Milbourne v. JRK Residential America, LLC, No. 3:2012cv00861 - Document 288 (E.D. Va. 2016)
Court Description: MEMORANDUM OPINION. Signed by District Judge Robert E. Payne on 8/11/2016. (jsmi, )
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Milbourne v. JRK Residential America, LLC Doc. 288 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division DERRICK A. MILBOURNE, On his own behalf and on Behalf of those similarly Situated, Plaintiff, v. Civil Action No. 3:12cv861 JRK RESIDENTIAL AMERICA, LLC, Defendant. MEMORANDUM OPINION This matter is before the Court on the parties' joint oral motion, made at the Final Pretrial Conference, to have the Court decide, as America, the Fair a matter of law, LLC' s ("JRK") Credit whether defendant violation of 15 U.S.C. Reporting Act ( "FCRA") JRK Residential 168lb(b) (2) § was of "objectively reasonable," as that concept was defined by the Supreme Court of the United States in Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007). (1) does For the reasons set forth below, the Court finds that: the "objective reasonableness" analysis set forth in Safeco not apply interpretation occurred; and because of (2) the JRK statute assuming did at that not the adopt time JRK's or that conduct act the on an violation sufficiently Dockets.Justia.com evinces an "interpretation" of the statute (as JRK contends to be the case), that interpretation is not objectively reasonable. BACKGROUND A. Class Claims On October 26, 2015, Plaintiffs ("Milbourne") and Samantha Churcher "Plaintiffs") filed a 147) Derrick ( "Churcher") First Amended Complaint A. Milbourne (collectively, ("FAC", on behalf of themselves and all others similarly situated, alleging that JRK violated two sections of the FCRA. One, ECF No. Plaintiffs potential alleged employees that JRK without took adverse complying with In Count action 15 against u.s.c. § 1681b(b) (3) (A), which requires that: In using a consumer report 1 for employment purposes, before taking any adverse action based in whole or in part on the report, the person intending to take such adverse action shall provide to the consumer to whom the report relates: ( i) a copy of the report; and (ii) a description in writing of the rights of the consumer under this subchapter, as presented by the Bureau under Section 1681g(c) (3) of this title. Count One is sometimes referred to as "the 1 § 1681b(b) (3) claim." The FCRA defines a "consumer report" as "any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used in whole or in part for the purposes of serving as a factor in establishing the consumer's eligibility for: ... employment purposes[.]" 15 U.S.C. § 1681a(d). 2 In Count Two, that JRK Plaintiffs alleged that the disclosure form provided Disclosure Form"} to all potential violated 15 employees U.S.C. ("the Standard 1681b(b) (2) (A), § which provides that: A person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless: ( i) a clear and conspicuous disclosure has been made 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 referred to in clause (i)) the procurement of the report by that person. Count Two is sometimes referred to as "the § 168lb(b) (2) claim." Plaintiffs alleged that the violations alleged in Counts One and Two were committed "willfully," and sought statutory and punitive damages. Count Three, filed on behalf of a putative subclass of the class represented in Count Two, alleged that a second disclosure form that Standalone violated § JRK provided Disclosure to Form" some or 1681b (b) (2) (A). 3 potential "the employees contingency form") ("the also FACTUAL BACKGROUND In November 2010, Milbourne applied for, received, a and conditionally job with JRK pending satisfactory completion of a background check. Before JRK obtained a consumer (FAC <JI<Jl 7-9). report on Milbourne, he signed two disclosure forms. 15-18. Id. at <Jl<JI The first form, the "Standard Disclosure Form," provides in pertinent part: I certify that the information contained herein is true and understand that any falsification will result in the rejection of my application or termination of my employment. I also understand that the requested information is for the sole purpose of conducting a background investigation which may include a check of my identity, work and credit history, driving records, and any criminal history which may be in the files of any state or local criminal agency ... I hereby authorize this company, its corporate affiliates, its employees, its authorized agents, and representatives ... to verify all information contained in this form or in my application and to inquire into any character, general reputation, personal characteristics, and mode of living ... I hereby release this company, its corporate affiliates, its employees, its authorized agents and representatives and all others involved in this background investigation from any liability in connection with any information they give or gather and any decisions made concerning my employment based on such information. I