Kenn v. Eascare

226 N.E.3d 318

103 Mass.App.Ct. 643

Nicole KENN

v.EASCARE, LLC.

No. 22-P-1017

Appeals Court of Massachusetts, Norfolk.

Argued September 12, 2023

Decided January 8, 2024

Employment. Jurisdiction. Practice, Civil, Standing, Motion to dismiss.

Civil action commenced in the Superior Court Department on December 5, 2019.

A motion to dismiss was heard by Sharon E. Donatelle, J.; a motion for reconsideration was considered by her; and entry of separate and final judgment was ordered by Paul D. Wilson, J.

Raven Moeslinger, Boston, for the plaintiff.

Sarah C. Spatafore, for the defendant.

Present: Massing, Henry, & Brennan, JJ.

MASSING, J.

₆₄₃In this appeal we consider whether the plaintiff job applicant, who authorized a potential employer to conduct a background check under conditions that allegedly violated the Fair Credit Reporting Act, 15 U.S.C. §§ 1681-1681W (FCRA), has standing to sue where the plaintiff does not allege that the employer’s FCRA violations caused her any "concrete" injury as ₆₄₄that term has been construed in the context of art. III of the United States Constitution (art. III). Based on the provisions of FCRA that establish the employer’s liability for willfully violating FCRA’s requirements and provide a cause of action for plaintiffs who are subject to such violations, we conclude that the plaintiff does have standing in the courts of the Commonwealth. Accordingly, the defendant’s motion to dismiss two counts of the plaintiffs complaint for lack of subject matter jurisdiction should have been denied. We therefore vacate the separate and final judgment.

Background. The plaintiff, Nicole Kenn, filed a four-count complaint in the Superior Court in December 2019 including, in counts III and IV, putative class action claims alleging that defendant, Eascare, LLC (Eascare), had violated certain provisions of FCRA.¹ The complaint and attached exhibits alleged the following facts, which we are bound to accept as true for the purposes of this appeal. See Curtis v. Herb Chambers I-95, Inc., 458 Mass. 674, 676, 940 N.E.2d 413 (2011).

Eascare is a Massachusetts limited liability company that provides ambulance services. Eascare conducts background checks, which are governed by FCRA, when it makes employment decisions. In January 2018, the plaintiff applied for a position as an emergency medical technician. Eascare provided the plaintiff with a combined disclosure and authorization form regarding the background check, entitled "Consumer Report/Investigative Consumer Report Disclosure and Release of Information Authorization." The front side of the form asked the plaintiff to acknowledge her understanding that Eascare would conduct a background check on her for employment purposes, which might include obtaining a "consumer report" or an "investigative consumer report" as defined under FCRA. The disclosure form included explanations of what the background investigation might entail, what would happen in the case of an adverse employment decision, and what an applicant could do if she disagreed with the accuracy of any information contained in the consumer report. The bottom of the form sought the plaintiffs authorization for Eascare to conduct the background check. The back side of the form sought her authorization for an entity named PT Research "to furnish the above information" and for the plaintiff to "release[ ]₆₄₅ and forever discharge[ ]" PT Research, Eascare, "and any person/entity from which they obtained information from any liability resulting from providing such information." The plaintiff signed both sides of the form and was subsequently hired, but resigned within a year.²

The complaint alleged that Eascare willfully provided a disclosure and authorization form that violated FCRA, injuring the plaintiff and those similarly situated, as follows:

"25. Without a clear notice that a consumer report is going to be procured on them, applicants like [the plaintiff] have no way to preserve their privacy or to correct errors or other problems with the reports.

"26. When a disclosure and authorization contains an exculpatory clause such as the release of liability in Eascare’s Disclosure Form, applicants like [the plaintiff] are misinformed about their legal rights and whether or how they may enforce them.

"27. As a result, Eascare’s purported disclosure and authorization was not clear, conspicuous or stand-alone, nor did it validly authorize Eascare to procure [the plaintiff’s] consumer report for employment purposes.

"28. Eascare’s actions resulted in depriving [the plaintiff] of a clear recitation of her rights and invaded her privacy, including by disseminating [the plaintiff’s] private information without proper authorization."

The complaint further alleged that Eascare had obtained consumer reports for job applicants, using forms either identical or substantially similar to the disclosure form that the plaintiff received, for at least five years.

