Hood v. Action Logistix, LLC

528 F.Supp.3d 1062

Darion HOOD, Individually and On Behalf of All Others Similarly Situated, Plaintiff,

v.ACTION LOGISTIX, LLC, Defendant.

Case No. 4:20 CV 978 RWS

United States District Court, E.D. Missouri, Eastern Division.

Signed March 25, 2021

Charles J. Brown, Jayson A. Watkins, Brown and Watkins LLC, Gower, MO, for Plaintiff.

Andrew W. Blackwell, Teresa D. Pupillo, Capes Sokol PC, St. Louis, MO, for Defendant.

MEMORANDUM AND ORDER

RODNEY W. SIPPEL, UNITED STATES DISTRICT JUDGE

Darion Hood ("Hood") brings this class action suit against Action Logistix, LLC ("Action Logistix"), alleging violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681, et seq. Action Logistix moves to dismiss Hood's claims for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). I will deny the motion for the reasons explained below.

BACKGROUND

In March 2019, Hood applied for a position at Action Logistix. He interviewed and received a tentative offer of employment, conditioned on the successful completion of a background check. He called Action Logistix the next day to check on the status of his background check, as instructed, and was told that the report was not ready. He called again the following Monday and was informed that he was no longer eligible for employment due to information uncovered by his background check. Hood asked to see the report and was told he could pick up a copy in person.

In his complaint, Hood states that Action Logistix violated his rights under 15 U.S.C. § 1681b(b)(3)(A) because he was not provided with an FCRA Summary of Rights or given the opportunity to review the report and address the information it contained before the employment offer was withdrawn.¹ He has not alleged that any of the information in the report was incorrect or misleading.

LEGAL STANDARD

The party invoking subject matter jurisdiction bears the burden of establishing that the case is properly in federal court. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (citations omitted). To satisfy the requirements of constitutional standing, the plaintiff must show (1) that he suffered an injury in fact; (2) that the injury he suffered is fairly traceable to the challenged action of the defendant; and (3) that the injury is likely to be redressed by a favorable court decision. Id. at 560-61, 112 S.Ct. 2130. If these three requirements are not satisfied, a court does not have subject matter jurisdiction over the case and must dismiss it. ABF Freight Sys., Inc. v. Int'l Bhd. of Teamsters, 645 F.3d 954, 958 (8th Cir. 2011).

When deciding a Rule 12(b)(1) motion to dismiss, I must determine whether the movant's attack on jurisdiction is "facial" or "factual." Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1990). If the attack is facial, "the court restricts itself to the face of the pleadings, and the non-moving party receives the same protections as it would defending against a motion brought under Rule 12(b)(6)." Id. If a movant raises a factual attack, the court may consider matters outside the pleadings. Id. I will construe this motion to dismiss as a facial attack on jurisdiction because Action Logistix has not "challenge[d] the veracity of the facts underpinning subject matter jurisdiction." Davis v. Anthony, Inc., 886 F.3d 674, 679 (8th Cir. 2018) (citation omitted).

ANALYSIS

Action Logistix argues that this case should be dismissed because Hood has not suffered any concrete injury and therefore lacks standing. This argument is grounded in the United States Supreme Court's decision in Spokeo, Inc. v. Robins, 578 U.S. 330, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016). In Spokeo, the Court clarified when intangible injuries are sufficiently concrete to satisfy the injury-in-fact requirement of constitutional standing. Id. at 1549. The Court explained that the "violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact." Id. However, it also emphasized that "a bare procedural violation, divorced from any concrete harm, does not satisfy the injury-in-fact requirement." Id. Although defendants have used Spokeo to challenge standing in a variety of cases nationwide, especially in the FCRA context, the case "was not a change in the substantive law" of Article III standing. Schumacher v. SC Data Center, Inc., 912 F.3d 1104, 1106 (8th Cir. 2019).

15 U.S.C. § 1681b(b)(3)(A) provides:

In using a consumer report for employment purposes, before taking any adverse action based in whole or in part on the report, the person intending to take such adverse action shall provide to the consumer to whom the report relates: (i) a copy of the report; and (ii) a description in writing of the rights of the consumer under this subchapter, as presented by the Bureau under section 1681g(c)(3) of this title.

