Gates v. The Grier Found.

1

JACOB GATES, Plaintiff, v. THE GRIER FOUNDATION and GEOFFREY GRIER, Defendants.

No. 4:23-CV-01443

United States District Court, M.D. Pennsylvania

January 17, 2024

MEMORANDUM OPINION

Matthew W. Brann, Chief United States District Judge.

Before the Court is Defendants The Grier Foundation's and Geoffrey Grier's Motion to Dismiss Plaintiff Jacob Gates' Complaint. In his Complaint, Gates alleges that Defendants improperly revoked an employment offer after learning that he had been convicted of misdemeanor trespass as a minor more than ten years prior. For the reasons explained below, the Court will grant Defendants' Motion in part and grant Gates leave to amend his Complaint.

I. BACKGROUND^[1]

On June 13, 2023, Jacob Gates accepted an offer of employment for a position as a History Teacher with The Grier Foundation (the “Grier School”).^[2] Gates accepted the offer, which included an annual salary and faculty housing and food on June 15, 2023.^[3] To finalize, secure, and formally accept the offer of employment, Gates was required by the Grier School to obtain an FBI Fingerprint Clearance from IdentoGO by IDEMIA.^[4] The background check (the “IdentoGO Report”) showed that, in 2009, Gates pleaded guilty to two misdemeanor counts of trespassing.^[5] The convictions arose from an incident in which Gates, then 17 years old, entered and took a beer from the open garage of a neighbor.^[6]

Upon receipt of the IdentoGO Report, Grier School Director Geoffrey Grier and Head of School Kara Lawler called Gates to rescind the offer of employment.^[7]During the phone call, Gates was accused of being “dishonest,” a “felon,” and having acted in “bad faith.”^[8] Gates explained that the convictions had been expunged in 2020 and both he and his attorney Sally Slipian sent Lawler and Human Resources Officer Lea Crofcheck records confirming as much.^[9] Neither Lawler or Crofcheck responded, nor did anybody at the Grier School inform Gates of his right to dispute the accuracy of the IdentoGO Report.^[10] On July 20, 2023, Gates received a letter from an attorney representing the Grier School stating that, after “carefully review[ing]” the expungement documents, it had decided to uphold the termination of Gates' employment offer.^[11]

Gates then initiated this litigation on August 20, 2023 with the filing of a Complaint alleging violations of the Fair Credit Reporting Act^[12] and the Pennsylvania Criminal History Record Information Act.^[13] Defendants moved to dismiss the Complaint on November 6, 2023.^[14] Defendants' Motion is fully briefed and ripe for disposition.^[15]

II. LAW

“Under Article III, a case or controversy can exist only if a plaintiff has standing to sue.”^[16] “To establish Article III standing, a plaintiff bears the burden of showing three ‘irreducible' elements.”^[17] “He ‘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.'”^[18] “Injury in fact is ‘‘the invasion of a concrete and particularized legally protected interest' resulting in harm ‘that is actual or imminent, not conjectural or hypothetical.''”^[19] “‘An injury is ‘concrete' if it is ‘real, or distinct and palpable, as opposed to merely abstract.'”^[20]

“A motion to dismiss for want of standing is . . . properly brought pursuant to [Federal Rule of Civil Procedure] 12(b)(1), because standing is a jurisdictional matter.”^[21] Where a movant raises a facial challenge to standing-whether the Complaint alleges facts sufficient to establish constitutional standing-courts “apply the same standard as on review of a motion to dismiss under Rule 12(b)(6).”^[22]

Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal for “failure to state a claim upon which relief can be granted.” The United States Court of Appeals for the Third Circuit has instructed that, under the standard established by the Supreme Court of the United States in Bell Atlantic Corp. v. Twombly^[23] and Ashcroft v. Iqbal,^[24] a court reviewing the sufficiency of a pleading must take three steps: (1) “take note of the elements the plaintiff must plead to state a claim”; (2) “identify allegations that, because they are no more than conclusions, are not entitled to the assumption of truth”; and (3) “assume the[] veracity” of all “well-pleaded factual allegations” and then “determine whether they give rise to an entitlement to relief.”^[25]

