quoting Gen. (1982) Tel. Co. of Sw. (emphasis 23 in original)). v. Falcon, 457 "Frequently that 'rigorous merits of helped." analysis' the plaintiff's entail underlying some overlap claim. with cannot That the be 131 S. Ct. at 2551. After Dukes, which "laid the groundwork for the heightened 'rigorous analysis' that will 'will required of a class certification petition entail some overlap with the merits of the plaintiff's underlying claim,'...the Supreme Court issued a pair of 2013 opinions address merits clarifying issues extent the at the class Timothy Coughlin & Barbara A. Tort Class Def. Couns. decisions Trust Certification J. was Funds, 428, Amgen 113 After 432 v. Ct. a court certification Comcast, 2013). Connecticut 1184 which Digging Deeper: Dukes, (Oct. Inc. S. Lum, to (2013). The can stage." Mass Toxic and first Amgen, of these Retirement Plans In the Amgen, 80 and Court clarified that, ta]lthough we have cautioned that a court's class-certification analysis must be rigorous and may entail some overlap with the merits of the plaintiff's underlying claim. Rule 23 grants courts no license to engage in free-ranging merits inquiries at the certification stage. Merits questions may be considered to the extent—but only to the extent—that determining prerequisites they are to the Rule certification whether for class relevant 23 are satisfied. Id. at Dukes 1194-95 (internal demonstrate that a citations court's 24 omitted). factual Thus, Amgen determinations at and the class certification stage should go only as far as necessary and no farther. That is, "Amgen appears to limit inquiry into a case's merits where the class certification inquiry touches upon an indispensable element of the claim and on which a failure of proof would end the case." Coughlin & Lum, at 432 (internal citations omitted). The Corp. V. second class Behrend, Supreme Court certification 133 further S. Ct. case 1426 of 2013 (2013) . clarified "that the In was Comcast Comcast, 'rigorous the analysis' required for class certification reaches not only to issues of liability, but also to damages and causation." at 432. district This position courts "reaffirms considering Dukes' motions for Coughlin & Lum, pronouncement class that certification often must look beyond the pleadings to issues that overlap with the merits. But again, the extent to which a court must delve into the merits remains undefined." Newberg Supreme on Class Actions Court decisions, Id. at 433. also analyzed two noting that although of the Dukes latest seems to "encourage merits review at certification," a different majority in Amgen cautions against "free-ranging merits inquiries at the certification stage", and stating that merits questions "may be considered to the extent—but only to the extent—that they are relevant to determining whether the class certification are satisfied." 25 Rule 23 prerequisites Newberg § 7:23. for Keeping in mind the Supreme Court's views in Dukes, Amgen, and Comcast, we examine the definition of the proposed classes. Based on the current about whether the record, proposed the class Court has serious satisfies Rule concerns 23(a), and particularly the requirement of typicality, because although it appears that Henderson and Hines were the subjects of incomplete reports, Plaintiffs have yet to persuade the Court that that is typical of other members of the proposed class. for purposes of this motion only, Rule 23(a) Nevertheless, the Court assumes that all prerequisites are satisfied and addresses only Rule 23(b) 1. Predominance Under Rule predominate members." 23(b)(3), over Amchem any questions questions Prods., Inc. v. common to affecting Windsor, the class only 521 "must individual U.S. 591, 615 ^ It is unclear as to some of NBD's arguments whether they are addressed to the requirements of predominance or ascertainability; NBD's brief frequently intermingles those analyses. However, the crux of most of NBD's ascertainability arguments is that Plaintiffs' proposed class is not viable because the class definition does not sufficiently tether the criteria for class membership to the elements that Plaintiffs must prove in order to prevail on their claim under § 1681k(a). Put slightly differently, NBD seems to argue that, if the Court were to certify the class as proposed by Plaintiffs (according to NBD), individualized inquiries would predominate because the proposed definition does not lend itself to a class-wide determination of liability. Therefore, the Court addresses NBD's arguments, to the extent appropriate, in the context of the predominance analysis. See part D.l infra. 26 (1997). Whether common questions predominate over individual questions "is a separate inquiry, distinct from the requirements found in Rule App'x 299, 2556) . 23(a)." 