Freckleton v. Target Corp.

• Decision Date: 12 January 2015
• Docket Number: Civil No. WDQ–14–0807.
• Parties: Charmaine FRECKLETON, on behalf of herself and others similarly situated, Plaintiffs, v. TARGET CORPORATION, et al., Defendants.
• Court: U.S. District Court — District of Maryland

81 F.Supp.3d 473

Charmaine FRECKLETON, on behalf of herself and others similarly situated, Plaintiffs

v.TARGET CORPORATION, et al., Defendants.

Civil No. WDQ–14–0807.

United States District Court, D. Maryland, Northern Division.

Signed Jan. 12, 2015.

Martin Eugene Wolf, Gordon, Wolf & Carney, Chts., Towson, MD, David A. Searles, James A. Francis, John Soumilas, Francis and Mailman PC, Irv Ackelsberg, Langer Grogan and Diver PC, Philadelphia, PA, for Plaintiff.

Katrina J. Dennis, Saul Ewing LLP, Baltimore, MD, Brian Melendez, Dykema Gossett PLLC, Minneapolis, MN, Reginald Goeke, Mayer Brown LLP, Washington, DC, John Nadolenco, John P. Zaimes, Mayer Brown LLP, Los Angeles, CA, for Defendants.

MEMORANDUM OPINION

WILLIAM D. QUARLES, JR., District Judge.

Charmaine Freckleton (the “Plaintiff”) sued Target Corporation (“Target”) and First Advantage LNS Screening Solutions, Inc. (“First Advantage”)¹ for violations of the Fair Credit Reporting Act (“FCRA”).² Pending are Target's and First Advantage's motions to dismiss the original complaint, the Plaintiff's motion to confirm leave to amend the complaint, and Target's motion to strike the amended complaint, or, in the alternative, to dismiss the amended complaint for failure to state a claim. No hearing is necessary. Local Rule 105.6 (D.Md.2011). For the following reasons, the motion to confirm leave to amend will be granted; the other motions will be denied.

I. Background³

A. Target's Relationship with First Advantage

First Advantage “is among the biggest of this nation's employment background screening companies.” ECF No. 45 at ¶ 14. First Advantage “enters into form contracts (“Agreement of Service”) with its employer customers, whereby, for a price, [First Advantage] agrees to provide consumer reports for employment purposes within the meaning of section 1681b(b) of the FCRA.”⁴ Id. at ¶ 15.

First Advantage's customers, through the Agreement of Service, “acknowledge and agree that the information it will provide in connection with a background check is regulated FCRA consumer report information.” Id. The customers must also agree to “follow FCRA procedures and safeguards that apply to the use of consumer reports.” Id. For each background check ordered, the client must “have disclosed in writing to the job applicant its intent to procure a ‘consumer report’ as part of the application and the applicant will have provided the customer with a written consent to such procurement.” Id. at ¶ 17.

When a client requires a background check, it sends a request to First Advantage. Id. at ¶ 19. Using proprietary software, First Advantage will gather information about the prospective employee. Id. “For an additional fee, [First Advantage] offers a ‘scoring service’ which, in addition to providing a ‘background report’ about the applicant, will score the applicant in accordance with an ‘adjudication matrix’ negotiated between the two companies.” Id. at ¶ 20. The adjudication matrix assigns the applicant one of three classifications: in-eligible for hire, eligible, or “ ‘decisional’ (meaning that the customer needs to decide itself.)” Id.

Target was one of First Advantage's “employer customers.” Id. at ¶ 16. In addition to using First Advantage's background checks, Target also contracted to use the scoring service, and specified the factors that would make a candidate “in-eligible for hire” when adjudicated. Id. at ¶ 20–23. “Target has used this background screening service by [First Advantage] as a way to manage its vast pool of job applicants, filtering out those applicants scored by [First Advantage] as ‘In–Eligible for Hire.’ ” Id. at ¶ 23.

“As part of its agreement with Target, one of the databases [First Advantage] used to adjudicate Target job applicants ... was its proprietary database known [ ] as ‘Esteem.’ ” Id. at ¶ 25. “The data maintained in the Esteem database consisted primarily of purported admissions of theft procured by a former employer and contributed to the Esteem system. This data is separate from criminal records information, which tends to be contained in separate databases....”⁵ Id. at ¶ 26. Target specified a “screening protocol” for prospective employees that “included, after a drug test, a Social Security number validation; then, at the next stage, an Esteem search; and then, if no Esteem match[es] were found, searches of [First Advantage's] National Criminal Record File and its ‘OFAC database.” Id. at ¶¶ 28–29.

B. The Plaintiff's Contacts with the Defendants

In early 2012, the Plaintiff applied for a job at Target. ECF No. 45 at ¶ 31. During the application process, “Target required [the] Plaintiff to consent to the procurement by Target of ‘consumer reports' about her.” Id. “In the consent documents that Target made [the] Plaintiff sign, Target asserted that it would be obtaining an FCRA consumer report.” Id.

