Gray v. Nachurs Alpine Sols.

1

Curtis J. Gray, Plaintiff, v. Nachurs Alpine Solutions, LLC, Defendant.

No. 3:21-cv-125

United States District Court, N.D. Ohio, Western Division

April 19, 2023

MEMORANDUM OPINION AND ORDER

Jeffrey J. Helmick United States District Judge

I. Introduction

Plaintiff Curtis Gray filed a complaint against Defendant Nachurs Alpine Solutions, LLC (“NAS”) alleging violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et. seq. (“FCRA”); invasion of privacy; and race discrimination under both federal and state law. (Doc. No. 1). Gray also asserts class action allegations with respect to the FCRA violations. (Id.).

NAS filed a partial motion to dismiss under Rule 12(b)(6) in April 2021. (Doc. No. 8).^[1] Instead of responding, Gray filed his first amended complaint on May 3, 2021. (Doc. No. 9). NAS again filed a partial motion to dismiss. (Doc. No. 11). After briefing, I granted NAS's motion to dismiss Gray's claims for relief under 15 U.S.C. § 1681d and § 1681m, and common law invasion of privacy; but denied NAS's motion to dismiss Gray's claim for relief under 42 U.S.C. § 1981. (Doc. No. 15).

After my ruling, Gray filed a motion for leave to amend the complaint a second time. (Doc. No. 20). In response, NAS filed a notice of non-opposition to Gray's motion for leave to amend.

(Doc. No. 21). I then granted the unopposed motion. (Non-Doc. Order June 21, 2022). The second amended complaint was filed on June 23, 2022. (Doc. No. 22). NAS answered the second amended complaint, (Doc. No. 24), but a week later also filed a partial motion to dismiss and a partial motion for judgment on the pleadings. (Doc. No. 25). Gray opposed the motion, (Doc. No. 28), and NAS filed a reply brief. (Doc. No. 31). For the reasons below, I grant NAS's partial motion to dismiss and deny its partial motion for judgment on the pleadings as moot.

II. Background

Gray, an African American male, began working at NAS in March 2019 as a temporary, seasonal employee placed through Arbet Staffing. (Doc. No. 22 at 1). By September, Gray's supervisor recommended he apply for full-time employment due to his strong work performance. (Id.). As part of the process, Gray was required to complete a standard online employment application. (Id.).

The application included a question about criminal history; in response to whether he had “been convicted of a crime in the last 10 years,” Gray answered “No.” (Doc. No. 25-2 at 6). The application included the following language: “I understand that any misrepresentation or material omission made by me on this application will be sufficient cause for cancellation of this application or immediate termination of employment if I am employed, whenever it may be discovered.” (Doc. No. 22-1 at 2). At the conclusion of the application, there was the following relevant disclosure:

I hereby authorize Nachurs Alpine Solutions to contact, obtain and verify the accuracy of the information contained in my application from all previous employers, educational institutions and references. I authorize Nachurs Alpine Solutions to conduct a criminal background check and obtain a credit report, as well. I release Nachurs Alpine Solutions, its representatives and all other persons or organizations providing such information from liability for seeking, gathering and using such information to make employment decisions.

(Doc. No. 22-1).

Gray also signed an authorization from ProScreening, a third-party vendor utilized by NAS to conduct background checks. The relevant contents of the disclosure are as follows:

I acknowledge receipt of the separate documents entitled DISCLOSURE REGARDING BACKGROUND INVESTIGATION, A SUMMARY OF YOUR RIGHTS UNDER THE FAIR CREDIT REPORTING ACT and the DISCLOSURE FOR INVESTIGATIVE CONSUMER REPORT and certify that I have read and understand those documents. I hereby authorize the obtaining of “consumer reports” and/or “investigative consumer reports” by the Employer at any time after receipt of this authorization and throughout my employment, if applicable.

(Doc. No. 22-2). Gray alleged he never received the documents cited in the authorization. (Doc. No. 22 at 7-8).

Subsequently, ProScreening conducted a background check on Gray. (Id. at 8). This background check returned information inconsistent with Gray's representations on his application.^[2] For example, the background check identified a January 2018 misdemeanor conviction in Marion, Ohio Municipal Court for operating a vehicle under the influence (Case No. TRC1711591A). (Doc. No. 22-5 at 3).

NAS did not offer Gray a position. (Doc. No. 22 at 8). Upon inquiry, NAS's HR Director, Alyson Issler, informed Gray there were issues with his background check but would not tell him any specifics. (Id. at 8-9).

