Jackson v. Genuine Data Servs.

• Decision Date: 26 January 2022
• Docket Number: CIVIL 3:21cv211(DJN)
• Parties: NIGEL E. JACKSON, on behalf of himself and all similarly situated individuals, Plaintiff, v. GENUINE DATA SERVICES, LLC, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

NIGEL E. JACKSON, on behalf of himself and all similarly situated individuals, Plaintiff, v. GENUINE DATA SERVICES, LLC, Defendant.

CIVIL No. 3:21cv211(DJN)

United States District Court, E.D. Virginia, Richmond Division

January 26, 2022

MEMORANDUM OPINION

David J. Novak, United States District Judge

(Granting Motion to Dismiss, Denying Jurisdictional Discovery and Denying Motion to Strike)

Plaintiff Nigel Jackson ("Plaintiff) brings this action individually and on behalf of all other similarly situated individuals against Defendant Genuine Data Services, LLC ("Defendant"), alleging violations of the Fair Credit Reporting Act ("the FCRA"). This matter now comes before the Court on Defendant's Motion to Dismiss the Amended Complaint Under Rule 12(b)(2) for Lack for Personal Jurisdiction and Rule 12(b)(3) for Improper Venue or, in the Alternative, to Transfer (ECF No. 27) and Plaintiffs Motion to Strike Defendant's Reply in Support of Its Motion to Dismiss (ECF No. 45). For the reasons set forth below, the Court hereby GRANTS the Motion to Dismiss (ECF No. 27) and DENIES both Plaintiffs Motion to Strike (ECF No. 24) and request for jurisdictional discovery. (Opp'n to Mot. to Dismiss at 38-39; Mem. in Supp. of Mot. to Strike at 10.).^[1]

I. BACKGROUND

"Under Rule 12(b)(2), a defendant must affirmatively raise a personal jurisdiction challenge, but the plaintiff bears the burden of demonstrating personal jurisdiction at every stage following such a challenge." Grayson v Anderson, 816 F.3d 262, 267 (4th Cir. 2016) (citation omitted). If a federal court reviews "only the parties' motion papers, affidavits attached to the motion, supporting legal memoranda, and the allegations in the complaint," then a plaintiff need only make a prima facie showing of personal jurisdiction to survive a motion to dismiss under Rule 12(b)(2). Id. at 268 (citations omitted). "[T]he court must construe all relevant pleading allegations in the light most favorable to [plaintiffs], assume credibility, and draw the most favorable inferences for the existence of jurisdiction," Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989), though the Court need not consider only Plaintiffs' proof of personal jurisdiction to decide which inferences it will make, Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 62 (4th Cir. 1993). "[W]here the defendant has provided evidence which denies facts essential for jurisdiction, the plaintiff must, under threat of dismissal, present sufficient evidence to create a factual dispute on each jurisdictional element which has been denied by the defendant and on which the defendant has presented evidence." Indus. Carbon Corp. v. Equity Auto & Equip. Leasing Corp., 737 F.Supp. 925, 926 (W.D. Va. 1990) (citation omitted). Similarly, the Court may consider evidence outside of the pleadings in ruling on a motion for improper venue and will also draw all inferences in favor of Plaintiffs. Sucampo Pharms., Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 549-50 (4th Cir. 2006). Based on these standards, the Court accepts the following facts.

A. Defendant's Operations

Defendant came into existence in 2010. (Def. Genuine Data Services, LLC's Reply in Supp. of Its Mot. to Dismiss the Am. Compl. Under Rule 12(b)(2) for Lack of Personal Jurisdiction and Rule 12(b)(3) for Improper Venue or in the Alternative, to Transfer ("Reply") Ex. A ("2d Klafehn Decl.") ¶ 3 (ECF No. 44).) It sells bulk public record data, which it obtains from third-party public record data collection vendors, and provides this data to its clients periodically. (2d Klafehn Decl. ¶¶ 5, 9-10.) Defendant is incorporated in Delaware, has its principal place of business in Dallas, Texas, and has its technology team in Chapin, South

Carolina. (Def. Genuine Data Services, LLC's Mem. in Supp. of Its Mot. to Dismiss the Am. Compl. Under Rule 12(b)(2) for Lack of Personal Jurisdiction and Rule 12(b)(3) ("Def.'s Mem. in Supp. of Mot. to Dismiss") Ex. A. ("1st Klahfen Decl.") ¶¶ 7-8 (ECF No. 28).) Of Defendant's 21 employees, all but four reside in Texas and South Carolina, and none reside in Virginia. (1st Klafehn Decl. ¶ 9.) Defendant does not have any employees, officers, offices, computer services or advertising in Virginia; it "operates exclusively from Dallas ... and Chapin" and has not sold records or data to a customer in Virginia. (1st Klafehn Decl. ¶¶ 10-15.) Defendant "does not know about whom or for whom its clients use [its] bulk public record data," or whether its clients use the data at all. (2d Klafehn Decl. ¶¶ 11-12.) According to Plaintiff, Defendant constitutes a consumer reporting agency subject to the provisions of the FCRA, because

it regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports for tenant screening purposes to third parties, and uses

interstate commerce, including the Internet, for the purpose of preparing and furnishing such consumer reports. (Am.Compl.¶ 15.)^[2]