understand that any offer of employment I may receive is contingent upon the successful completion of the background investigation. I further understand that I have a right, under Section 606 (B} of the 4 Fair Credit Reporting Act, to make a written request to this company within a reasonable period of time for a complete and accurate disclosure of the nature and scope of the investigation requested. (ECF No. 49-2 at 2) Standard Disclosure Form when she applied for JRK in September 2013. After Churcher also signed the (emphasis added). extensive <JI<JI 2 7 -31) . discovery, became (not Churcher), had also signed a second disclosure form before JRK form"). their background class that along 558 other apparent members it Milbourne, obtained with ( FAC employment with checks {"the Standalone including Disclosure That form provides: understand that my employment with JRK is subject to the successful clearance of my background report to acceptable company standards. The results of my background report will be reviewed and evaluated by JRK and JRK, in its sole discretion, will determine whether it is approved. I (ECF No. 150, Exs. 1-650). Milbourne was conditionally hired by JRK, the contingent upon successful check. receiving felony clearance Milbourne's arrest (ECF No. 76-8 records, <JI<JI 2-3). of his consumer JRK background report, terminated which contained Milbourne' s After two employment. Milbourne did not receive a copy of his consumer report or a summary of rights under the FCRA before JRK informed However, him of its decision to terminate his employment. Milbourne later received a "Notice of Adverse Action" 5 accompanied by those materials from United States Background Screening ("USBS"), the consumer reporting agency from which JRK purchased employment-purposed background checks. (ECF No. 76- 5) • PROCEDURAL HISTORY On October 31, 2014, the Court certified two classes based on the alleged deficiencies of the Standard Disclosure form. First, the Court certified an "Impermissible Use Class," defined as follows: All natural persons residing in the United States (including all territories and other political subdivisions of the United States), (a) who applied for an employment position with Defendant or any of its subsidiaries, (b) as part of this application process were the subject of a consumer report obtained by Defendant during the two years proceeding [sic] the filing of the Complaint, (c} where Defendant used a form to make its disclosures pursuant to 15 U.S.C. § 1681b(b) (2) that contained a release and/or waiver of the signing consumer's claims and/or rights. (ECF No. 56). The Court also certified an "Adverse Action" subclass, defined as follows: All natural persons residing in the United States (including all territories and other political subdivisions of the United States), (a} who applied for an employment position with Defendant or any of its subsidiaries, (b) as part of this application process were the subject of a consumer report background check obtained by Defendant on or after the date two years proceeding [sic] the filing of the 6 Complaint, (c) where Defendant's records show that the applicant was denied employment because of the background check, (d) and to whom Defendant did not provide a copy of the consumer report and other disclosures stated at 15 U.S. C. § 168lb(b) (3) (A) (ii) at least five business days before the date the employment decision is first noted in Defendant's records. Id. On March 15, 2016, the Court granted Plaintiffs' motion for summary judgment on the issue of whether JRK violated the FCRA as to Count One (the § 1681b(b) (3) claim). (ECF No. 199). The Court also granted summary judgment for Plaintiffs on Count Two, finding that JRK had violated the FCRA as to those class members who signed the Standalone Disclosure Disclosure report. Standard Disclosure Form only Id. Form after or JRK Form and did not who had signed procured sign the the Standalone their background The Court granted summary judgment in JRK's favor on Count Three except as to 91 class members whose background reports JRK had already procured Standalone Disclosure Form form. before they signed the JRK conceded that it was not entitled to summary judgment as to those 91 class members, remain part reserved for of the trial Impermissible the issue Use of Class. whether violations in Counts One and Two was "willful." 