Thomas v. FTS USA, LLC et al, No. 3:2013cv00825 - Document 230 (E.D. Va. 2016)
Court Description: MEMORANDUM OPINION. Signed by District Judge Robert E. Payne on 6/30/2016. (sbea, )
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Thomas v. FTS USA, LLC et al Doc. 230 f IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division fl JUN 3 0 2016 0 :!) CLERK, U.S. DISTRICT COURl RICHf,iOND VA KELVIN M. THOMAS, et al., Plaintiffs, v. Civil Case No. 3:13-cv-825 FTS USA, LLC, et al., Defendants. MEMORANDUM OPINION This matter is before PARTIAL SUMMARY forth herein, JUDGMENT the Court on (ECF No. PLAINTIFF'S MOTION For 164). the reasons FOR set the motion will be granted in part and denied in part. BACKGROUND On December 11, 2013, a class action similarly ( \\ FTS") (Complaint Complaint Act, ("Compl.") allege respectively. behalf of himself and that defendant FTS Global "Defendants") 15 U.S.C. (ECF No. violations ("Thomas") Unitek of collectively, Reporting on alleging subsidiary ( ("Unite k") ; Credit complaint situated, a I Plaintiff Kelvin Thomas of 1)). § § had 1681 all filed others USA, Services, violated et seg. the LLC Inc. Fair ( "FCRA") . Counts One and Two of the 1681b(b) (2) (A) (i} and (ii}, Section 1681b(b} (2) (A} provides that: Dockets.Justia.com 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. 15 u.s.c. § 1681b(b) (2). Counts Three 1681b{b) (3) (A} (i) Four and and (ii} I allege violations respectively. Those of §§ sections require that: In using a consumer report 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. 15 u.s.c. On § 1681b(b} January 7, (3). 2016, the Court granted Thomas' certify two classes based on the allegations (ECF No. 105} . The Court first 2 to in the Complaint certified "Impermissible Use Class," defined as follows: motion a so-called All ·natural persons residing in the United States (including all territories and other political subdivisions of the United States) , who applied for an employment position with Defendants or any of their subsidiaries within the two years immediately preceding the filing of the Complaint in this matter on December 11, 2013, and as part of this application process were the subject of a consumer report obtained by Defendants, (a) where the defendants failed to provide a writ ten disclosure as stated at 15 U.S.C. § 168 lb (b) ( 2) (A) ( i) to the applicant that they intended to obtain a consumer report for employment purposes, (b) and where as a result the Defendants failed to obtain a proper written authorization as stated at 15 U.S.C. § 1681b(b) (2) (A) (ii) signed by the applicant prior to obtaining the consumer report. (ECF No. 105). The Court also certified an "Adverse Action Sub-Class,n defined as follows: All natural persons residing in the United States (including all territories and other political subdivisions of the United States), who applied for an employment position with Defendants or any of their subsidiaries within the two years immediately preceding the filing of the Complaint in this matter on December 11, 2013, and as part of this application process were the subject of a consumer report obtained by Defendants, (a) where the defendants failed to provide a written disclosure as stated at 15 U.S.C. § 1681b {b) (2) (A) (i) to the applicant that they intended to obtain a consumer report for employment purposes, (b) and where as a result the Defendants failed to obtain a proper written authorization as stated at 15 U.S.C. § 1681b(b) (2) (A) (ii) signed by the 3 applicant prior to obtaining the consumer report, and (c) whom Defendants found ineligible for the position for which the applicant had applied based on the applicant's consumer report; (d) to whom Defendants did not provide a copy of the consumer report as stated at 15 U.S.C. § 16Blb (b) ( 3) (A) ( i) at least five business days before the date the adverse employment decision is first noted in Defendants' records, (d) and to whom Defendants did not provide a written summary of Fair Credit Reporting Act rights as stated at 15 U.S.C. § 16Blb(b) (3) (A) (ii) at least five business days before the date the adverse employment decision is first noted in Defendant's records. Id. After conducted the Court limited certified the the classes, post-certification discovery. parties The Court granted leave for Defendants to file a second motion for summary judgment "limited to Representative Kelvin Release that the Form following Thomas' he two issues: understanding signed at employment with FTS USA, LLC; and b. the of time a. the he Class Employment applied for Plaintiffs' damages." (ECF No. 124). 