305 This {4th Ealy v. Cir. Pinkerton Gov't 2013) requirement is (citing "even Servs., more F. 131 Dukes, 514 Ct. at demanding S. than Rule 23(a)," Comcast, 133 S. Ct. at 1432, and "tests whether proposed classes are sufficiently cohesive to warrant representation," Amchem, 521 U.S. at 623. matter of checking counting the predominance final test common versus tally. is than Stillmock V. Weis Markets, Inc., 2010) Healthplan Servs., (citing Gunnells v. (4th Cir. quality 2003)). of questions." the questions quantitative." (4th Cir. 348 F.3d 417, Rule 23(b)(3) to those and commonality- 385 F. App'x 267, 272 In other words. common questions 23(b)(3)'s rather by This is not simply a noncommon "Rule qualitative adjudication of 429 "compares the the noncommon Newberg § 3:27. If the "qualitatively overarching issue" in the litigation is common, resolve a class may be certified notwithstanding the need to individualized ("Indeed, issues. See Ealy, 514 F. App'x 305 common issues of liability may still predominate even when some individualized inquiry is required."). if regarding "common courts at questions generally find predominate the predominance liability, requirement satisfied even if individual damages issues remain." 27 For example, then to be Stillmock, 385 F. Inc., App'x 323 at 273 F.3d 32, (citing 40 (1st Cir. certification in time, and expense, effort, Smilow such cases v. Sw. 2003)). will Bell This still Mobile Sys., is because class "achieve economies of and promote... uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about Gunnells, 348 F.3d at 424 also at id. would 426 require enormous discovery, potentially hundreds similar, these and even recurring these redundancy of actions, identical, in of by the and legal issues 521 U.S. issues testimony common undesirable (citing Amchem, ("Proving duplicative other at 615); individual effort, same also see trials including witnesses relitigation issues. will results." of in many Consolidation conserve of important judicial resources."). Plaintiffs contend that questions of law or fact common to the members of the class predominate over individual issues primarily because "the question of whether a CRA follows § 1681k ^strict procedures' inquiry." is not an (PI. Mem. at 29-30). § 1681k(a) (2) idiosyncratic case-by-case Second, Plaintiffs contend that does not require any individualized proof because "class members actual damages would not be required in order to obtain 30. 28 to prove causation statutory damages." or Id. at NBD proffers argues that numerous arguments determining whether a in response. First, particular public NBD record is "complete and up to date" creates insurmountable individualized issues. (Def. analysis of Mem. the at strictness individualized based the data million returned 9-13). in queries."^ on its Second, of NBD's business response Id. at to that procedures practices, each 22. NBD contends of as the Third, will be applied more NBD "the than argues to 1.7 that This argument can be quickly disposed of, because NBD is not entitled to rely on procedures maintained exclusively by SafeRent, a legally independent entity, to satisfy its obligations under § 1681k(a)(2), the statute, on its face, for several reasons. First, applies to any CRA "which 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 employment [.]" 15 U.S.C. § 1681k (a). ability to obtain That is, ^ CRA that meets either this threshold definition must comply with § 1681k(a) (1) or § 1681k(a)(2). Second, the FTC has explicitly stated that "CRAs that provide reports for employment purposes must comply with this section, even if they are merely resellers of consumer reports obtained from other CRAs." 40 Years Staff Report 81; see also id. (noting that a "CRA that furnishes consumer reports for employment purposes based on previously acquired public record information (purchased periodically from a third party) must verify that any such information is complete and up to date, in order to comply with subsection (a)(2)."). Finally, the Fourth Circuit has made clear that a CRA may not satisfy the "reasonable procedures" requirement of § 1681e(b) or, by extension, the "strict procedures" component of § 1681k (a) as a matter of law by relying entirely on its vendors to provide complete, up-to-date, and reliable information. Dalton, 257 F.3d at 417-418. Therefore, NBD itself has a responsibility to comply with § 1681k (a), and may not avoid liability by relying on procedures of another entity elsewhere in the chain of transmission. 29 Plaintiffs' the proffered potential Fourth, for five-year insurmountable to members' customers' employment queries limitations individualized Court would of have the was prospects individualized inquiry.® "users" of NBD contends that whether the data that response the statute to reports "likely cannot Id. at 28. determine sold by be it creates inquiries.