7 who Id. The Court either of JRK's In accordance with those decisions, definition of the the Court amended the Impermissible Use Class, which now includes the following consumers: All natural persons residing in the United States (including all territories and other political subdivisions of the United States) , (a) who applied for an employment position with Defendant or any of its subsidiaries, (b) as part of this application process were the subject of a consumer report obtained by Defendant (c) on or after November 30, 2010 (two years preceding the filing of the Complaint) and before March 15, 2016 (the date of the Court's Order amending this definition) (d) where Defendant used a form to make its disclosures pursuant to 15 U.S.C. § 1681b (b) (2) that contained a release and/or waiver of the signing consumer's claims and/or rights, and (e) Defendant did not provide the applicant with any other disclosure form prior to obtaining the applicant's consumer report. (ECF No. 203). Because Milbourne had signed the Standalone Disclosure Form, he could no longer prosecute a claim on behalf of the Impermissible appointed to Use serve representative. Id. Class; the as substance addressing of argued that, the Impermissible Churcher Use was Class Id. admissibility instructions under therefore, Milbourne remains the class representative of the Adverse Action Sub-Class. In and, Safeco, matter of law on Count Two, on of exhibits the topic was entitled § 1681b(b) (2) it the 8 of and the willfulness, JRK to judgment claim. as a That was so, said JRK, was objectively could not be Count Two. 2 because its use of the Standard Disclosure Form Therefore, reasonable. held accountable Plaintiffs for argued a according willful that Safeco to JRK, violation was it under inapplicable because JRK had never adopted or acted on an interpretation of § 1681b(b) (2); and that, as a matter of law, JRK was objectively unreasonable in acting as it did even if JRK could be considered to have acted pursuant to some interpretation of § 1681b(b) (2). The factual record respecting this issue is fairly sparse. The entirety of JRK's evidence on this point amounts to one email from Melody {"Salazar") , Salazar administrative an assistant at JRK, to Andrew Klein ("Klein"), head of USBS. No. 49-1). In "compliance/legal" that e-mail, Salazar team examine the before JRK begins using it. evidence that comprised careers to of it engaged Id. USBS, "professionals Pre-Employment who requests Standard that Form JRK points to that e-mail as which have holds devoted Screening ... and (ECF No. 49 USBS' Disclosure itself their Employment interpret the FCRA on JRK' s behalf and ensure JRK' s with the statute. {ECF out as entire Law" to compliance 3). 2 JRK does not contend that it adopted an objectively reasonable interpretation of 15 U.S.C. § 1681b(b) (3). The only remaining question to be decided as to Count One, therefore, is whether JRK's violation was knowing or reckless or whether it was merely negligent. The parties agree that that issue should be decided by the jury. Accordingly, only the reasonableness of JRK' s interpretation of § 1681b(b) (2) is addressed herein. 9 However, of that when deposed, e-mail was Salazar testified that the purpose merely to confirm the compliance of a particular box that she had added to the form "for accounting purposes only." at 63: 15-24) . (ECF No. Moreover, 262-4, Deposition of Melody Salazar, the record shows that JRK did Instead, the not retain USBS for legal or compliance purposes. record proves that JRK merely paid USBS to provide background reports, a service for which USBS was paid on a report-by-report basis. (ECF No. 35:1-17). 270-1, JRK's Deposition of Michael Moerschbacher, contract compliance services. with USBS contains Id. at 35:12-36:8. no mention at of Furthermore, according to JRK's head of Human Resources and corporate designee pursuant to Fed. R. Civ. communicated P. with 30(b) (6), USBS neither he nor anyone else at JRK concerning 1681b(b) (2) during the class period. JRK's compliance Id. at 36:14-23. with § There is no evidence about when or why the release language was included in the Standard Disclosure Form or whether anyone at JRK made any decision respecting the language contained in the form. DISCUSSION A. Legal Framework In Safeco Ins. Co. of Am. considered two consolidated cases v. Burr, the Supreme in which consumers insurers for violations of 15 U.S.C. § Court had sued 1681m(a), which requires that notice be provided to any consumer subjected to "adverse 10 action ... based in whole or in part on any information contained in a consumer report." 551 U.S. 47, 52 One (2007). who "willfully fails" to provide such notice is civilly liable under 15 U.S.C. § 168ln. The Supreme Court began by clarifying that "willfulness" in the context of the FCRA "cover [s] but reckless ones as well[.]" citations The omitted) . not only knowing violations, Safeco, Court 551 U.S. at 57 reasoned that a (internal definition of willfulness encompassing "reckless disregard" was consonant with both the common law and the Court's comparable language in -other statutes. The Supreme Court interpretations of Id. then elaborated that "recklessness" is defined "in the sphere of civil liability as conduct violating an objective standard: action entailing 'an unjustifiably high risk of harm that is either known or so obvious that it should be known.'" 