1 After summary [sic] the close judgment, in of discovery, which he Thomas seeks questions other than damages." filed a motion summary judgment ( ECF No. 164) . for "on al That is, Thomas contends that he is entitled to summary judgment on the 1 DEFENDANTS' SECOND MOTION FOR SUMMARY JUDGMENT {ECF No. has been denied by separate Memorandum Opinion and Order. 4 156) issue of liability on all counts and on the issue of {Memorandum in Support of Plaintiff's Motion for willfulness. Partial Summary Judgment ("Pl. Mem.," ECF No. 165) ) . A. Factual Background In September Communications 165-2) FTS. employment No . with "Employment obtained a 38 FTS, Release job with Cableview which was purchased by FTS in the (Deposition of Kelvin Thomas at 12). ( EC F Thomas ( \\Cableview"} , fall of 2011. No. 2009, (\\Thomas Dep.," ECF Defendant UniTek is the parent company of at on 6, <JI 2) . January Statement," In 17, which order 2012, to continue Thomas provides, in part: Prior to and for the duration of my employment with FTS USA, LLC {the \\Company"), I understand that investigative background inquiries are going to be made on myself (sic] . I understand that the Company will be requesting information from various Federal, State, Local and other agencies which maintain records concerning my past activities relating to my driving history, credit, criminal, civil, and other experiences. These reports may also include inquiries regarding my educational history and past work experience and performance including reasons for termination of employment. I authorize, without reservation, any party or agency contacted by the Company or its agents to furnish any of the above mentioned information or any other information requested. 5 signed his an pertinent (ECF No. 92 Defendants' the Ex. to Steven corporate designee under Fed. Employment Uni Tek' s According 1). Release standard prospective Statement disclosure (Deposition of Steven Conlin Thomas which was 30(b) (6), P. received provided was to all period. class relevant the ("Conlin"), Civ. R. that form, during employees Conlin 165-1) ("Conlin Dep.," ECF No. at 58) • After its acquisition of Cableview, FTS required every Cableview employee who wished to continue employment with FTS to undergo a UniTek's background internal check. hiring (ECF policies 38 No. provided 3, at that 7-10). "[a) pending employee may not be eligible for hire" if the employee has been charged with or convicted of certain felonies, driving offenses, or other "unacceptable" crimes. misdemeanors, 11 Id. at 12. On or about January 20, consumer report-related and ... FTS," ordered a 2012, UniTek, functions behalf on Backgroundchecks.com ("BGC"), a consumer reporting agency. (ECF Ex. D). BGC performed all background consumers who applied for employment with FTS, engaged various background employees. other checks on consumer its reporting other (Conlin Dep. at 73). 6 on itself from 99, check of Thomas No. background which performed "all checks for but UniTek also agencies subsidiaries' to perform potential BGC' s initial convictions, report knowledge of a (ECF No. revealed that Thomas' violations, Thomas as was well at all juvenile, driving as a of 38, of carnal and were incorrectly The report also C). record contained several moving report of a 2011 Thomas Id. fault. rape, which Ex. felony distribution for statutory laundering, attributed to Thomas. contained numerous convictions including money marijuana, on Thomas accident was not in which afforded an opportunity to review or address the contents of that report. On March 12, 2012, Thomas' supervisor informed Thomas that, as a result of his driving record, he was ineligible for the position for which he had applied. Conlin Dep. at 136). ( ECF No. On that same date, 38, Exs. E, F; an FTS representative provided Thomas with an edited copy of the BGC background check, which included some of the erroneous convictions. at 21). Thomas then check was inaccurate. background check that confirmed that Thomas' informed Id. Defendants that (Thomas Dep. his background Thereafter, BGC provided an updated reflected no criminal charges, driving record was accurate. but (ECF No. 38, Ex. D). It is undisputed that Thomas was never given a copy of the background check before March 12, 2012, and that Defendants did not ever provide Thomas with a summary of his rights under the FCRA. In fact, Defendants never 7 provided either of these documents to according their to any current Defendants, they third-party vendors (Conlin Dep. belief at or were would under provide employees the the because, impression that required notices. Defendants claim to have held that 121-122). notwithstanding potential the absence of any provisions to that effect in the contracts between Defendants and their background check