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Downing v. Haven Health Group LLC

United States District Court, D. Arizona

January 25, 2019

Justin Downing, Plaintiff,
v.
Haven Health Group LLC, Defendant.

          ORDER

          DOMINIC W. LANZA UNITED STATES DISTRICT JUDGE

         Pending before the Court is Defendant's motion, under Rule 12(b)(1), to dismiss Count One of the complaint for lack of standing. (Doc. 27.) As explained below, the motion will be denied.[1]

         BACKGROUND

         A. Factual Allegations

         The complaint was filed on May 23, 2018. (Doc. 1.) The following summary assumes the truth of all allegations contained therein.

         Under the Fair Credit Reporting Act (“FCRA”), codified at 15 U.S.C. § 1681 et seq., an employer that wishes to obtain and use consumer reports regarding its job applicants and employees must provide a “clear and conspicuous” disclosure of its intention to do so “in a document that consists solely of the disclosure.” (Doc. 1 ¶ 3.)

         In or around January 2018, Justin Downing (“Plaintiff”) was hired by Haven Health Group, LLC (“Defendant”).[2] (Doc. 1 ¶ 12.) During the hiring process, Plaintiff was presented with various disclosure and authorization forms. (Id. ¶ 13.) However, the form that disclosed Defendant's intention to obtain consumer reports concerning Plaintiff “was replete with extraneous information” (see Id. ¶ 14) and the separate form that sought authorization to obtain such reports was “similarly riddled with extraneous information” (see Id. ¶ 15). The presence of this extraneous information caused Plaintiff to become “confused as to the nature of the report being procured about him” and “deprived [him] of [his] ability to meaningfully understand and authorize the reports.” (Id. ¶ 16.) Plaintiff “wouldn't have authorized” Defendant to obtain his consumer reports “had a lawful disclosure been made.” (Id.)

         “Shortly after” Plaintiff was hired, Defendant obtained a consumer report pertaining to him, which revealed that Plaintiff had a criminal history. (Id. ¶ 17.) In February 2018, Defendant terminated Plaintiff's employment, effectively immediately, without showing him the consumer report and without providing any advance notice of its intent to take an adverse employment action. (Id. ¶¶ 18-19.)

         B. Legal Theory

         The complaint, which asserts claims on behalf of a class of similarly-situated individuals (see Doc. 1 ¶¶ 24-31), contains two counts. Count One-which is the only count challenged in the motion to dismiss-is a claim that Defendant willfully violated 15 U.S.C. § 1681b(b)(2)(A)(i) by failing to provide a clear and conspicuous disclosure, in a standalone form, of Defendant's intention to obtain consumer reports concerning its employees. (Doc. 1 ¶¶ 32-41.) Count Two is a claim that Defendant willfully violated 15 U.S.C. § 1681b(b)(3) by terminating Plaintiff without first providing a copy of his consumer report or providing notice of its intent to take adverse action. (Doc. 1 ¶¶ 42-50).

         DISCUSSION

         A. Legal Standard

         In Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016) (“Spokeo I”), the Supreme Court considered whether a plaintiff alleging a violation of the same regulatory scheme at issue in this case-the FCRA-had standing to pursue his claim. The Court began by reiterating several long-established standing principles, including that the plaintiff “must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision, ” that the plaintiff, “as the party invoking federal jurisdiction, bears the burden of establishing these elements, ” and that the injury-in-fact element is satisfied only if the plaintiff “suffered ‘an invasion of a legally protected interest' that is ‘concrete and particularized' and ‘actual or imminent, not conjectural or hypothetical.'” Id. at 1547-48 (citations omitted). The Court further stated that for an injury to be “particularized, ” “it ‘must affect the plaintiff in a personal and individual way.'” Id. at 1548 (citation omitted). And for an injury to be “concrete, ” it “must be ‘de facto'; that is, it must actually exist.” Id. The Court cautioned, however, that “concrete” is not “necessarily synonymous with ‘tangible.' Although tangible injuries are perhaps easier to recognize, . . . intangible injuries can nevertheless be concrete.” Id. at 1549.

         After articulating these standards, the Court applied them to the FCRA claim before it. The Court concluded, on the one hand, that standing doesn't automatically arise whenever a plaintiff alleges a violation of a statutory scheme. The Court explained that “Congress' role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right, ” that “Article III standing requires a concrete injury even in the context of a statutory violation, ” and that a plaintiff therefore cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” Id. at 1549. On the other hand, the Court recognized that “the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact. In other words, a plaintiff in such a case need not allege any additional ...


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