Winters v. Douglas Emmett, Inc.

547 F.Supp.3d 901

Ernest WINTERS, Plaintiff,

v.DOUGLAS EMMETT, INC., et al., Defendants.

CV 21-4052 DSF (SPx)

United States District Court, C.D. California.

Signed July 2, 2021

Abigail Ameri Zelenski, David Zelenski, Zelenski Law PC, Pasadena, CA, Mark Samuel Greenstone, Greenstone Law APC, Los Angeles, CA, for Plaintiff.

Christina M. Behrman, Brian Thomas Daly, Rafael Gonzalez, Mullen and Henzell LLP, Santa Barbara, CA, for Defendants Douglas Emmett, Inc., Douglas Emmett Management, Inc., Douglas Emmett Management, LLC.

Order GRANTING Plaintiff's Motion to Remand (Dkt. 9) and DENYING as Moot Defendants’ Motion to Compel Arbitration (Dkt. 13)

Dale S. Fischer, United States District Judge

Plaintiff Ernest Winters moves for remand. Dkt. 9 (Remand Mot.). Defendants Douglas Emmett, Inc.; Douglas Emmett Management, Inc.; and Douglas Emmett Management, LLC (collectively, Douglas Emmett) oppose, dkt. 20 (Remand Opp'n), and move to compel arbitration, dkt. 13. The Court deems these matters appropriate for decision without oral argument. See Fed. R. Civ. P. 78 ; Local Rule 7-15. The hearings set for July 12, 2021 are removed from the Court's calendar. For the reasons stated below, the motion to remand is GRANTED, and the motion to compel arbitration is DENIED as moot.

I. BACKGROUND

Winters is a former employee of Douglas Emmett Management, LLC. Dkt. 17 ¶ 4. The remaining defendants are related entities. Id. ¶ 2. Winters and Douglas Emmett entered into a dispute resolution agreement that requires arbitration of disputes arising out of or relating to the employment relationship. Id. ¶ 3 & Ex. A. Additionally, Winters completed and signed an employment application that authorized Douglas Emmett to obtain a consumer report on Winters. Dkt. 11 (Winters Decl.) ¶ 2.

On March 18, 2021, Winters filed this putative class action in Los Angeles County Superior Court. Dkt. 1, Ex. A (Compl.). His complaint alleged claims for relief under the federal Fair Credit Reporting Act (FCRA) and California Private Attorneys General Act. Id. ¶¶ 47-75. Douglas Emmett removed the case on May 14, 2021, alleging this Court had federal question jurisdiction under 28 U.S.C. § 1331 because two of Winters’ three claims are federal claims arising under the FCRA. Dkt. 1 at 1-4.

II. LEGAL STANDARD

A. Remand

"Federal courts are courts of limited jurisdiction" and "possess only that power authorized by [the] Constitution and statute." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). A defendant may remove an action to federal court if the federal court could exercise subject matter jurisdiction over the action. 28 U.S.C. § 1441(a). "The removal statute is strictly construed against removal jurisdiction," and "[t]he defendant bears the burden of establishing that removal is proper." Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009). If a defendant fails to meet its burden of establishing the Court has subject matter jurisdiction, the suit is remanded. 28 U.S.C. § 1447(c).

B. Standing

"The Constitution limits Article III federal courts’ jurisdiction to deciding ‘cases’ and ‘controversies.’ " Oklevueha Native Am. Church of Haw., Inc. v. Holder, 676 F.3d 829, 835 (9th Cir. 2012) (quoting U.S. Const. art. III, § 2). The Court's "role is neither to issue advisory opinions nor to declare rights in hypothetical cases, but to adjudicate live cases or controversies consistent with the powers granted the judiciary in Article III of the Constitution." Thomas v. Anchorage Equal Rights Comm'n, 220 F.3d 1134, 1138 (9th Cir. 2000) (en banc).

"To satisfy Article III 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.’ " Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037, 1042 (9th Cir. 2017) (brackets omitted) (quoting Spokeo, Inc. v. Robins (Spokeo II ), 578 U.S. 330, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016) ). A plaintiff establishes an injury in fact, if "he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’ " Spokeo II, 136 S. Ct. at 1548 (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). However, "a plaintiff does not ‘automatically satisfy the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.’ Even then, ‘Article III standing requires a concrete injury.’ " Robins v. Spokeo, Inc. (Spokeo III ), 867 F.3d 1108, 1112 (9th Cir. 2017) (citation and brackets omitted) (quoting Spokeo II, 136 S. Ct. at 1549 ).

