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Jones v. The Salvation Army

United States District Court, M.D. Florida, Jacksonville Division

November 15, 2019

LASHANNDA JONES, on behalf of herself and on behalf of all others similarly situated, Plaintiff,
v.
THE SALVATION ARMY, Defendant.

          ORDER

          TIMOTHY J. CORRIGAN, UNITED STATES DISTRICT JUDGE

         In this Fair Credit Reporting Act class action, the Court must determine whether a prospective employer's background check disclosure was compliant with statutory requirements, and if not, whether such violation, without more, constitutes an injury in fact for Article III standing. Before the Court are the parties' Joint Motion for Preliminary Approval of Class Action Settlement, (Doc. 26); the parties' memorandums on standing, (Docs. 28, 29); Defendant The Salvation Army's Motion to Dismiss, (Doc. 10), Plaintiff LaShannda Jones's Response, (Doc. 37); and The Salvation Army's Motion to Strike, (Doc. 38), and Jones's Response (Doc. 39). On March 25, 2019, the Court held a hearing, the record of which is incorporated herein. (Docs. 30, 35).

         I. BACKGROUND

         A. Class Representative's Claims

         On approximately January 31, 2018, Jones applied for and was hired as an assistant store manager at The Salvation Army. Complaint, Doc. 9 ¶ 14. As part of the application process, The Salvation Army gave Jones “several documents related to the [Fair Credit Reporting Act of 1970 (“FCRA”)], all of which [were] presented simultaneously . . . .” (Id. ¶ 36). On February 23, 2018, The Salvation Army fired Jones without notice. (Id. ¶ 15). Confused about why she was fired, Jones called The Salvation Army's Georgia office, which informed her that she was fired because of credit issues identified in her background report. (Id. ¶ 17). Although Jones does not contest the accuracy of the report, she wanted to explain the circumstances that caused her credit issues before being terminated. (Id. ¶ 18).

         Jones contends that The Salvation Army routinely violated the FCRA in its hiring process by providing confusing, noncompliant disclosures. (Id. ¶¶ 38- 39, 47). Further, Jones asserts that the authorization she gave The Salvation Army to obtain a consumer report was invalid because “[o]ne cannot meaningfully authorize her employer to take an action if she does not grasp what the action entails.” (Id. ¶ 89). Jones also claims that The Salvation Army violated the FCRA when it fired her based on information contained in her credit report without first providing her with a copy of the report. (Id. ¶ 16).

         B. Procedural History

         Jones filed a class action complaint in Florida's Fourth Judicial Circuit, claiming that The Salvation Army's FCRA violations harmed two classes: a Pre-Adverse Action Class and a Background Check Class. (Doc. 9 ¶¶ 62-63). The Salvation Army removed this action, (Doc. 1), and moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of standing and under Rule 12(b)(6) for failure to state a claim. (Doc. 5). The Salvation Army argued that Jones lacked standing because her injury was a “bare procedural violation that, without more, cannot rise to the level of concrete injury needed for Article III standing.” (Doc. 5 at 19).

         Jones then filed an Amended Class Action Complaint, [1] which contends that The Salvation Army violated the FCRA by failing to provide Jones a copy of her consumer report before taking an adverse employment action (First Class Claim for Relief-“pre-adverse action” claim), failing to make a proper disclosure of Jones's rights regarding the background check (Second Class Claim for Relief-“disclosure” claim), and failing to obtain proper authorization to conduct the background check (Third Class Claim for Relief - “authorization” claim). (Doc. 9). Additionally, Jones alleges various injuries she suffered as a result of The Salvation Army's alleged FCRA violations. (Doc. 9 ¶¶ 54-61). The Salvation Army moved to dismiss again under 12(b)(1) and 12(b)(6). (Doc. 10). In response, Jones moved to remand, arguing that The Salvation Army has the burden of establishing jurisdiction and thus, the Court should remand if The Salvation Army believes that Jones lacks Article III standing. (Doc. 11). Jones further contends:

If Defendant wants to be in this Court and is willing to show a jurisdictional basis to be here, Plaintiff has no objection. But Defendant has shown itself unwilling to carry that burden: by moving to have this case dismissed for lack of subject matter jurisdiction, Defendant denies the very federal court jurisdiction it invoked upon removal.