825, 836 551 U.S. at 68 (1994)). (citing Farmer v. Brennan, 511 U.S. Therefore, the Court held that a company subject to the FCRA "does not act in reckless disregard of it unless the action is not only a violation under a reasonable reading of the statute's terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with a reading that was merely careless." Importantly, however, the Supreme Court Id. at 69. qualified that definition by stating that a defendant does not act willfully if 11 its "reading" of the statute, even if erroneous, was objectively reasonable. the In determining that Safeco's interpretation of Id. definition of unreasonable," the "adverse action" Supreme Court "not was was objectively influenced by three factors. First, the statute did not define the term at issue; in words, the other Id. at 69-70. of the FCRA provided a statutory text was "less-than-pellucid." Second, the Court observed that Safeco's reading had a "foundation sufficiently in the convincing statutory text" justification that to "have persuaded the District Court to adopt it and rule in Safeco' s favor." which Id. had a at 70. basis In other words, in the Safeco' s statutory text, interpretation, was sufficiently reasonable as to warrant adoption by an independent third party. Third, "the the Court found it significant that Safeco did not have benefit of guidance Federal Trade Commission from the view it took." from (FTC} Id. the courts of appeals or the that might have warned it away Therefore, "[g]iven this dearth of guidance and the less-than-pellucid statutory text," the Court found that Safeco's reading was "not objectively unreasonable," and risk' so "f [ell] of violating liability." Safeco involves well a short the of raising statute the 'unjustifiably high necessary for reckless Id. teaches two-step that assessment 12 the First, inquiry. of it willfulness is issue necessary to determine whether the violative conduct on, defendant "adopt[ed]," and based its an "interpretation" that was "objectively reasonable," as that concept was defined in Safeco, a question of law that both parties agree is to be decided by the Court. If the Court finds that the defendant's interpretation was objectively reasonable, its conduct falls within the safe harbor created by Safeco and the defendant is entitled to judgment as a matter of law on the issue of willfulness. And, that is what JRK now seeks. If, was however, not the objectively Court concludes that it reasonable, the becomes interpretation necessary to determine whether the defendant's violation rose to the level of a knowing or reckless violation, as defined by Safeco. That determination, the parties agree, must be made by the jury. B. Analysis With these instruction principles provided by in Safeco, mind, the and guided objective by reasonableness issue will be assessed as it is presented on this record. the reasons that follow, JRK' s position does the For not pass muster "objectively reasonable under Safeco. 1. JRK Did Not "Interpret" The Statute. To take advantage interpretation" safe harbor, the of Safeco requires that the defendant have "adopt[ed]" and acted on an interpretation of the statute. 13 Safeco, 551 U.S. language Court used at 70 n.20. in the repeatedly That premise is clear from the holding referred in to First, Safeco. the defendant's the Supreme "reading," "adopt[ion]" of an "interpretation" of the statute. or Second, the Court exonerated Safeco because it had acted in accordance with that reading when it violated the statute. As the Court put it, "Safeco took the definition as excluding initial rate offers for new insurance, plaintiffs. and so sent no adverse Safeco, 551 U.S. at 69. its obligations to abide by the determine what the statute action notices" to the That is, Safeco recognized FCRA, examined the statute to required, and relied on that interpretation when it took the actions that violated the FCRA. Thus, the initial question is whether the record shows that JRK actually interpreted 168lb (b) (2) § when it implemented the Standard Disclosure Form in 2008 and provided that form to the class members throughout the class period. evidence that 168lb(b) (2) violated JRK actually adopted the Here, there is no interpretation the statute. Instead, the record simply used a shows that form that evidence that the with any interpretation of the vendor made any background check vendor § comment 1681b(b) (2) on 14 the JRK, had been provided to it by a third-party background check vendor. no § that it has urged throughout this litigation when it uninformed by any analysis, is of There provided JRK at all, much less that propriety of the release language. In sum, there is nothing in the record from which the Court could inf er that anyone at JRK made a decision as to what the word "sole 1 y" in 16 8 lb (b) ( 2) § requires or that anyone at JRK ever sought advice on whether inclusion of the release in the form was permissible, either at the time that JRK adopted the Form Standard Disclosure or at any point thereafter. Therefore, the "objective reasonableness" analysis called for by Safeco does not apply in this case. Relying Appeals for show that take on decisions from the Third Circuit, it "adopt [ed] advantage of the