Bebault v. DMG Mori USA, Inc.
| Decision Date | 29 April 2020 |
| Docket Number | Case No. 18-cv-02373-JD |
| Parties | BRANDON BEBAULT et al., Plaintiffs, v. DMG MORI USA, INC., Defendant. |
| Court | U.S. District Court — Northern District of California |
Named plaintiffs Brandon Bebault and Steven Arnold ask for certification of a national class for claims under the Fair Credit Reporting Act ("FCRA") against DMG Mori USA, Inc. ("DMG"). Dkt. No. 68. The Court certifies a class consisting of all persons residing in the United States for whom DMG procured or caused to be procured a consumer report for employment purposes on or after April 19, 2016. Plaintiff Arnold will be the class representative.
The salient facts are undisputed. DMG is an Illinois corporation that makes cutting machine tools. Bebault and Arnold are former employees of DMG. During the employment application process, DMG gave them a one-page form authorizing DMG to obtain a consumer report as part of a pre-employment background check. Dkt. No. 65 (second amended complaint) ¶ 15. The form contained the disclosures and written authorization that the FCRA requires before a consumer report can be obtained by a prospective employer. Id. ¶ 15 and Exh. 1; Dkt. No. 68-1 at 3. It also contained, in the same page, additional information about consumer reports specific to the state laws of California, New York, Maine, Minnesota, Oklahoma, Oregon and Washington. Dkt. 68-1 at 3. DMG does not dispute that it used this form for all job applicants during the relevant time period.
Plaintiffs contend that the inclusion of the state-law provisions in the form violated Congress's mandate that the document consist "solely" of the FCRA disclosures on a standalone basis, without any extraneous information. See 15 U.S.C. § 1681b(b)(2)(A)(i). Plaintiffs expressly allege that they were "confused by the extraneous information" in DMG's disclosure. Dkt. No. 65 ¶ 15. They sued DMG on a single claim under the FCRA, which the Court sustained over DMG's motion to dismiss. Dkt. No. 38.
Plaintiffs seek certification under Federal Rule of Civil Procedure 23(b)(3) of a class of all "natural persons residing in the United States (including all territories and other political subdivisions of the United States) who were the subject [of] a consumer report that was procured by Defendant (or that Defendant caused to be procured) within five years of the filing of this Compliant through the date of final judgment." Dkt. No. 68-1 at 8.
The standards governing a motion for certification are well-settled. See generally Brickman v. Fitbit, Inc., No. 15-cv-02077-JD, 2017 WL 5569827, at *2-3 (N.D. Cal. Nov. 20, 2017). As the parties seeking certification, plaintiffs bear the burden of showing that the requirements of Federal Rule of Civil Procedure 23 are met. Mazza v. Am. Honda Motor Co., 666 F.3d 581, 588 (9th Cir. 2012). The proposed class action must satisfy all four requirements of Rule 23(a), and at least one of the sub-sections of Rule 23(b). Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013); Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1186 (9th Cir.), amended by 273 F.3d 1266 (9th Cir. 2001).
Rule 23(a) imposes four prerequisites. The class must be "so numerous that joinder of all members is impracticable" (numerosity). There must be "questions of law or fact common to the class" (commonality). The claims or defenses of the named plaintiffs must be "typical of the claims or defenses of the class" (typicality). And the named parties must show that they "will fairly and adequately protect the interests of the class" (adequacy). Fed. R. Civ. P. 23(a)(1)-(4).
To obtain certification of a Rule 23(b)(3) class, plaintiffs must also must show that "questions of law or fact common to class members predominate over any questions affecting onlyindividual members" (predominance) and that a class action is "superior to other available methods for fairly and efficiently adjudicating the controversy" (superiority). Fed. R. Civ. P. 23(b)(3).
The Court's "class-certification analysis must be rigorous and may entail some overlap with the merits of the plaintiff's underlying claim." Amgen Inc. v. Connecticut Ret. Plans & Trust Funds, 568 U.S. 455, 465-66 (2013) (internal quotations and citations omitted). "That is so because the class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action." Comcast, 569 U.S. at 33-34 (internal quotations and citations omitted). These principles apply to the Rule 23(a) and 23(b) analysis alike. Id. at 34.
