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Williams v. First Advantage LNS Screening Solutions Inc.

United States District Court, N.D. Florida, Gainesville Division

March 2, 2017

Richard Alexander Williams, Plaintiff,
First Advantage LNS Screening Solutions, Inc., f/k/a LexisNexis Screening Solutions, Inc., Defendant.


          Mark E. Walker, United States District Judge

         You're a college-educated, law-abiding citizen with no criminal record. Given the abysmal post-recession job market, you cast a broad job-search net. Many employers deny you, few interview you, and even fewer seriously consider you for a position. Finally, you hear the words that you have been waiting for: “Welcome aboard (pending a criminal-background check)!” But you have nothing to fear-you've never been arrested, let alone convicted of a crime. Nonetheless, you eventually receive a letter notifying you that, apparently, you were arrested and convicted for selling cocaine. Knowing that to be untrue, you successfully dispute the report. But it's too late-the employer already hired somebody else for the job.

         Dejected, you continue your search and, after an even more strenuous search, you finally hear those magic words again. Yet this time, you receive a letter notifying you that you committed burglary and aggravated battery on a pregnant woman. You're disgusted to have been accused of such a heinous crime, and you, yet again, successfully dispute the report. Déjà vu; it's too late, the employer has moved on, and it takes five months for you to convince them that you are not a criminal so that they are finally willing to bring you on board. What are you to do-give up and accept your fate, or file a Fair Credit Reporting Act lawsuit?

         The Plaintiff in this case, Richard Williams, [1] chose the latter option. He claims that Defendant First Advantage Background Services Corp. (“First Advantage”)-a consumer reporting agency (“CRA”) that runs background reports on potential employees for various employers-erroneously reported criminal records for a different person (career criminal “Ricky” Williams) on two different occasions. He filed suit against First Advantage, [2] alleging that it violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq.

         After this Court granted summary judgment in favor of First Advantage on two of Plaintiff's FCRA claims, ECF No. 123, the remaining claims were tried by a jury. After Plaintiff's casein-chief, First Advantage moved under Rule 50(a) for judgment as a matter of law and argued, in relevant part, that no reasonable jury could conclude (1) that it willfully or negligently violated the FCRA; (2) that Plaintiff was entitled to reputational damages; and (3) that Plaintiff properly mitigated his damages. Tr. at 399- 426. This Court denied First Advantage's motion as to the negligence argument, the damages arguments, and took the willfulness argument under advisement. Tr. at 444-45. After First Advantage presented its case, the jury found in Plaintiff's favor and awarded him $250, 000 in compensatory damages and $3, 300, 000 in punitive damages. First Advantage now renews its motion for judgment as a matter of law and, in the alternative, seeks a new trial. ECF No. 207 (motion); ECF No. 208 (memorandum). For the reasons set forth below, that motion is DENIED.


         A. First Advantage's Business, Policies, and Procedures

         First Advantage is a CRA that provides a variety of background-screening products and services. One of its primary services is running criminal-background checks on prospective employees for employers. The employers identify the background search's scope, their specific hiring criteria, and provide identifying information (typically first name, last name, and date of birth) for the prospective employee (or, in FCRA terms, the “consumer”). First Advantage then runs that search and applies the employer's hiring criteria to suggest whether the consumer is “eligible” or “ineligible” for employment.

         Most of First Advantage's criminal-background searches are run through its National Criminal File, a self-maintained database of criminal records. Tr. at 464. If an employer orders a National Criminal File search, First Advantage runs the consumer's identifying information through an automated search of that database and First Advantage's Records Adjudication Team “adjudicates” that application by reviewing any “hits” to determine whether they can be matched with the consumer. Pursuant to First Advantage's policies and procedures, it will only include a criminal record in a consumer's background report if that record contains two “identifiers”-for example, first-and-last[3] name (which counts as one identifier), social security number, driver's license number, date of birth, address, etc.- that match those for the consumer, which are provided by the employer.