vendors. (ECF Nos. 165-9, 165-11). DISCUSSION A. Lega1 Standard Summary judgment is proper when there is no genuine issue as to any material fact in the case such that the moving party is entitled to judgment as a matter of law. 56 (c). See Fed. R. Civ. P. Once the moving party properly files and supports its motion for summary judgment, the opposing party must show that a genuine issue of fact exists. See Matsushita Elec. Indus. Co v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). A fact is material if the existence or non-existence thereof could lead a jury to different resolutions of the case. See Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 248 genuine issue of material fact only exists when (1986). the A opposing party has presented sufficient evidence upon which a reasonable jury could return a verdict in its favor. Id. This means that "summary judgment is only appropriate when, after discovery, the non-moving party has failed to make 8 a 'showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.'" BM v. Chesterfield County School Dist., 2010 WL 145661, at (E.D. *l U.S. 317, Va. 2010) 322 (quoting Celotex Corp. In (1986)). considering v. Catrett, motions for 477 summary judgment, the court must consider the evidence in the light most favorable to the party. non-moving Commonwealth Univ., 84 F.3d 672, v. Smith Virginia 675 (4th Cir. 1985). B. Plaintiffs are Entitled to Summary Judgment that the Employment Release Statement Violates 15 u.s.c. § 1681b (b) (2) (A) (Counts One and Two) In the support of Employment the motion Release (Counts One and Two), Order (ECF JUDGMENT No. ( ECF No. Employment the for Statement Plaintiffs' 59) denying 37), summary violates brief on the Court's MOTION without FOR SUMMARY elaboration, "does Statement 1681 (b) (2) (A) § relies DEFENDANTS' which states, Release judgment on whether not that satisfy the disclosure and authorization requirements set forth in 15 U.S.C. § 1681b (b) (2) However, •II in Defendants' Second Motion for Plaintiffs elaborate that contend that that consumer a "actually data the on disclosure report misdirects the source--government Plaintiff's Summary Judgment position. form will does be reasonable agencies." 9 Opposition not First, consumer because to No. 176), Plaintiffs "clearly" obtained (ECF (ECF No. to an 176 disclose the form alternate at 8). Moreover, law not "the disclosed government agencies are as a matter of capable of definition not furnishing 'consumer a 'consumer reporting Plaintiffs contend that Defendants' not does contain the report' and are by Id. agencies.'" Second, Employment Release Statement required authorization by § 1681b(b) (2) (A) (ii), because the form does not actually authorize Defendants to obtain applicants' form actually agenc [ ies] of the to release presented those "third authorizes only form)." consumer reports; [the consumers' ] Id. at same At 9-10. arguments in party records oral support of responded to those arguments. the governmental (hence the name argument, pending motion for partial summary judgment Defendants rather, Plaintiffs their (ECF No. For the currently 164), and reasons set forth below, the Court finds both of those arguments persuasive. 1. The Emp1oyment Re1ease Statement The text of the Employment Release Statement consists of the following: Prior to and for the duration of my employment with FTS USA, LLC (the "Company"), I understand that investigative background inquiries are going to be made on myself [sic]. I understand that the Company will be requesting information from various Federal, State, Local and other agencies which maintain records concerning my past activities relating to my driving history, credit, criminal, civil, and other experiences. These reports may also include inquiries regarding my educational history and past work experience and performance 10 disclosure including employment. reasons termination for of I authorize, without reservation, any party or agency contacted by the Company or its agents to furnish any of the above mentioned information or any other information requested. A photocopy of this document is considered to be as valid as the original document. ( ECF No. 165-3) name the of At the top of the form, (emphasis added) . company for which the background check is the being performed is printed next to its logo, and "*Employee Candidate* Employment Release Statement" Beneath the quoted text, is printed in large, bold type. spaces are provided for the applicant or employee to sign and date the form and to print the project location, the considered, phone and number, position for which the the applicant's full social security number, name, driver's license number and issuing state. of the form, Minnesota applicant is current date of Id. being address, birth, and At the bottom there is a space where "(r]esidents of California, and Oklahoma only" can signify with they "would like the background vendor to mail [their) consumer report(s) ." a checkmark [them] a copy of Id. 2. Applicable Legal Framework Section 1681 (b} (2) (A) requires that: Except as provided in subparagraph {B) (dealing with applications for employment by mail, telephone, or computer], a person may 11 if 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 documents referred to in clause (i)) the procurement of the report by that person. 