an the United States JRK contends that interpretation" "objectively Court it need not of the reasonable of statute to interpretation" safe harbor formulated by the Supreme Court in Safeco. See Long v. Fuges v. Sw. Tommy Hilfiger U.S.A., Fin. decisions Servs., do 707 Inc., F.3d hold that 671 F.3d 371 241 requiring {3d Cir. (2012}; 2012). evidence of And, an those express pre- litigation "interpretation" is "expressly foreclosed by Safeco, which held that evidence of subjective bad faith or intent of the defendant reasonable is irrelevant when interpretation of the conduct in question." there is an objectively statute that would allow the Long, 671 F.3d at 377 (citing Safeco, 551 U.S. at 70 n.20). The principle announced in Long and Fuges persuasive because both decisions 15 rest on the is not at faulty all premise that determining whether a defendant adopted, and acted on, a "reading" or "interpretation" of the statute requires an inquiry into "subjective bad faith" or "subjective intent." that view, Long and footnote in Safeco. 251-52. Fuges rely on an erroneous Long, 671 F.3d at 377; To support reading Fuges, of a 707 F.3d at That footnote actually reads as follows: Respondent-plaintiffs argue that evidence of subjective bad faith must be taken into account in determining whether a company acted knowingly or recklessly for purposes of § 1681n (a) . To the extent that they argue that evidence of subjective bad faith can support a willfulness finding even when the company's reading of the statute is objectively reasonable, their argument is unsound. Where, as here, the statutory text and relevant court and agency guidance allow for more than one interpretation, it would defy history and current thinking to treat a defendant who merely adopts one such interpretation as a knowing or reckless violator. Safeco, 127 S. Ct. at 70 n.20 (emphasis added). Of course, the footnote does deal with the topic of subjective bad faith and how that relates to whether a company's statute was objectively reasonable. not eliminate the rest of the interpretation of the However, that footnote does Safeco opinion, in which the Supreme Court quite clearly found that Safeco had, and had acted on, an interpretation violated the FCRA. of Indeed, the statute at the time that the footnote on which Long, and JRK rely clearly contemplates that a court can, 16 it Fuges, and should, determine a company's "reading" of the statute and consider the reasonableness of that subjective bad faith. reading And, without any inquiry into that is perfectly logical because having an interpretation and relying on it at the time of the allegedly offending conduct is not a matter of subjective bad Rather, faith at all. whether a company had, and relied upon, an interpretation at the time it allegedly violated the act is an objectively demonstrable inquiry that simply determines what the company knew about the law at the time that it took the actions that are alleged to have violated the law, and whether Accordingly, the it acted in reliance on that view of the law. Court declines JRK's invitation to adopt the views expressed in Long and Fuges. JRK also points immunity jurisprudence, to the to demonstrate jurisprudence. analogy to Supreme Court proposition defendant's Safeco to qualified that an actor's conduct and does not require the actor in familiarity with relevant the However, JRK overstates Safeco's reliance on the the qualified in that immunity Safeco the violation reasonableness inquiry, 3 in which requires was objectively reasonable, question analogy cited state is of analysis. Saucier the law relevant v. at to Although Katz 3 the the for time of 17 the the objective nowhere did the Supreme Court hold, 533 U.S. 194 (2001). the or even suggest, that it intended to substitute the qualified immunity analysis for the determination of willfulness under the FCRA that the Court so thoroughly laid out in the rest of its opinion. To the contrary, in qualified immunity only once, introduced by "Cf." Safeco, the Court mentioned in a parenthetical to a citation "Cf." is used See Safeco, 551 U.S. at 70. to introduce a citation when the "[c] ited authority supports a proposition different from the main proposition but sufficiently analogous to lend support. The Bluebook: 'cf. ' means 'compare. ' " A Uniform System of Citation {Columbia Law Review Ass'n et al. eds., HomeAdvisor, Literal 1 y, Inc., 20th ed. 102 F. 2015) Supp. at 59. See also Lengel v. 3d 1202, 1211 {D. Kan. 2015) {noting the limits of the analogy between qualified immunity and willfulness in Additionally, of the context of statutory interpretation) . the Safeco Court considered not only the "dearth guidance" in deciding that Safeco's interpretation objectively reasonable, but also considered other factors, as whether the defendant's the statutory text, foundation offered a in statutory "sufficiently interpretation. comparison the to Safeco, qualified text," and whether convincing 559 U.S. immunity whether JRK must have had, 