^ returned in adverse" to determined class without Finally, NBD asserts that whether NBD, NBD's and customers that also were would necessitate individualized factual inquiries. ^ Plaintiffs respond that a five-year statute of limitations is uniquely appropriate in this case because the subjects of reports sold by NBD are never made aware of NBD's role in the preparation of their employment-purposed consumer reports. {Reply in Support of Plaintiffs' Motion for Class Certification ("PI. Reply," ECF No. 305) at 23-24). The record is undeveloped on that point, so the Court need not resolve that issue here; however, even assuming that NBD is correct that the proposed five-year limitations period creates individualized issues, the problem could be remedied by limiting the class period to the two years preceding the filing of this action. Therefore, the statute of limitations issue does not, alone, defeat certification. ® The Court has arguments in its summary judgment. already explicitly rejected NBD's two final Memorandum Opinion denying NBD's motion for (ECF No. 277). However, NBD, undeterred, contends that class certification is improper because the Court's interpretation of the law as expressed in its previous opinion was incorrect. (Def. Mem, at 28-29). The Court has already thoroughly analyzed those arguments in deciding both NBD's motion for summary judgment and its motion for reconsideration of the Court's decision on summary judgment, has declined to adopt NBD's view on those matters. those arguments are not addressed further herein. 30 and Therefore, Certainly, Plaintiffs issues are common. non-compliance are correct For example, with § that some important NBD does not dispute that its 1681k(a){l) is subject proof, because it "has acknowledged that, to generalized as a matter of policy, it never provides notice to the subjects of the consumer reports it prepares." Farmer, 1681k(a)(2), however, First, as Plaintiffs' set position, 285 F.R.D. at 688. Non-compliance with § is much more complicated. forth in part B above and contrary to the Court does not reach the question of "strict procedures" unless and until Plaintiffs have shown that NBD reported incomplete or out-of-date records. Plaintiffs have not specified how the records provided by NBD were not complete, not up-to-date, or both, except to assert that the vast majority of those However, failure records lacked Social Security the Court has concluded that, to include SSN's does not, have extent to that Plaintiffs be resolved NBD's as records acknowledge, is a as a not matter of law, Therefore, factual do not ("SSN"). for several reasons, record incomplete or not up-to-date. v/ould numbers universally Thus, to the (which, SSNs true), render a that question matter. include the as it is still necessary to determine whether an SSN was actually available for that record despite the the and whether absence Plaintiffs' key of the the record SSN. theory of 31 was This, nonetheless in liability, turn, for "complete" means the that on proposed nationwide class, the individual issues central to liability will predominate. Furthermore, Plaintiffs have as to the provided putative nationwide no meaningful class, alternative the theory of liability respecting how the records provided by NBD are neither complete nor systemically up-to-date. incomplete, To show that Plaintiffs NBD's primarily reports rely on are NBD's arguments that NBD does not know the identity of the consumer at issue when it furnishes a report. completeness of the public (PI. Mem. at 9-11) . records independent of whether NBD knows that NBD furnishes (or should know) of the consumer to whom the report is addressed. event, NBD's Plaintiffs arguments have are generally not evidence. alleged that is the identity And, Moreover, NBD However, in any although provides only "partial record[s]," they have not demonstrated or even argued with any specificity (other than the absence of SSNs) any way in which those records are uniformly incomplete or out-of-date such that completeness would be amenable to class-wide proof. Thus, under would Plaintiffs' theory, determining NBD's liability require predominantly individualized inquiries. Plaintiffs member's the report impossible contend was task that requiring incomplete of or "'proving out-of-date a complete reports were ever furnished. 32 proof that every imposes negative'—showing on class them that no But at this stage if not far earlier. the Defendant contrary." themselves in should (PI. this Mem. proposed never furnished class a at is come forward 22). predicament pursue class certification, their have with proof Plaintiffs because they have have put chosen to rather than individual actions, premised complete on report, the yet assumption they have to and that NBD refused to limit the class to reports that were incomplete or outdated in a specific, objective, Plaintiffs must and verifiable way. offer proof to certification is warranted. The two cases proposition are in both cases that They have not done so. Plaintiffs based then. support their contention before distinguishable. was Unsurprisingly, on cite The the in support of certification of plaintiffs' proof this classes that Trans Union had inaccurately labeled many thousands of class members as name-only match. "terrorists" Patel V. Ramirez Trans v. Under those Trans based on Union, LLC, Union, unusual nothing more 308 LLC, than F.R.D. 301 F.R.D. circumstances, 292 [that] a 408 accurately terrorists 308; [of that the destroys accord Ramirez, case, as Patel where class] 301 (N.D. Cal. 2015); (N.D. Cal. 2014). the district it was "reasonable to infer at fraction a court held that stage that there [was] tagged as predominance." Patel, 308 F.R.D. By contrast, at 422. not potential F.R.D. in at this in numerous other cases distinguished by the court certification was denied 33 on a similar theory, in the predominance inquiry necessarily ^'involve [s] data that varies markedly by individual." the decisions For burden the of Id. in Patel and Ramirez are not foregoing proving reasons. that questions individualized inquiries at trial. reporting at 309. of Thus, instructive here. Plaintiffs common the have will not met their predominate Therefore, over certification of the proposed class is inappropriate. 