15 U.S.C. § 168lb(b) (2) (A). 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. § 168la(d). In turn, a "consumer reporting agency" is defined as: any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports. 15 u.s.c. § 1681a(f). 12 Importantly established for that purposes of governmental this motion, agencies it are is not well- consumer reporting agencies because governmental agencies do not compile information on persons "for the purpose of furnishing consumer reports to third parties[,]" and because subjecting governmental agencies to the FCRA could potentially give rise to a host of constitutional issues. Inc., 2011 WL 864332, Busch Entm't Corp., Logically, then, See, e.g., Arnold v. Capital One Servs., at *4 (E.D. Va. Mar. 10, 2011); Smith v. 2009 WL 1608858 (E.D. Va. June 3, 2009). because a consumer report must be furnished by a consumer reporting agency, a background report furnished by a governmental agency cannot be a "consumer report." a. Clarity Although the FCRA § 1681b (b) (2} (A) require that the and several other provisions of consumer a receive "clear and conspicuous" disclosure of certain information, the statute does not define provision. "clear and conspicuous" Furthermore, there is to Uniform ("TILA"), FTC commentary, Commercial Code as well ("UCC") it relatively authority interpreting this requirement. looked as as and appears little any judicial Therefore, courts have decisions Truth in both of which contain the same language, 13 in applying the Lending Act to determine the meaning of "clear and conspicuous" under the FCRA. 2 Cole v. (citing U.S. Stevenson Capital, v. TRW 389 F.3d 719, Inc., 987 729 F.2d (7th Cir. 288, 295 2004) (5th Cir. 1993)}. FTC commentary and judicial authority interpreting the FCRA and TILA teach "reasonably that "clear" disclosures See 16 understandable." Capital One Bank (USA) N.A., 28 F. to consumers must C.F.R. Supp. 680.3; § 3d 575, 591 Murr be v. (E. D. Va. 2014}; Reardon v. ClosetMaid Corp., 2013 WL 6231606, at *6 (M.D. Pa. 2004) (holding satisfactory form, the because amount of that a it was "in a on the page text disclosure appear [ed] in such readily that it Recently, [was] describing the "understandable" syntax and avoid FTC should or "use technical in of the document consumer."). the context elaborated clear jargon. DOT COM DISCLOSURES: How TO MAKE 2 EFFECTIVE of that language and Disclosures should be as simple and straightforward as possible." COMM' N, and the the to further was understandable minimal, sentence disclosures disclosures legalese [was) noticeable required disclosure reasonably the opening advertising, digital 168lb(b) (2) (A) § DISCLOSURES FED. IN TRADE DIGITAL Because the Employment Release Statement fails to satisfy the "clarity" and "authorization" requirements of § 168lb (b) (2) (A), there is no need to consider whether the disclosure is "conspicuous." Therefore, the remainder of the discussion herein addresses only the clarity and authorization requirements. 14 ADVERTISING 21 whether a assessed However, (2013}. disclosure "in light is of as the Third Circuit has noted, "reasonably the disclosed. The discussed." Applebaum v. understandable" difficulty benchmark is the Nissan of the nature must matter of the Motor Acceptance that the be being matter Corp., 226 F.3d 214, 220 (3d Cir. 2000}. Plaintiffs Employment avoids do not Release legalese dispute Statement and is technical the and In jargon. in straightforward, simple, language the that sense, Employment Release Statement is "reasonably understandable." the Court has previously noted, raises the question: however, what, As that conclusion merely exactly, must be reasonably understandable for a disclosure form to satisfy the requirements of § 168lb(b} (2)? Milbourne v. JRK Residential Am., LLC, 2016 WL 1071570, at *7 (E.D. Va. Mar. 15, 2016). In this case, it is reasonably understandable from the Employment Release Statement that Defendants would be obtaining background reports that are not consumer reports. The Employment Release Statement specifies that "the Company will be requesting other information agencies [. ] " from various The explicit Federal, State, reference to Local and gathering information from "Federal, State, [and] Local" agencies strongly implies are that "other agencies" governmental as well. 15 governmental or quasi- From the conclusion standpoint follows from sociis, reading however, same consumer, comprehension that skills. two basic canons of textual result. Russell Motor Car Co. (1923). which the reasonable The first, noscitur a instructs that "a word may be known by the company it keeps." 