The rigorous analysis, however, has its limits. Amgen, 586 U.S. at 466. The class certification procedure is decidedly not an alternative form of summary judgment or an occasion to hold a mini-trial on the merits. Alcantar v. Hobart Service, 800 F.3d 1047, 1053 (9th Cir. 2015). The goal under Rule 23 is "to select the metho[d] best suited to adjudication of the controversy fairly and efficiently." Amgen, 568 U.S. at 460 (internal quotations omitted) (modification in original). That means deciding whether efficiency and the interests of justice are best served by having the named plaintiffs go forward to the merits as individuals or on behalf of a class as "an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 348 (2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 700-01 (1979)).
The decision of whether to certify a class is entrusted to the sound discretion of the district court. Zinser, 253 F.3d at 1186.
DMG broadly objects to certification on the grounds that plaintiffs "will be unable to establish either standing or liability." Dkt. No. 71 at 1. This is a surprising proposition becauseboth points have been expressly refuted in recent cases. DMG says that plaintiffs lack standing under Spokeo, Inc. v. Robins, ___ U.S. ___, 136 S. Ct. 1540 (2016) because a violation of the FCRA's standalone disclosure requirement is a "bare" procedural violation that cannot result in cognizable harm. Dkt. No. 71 at 1-3. But the Ninth Circuit has expressly rejected that argument, and concluded that an improper disclosure under Section 1681b(b)(2)(A)(i) causes a concrete injury sufficient to establish Article III standing. Syed v. M-I, LLC, 853 F.3d 492, 499-500 (9th Cir. 2017).
With respect to liability, the Ninth Circuit "reads the FCRA as mandating that a disclosure form contain nothing more than the disclosure itself," without any "extraneous information" even if it might be "closely related" to the FCRA. Walker v. Fred Meyer, Inc., 953 F.3d 1082, 1087-88 (9th Cir. 2020) (internal citation omitted).1 The circuit has specifically held, on facts indistinguishable from those here, that "a prospective employer violates FCRA's standalone document requirement by including extraneous information relating to various state disclosure requirements in that disclosure." Gilberg v. California Check Cashing Stores, LLC, 913 F.3d 1169, 1171 (9th Cir. 2019); see also Walker, 953 F.3d at 1088 (). The Court denied DMG's motion to dismiss for exactly this reason. Dkt. No. 38. There is no room under governing case law for DMG to suggest that plaintiffs' claim is an overreach or otherwise questionable under the FCRA.
DMG also challenges Bebault's role in the litigation. Whether presented as a question of standing, or as an issue of ascertainability or other Rule 23 factor, as DMG does at various points, the heart of the objection is that Bebault waited too long to sue, with the consequence that he cannot be a named representative and that the class period cannot start any earlier than two years before the original complaint was filed. Dkt. No. 71 at 14-18. DMG makes no similar objections to plaintiff Arnold, and in effect acknowledges that he is a suitable representative. Id. at 10.
Bebault's claim is untimely. The FCRA has a two-year statute of limitations, which begins to run as of "the date of the discovery by the plaintiff of the violation that is the basis for such liability." 15 U.S.C. § 1681p(1). DMG suggests that the discovery date should be the day when plaintiffs received and acknowledged a defective disclosure notice, see Dkt. No. 71 at 9, but that argument was again expressly rejected in Syed. An employer does not violate the FCRA by providing an improper disclosure. Syed, 853 F.3d at 506. "The employer violates the FCRA only where, after violating its disclosure procedures, it 'procure[s] or cause[s] to be procured' a consumer report about the job applicant." Id. (citing 15 U.S.C. §1681b(b)(2)(A)(i)) (modifications in original).
Consequently, the relevant inquiry is when did Bebault discover that DMG had procured a report about him. The record demonstrates that DMG's outside vendors responsible for handling its background checks and consumer reports mailed a copy of Bebault's report to him on October 28, 2015. See Dkt. No. 71-1 Exh. 5 ¶ 6 (Hertz Decl.). This was the report DMG procured under the challenged disclosure notice. Id. ¶¶ 4-5; see also Dkt. No. 71-1 Exh. 4 ¶¶ 3-8 (Rau Decl.). Under a rule familiar to all first-year law students, and beloved by bar examiners, there is a rebuttable presumption that Bebault received his consumer report three days after it was mailed. See Dandino, Inc. v. U.S. Dept. of Transp., 729 F.3d 917, 921 (9th Cir. 2013). Consequently, the...
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