69-70. does and acted on, the statute when it violated the FCRA. 18 little such reading had "a the justification" at was defendant for its Therefore, the to illuminate an interpretation of Given that the record shows that JRK never subscribed to a JRK, of "reading" or necessity, asserts that the Court may infer its interpretation "interpretation" of 1681b(b(2)' § of the law at the time that it violated the statute through its conduct: namely, the adoption and use of the form in question. However, the fact that JRK was sufficiently cognizant of the FCRA to know that it needed to provide applicants for employment with some sort of disclosure form does plausible inference that any employee, ( 1) had or 1681b(b) (2) whether subscribed to at inclusion permitted by legal all; or (2) of the the with give officer, any language or sought (3) respect or decision release to that to reading with in or rise a or agent of JRK interpretation made statute; otherwise, any not respect that acted of form on § to was advice, language. To the contrary, JRK takes the position that it simply used a form that it had received from a background check vendor, and that it relied on that vendor to interpret the law on JRK's behalf, even though there is no evidence that the vendor was ever retained for legal or compliance services. 2. JRK's Interpretation Is Objectively Unreasonable Even assuming, acted on not) urged an arguendo, "interpretation" that the of 1681b(b) (2) § record showed that in using the Standard Disclosure Form, by JRK was not objectively 19 (which JRK it does the interpretation reasonable because it is contrary to requires a disclosure. the unambiguous disclosure As the language document Court that has of 168 lb (b) {2) , § consists which "solely" previously noted, of the the word "solely" generally means "'to the exclusion of all else,'" and the language of the statute "does not qualify the word 'solely' or otherwise limit its meaning." Am., 92 F. Supp. omitted). 3d 425, 432 Milbourne v. (E.D. Va. 2015) JRK Residential (internal citation Therefore, JRK's interpretation is "foreclosed by the straightforward statutory text." F. 3d 853, Seamans v. Temple Univ. , 7 44 868 (3d Cir. 2014). JRK contends that the plain meaning of the word "solely" is put into question by the statutory provision permitting authorization to appear in the Standard Disclosure Form. argument is unavailing. To begin, the allowance of a an That limited exception allowing the inclusion of an authorization cannot be the basis for inclusion of obviously entitled to statutory rule. Moreover, Congress's failure to make anything an make the other else. express court "Congress exception may exceptions is within construe a from that such other Supp. 3d at 1211 exceptions were not intended." Lengel, 102 F. (internal citations omitted). Indeed, if Congress had desired to make surely another exception, it could have so provided. That Congress did not do so does not cast any doubt on the plain meaning of the word "solely." 20 Thus, "[t]he key factor distinguishing this case from Safeco ... is that the statutory provision at issue here cannot be called 'less-than-pellucid,' anything close to it." 2008 WL 4316950, at Safeco, [551 U.S. at 70], or Gillespie v. Equifax Info. Servs., LLC, *6 (N.D. Ill. Sept. 15, To 2008). the contrary, the statutory text is clear now and was clear when JRK started using the Standard Disclosure Form and throughout the class period. It is decisions as construing implemented period. true, the JRK notes, § Standard that 1681b (b) (2) Disclosure there at were the Form or no time during appellate that the it class For that matter, there is no appellate authority on the issue even today. In addition, by the end of the class period, district courts had reached differing conclusions on the issue. 4 Contrast Singleton v. Domino's Pizza, LLC, 2012 WL 245965, at *8 (D. Md. Jan. 25, 2012) with Smith v. Waverly Partners, LLC, 2012 4 JRK contends that the Court should consider the presence or absence of judicial and administrative authority as of late 2013, when Churcher, the class representative for the Impermissible Use Class, received and signed the Standard Disclosure Form. Cf. Saucier, 533 U.S. at 202 (for purposes of qualified immunity analysis, courts look to whether the law was clearly established at the time of the alleged constitutional violation) . However, other class members received the form as early as 2010. Thus, no single date within the class period stands out as the ideal elevation from which to survey the legal landscape. However, because JRK continued to use the same form throughout the class period, the Court finds it appropriate to examine the judicial guidance that existed in 2013. 