519 teach the simple From a legal perspective, interpretation of v. United States, The second, ejusdem generis, follow specified." specific Gooch v. ones to 514, "limits general terms matters United States, 261 U.S. similar 297 U.S. 124, to 128 those (1936). Both of those canons reinforce the conclusion that follows from applying the "other" must "federal, elementary be concept interpreted state, (and] of in local." harmony Thus, the Employment Release Statement, apprehend directly that from Defendants various reporting as information to the would be Defendants Court's recent (Memorandum of sources that decision in Partial Summary Judgment in agencies, the § this companions Mem. information consumer disclosure misleads their misdirection personal does not by the 168lb (b) (2) (A). case Milbourne, 16 word not which That Opposition ("Def. its requesting from obtained. contend Law be put, satisfy the clarity requirement of with the the reasonable consumer would would Simply clues: based on the language of governmental agencies. consumers context to is governed 2016 Plaintiff's WL 1071570. Motion in Opp.," ECF No. 166) for at 18-20). for In that case, summary judgment even "background on the adequacy though 168lb(b) (2), its disclosure report" contain However, the the Court granted the defendant's motion phrase in lieu of "consumer of the form "consumer reporting form used report" under the term and did Id. agency." § at not *8. there is a crucial distinction between the disclosure form at issue in Milbourne and the Employment Release Statement at issue here: the disclosure form in Milbourne, even though it did not provide specific information as to the origins of the background reports, to the sources obtained. did not from which Here, the affirmatively mislead consumers their personal text of the as information would be Employment Release Statement tells the consumer that Defendants would be procuring background reports directly from government sources, of reliability information agencies, that would unspecified which are or be absent revealed notoriously to giving an impression were be the consumer inaccurate. source of reporting Therefore, the Employment Release Statement is easily distinguishable from the standalone disclosure form found to be sufficient in Milbourne. Moreover, the the appearance of the term ''consumer report" at very bottom of save Defendants. the Employment (Def. Mem. that portion of the form, the consumer's signature, in Opp. Release at 21). Statement does not The full text of found beneath the blank designated for provides: 17 "Residents of California, Please check here if you would like Minnesota and Oklahoma Only: the background vendor ( ECF No. report." to mail 165-3) you a copy of your consumer Located at (emphasis in original) . the end of the last sentence at the bottom of the form, the candidate's Presumably, conspicuous. sentence, term the certainly is given the bolded who are most consumers Minnesota, form. information, beneath preface not residents to not that of California, and Oklahoma would not even read that section of the In any event, the inclusion of phrase the "consumer report" at the end of the form is insufficient to clarify the prominent and misleading disclosure above disclosure found in the Employment Therefore, the Statement does not it. Release satisfy the clarity requirement of § 1681b(b) {2). b. Authorization Section 168lb(b) (2) consumer's written also requires that a person obtain the authorization report for employment purposes. before obtaining a consumer 15 U.S.C. § 168lb(b) (2) (A) (ii). The Employment Release Statement does, at first to contain an authorization. as Plaintiffs point out, However, glance, appear the authorization in the Employment Release Statement does not authorize Defendants to obtain a consumer Employment Release Statement actually provides: without reservation, Company or its agents any to party furnish 18 or agency any of report. "I authorize, contacted the above The by the mentioned (ECF No. information or any other information requested." 