On or about March 23, 2012, Target requested that First Advantage complete a background screening on the Plaintiff.⁶ Id. at ¶ 32. “[A]fter validating [the] Plaintiff's Social Security number, [First Advantage] conducted a search of the consumer report about [the] Plaintiff in its Esteem database and discovered a match.” Id. at ¶ 34. First Advantage adjudicated the Plaintiff in-eligible for hire, and reported to Target that she had been involved in a theft on December 2, 2011. Id. at ¶¶ 34–35, 64.⁷ The background check and screening process were completed on March 23, 2012, the day Target sent the initial request. Id. at ¶ 42.

“Several days after [First Advantage] transmitted the Background Report [ ] to Target ..., provided [the] Plaintiff with a copy of the same background screen report [First Advantage] had earlier furnished to Target, accompanied by a written standardized notice, representing that the report might have an adverse effect on her application for employment and a form notice explaining, inter alia, her right under the FCRA to dispute the accuracy of the report.” Id. at ¶ 39.

C. Procedural History

On March 17, 2014, the Plaintiff sued Target on behalf of herself and similarly situated others, alleging that Target had violated 15 U.S.C. § 1681b(b)(3). ECF No. 1. The Plaintiff also asserted an individual claim against First Advantage for violating 15 U.S.C. § 1681e(b). Id. On April 30, 2014, Target moved to dismiss for failure to state a claim. ECF No. 28. On May 8, 2014, the Court approved the Plaintiff and Target's joint stipulation giving the Plaintiff until June 19, 2014 to “respond” to the motion to dismiss. ECF Nos. 35–36. On May 23, 2014, First Advantage moved to dismiss for failure to state a claim. ECF No. 40. On June 6, 2014, the Court approved the parties' joint stipulation giving the Plaintiff until June 27, 2014 to respond to First Advantage's motion to dismiss. ECF Nos. 43–44.

On June 20, 2014, the Plaintiff filed an amended complaint. ECF No. 45. The Plaintiff believed that she was filing the amended complaint as of right under Fed.R.Civ.P. 15(a)(1) because of the extensions of time under the two joint stipulations.⁸ See ECF No. 50–1 at 7. “After learning that [the] Defendants were taking the position that the amended complaint had been filed without their consent ..., and in order to eliminate any question that her First Amended Complaint was properly filed, [the] Plaintiff filed” a motion to confirm leave to amend. ECF No. 46; ECF No. 50–1 at 7.

On July 2, 2014, Target moved to strike the amended complaint, or, alternatively, to dismiss the amended complaint for failure to state a claim. ECF No. 47. On July 10, 2014, Target opposed the Plaintiff's motion to confirm leave to amend. ECF No. 48. On July 14, 2014, First Advantage opposed the Plaintiff's motion to confirm leave to amend. ECF No. 49. On July 21, 2014, the Plaintiff opposed Target's motion to strike the amended complaint. ECF No. 50. On July 28, 2014, the Plaintiff replied to Target's opposition to her motion to confirm leave to amend. ECF No. 51. On August 7, 2014, Target filed its reply for its motion to strike the amended complaint. ECF No. 55.

II. Analysis

A. Legal Standards

1. Amending a Complaint

Fed.R.Civ.P. 15(a)(1) allows a party to “amend its pleading once as a matter of course” within “21 days after serving it” or, “if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.” All other amendments may be made “only with the opposing party's written consent or the court's leave.” Rule 15(a)(2).

Federal Rule of Civil Procedure 15(a)(2) instructs that leave to amend should be freely given when justice requires. Leave should be denied only when amendment would unduly prejudice the opposing party, amount to futility, or reward the movant's bad faith. Steinburg v. Chesterfield Cnty. Planning Comm'n, 527 F.3d 377, 390 (4th Cir.2008) ; Equal Rights Ctr. v. Niles Bolton Associates, 602 F.3d 597, 603 (4th Cir.2010).

2. Motion to Dismiss for Failure to state a Claim

Under Fed.R.Civ.P. 12(b)(6), an action may be dismissed for failure to state a claim upon which relief may be granted. Rule 12(b)(6) tests the legal sufficiency of a complaint, but does not “resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir.2006).

The Court bears in mind that Rule 8(a)(2) requires only a “short and plain statement of the claim showing that the pleader is entitled to relief.” Migdal v. Rowe Price–Fleming Int'l Inc., 248 F.3d 321, 325–26 (4th Cir.2001). Although Rule 8's notice-pleading requirements are “not onerous,” the plaintiff must allege facts that support each element of the claim advanced. Bass v. E.I. Dupont de Nemours & Co., 324 F.3d 761, 764–65 (4th Cir.2003). These facts must be sufficient to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). This...