(Doc. 11).

         After several motions for extensions of time, the parties moved to stay the case while they attempted early mediation, (Doc. 17), which the Court granted, (Doc. 18). The parties settled at mediation, (Doc. 23), and then filed a Joint Motion for Preliminary Approval of Class Action Settlement, (Doc. 26). The motion states that the parties have agreed to a settlement and seek the Court's preliminary and, ultimately, final approval. (Doc. 26). The settlement consists of The Salvation Army contributing $500, 000 to a fund that would be distributed to two separate classes: The Disclosure and Authorization Class, which consists of approximately 25, 579 members; and the Pre-Adverse Action Class, which has approximately 1, 537 members, all of whom also belong to the Disclosure and Authorization Class. (Doc. 26 at 7-9).

         After reviewing the Motion for Preliminary Approval, the Court, concerned about its jurisdiction, directed each party to file a memorandum discussing whether Jones, the class representative, has Article III standing. (Doc. 27). The parties filed their respective briefs, (Docs. 28, 29), and the Court held a hearing on the motion, the record of which is incorporated herein, (Doc. 30). Following the hearing, the Court deferred ruling on the Motion for Preliminary Approval and directed Jones to respond to The Salvation Army's motion to dismiss. (Doc. 34). Jones filed her response, arguing that the parties want to settle, she has standing, and the complaint states claims for relief. (Doc. 37). The Salvation Army then moved to strike portions of Jones's response that referenced settlement discussions, (Doc. 38), to which Jones responded in opposition, (Doc. 39).

         II. DISCUSSION

         A. The Fair Credit Reporting Act of 1970, 15 U.S.C. § 1681 et seq.

         Before procuring a consumer report on an applicant, the FCRA requires employers to provide the applicant with “a clear and conspicuous disclosure . . . in writing . . . in a document that consists solely of the disclosure, ” that informs the applicant that a consumer report may be obtained. 15 U.S.C. § 1681b(b)(2)(A) (2018) (emphasis added). An employer may not obtain the consumer report unless the applicant provides written authorization, which may be obtained on the disclosure. Id. Further, the FCRA requires that an employer provide the employee with a copy of the report and a written description of the employee's rights under the FCRA before taking adverse action based on information in a consumer report. Id. § 1681b(b)(3)(A).

         Any person who negligently fails to comply with the FCRA is liable for actual damages sustained, attorneys' fees, and costs. Id. § 1681o(a). Any person who willfully fails to comply with the FCRA is liable for actual damages or statutory damages of $100 to $1, 000 per violation, attorneys' fees and costs, and possibly punitive damages. Id. § 1681n(a). Jones has alleged willful violations. (Doc. 9 ¶¶ 75, 77, 83, 84, 89, 91).

         B. Article III Standing

         Although the parties have settled the case, the Court must ensure it has jurisdiction to provide the requested relief. Frank v. Gaos, 139 S.Ct. 1041, 1046 (2019) (“A court is powerless to approve a proposed class settlement if it lacks jurisdiction over the dispute, and federal courts lack jurisdiction if no named plaintiff has standing.”); see A&M Gerber Chiropractic LLC v. GEICO Gen. Ins. Co., 925 F.3d 1205, 1210 (11th Cir. 2019) (“Standing cannot be waived or conceded by the parties, and it may be raised (even by the court sua sponte) at any stage of the case.”). If Jones lacks standing, then the Court cannot certify the two classes and approve the preliminary settlement. See Church v. Accretive Health, Inc., 654 Fed.Appx. 990, 995 (11th Cir. 2016) (“[S]tanding is a jurisdictional threshold question which must be addressed prior to and independent of the merits of a party's claims.” (quotation marks omitted) (quoting DiMaio v. Democratic Nat'l Comm., 520 F.3d 1299, 1301 (11th Cir. 2008))).