III. ANALYSIS

A. Fair Credit Reporting Act (Count II)

1. Standing

The Fair Credit Reporting Act^[26] imposes certain duties on users of consumer reports, including that:

[A]ny person [who] takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report . . . shall . . . provide to the consumer an oral, written, or electronic notice of the consumer's right . . . to dispute, under [15 U.S.C. § 1681i], with a consumer reporting agency the accuracy or completeness of any information in a consumer report furnished by the agency.^[27]

Even if the Court assumes Gates' Complaint is sufficient to state a claim that Defendants violated FCRA's notice requirement, that alone does not establish standing. “Article III standing requires a concrete injury even in the context of a statutory violation.”^[28] Gates cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.”^[29] Defendants argue that is just what Gates has done. In support, they direct the Court to the opinion of our Court of Appeals in Long v. SEPTA.^[30] Defendants assert that the Third Circuit in Long held that an employer's failure to provide an unsuccessful job applicant notice of their FCRA rights is a “mere procedural violation” and insufficient to establish standing.^[31] Gates argues that the failure to notify him of his right to dispute the IdentoGo Report denied him the opportunity to “fix his inaccurate record with IdentoGo by IDEMIA and re-submit fingerprints for an accurate record.”^[32]

In Long, the Third Circuit held that the fact that the plaintiffs were able to bring a lawsuit within the statute of limitations for a FCRA suit was sufficient to show that plaintiffs were not injured.^[33] This case is distinguishable because Gates has argued that the failure to inform him of his right to challenge the Report with IDEMIA denied him the opportunity to correct the record and have his employment application considered with the benefit of a new, accurate report.^[34] That Gates was able to file a lawsuit weeks after having his employment offer revoked does not negate the harm that Gates alleges he suffered.^[35] Nevertheless, Gates concedes that he was able to challenge the accuracy of the report with the School itself. He claims that he explained to Grier and Lawler that his convictions were expunged and that he and his attorney sent records to Lawler and Crofcheck reflecting as much. Further, he “received a letter from the Grier School's attorney, which stated that the Grier School ‘carefully reviewed' the expungement documents but upheld its termination of Mr. Gates' employment offer.”^[36]

Defendants were aware that the IdentoGO Report was inaccurate when they affirmed their decision to revoke his employment offer. Therefore, the allegations of Gates' complaint are insufficient to show that, even if he had been able to contest the accuracy of the Report, it would have had any impact on Defendants' decision. As such, he has failed to demonstrate that he was harmed by the alleged FCRA violation.

Therefore, the Court will grant Defendants' Motion as to Count II without prejudice. Gates may amend his Complaint if he is able to allege facts sufficient to show that, if he were aware of his right to contest the accuracy of the IdentoGO Report with IDEMIA, it would have had an impact on his pending job offer. However, he is advised not to attempt to stave off dismissal by simply creatively re- stating facts already alleged. If there are no new facts to be alleged, or existing facts that may be alleged more completely, amendment is discouraged.

2. Failure to State a Claim

As the Court will allow Gates the opportunity to amend his Complaint, the Court will address the balance of Defendants' arguments for dismissal so as to avoid piecemeal amendments. Defendants argue that, even if Gates has standing to assert his FCRA claim, he has failed to state a claim upon which relief can be granted as the IdentoGO Report “does not constitute a ‘consumer report' because it was not obtained by a ‘consumer reporting agency'” as defined by FCRA.^[37]

FCRA defines “consumer reporting agency” 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.^[38]

Defendants argue that “[t]he Complaint contains no averments that IdentoGO;

1) for monetary fees, dues, or on a cooperative nonprofit basis; 2) regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers 3) for the purpose of furnishing consumer reports to third parties; 4) using means or facility of interstate commerce.”^[39]

Defendants also argue that the report is not a “consumer report” because it was furnished to Gates himself, not a third party, and because IdentoGO “did not ‘assemble or evaluate' the FBI criminal background check.”...