         Difficulties arise, however, if the consumer has a common name. In that scenario, First Advantage will only include a criminal record in the criminal-background report if that record either contains three matching “identifiers” (as opposed to two) or if a supervisor approves the record and notes that additional attempts were made to identify a third matching identifier. Tr. at 314-15. That process may include, for example, running a credit-bureau report (for example, Experian or Equifax) to crosscheck addresses, middle initials, or social security numbers. Tr. at 314. Moreover, if a common-named consumer matches a criminal record for an individual with a different address, First Advantage is “supposed to go to use Experian and develop some address history information.” Tr. at 318. First Advantage, however, approves only a limited number of its staff to run those reports. Tr. at 317-18.

         Assuming that a criminal record is matched with a consumer, that consumer has the ability to dispute its accuracy. First Advantage will then review any information provided by the consumer and will order copies of the underlying record to determine whether the criminal record was erroneously matched with the consumer. If the match was erroneous, First Advantage will remove the record from the report and will apply a “case block” so that the same disputed record is not erroneously matched at a later date. Unlike many credit bureaus, however, First Advantage has not implemented “cross-blocking” or “flagging” procedures that block any and all erroneous records from one individual (the criminal) being matched with another (the consumer) again. Tr. at 358-60.

         First Advantage-which charges approximately $11 to $12 for each background report-prepared 3, 554, 163 background reports between 2010 and 2013 containing public-record information on a nationwide basis. Tr. at 93-94. Of those approximately 3.5 million reports, 17, 431 were disputed, 14, 346 resulted in a revised background report, [4] and 13, 392 of those revised reports were based on disputes where the consumer complained that a public record in his or her report belonged to another individual.[5] Tr. at 93-94. That amounts to a .38% inaccuracy rate[6] nationwide.[7] Tr. at 95.

         B. Plaintiff's Missed Opportunities

         After graduating with his bachelor's degree in criminology, Plaintiff applied in February 2012 for an Account Representative position at a Rent-A-Center store in Chiefland, Florida, where he had lived his entire life. Tr. at 26, 34. As part of that application process, Plaintiff agreed to undergo a drug test (which he passed) and a criminal-background check. Tr. at 116.

         Rent-A-Center contracted with “Lexis Nexis”[8]-which has since been acquired by First Advantage-to perform these types of background checks and “adjudicate” applicants. As a part of its background check, First Advantage searched the National Criminal File and conducted a public-record search in Levy County. Tr. at 260, 263. Although the Levy County public-record search came back clean, the National Criminal File search “matched” Plaintiff with a 2009 sale-of-cocaine record[9] from Palm Beach County, Florida for “Ricky” Williams based on his name and date of birth. Tr. at 260. First Advantage verified that those records existed and that the information was “complete” by researching Palm Beach County court records online. Tr. at 261. Despite the fact that Palm Beach County is approximately 300 miles from Chiefland, tr. at 378, Plaintiff was deemed ineligible for employment by Rent-A-Center pursuant to Rent-A-Center's hiring criteria, tr. at 125. Critically, although First Advantage acknowledged that “Richard Williams” is a common name, it did not obtain three identifiers for that record or obtain supervisor approval to include it in the report. In fact, First Advantage mistakenly placed Plaintiff's social security number in the background report even though that was not used in matching him to that record. Tr. at 287.

         First Advantage then sent the report (and adjudication of ineligibility) to Rent-A-Center, tr. at 96, and notified Plaintiff that it was reporting the cocaine record to Rent-A-Center, tr. at 117-18. Appalled, Plaintiff disputed the cocaine record and, in support, provided his social security number and a copy of his driver's license. Tr. at 126. First Advantage then reopened the investigation and, pursuant to its policies and procedures, obtained hard copies of the underlying court records. Plaintiff's dispute was resolved in his favor based on the difference between the 6'2” height listed on “Ricky” Williams's court records and the 5'10” height listed on Plaintiff's driver's license. Tr. at 264-65. Evidence presented at trial also established that the reinvestigation revealed that “Ricky” Williams's listed address was in Boynton Beach, Florida-not Chiefland, Florida. Tr. at 265-66. First Advantage thus removed the criminal record from Plaintiff's report. Unfortunately, that resolution was too late for Plaintiff-Rent-A-Center had already moved on and hired somebody else for the position. Tr. at 127.