B. Factual Background

Before Defendant's inception, Defendant's predecessor collected a Virginia traffic record from July 2000 reflecting that Plaintiff had been found "Guilty in Absentia" for the traffic infraction of "NO CO TAG-B." (Am. Compl. ¶¶ 31-34; 2d Klafehn Decl. ¶14.) The predecessor provided this record to RealPage. (2d Klafehn Decl. ¶ 14.) At some point after Defendant's creation, Defendant received the record from its predecessor, and later, it also provided the record to RealPage as part of a bulk public data file that included thousands of other public records. (2d Klafehn Decl. ¶¶ 19.)

In December 2019, ^[3] Plaintiff applied to rent an apartment at The Nexus at West Alex ("The Nexus"), an apartment complex located in the Eastern District of Virginia, which required a background check. (Am. Compl. ¶¶[ 25-26.) Plaintiffs prospective landlord ordered a background check from RealPage, which provides consumer reports to landlords for tenant screening purposes under the name "The Leasing Desk," in December 2020. (Am. Compl. ¶¶ 5, 27-28.) Using the public record data that it received from Defendant and Defendant's predecessor, RealPage included Plaintiffs July 2000 traffic infraction in the background check that it provided to The Nexus. (Am. Compl. ¶ 38.) As a result, The Nexus denied Plaintiffs rental application. (Am. Compl. ¶ 39.)

At the time when the record at issue was first collected, Defendant did not exist. (2d Klafehn Decl. ¶ 14.) Instead, Defendant's predecessor collected the record and first provided it to RealPage, then later transferred the record to Defendant. (2d Klafehn Decl. ¶¶ 14-15.) Defendant also provided the record to RealPage in a bulk public data file. (2d Klafehn Decl. ¶ 19.)

C. The Amended Complaint

On March 30, 2021, Plaintiff filed his original Complaint. (ECF No. 1.) On June 18, 2021, Defendant moved to dismiss this Complaint. (ECF No. 15.) On July 9, 2021, Plaintiff filed his Amended Complaint, raising two claims for relief based on the above allegations. (ECF No. 22.) Count One asserts a class-action claim under the FCRA, alleging that Defendant neglected to remove traffic infraction information older than seven years from background check reports on Plaintiff and each of the class members in violation of 15 U.S.C. § 1681c(a). (Am. Compl. ¶¶ 57-58.) Count Two also asserts a class-action claim under the FCRA, alleging that Defendant did not implement procedures designed to prevent violations of FCRA in the course of its record reporting in violation of 15 U.S.C. § 1681e(a). (Am. Compl. ¶ 73.) Based on these claims, Plaintiff, on his own behalf and on behalf of the putative class members, seeks class certification, statutory and punitive damages and attorney's fees. (Am. Compl. at 15.)

D. Defendant's Motion to Dismiss

In response to the Amended Complaint, Defendant filed a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and under 12(b)(3) for improper venue, or, in the alternative, to transfer. (ECF No. 27.) Defendant argues that Plaintiff could not establish that this Court had general or specific personal jurisdiction over Defendant, and that neither the Eastern District of Virginia nor the Richmond Division constitute proper venues for this action. (Mem. in Supp. of Mot. to Dismiss at 8-28.) In support of its Motion to Dismiss, Defendant attached a Declaration by Cathy Klafehn ("Klafehn"), Defendant's former Vice President of Operations, who described Defendant's business operations based on her personal knowledge and review of company records. (1st Klafehn Decl. ¶¶ 1-2.)

Plaintiff responded to this Motion on September 9, 2021. (PL's Opp'n to Def. Genuine Data Services, LLC's Mot. to Dismiss Under Rule 12(b)(2) for Lack of Personal Jurisdiction and Rule 12(b)(3) for Improper Venue, or in the Alternative, to Transfer ("Opp'n to Mot. to Dismiss") (ECF No. 39).) In his Response, Plaintiff requested that, if the Court found that it lacked personal jurisdiction over Defendant, then Plaintiff would be permitted to take jurisdictional discovery on the extent of Defendant's contacts with Virginia. (Opp'n to Mot. to Dismiss at 38-39.) The Court later granted another extension of time for Defendant to file its Reply. (ECF No. 42.) On October 7, 2021, Defendant filed its Reply, to which it attached a second Declaration by Klafehn, rendering the Motion to Dismiss the Amended Complaint ripe for review.

E. Plaintiffs Motion to Strike

On October 19, 2021, Plaintiff filed a Motion to Strike, moving to strike Defendant's Reply in support of its Motion to Dismiss the Second Amended Complaint and Klafehn's Declarations. (ECF No. 45.) Plaintiff posited that Defendant...