2. Superiority Superiority requires that use of a class action be "superior to other available methods for fairly and efficiently adjudicating the Superiority "Mepends each case,'" the achieved.'" of the Stillmock, When action device court for making is a Fed. greatly on and "Mt]he objectives omitted). controversy." rule 385 a F. and other no Brown In v. at all Cameron-Brown determining superior, in action whether might Co., 274 the 23(b)(3). surrounding find really of whether controlling will the available be class to adjudication of the the not contemplate the possibility be superior F.R.D. class 32, action to 49 a class (E.D. the mechanism 34 prosecution or action." Va. the court should consider "the class members' individually that {internal citation methods efficient 92 P. court to procedure "determination controversy...[the court should] that the App'x at to Civ. circumstances requires class-action superior fair the R. is 1981). truly interest defense of separate actions; concerning the the extent controversy and nature already begun of by any or litigation against class members; the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and the likely difficulties in managing the class that action." the Fed. R. Civ. P. requirement is 23(b) (e) (A)-(D) . Plaintiffs satisfied slight because to (citation contend "statutory damages support individual omitted). adjudication is superiority the FCRA are (PI. Plaintiffs assert that class members would never because "class Mem. ^too suits.'" Second, superior under at 30) think to bring individual claims because they are unaware even of the existence of NBD or that their rights have been violated- -having little protections." NBD lay knowledge of the complex blanket of FCRA Id. responds that "[t]he novelty of Plaintiffs' claims, particularly in combination with the enormous statutory damages sought, renders adjudication." Second, class (Def. Mem. in 0pp. NBD asserts that practical and class action." realistic Id. treatment an inferior at 30) Finally, to a of (citations omitted). "individual suits under the alternative method sprawling FCRA are a and NBD points out that the novel judicial economy contemplated by the class action device is not realized 35 here because of the daunting nature of the inquiries necessary to determine liability. Neither side has superior given individual predominance. In the But, the inquiries Id. at 31. hit concerning superiority. mark individualized a class action is nonetheless not manageability discussed other their issues in words, with the created preceding superiority arguments is by the section not on satisfied because "[t]he potential efficiencies of a class action are not realized where member's F.R.D. an claims 208, individual assessment Moreover, be made." {E.D. 217 must Pa. 1681k SafeRent, are individual quite LLC, -- F. actions Supp. 22, 2016); Lang v. 2016 WL 740288 Advantage LNS (N.D. 2015); Cox v. Jan. 30, 2015); (D. Colo. Jan. 81 F. Supp. See, Feb. Sol, 2015); (N.D. 24, Oses WL Inc., 2016); 155 Inc., LLC, 24 6 under v. 1106857 F. Knight Trans., Smith v. Ga. Williams Supp. (N.D. Inc., v. 111. Corp., First (N.D. (N.D. Ohio 2015 WL 328250 E-Backgroundchecks.com, 2015). Furthermore, Inc., both named for actual damages case for alleged violations of § 1681e(b) 36 the Corelogic 3d 1233 2015 WL 413812 Plaintiffs are currently pursuing claims this class individual actions under 2016 ScreeningOne, 3d 1342 feasible e.g., 3d Ohio Maiteki v. 23, Union, First Advantage Background Servs. Screening Fla. Trans are In fact, common. Mar. v. putative 2007). circumstances presented here. § Klotz of each in which arise out of the could same course of events as easily have 1681k as well. brought Finally, their § plausible 1681k (a) individual claim; claims they under § the viability of individual actions is aptly demonstrated by the litany of individual claims that these Plaintiffs and their counsel have brought other actions before this Court alone. 3:12-CV-589; 3:12-cv-730. this individual case, Therefore, actions under See, the e.g., FCRA in 3:ll-cv-514; under the circumstances of are a viable and preferable alternative to a huge, unwieldy, and unmanageable class. For all of the foregoing reasons. demonstrate that a class action Plaintiffs have failed to is a superior method of adjudication in this case. CONCLUSION For the reasons set forth above, FOR CLASS CERTIFICATION It is (ECF No. 281) PLAINTIFFS' RENEWED MOTION will be denied. so ORDERED. /s/ Robert E. Payne Senior United States District Judge Richmond, Virginia Date: September / , 2016 37

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