"A ‘concrete’ injury must be ‘de facto ’; that is, it must actually exist," and be "real" rather than "abstract." Spokeo II, 136 S. Ct. at 1548 ; see also Spokeo III, 867 F.3d at 1112 ("To establish such an injury, the plaintiff must allege a statutory violation that caused him to suffer some harm that actually exists in the world; there must be an injury that is real and not abstract or merely procedural") (brackets and quotation marks omitted). " ‘Concrete’ is not, however, necessarily synonymous with ‘tangible.’ " Spokeo II, 136 S. Ct. at 1549. "Although tangible injuries are perhaps easier to recognize ... intangible injuries can nevertheless be concrete." Id. For example, "Congress may ‘elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.’ " Id. (quoting Lujan, 504 U.S. at 578, 112 S.Ct. 2130 ). Thus, although "some statutory violations, alone, do establish concrete harm," Spokeo III, 867 F.3d at 1113, "[i]n determining whether an intangible injury is sufficiently concrete, both history and the judgment of Congress play important roles." Eichenberger v. ESPN, Inc., 876 F.3d 979, 982 (9th Cir. 2017) (quotation marks omitted).

III. DISCUSSION

The Court first addresses Winters’ motion to remand. See SanDisk Corp. v. SK Hynix Inc., 84 F. Supp. 3d 1021, 1028 (N.D. Cal. 2015) ("[T]he Court finds that to reach Hynix's motion to compel arbitration the Court would first have to decide whether Hynix properly removed this case ....").

A. Motion to Remand

Winters argues the Court does not have subject matter jurisdiction because Winters’ FCRA claims do not assert he has suffered an "injury in fact" that would satisfy Article III's case and controversy requirement. Remand Mot. at 1. In his Complaint, Winters alleges Douglas Emmett failed to make proper disclosures and failed to obtain proper authorization in violation of 15 U.S.C. § 1681b(b)(2)(A). Compl. ¶¶ 47-60. Pursuant to section 1681b(b)(2)(A), persons may not procure a consumer report unless they disclose in writing to the consumer in a document that consists solely of the disclosure that a report may be obtained for employment purposes. 15 U.S.C. § 1681b(b)(2)(A). Winters alleges Douglas Emmett's disclosure violates this requirement because it did not consist solely of the disclosure. Compl. ¶¶ 3-4.

"A violation of one of the FCRA's procedural requirements may result in no harm. For example, even if a consumer reporting agency fails to provide the required notice to a user of the agency's consumer information, that information regardless may be entirely accurate." Spokeo II, 136 S. Ct. at 1550." "In addition, not all inaccuracies cause harm or present any material risk of harm." Id. Violations of section 1681b(b)(2)(A) may give rise to a concrete injury when the allegations are sufficient to support the inference that a plaintiff "was deprived of the right to information and the right to privacy guaranteed by" the section. Syed v. M-I, LLC, 853 F.3d 492, 499 (9th Cir. 2017). However, such a finding requires the reasonable inference that the violation caused actual confusion. See id. at 499-500.

Syed alleged a violation of the same FCRA provision as Winters does here, section 1681b(b)(2)(A). Id. at 499. That section creates "a right to information by requiring prospective employers to inform job applicants that they intend to procure their consumer reports as part of the employment application process." Id. It also "creates a right to privacy by enabling applicants to withhold permission ... and a concrete injury when applicants are deprived of their ability to meaningfully authorize the credit check." Id. Syed alleged that he discovered the defendant had procured a consumer report on him only after he obtained and reviewed his personnel file. Id. From that allegation, the Circuit inferred Syed was not aware he was authorizing a credit check when he signed the form and was confused or would have declined to authorize the report had the disclosure been FCRA-compliant. Id. at 499-500.

On the basis of that confusion, the circuit found Syed alleged a concrete injury sufficient for Article III standing. Id. ("Syed alleged in his complaint that he ‘discovered Defendant M-I's violation(s) within the last two years when he obtained and reviewed his personnel file from Defendant M-I and discovered that Defendant M-I had procured and/or caused to be procured a consumer report regarding him for employment purposes based on the illegal disclosure and authorization form.’ This allegation is sufficient to infer that Syed was deprived of the right to information and the right to privacy guaranteed by Section 1681b(b)(2)(A) ([i])-(ii) because it indicates that Syed was not aware that he was signing a waiver authorizing the credit check when he signed it. Drawing all reasonable inferences in favor of the moving party, we can fairly infer that Syed was confused by the inclusion of the liability waiver with the disclosure and would not have signed it had it contained a sufficiently clear disclosure, as required in the statute." (quotation marks omitted)).

In arguing...