Banks v. Central Refrigerated Services Inc, 2:16-cv-00356

Background

Banks applied online to Central Refrigerated for a truck-driver job in March 2013; Central obtained background reports from HireRight and DriverFACTS and then rejected him.
Banks learned rejection was based on the DriverFACTS report, requested the report from Central (which allegedly refused) and later obtained and disputed the DriverFACTS report; DriverFACTS denied the dispute.
Banks sued Central under the Fair Credit Reporting Act (FCRA) alleging Central failed to give required adverse-action notices (including notice of right to obtain a free report and to dispute) after taking adverse action based in whole or in part on consumer reports.
The case was transferred to the District of Utah; Banks moved to certify a nationwide class of remote applicants from 3/18/2010–2/1/2014 who were subject to HireRight/DriverFACTS reports and received no timely adverse-action notice; Central moved to dismiss for lack of jurisdiction and for summary judgment.
The court denied Central’s Rule 12(b)(1) motion (standing), granted class certification under Rule 23(b)(3), and denied Central’s summary judgment motion (statutory exclusion under 15 U.S.C. §1681a(y)).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing (injury-in-fact under Spokeo)	Banks suffered concrete informational injury because Central failed to provide statutorily required adverse-action notices and a copy of the report	No concrete harm: Banks suffered no economic, physical, or emotional injury and would have been rejected regardless of notice	Court: Denies dismissal — statutory informational right under 15 U.S.C. §1681b(b)(3)(B) can give concrete injury; Banks has standing
Class certification — ascertainability & composition	Class members can be identified by cross-referencing Central’s rejection records (recruiter notes/codes) with HireRight/DriverFACTS records; class definition targets those who didn’t receive required notices	Proposed definition is a fail-safe tied to liability; identification would require individualized, extensive file-by-file review and Central’s records are inconsistent	Court: Class is ascertainable; proposed methodology is sufficiently reliable and administrability concerns do not defeat certification
Class certification — Rule 23(a) and 23(b)(3) (numerosity, commonality, typicality, adequacy, predominance/superiority)	Common questions (whether reports are consumer reports, systemic failure to provide notices, willfulness) predominate; numerosity, typicality, adequacy satisfied; class action is superior given small statutory damages	Individualized issues (statute of limitations differences, in-person contact affecting which FCRA subsection applies) will predominate and defeat typicality/predominance	Court: Requirements satisfied — numerosity, commonality, typicality, adequacy met; common issues predominate and class action is superior; class certified
Summary judgment — §1681a(y) exclusion (employee-investigation communications)	N/A for plaintiff (argues reports are consumer reports and FCRA applies)	Central: reports were obtained to comply with DOT-mandated investigations, so communications fall within §1681a(y) exclusion and are not consumer reports	Court: Denies summary judgment — §1681a(y) excludes communications made to an employer about investigations of an employee’s compliance with regulations; Central did not show the exclusion applies to applicant background checks here

Key Cases Cited

Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (Article III requires a concrete injury even for statutory violations)
Warth v. Seldin, 422 U.S. 490 (1975) (standing is threshold for federal jurisdiction)
Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (rigorous Rule 23 analysis; commonality requirements)
Mullins v. Direct Digital, LLC, 795 F.3d 654 (7th Cir. 2015) (discussion of "fail-safe" classes and ascertainability)
Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (predominance requirement and cohesion of class issues)
Young v. Nationwide Mut. Ins. Co., 693 F.3d 532 (6th Cir. 2012) (practical standard that identification methods need be reasonably accurate, not perfect)