21 WL 3645324 (W.D.N.C. Aug. 23, 2012). And, as JRK points out, it lacked the benefit of any binding authority from the FTC. However, a lack of judicial or administrative guidance cannot salvage an objectively unreasonable interpretation where the statutory text is Information Solutions, 2014) ; Supp. Follman v. 2d 960, text of [the] Partners, Inc., 71 F. e.g., Dreher Supp.3d 572, Hosp. Ill. 2007) v. Experian 580 Plus of Carpentersville, {N.D. 964 {E.D. Inc., (holding that, Va. 532 F. where "the statute is clear and open to only one reasonable interpretation ... a defendant's See, clear. dearth readings the only of guidance plausible.") . case decided does not render in Moreover, before or during [a] Waverly the class period that expressly permitted the use of release language, the court recognized that the violated the text of § the was release unclear, but inclusion of such 1681b {b) (2), permissible, because but ultimately found that not inclusion language actually because of the the release statute was not distracting as to undermine the purpose of the disclosure. WL 3645324, at *5-*6. was so 2012 In other words, as of 2013, no court had held that inclusion of release language complied with the text of the statute and at least one court had found to the contrary. See Singleton, 2012 WL 245965, at *8. In addition Burghy v. to Waverly, Dayton Racquet Club, JRK points Inc., 22 695 F. to the Supp. decision 2d 689 in {S.D. Ohio to 2010) However, support Burghy 1681b(b) (2) dealt as only "conspicuousness" in that case. alongside its of the part requirement, its language "solely" of with statute. the in of discussion the issue the dispositive which was § Id. at 699 ("[i]ncluding the explanatory language the disclosure language is logical, given their relationship, and the Court cannot conclude that the presence of the former renders the latter inconspicuous.") . Thus, Burghy does not aid JRK's argument. JRK also cites 2015 WL 3407899 2014 WL 5426862 Schoebel (M.D. (E.D. Fla. Cal. v. American May 27, Oct. 2015) 23, text although inclusion of a of the statute, the Ins. and Syed v. 2014) Co. , M-I LLC, in support of its Schoebel and Syed found argument on objective reasonableness. that, Integrity release may not comply with the meaning of the word "solely" in § 1681b(b) (2) is sufficiently flexible that inclusion of a release is not "objectively unreasonable." forth above, more Supp. the Court finds the decisions to the contrary much persuasive, articulated 3d 6231606, and therefore declines in Syed and Schoebel. at at However, for the reasons set 1211-12; *9 (W.D. Reardon Pa. v. Dec. 245965, at *9. 23 2, See, to e.g., the Lengel, view 102 F. Corp., 2013 WL Singleton, 2012 WL Closetmaid 2013); adopt Furthermore, issue, waiver the FTC expressly advised that inclusion of a liability would disclosure violate be disclosure. see shortly after the enactment of the section at § 168lb(b) (2)'s made a document in Hauxwell Letter, also Milbourne, 92 F. requirement consisting 3d at 431 opinion letters are persuasive authority, not binding} . And, as "solely" 1998 WL 34323756 Supp. noted above, that of the the (June 12, 1998); (noting that FTC even though they are the dearth of binding authority cannot rescue JRK's interpretation where, as here, the Dreher v. statutory text is unambiguous. Solutions, Inc., 71 F. Supp.3d 572, 580 Experian Information (E.D. Va. 2014). Nor does the dearth of appellate authority interject ambiguity into Therefore, otherwise clear statutory text. even assuming that JRK has sufficiently demonstrated that it had ever "interpreted" § 1681b(b} (2) (which it has not}, that interpretation was not objectively reasonable. CONCLUSION For the foregoing reasons, the record here does not permit a finding that JRK held, and acted on, an objectively reasonable "int e rp re tat ion" of 15 U. S . c . § 16 8 lb (b} ( 2 ) in vi o 1 at ing that statute by using the Standard Disclosure Form. is not entitled Accordingly, to the safe harbor Therefore, provided by JRK, Safeco. JRK's oral motion for judgment as a matter of law on the issue of objective reasonableness will be denied, and the 24 question of whether JRK's violation of § 168lb{b} {2} was knowing or reckless will be decided by the jury. 5 It is so ORDERED. Isl Robert E. Payne Senior United States District Judge Richmond, Virginia Date: August _Jj__, 2016 5 Because JRK seeks the Safeco safe harbor, it is logical that the burden of proving entitlement thereto should fall on JRK. However, in some of its briefs, JRK suggests that it is up to the Plaintiffs to prove that JRK's conduct was objectively unreasonable. Where that burden falls was somewhat confused by the Supreme Court's comment in Safeco that Safeco's reading was "not objectively unreasonable." Id. The parties have not squarely addressed the burden issue, but it is not necessary to resolve it here because no matter who has the burden, the record shows that JRK is not entitled to the Safeco safe harbor both because it neither adopted, nor acted on, any interpretation of § 168lb{b} {2}; and because, even if JRK's conduct could be regarded as an interpretation on which it acted when it violated § 168lb{b} (2), the interpretation was not objectively reasonable. 25
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