         Undeterred, Plaintiff continued applying for a multitude of jobs. Plaintiff was eventually hired as a 911 dispatcher at the Levy County Sheriff's Office. Tr. at 135. While in the academy, however, Donna Capps-the communications supervisor- informed Plaintiff that he “wasn't meeting requirements.” Tr. at 136. Plaintiff thus decided to leave the academy. Id. Plaintiff later obtained a part-time job at a Kangaroo gas station in Williston, Florida-which is quite some distance from Chiefland-but left that job too because all his pay was being spent on fuel to travel to and from work. Tr. at 137-38. Neither the Levy County Sheriff's Office nor Kangaroo retained First Advantage to run their criminal-background checks.

         In early 2013, Plaintiff applied for and received a conditional offer of employment to work at a Gainesville, Florida Winn-Dixie store as a liquor store associate. Tr. at 35. As with the Rent-A-Center report, First-Advantage was tasked with conducting the criminal-background check. And, in Plaintiff's words, it “happened again.” Tr. at 141. First Advantage ran a National Criminal File search, yet this time it matched Plaintiff with burglary and aggravated battery on a pregnant woman records from Broward County, Florida, for “Ricky” Williams based on his name and date of birth. Tr. at 4. First Advantage verified that those records existed and that the information was “complete” by reviewing the Florida Department of Corrections website. Tr. at 289. That website noted that “Ricky” Williams was 6'2” tall. Tr. at 290. It also noted that “Ricky” Williams was incarcerated in the Broward County Jail. Tr. at 548. Again, the match was only based on two identifiers. Nonetheless, Plaintiff was deemed ineligible for employment by Winn-Dixie pursuant to Winn-Dixie's hiring criteria. Tr. at 124-25. This is so even though, as testified by one of First Advantage's executives, “a reasonable person would” conclude “with a certainty or virtual certainty that Ricky Williams who committed burglary and aggravated battery on a pregnant woman whose records First Advantage matched with Richard Williams was not, in fact, Richard Williams[.]” Tr. at 300.

         As with the Rent-A-Center report, First Advantage sent the report (and adjudication of ineligibility) to Winn-Dixie, tr. at 98, and notified Plaintiff that it was reporting the records to Winn-Dixie, tr. at 98-99. Plaintiff again disputed the criminal records in the report, tr. at 99, and First Advantage again reopened the investigation. After obtaining hard copies of the underlying court reports, [10] First Advantage discovered that “Ricky” Williams's social security number did not match Plaintiff's. As a result, First Advantage removed those records from Plaintiff's report. Yet again, that removal was too little, too late; Winn-Dixie had already hired somebody else for the liquor store associate position. Tr. at 151. Plaintiff was eventually hired by Winn-Dixie approximately five months later. Tr. at 151, 164.

         C. Trial

         After this Court dismissed some of Plaintiff's claims on summary judgment, ECF No. 123, the remaining claims were tried before a jury. Plaintiff presented evidence that First Advantage both willfully and negligently violated the FCRA, arguing that it ignored certain “red flags” that distinguished Plaintiff from “Ricky” Williams and consciously overrode its policies and procedures. According to Plaintiff, those decisions were made to reduce costs and ensure, in First Advantage's words, “[i]ndustry-leading turnaround times . . . .” Tr. at 256, 360.