After the plaintiff filed her complaint, Eascare removed the case to the United States District Court for the District of Massachusetts pursuant to 28 U.S.C. § 1441(a) and there moved to dismiss the plaintiff’s FCRA claims under Fed. R. Civ. P. 12(b)(6) for failure to state a claim. A United States District Court judge granted Eascare’s motion to dismiss, concluding that the plaintiff lacked standing under art. III because she failed to allege a "concrete" injury. Kenn v. Eascare, LLC, 483 F. Supp. 3d 26, 32 (D. ₆₄₆Mass. 2020). The judge initially ordered that the FCRA claims be dismissed without prejudice, but acting on the plaintiff’s motion for reconsideration, vacated the dismissal and instead remanded the claims to the Superior Court.³

Back in the Superior Court, Eascare moved to dismiss the plaintiff’s FCRA claims pursuant to Mass. R. Civ. P. 12 (b) (6), 365 Mass. 754 (1974), for lack of standing. A Superior Court judge allowed the motion, largely adopting the reasoning of the United States District Court judge.⁴ The plaintiff filed a motion for reconsideration, which the motion judge denied. The plaintiff subsequently filed a motion under Mass. R. Civ. P. 54 (b), 365 Mass. 820 (1974), for separate and final judgment on the FCRA claims. A second judge allowed the motion, and final judgment dismissing the plaintiff’s FCRA claims was entered in August 2022. The plaintiff timely filed a notice of appeal from the separate and final judgment dismissing the FCRA claims.

Discussion. 1. FCRA. The plaintiff claimed that Eascare willfully violated the provisions of FCRA in two ways. In count III of her complaint, the plaintiff alleged that Eascare obtained her consumer report without providing a stand-alone, clear and conspicuous disclosure form, in violation of 15 U.S.C. § 1681b(b)(2)(A)(i). In count IV, the plaintiff alleged that because she agreed to the background check based on documents that did not comply with FCRA, Eascare obtained her consumer report without valid authorization, in violation of 15 U.S.C. § 1681b(b)(2)(A)(ii).⁵

[1] ₆₄₇Because we are reviewing the allowance of a motion to dismiss under Mass. R. Civ. P. 12 (b) (6),⁶ we accept the complaint’s factual allegations as true and draw all reasonable inferences in the plaintiff’s favor. See Curtis, 458 Mass. at 676, 940 N.E.2d 413. Thus, although the front side of the disclosure and authorization form attached to the complaint is arguably in compliance with FCRA, we must assume for the purposes of this appeal that the releases of liability appeared on the back side of the same form, such that the plaintiff was not provided with "a document that consists solely of the disclosure." 15 U.S.C. § 1681b(b)(2)(A)(i).

[2] Accordingly, we accept the allegations that Eascare willfully violated the provisions of FCRA in inducing the plaintiffs authorization for Eascare to obtain her consumer report. In cases of willful violations, FCRA provides the following remedy:

"Any person who willfully fails to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer in an amount equal to the sum of … any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000."

15 U.S.C. § 1681n(a)(1)(A). The term "person" includes corporations, and the term "consumer" is defined as "an individual." 15 U.S.C. § 1681a(b), (c). The remedy provision also authorizes punitive damages, costs, and reasonable attorney’s fees for a successful action. See 15 U.S.C. § 1681n(a)(2)-(3).⁷ The statute further provides that "[a]n action to enforce any liability created [by FCRA] may be brought in any appropriate United States district court, without regard to the amount in controversy, or in any other court of competent jurisdiction." 15 U.S.C. § 1681p. Thus, FCRA clearly creates a cause of action for an individual, ₆₄₈such as the plaintiff, against any person, such as Eascare, who willfully fails to comply with "any requirement" of FCRA.

[3–6] 2. Art. III standing. Despite having a cause of action, not every individual whose FCRA protections have been violated has standing to sue in Federal court. Under art. III, Federal judicial power is limited to the resolution of "Cases" and "Controversies." TransUnion LLC v. Ramirez, 594 U.S. 413, 141 S. Ct. 2190, 2203, 210 L.Ed.2d 568 (2021) (TransUnion). To have standing under art. III, a plaintiff must allege a "concrete" injury, that is, one that is "real" and not "abstract." Spokeo, Inc. v. Robins, 578 U.S. 330, 340, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016) (Spokeo). "For [art. III] standing purposes, therefore, an important difference exists between (i) a plaintiff’s statutory cause of action to sue a defendant over the defendant’s violation of federal law, and (ii) a plaintiff’s suffering concrete harm because of the defendant’s violation of federal law." TransUnion, supra at 2205. While "Congress may enact legal prohibitions and obligations" and create causes of action to enforce them,...