3) That sentence plainly authorizes persons (emphasis added). contacted by information 165- Defendants to release the plaintiffs' personal It does not purport (hence the name of the form). to authorize Defendants to obtain that information. Moreover, for the reasons set forth in the preceding section, the text preceding the authorization gives leads to the conclusion that authorization actors. the refers phrase to "party federal, or agency" state, or found local in the governmental Thus, even if one were to assume that the authorization language implicitly also authorized the pursuit of information by Defendants (which it does not), immediately preceding disclosure the information report." released Therefore, by the misleading nature of the forecloses the the authorization inference that is a "consumer the Employment Release Statement also does not satisfy§ 168lb(b) (2) (A)'s "authorization" requirement. For the foregoing reasons, Plaintiffs' motion for summary judgment that the Employment Release Form violates § 1681b(b) (2) will be granted. C. P1aintiffs are Entit1ed to Summary Judgment that Defendants Vio1ated 15 U.S.C. § 168lb(b) (3) (Counts Three and Four) Plaintiffs judgment that contend that Defendants "[n] either UniTek nor any of they violated its 19 are § entitled to 168lb(b) (3) subsidiaries, summary because including FTS, ever provides action is to applicants taken based or employees upon their against consumer whom adverse reports any pre- adverse action notice or a copy of their consumer reports or a summary of their FCRA rights as required by § 168 lb (b) ( 3) (A) ( i) and (ii)." al though (Pl. Mem. at 6-7). Defendants Moreover, apparently believed Plaintiffs argue that, that background check vendors were sending the their third-party required pre-adverse action notices, the vendors never actually did so. Id. at 7. Section 1681b(b) (3) requires that: In using a consumer report 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 168 lg ( c) ( 3) of this title. 15 u.s.c. § 168lb(b) (3). The FCRA defines an "adverse action" in this context as "a denial of employment or any other decision for employment purposes prospective employee." Conlin, Defendants' Civ. P. 30(b) (6), that adversely affects any current or 15 U.S.C. § 1681a(k) (B) (ii). designee on this topic under at 104-105, R. specifically testified that neither UniTek nor any of its subsidiaries sent any such communications. Dep. Fed. 133). Thus, (Conlin the undisputed record shows that Defendants never sent the required information to Adverse Action 20 Sub-Class members before taking adverse employment action. Conlin testified that "[t) he pre-adverse was always handled by the background vendors." (Def. Mem. in Opp. at 27-30; Conlin Dep. at 104). However, the record disproves Defendants' assumption that its background check vendors provided the required notices. example, the Service Agreement between FTS and BGC For actually provides that, before taking adverse employment action based on a "the Customer BGC report, copy of the writing, 165-11, that report to Defendants J will provide a [i.e., the individual and a description, (ECF No. of the individual's rights under the FCRA." at 1). BGC did BGC' s president, not send 1681b(b) (3) notices the Service Agreement between UniTek and CSS Test, mention of Plaintiffs § background 168lb{b) (3) point out, check notices. "neither of Defendants' Similarly, another Declaration on (ECF ("CSS"), 165-10, also testified behalf. Inc. No. § Craig Kessler, in Craig vendor, {ECF UniTek No. nor FTS Kessler). provides 165-9). have no As produced copies of any pre-adverse action notices that were sent to any member of the adverse action class. " 3 3 {Pl. Mem. at 7) . On this In conjunction with their motion for summary judgment, Defendants filed a declaration with previously undisclosed evidence relating to adverse action notices sent by CSS. ( ECF No. 159) . However, Defendants failed to timely disclose that evidence in accordance with the rules of discovery and the Court's previous orders. Therefore, on Plaintiff's motion, the 21 record, Defendants have presented no genuine dispute of material fact to show that they or their third-party vendors provided the required information to any members of the Adverse Action SubClass in conjunction with the Accordingly, Defendants. class summary members' judgment employment will be with granted in favor of the Adverse Action Sub-Class on the issue whether the Employee Release Statement violates § 1681b(b) (3). D. Plaintiffs are Not Entitled to Issue of Willfulness. Nearly the their motion willfulness. violations of entirety for summary of Plaintiffs' brief in FCRA were Plaintiffs willful argue because ignored their obligations to comply with literally no FCRA procedure, that FCRA: no compliance review, review of the process or the need for a policy. of issue of Defendants' Defendants the the support judgment is directed to the Essentially, the Summary Judgment on simply they "had no attorney Nothing." (Pl. Mem. at 13). In Safeco Ins. Co. v. Burr, the Supreme Court relied on the common law definition of "willfulness" to conclude that willful violations of the FCRA include reckless knowing or intentional violations. 