         Plaintiff and his mother testified that losing the Rent-A-Center and Winn-Dixie positions left Plaintiff feeling “horrible, ” wondering whether he would ever get a job, and caused headaches, lost appetite, and insomnia. Tr. at 147-54, 241-44. Plaintiff also testified that, although he obtained the 911-dispatcher position in part due to his good reputation, that other employers blindly trusted the First Advantage report's accuracy. Tr. at 150. After Plaintiff's case-in-chief, First Advantage moved for judgment as a matter of law, arguing that no reasonable jury could conclude (1) that it willfully or negligently violated the FCRA; (2) that Plaintiff was entitled to reputational damages; and (3) that Plaintiff properly mitigated his damages. Tr. at 399- 426. That motion was denied as to the negligence and damages arguments, and the willfulness argument was taken under advisement. Tr. at 444-45.

         As for its case-in-chief, First Advantage argued that it took steps to ensure that its policies and procedures are consistently followed, see, e.g., tr. at 473-74, that no screening companies require more than two matching identifiers to include a criminal record in a consumer's background report, see, e.g., tr. at 383, and that no other similar companies implement tools that attempt to prevent information from appearing on the wrong consumer's record if that information was matched to another person in the past, tr. at 371. The jury apparently disagreed; it found in Plaintiff's favor and awarded him $250, 000 in compensatory damages and $3.3 million in punitive damages. ECF No. 188.[11]

         First Advantage now renews its pre-verdict Rule 50 motion and, in the alternative, asks for a new trial. ECF No. 207. Specifically, it argues that there is insufficient evidence from which a reasonable jury could conclude that it negligently and willfully violated the FCRA. ECF No. 208, at 2. Further, even assuming liability, First Advantage argues that Plaintiff is not entitled to emotional-distress damages and that Plaintiff's lost-wage damages should be reduced because he failed to mitigate his damages. Id. at 2-3. Finally, First Advantage asserts that the jury's punitive-damages award is “manifestly unjust, arbitrary, falls far outside of constitutional limits, and must be, at the very least, greatly reduced.” Id. at 29.


         Federal Rule of Civil Procedure 50 authorizes courts “to remove cases or issues from the jury's consideration when the ‘facts are sufficiently clear that the law requires a particular result.'” Weisgram v. Marley Co., 528 U.S. 440, 447-48 (2000) (citation omitted). Parties may only move for judgment as a matter of law on grounds that were advanced in a pre-verdict motion. Fed.R.Civ.P. 50(b). The ultimate question “is whether the evidence is ‘legally sufficient . . . to find for the party on that issue.'” McGinnis v. Am. Home Mortg. Serv., Inc., 817 F.3d 1241, 1254 (11th Cir. 2016) (quoting Fed.R.Civ.P. 50(a)(1)). A motion for judgment as a matter of law should only be granted “‘[i]f the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable [persons] could not arrive at a contrary verdict . . . .'” Lipphardt v. Durango Steakhouse of Brandon, Inc., 267 F.3d 1183, 1186 (11th Cir. 2001) (quoting Watts v. Great Atl. & Pac. Tea Co., 842 F.2d 307, 309-10 (11th Cir. 1988)).


         As to liability, First Advantage has two arguments; namely, that a reasonable jury could not find that it negligently or willfully violated the FCRA. This Court disagrees.


         First Advantage contends that Plaintiff failed to meet his burden in proving that it willfully violated the FCRA. An FCRA violation is willful if the defendant violates that statute with “reckless disregard.” Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 68-69 (2007); see also Harris v. Mexican Specialty Foods, Inc., 564 F.3d 1301, 1310 (11th Cir. 2009) (“A violation is ‘willful' for the purposes of the FCRA if the defendant violates the terms of the Act with knowledge or reckless disregard for the law.” (citing Safeco, 551 U.S. at 60)). A violation is deemed reckless if, objectively, it “entail[s] ‘an unjustifiably high risk of harm that is either known or so obvious that it should be known.'” Safeco, 551 U.S. at 68 (quoting Farmer v. Brennan, 511 U.S. 825, 836 (1994)).