Gray reached out to Arbet for help and Arbet ran a nationwide background check to help Gray identify the issue. (Id. at 9; Doc. No. 22-3). Relevantly, the Arbet background report noted a misdemeanor public intoxication conviction and the misdemeanor conviction for operating a vehicle under the influence (Case No. TRC1711591A).^[3] (Doc. No. 22-3 at 6; see also Doc. No. 22 at 9).

Arbet asked NAS to explain why it did not hire Gray, and Issler responded it was due to Gray's “work history, references, and background” and that his “work performance was poor.” (Doc. No. 22 at 10). Arbet had received no complaints from NAS regarding Gray's work performance; instead, Gray's performance was reported as strong. (Id.).

In February 2020, Gray filed an OCRC/EEOC charge alleging race discrimination. (Id.). Gray alleges NAS's position statement contained multiple inconsistencies regarding Gray's discussions with Issler and the contents of the NAS background report. (See id. at 10-11).

III. Standard

NAS brings its partial motion to dismiss under Rule 12(b)(1) challenging this court's subject matter jurisdiction for lack of Article III standing. A challenge to a court's subject matter jurisdiction falls into one of two categories: facial attacks and factual attacks. U.S. v. Ritchie, 15 F.3d 532, 598 (6th Cir. 1994). NAS asserts a facial attack which challenges the sufficiency of the complaint's allegations to invoke federal jurisdiction. Id. “On such a motion, the court must take the material allegations of the [pleading] as true and construed in the light most favorable to the nonmoving party.” Id. The burden of proving the existence of subject matter jurisdiction lies with the party invoking federal jurisdiction, in this case, the plaintiff. Madison-Hughes v. Shalala, 80 F.3d 1121, 1130 (6th Cir. 1996).

Article III standing is essential to invoking federal jurisdiction. U.S. Const. Art. III, § 2; see also Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). Standing must be demonstrated “for each claim [plaintiff] seeks to press and for each form of relief sought.” Lujan, 504 U.S. at 561. To establish standing, the plaintiff must show: (1) an injury in fact that is (2) fairly traceable to the defendant's conduct and that (3) will likely be redressed by a decision in plaintiff's favor. Id.

NAS's motion focuses on the first element - injury in fact, which “requires the plaintiff to allege an injury that is both concrete and particularized.” Spokeo, Inc. v. Robins, 578 U.S. 330, 339 (2016) (citation and internal quotation marks omitted). Particularized means it “must affect the plaintiff in a personal and individual way.” Spokeo, 578 U.S. at 339 (citation omitted). “A ‘concrete' injury must be ‘de facto'; that is, it must actually exist.” Id. at 340. An “abstract injury” does not satisfy the injury in fact requirement. O'Shea v. Littleton, 414 U.S. 488, 494 (1974).

“Article III standing requires a concrete injury even in the context of a statutory violation.” Spokeo, 578 U.S. at 341. A plaintiff cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury in fact requirement of Article III.” Id. (citation omitted). The Supreme Court recently clarified “the mere risk of future harm, standing alone, cannot qualify as a concrete harm.” TransUnion LLC v. Ramirez, 141 S.Ct. 2190, 2210-11 (2021). “Rather, plaintiffs must demonstrate that the ‘risk of future harm materialized,' or that the plaintiffs ‘were independently harmed by their exposure to the risk itself.'” Ward v. Nat'l Patient Account Servs. Solutions., Inc., 9 F. 4th 357, 361 (6th Cir. 2021) (quoting TransUnion, 141 S.Ct. at 2211).

IV. Analysis

NAS's partial motion to dismiss challenges Gray's standing to assert each of the FCRA claims, arguing Gray has not adequately alleged a cognizable injury in fact resulting from the procedural violations.

A. Standing for 15 U.S.C. § 1681b(b)(3) claim

Section 1681b(b)(3) states that “before taking any adverse action, based in whole or in part on the [consumer] report,” the company must provide the consumer with (1) a copy of the consumer report; and (2) the FCRA Summary of Rights. 15 U.S.C. § 1681b(b)(3)(A).^[4]

In support of standing, Gray argues the Congressional purpose in enacting § 1681b(b)(3) was to provide consumers an opportunity to address the contents of the consumer report prior to the adverse action; and since the exact harm the statute was meant to prevent occurred, the statutory violation alone is sufficient to establish standing. (Doc No. 28 at 7-11) (citing Long v. Se. Penn. Transp. Auth., 903 F.3d 312 (3d Cir. 2018) (finding standing for § 1681b(b)(3) claim because “taking an adverse employment action without providing the required consumer report is the very harm that Congress sought to prevent”) (internal quotations omitted), and Robertson v. Allied Solutions, LLC, 902 F.3d 690 (7th Cir. 2018) (finding standing for § 1681b(b)(3) informational injury where plaintiff was prevented from providing...