551 violations as U.S. the common law understanding of willfulness, 47 (2007). well as Under the term included "not only knowing violations of a standard, but reckless ones as Court struck that evidence, this case. (ECF No. 217) . and 22 it will not be considered in well." Id. Court at then 58 (internal defined unjustifiably high citations recklessness risk of harm as ''action that obvious that it should be known.'" The Supreme omitted) . is entailing either known 'an or so Id. at 68 (quoting Farmer v. Brennan, 511 U.S. 825, 836 (1994)). Accordingly, a company "does not act in reckless disregard of [the FCRA] unless the action is not only a violation under a reasonable reading of the statute's terms, company ran a than the risk of violating the risk careless." associated Id. at with shows that the law substantially greater a reading Conversely, 69. but that was merely where a party acts on an interpretation of the FCRA that has some basis in the statutory text, and there is no contrary guidance from the Federal Trade Commission or objectively held that Dalton v. (internal Bank, high judgment possessed a appeals, and, risk is of citation party's therefore, is Assoc. a question Indus., omitted); 123 F. Toys "R" us, of mind," see Supp. 527 F. 23 actions do Id. at 'seldom appropriate' willfulness Capital the harm. particular state Nat' 1 Ass'n, Edwards v. of unreasonable unjustifiably "summary courts not Inc., involve 69-70. on courts of are fact for 257 F.3d a party frequently the jury. 409, also Manuel v. Wells 3d 810, 829 (E.D. Va. Supp. 2d 1197, 1210 an Because whether have not 418 Fargo 2015); (C.D. Cal. 2007) ("Willfulness under the FCRA is generally a question of fact for the jury."). Plaintiffs have presented no evidence that Thus, knowingly or intentionally violated the FCRA. must show that Defendants' unjustifiably high obvious it that (internal risk should citation of violations harm be that known.'" omitted) . The is Plaintiffs "'an constituted either Safeco, Court Defendants known or so U.S. at 68 551 cannot conclude that that is so as a matter of law. First, as to the Impermissible Use Class, not shown that Defendants' objectively unreasonable. interpretation of As § Plaintiffs have 168lb (b) (2) was the Court observed in Milbourne, administrative and judicial guidance concerning 168lb(b) (2)'s § clarity requirement is all but non-existent, and district courts have differed on whether the phrase "consumer report" or ''consumer reporting agency" must be included in the disclosure. 2016 WL 1071570, at *9. Indeed, the Court in Milbourne noted that that case was "a close one." Id. at *8. Court summary declines Defendants' to resolve on Therefore, judgment the whether adoption of the Employment Release Statement was a willful violation of the FCRA. Second, cannot say unreasonable as to as a for the Adverse matter of Defendants Action law to 24 Sub-Class, that rely it on the Court was objectively their third-party background check vendors In opposing Plaintiffs' to supply pre-adverse action notices. motion on this point, Defendants first point to several e-mails from BGC that Defendants interpreted to mean that BGC Defendants' contend took would behalf. that steps pre-adverse {ECF their to send No. violations educate not and his willful Third, Defendants add, review UniTek began procedures, post-adverse Al though action notices. Defendants' proof on whether Defendants' vendors was this point on Conlin the FCRA. after an internal sending (Conlin on Defendants because successor (Conlin Dep. at 116) . of notices Second, 168-2). were himself action its pre- at Dep. own 114-115). appears rather and thin, purported reliance on their background check objectively unreasonable remains a question best suited to resolution at trial. For the foregoing reasons, Plaintiffs' motion for summary forth above, judgment on the issue of willfulness will be denied. CONCLUSION For the reasons, PLAINTIFF'S MOTION FOR and to the extent, PARTIAL SUMMARY set JUDGMENT (ECF No. will be granted in part and denied in part. It is so ORDERED. /s/ flt/ Robert E. Payne Senior United States District Judge Richmond, Virginia Date: June 30, 2016 25 164)
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