         In other words, the violation at issue must be “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.” Id. at 69.

         The jury could have, and did, reasonably find that First Advantage willfully violated the FCRA. For example, First Advantage clearly knew of the potential for harm to those with common names. Indeed, it implemented procedures in an apparent attempt to mitigate that risk. See tr. at 318 (referencing the requirement that if a common-named consumer matched an individual with a different address, then an address history should be developed). The problem is that the procedures were woefully insufficient to mitigate that risk. Rather than providing all employees access to databases like Experian-which could be used to help distinguish one individual from another-First Advantage arguably padded its bank accounts by restricting that access to a limited number of individuals. Indeed, had that access been provided to all individuals, First Advantage likely would have discovered the numerous disparities-including social security number, address, height, etc.-between Plaintiff and “Ricky” Williams prior to the dispute-resolution process.

         Furthermore, the jury could have reasonably concluded that First Advantage neglected to implement procedures so that repeat-mismatched consumers could have their record flagged to prevent those consumers from being mismatched with the same similarly named individual. But First Advantage says that its system effectively “flags” records by automatically blocking all previous charges that have been successfully disputed and only releasing the background report to the client after it has verified that any matched records are not being erroneously reported for a second time. And that procedure was effective, argues First Advantage; namely, “Ricky” Williams's cocaine charge was blocked from the Winn-Dixie report after Plaintiff successfully disputed that charge in the Rent-A-Center report. But that misses the point. Recidivism rates demonstrate that it is likely- and, quite possibly, more likely than not-that the subject of the mismatched criminal report (here, “Ricky” Williams) will commit another crime even after an erroneous criminal-background report is issued. See Daniel S. Nagin, et al., Imprisonment and Reoffending, 38 Crime & Just. 115, 120 (2009) (“[R]eoffending among prison inmates is high, with rates of official recidivism often reaching 60 percent within 3 years . . . .” (citation omitted)). First Advantage not only knows about this possibility, see tr. at 305-06 (agreeing that “folks who commit crimes often commit other crimes”), but its procedures do nothing to prevent that harm. Indeed, assuming “Ricky” Williams persisted in his criminal endeavors, Plaintiff could continue to be erroneously matched with him for eternity, thus foreclosing-or at least, at a minimum, making it much more difficult to obtain-any future employment opportunities.

         Nevertheless, First Advantage argues, and argued ad nauseam at trial, that their procedures “did and do in fact assure maximum possible accuracy because during the relevant time period First Advantage accurately matched criminal records with consumers 99.62% of the time.” ECF No. 208, at 16 (emphasis in original). That argument is like the thirteenth chime of a clock. You not only know it is wrong, but it leads you to question everything you heard before it. It isn't First Advantage's accuracy rate as applied to all consumers that matters; it is First Advantage's accuracy rate as applied to common-name consumers. Although neither party presented definitive evidence on that issue, it is far more likely that one would erroneously match a common-name consumer than a unique-name consumer.[12] Common sense thus suggests that many of the 14, 346 “not-me” errors were for common-name consumers.

         But even assuming those procedures were sufficient, they simply were not followed here. First Advantage's policies and procedures for common names required that “[a]dditional attempts must be made to obtain a third identifier on common names, (i.e. Robert Jones). If a third identifier cannot be located, appropriate notes should be included . . . as to attempts made, and the record reported with supervisor approval.” Tr. at 314-15. For example, if a common-name consumer matches to a record containing a different address, then the adjudicator shall develop additional address-history information by using an outside resource, such as Experian. Tr. at 318-19. Had that procedure been followed, First Advantage would have learned what they later learned in the dispute process; namely, that Plaintiff was not the criminal, “Ricky” Williams. Yet First Advantage consciously ignored this procedure. Tr. at 320. That evinces willfulness. See Lee v. Sec. Check, LLC, No. 3:09-cv-421, 2010 WL 3075673, at *12 ...

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