Two circuit courts have addressed factual scenarios like the one presented here and found that plaintiffs have standing to bring § 1681b(b)(3) claims under these circumstances. See Long v. Se. Pa. Transp. Auth., 903 F.3d 312, 319 (3d Cir. 2018) (finding that plaintiffs had standing to assert their claim that defendant had violated the FCRA by not providing copies of their consumer reports before rescinding their job offers and analogizing the deprivation of the right to receive the reports to common law privacy torts); Robertson v. Allied Sols., LLC, 902 F.3d 690 (7th Cir. 2018) (same, but finding that the deprivation constitutes an informational injury). But see Dutta v. State Farm Mut. Auto. Ins. Co., 895 F.3d 1166, 1175 (9th Cir. 2018) (plaintiff cannot establish standing by showing a bare violation of § 1681b(b)(3) ; rather, he must "demonstrate actual harm or a substantial risk of such harm resulting from the violation," which did not exist in this case because the defendant still would not have hired the plaintiff even if he had the opportunity to contest certain information in his consumer report). Many district courts have reached the same conclusions as the Third and Seventh Circuits. See, e.g., Mattiaccio v. DHA Group, Inc., 474 F.Supp.3d 231 (D.D.C. 2020) ; Jones v. Salvation Army, 2019 WL 6051437 (M.D. Fla. Nov. 15, 2019) ; Anderson v. Wells Fargo Bank, N.A., 266 F.Supp.3d 1175 (D.S.D. 2017) ; Thomas v. FTS USA, LLC, 193 F.Supp.3d 623 (E.D. Va. 2016).

One judge in the Western District of Missouri repeatedly found that plaintiffs like Hood lack standing to assert claims under § 1681b(b)(3). Campbell v. Adecco USA, Inc., 2017 WL 1476152 (W.D. Mo. Apr. 24, 2017) ; Davis v. D-W Tool, Inc., 2017 WL 1036132 (W.D. Mo. Mar. 17, 2017) ; Boergert v. Kelly Serv., Inc., 2016 WL 6693104 (W.D. Mo. Nov. 14, 2016). These cases stood for the proposition that plaintiffs only have standing to sue under § 1681b(b)(3) if they allege that the consumer reports at issue contained incorrect information; if the reports are accurate, plaintiffs have not suffered "any injury beyond the lack of access to [statutorily required] information." Campbell, 2017 WL 1476152, at *3. However, Judge Nanette Laughrey, who issued these rulings, later departed from this logic and found that a plaintiff has standing even if she does not contest the accuracy of information in her consumer report. Schumacher v. SC Data Center, Inc., 2019 WL 4392306, at *5 (W.D. Mo. June 3, 2019). Following Long and Robertson, Judge Laughrey concluded that the plaintiff suffered an injury in fact because she was deprived of "the opportunity to contest or contextualize the contents of the report." Id.

The Missouri Court of Appeals has adopted Judge Laughrey's earlier position. See Campbell v. Adecco USA, Inc., 561 S.W.3d 116, 123 (Mo. Ct. App. 2018) (upholding circuit court's dismissal of plaintiff's adverse action claim for lack of standing after case was remanded from federal court because plaintiff "failed to identify what the alleged errors in the consumer report were or how those alleged errors caused him harm or presented a material risk of causing harm"); see also Courtright v. O'Reilly Auto., 604 S.W.3d 694 (Mo. Ct. App. 2020) (finding that only one of four plaintiffs had standing to pursue his adverse action claim because he alleged that the consumer report his employer obtained contained inaccurate information while the other plaintiffs did not).

The United States Court of Appeals for the Eighth Circuit has not yet addressed the issue of standing under § 1681b(b)(3). See Schumacher, 912 F.3d at 1106. However, both Hood and Action Logistix argue that the Eighth Circuit has previously considered the broader question of when a statutory violation can constitute a concrete injury, and that those cases are persuasive in this context. Hood points to Citizens Telecomm. Co. of Minnesota, LLC v. Fed. Commc'ns Comm'n, 901 F.3d 991 (8th Cir. 2018) while Action Logistix relies on Auer v. Trans Union, LLC, 902 F.3d 873 (8th Cir. 2018).

According to Hood, Citizens established that "where a statute provides the right to notice and an opportunity to contest an action; the failure to provide notice or the right to contest causes concrete harm." However, the question in Citizens was whether the FCC's rulemaking process violated the Administrative Procedures Act ("APA"). 901 F.3d at 1006 (concluding that "the law regarding prejudice under the APA ensures procedural integrity. Losing the opportunity to dissuade an agency from adopting a particular rule is prejudicial.")

(citation omitted). The case was not about Article III standing.

The Eighth Circuit did discuss standing under the FCRA in Auer. However, the plaintiff in that case did not allege any violation of § 1681b(b)(3) ; her claims arose from different provisions of the FCRA. Auer was fired from her job approximately three months after she was hired. She alleged that her former employer had not obtained her proper written authorization for disclosure of her consumer report; that the employer used the report...