         1. The standard for reviewing a complaint for lack of standing.

         “A district court may dismiss a complaint for lack of subject-matter jurisdiction based on: (1) the complaint alone; (2) the complaint plus undisputed facts evidenced in the record; or (3) the complaint plus undisputed facts plus the court's resolution of disputed facts.” Butler v. Morgan, 562 Fed.Appx. 832, 834 (11th Cir. 2014) (per curiam) (unpublished) (citing Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir. May 1981)). Here, the Court relies on only the Amended Complaint and undisputed facts in the record, and therefore it need not hold an evidentiary hearing.[2] Cf. Bischoff v. Osceola Cty., 222 F.3d 874, 881 (11th Cir. 2000) (requiring an evidentiary hearing in cases “where the evidence relating to standing is squarely in contradiction as to central matters and requires credibility findings . . . .”).

         Although a court is generally required to accept the factual allegations of the complaint as true, Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), it “does not accept as true unwarranted deductions of fact.” Almanza v. United Airlines, Inc., 851 F.3d 1060, 1071 (11th Cir. 2017). And, a court is not required to accept as true conclusory allegations and mere legal conclusions. Iqbal, 556 U.S. at 678. The Court's “duty to accept the facts in the complaint as true does not require [it] to ignore specific factual details of the pleading in favor of general or conclusory allegations. Indeed, when the exhibits contradict the general and conclusory allegations of the pleading, the exhibits govern.” Griffin Indus., Inc. v. Irvin, 496 F.3d 1189, 1205-06 (11th Cir. 2007).

         “[T]he party asserting federal jurisdiction when it is challenged has the burden of establishing it.” DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n.3 (2006). As the removing party, The Salvation Army had the initial burden of demonstrating federal jurisdiction. See id. However, after The Salvation Army moved to dismiss for a lack of standing, Jones filed an amended complaint that added allegations of injury to combat The Salvation Army's standing argument, (Doc. 9 ¶¶ 54-61), and she has argued in her supplemental memorandum on standing, at oral argument, and in response to The Salvation Army's motion to dismiss that she has standing, (Docs. 28, 35, 37). Thus, Jones is now the party asserting jurisdiction, giving her the burden of demonstrating standing. See Cuno, 547 U.S. at 341-42 (finding that the plaintiff, who had originally sought to remand the case based on concerns for lack of standing, was the party asserting federal jurisdiction because it had argued it had standing in its briefs to the Supreme Court).

         “[A] plaintiff must demonstrate standing for each claim [s]he seeks to press. . . .” Town of Chester v. Laroe Estates, Inc., 137 S.Ct. 1645, 1650 (2017) (quotation marks omitted) (quoting Davis v. Fed. Election Comm'n, 554 U.S. 724, 734 (2008)). And, “[i]t is well-settled that ‘if none of the named plaintiffs purporting to represent a class establishes the requisite of a case or controversy with the defendants, none may seek relief on behalf of himself or any other member of the class.'” Gerber Chiropractic, 925 F.3d at 1211 (quoting O'Shea v. Littleton, 414 U.S. 488, 494 (1974)). Thus, as class representative, Jones must demonstrate standing for all of her claims. Laroe Estates, 137 S.Ct. at 1650.

         2. Injury in fact under Article III.

         To satisfy the “‘irreducible constitutional minimum' of standing, ” 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.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)). “To establish injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected interest' that is ‘concrete and particularized' and ‘actual or imminent, not conjectural or hypothetical.'” Id. at 1548 (quoting Lujan, 504 U.S. at 560).

         Only the injury in fact element is at issue here, and more specifically, whether Jones alleges a concrete injury.[3] When determining whether a plaintiff has alleged a concrete injury, courts must look at the ÔÇťallegations in light of the statute, [Eleventh Circuit] ...


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