1:20-cv-07948
S.D.N.Y.Oct 30, 2024Background
- Grace Grissom filed a class action against Sterling Infosystems, Inc., alleging that its SSN Trace tool in background checks incorrectly associated her with criminal records, resulting in her losing a job opportunity.
- The class action, brought under the Fair Credit Reporting Act (FCRA), seeks remedies for individuals similarly impacted by errors in Sterling’s background reporting processes.
- Two settlement classes were proposed: (1) the Injunctive Relief Class (approx. 44,658 members), who would receive non-monetary relief via a change in Sterling’s SSN Trace tool; and (2) the Damages Class (approx. 7,469 members), who would receive payments from a $2.5 million fund.
- Plaintiffs and Sterling reached a mediated settlement after extensive discovery and submitted an unopposed motion for preliminary approval.
- The Court found the settlement fair, reasonable, and adequate, and preliminarily approved it, scheduled a final fairness hearing, and outlined requirements for notice and further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sterling’s SSN Trace procedure violated FCRA | Sterling’s SSN Trace was unreasonable and caused report errors | Not opposed at this stage | Preliminaryly found class criteria and relief fair |
| Adequacy of class representation and relief | Plaintiff and counsel fairly represent class; relief is adequate | Not opposed at this stage | Court found representation and relief adequate |
| Arm’s-Length nature and fairness of settlement negotiations | Settlement reached after substantial discovery and mediation | Not opposed at this stage | Court presumed fairness; approved process |
| Whether class certification criteria are satisfied | Classes are numerous, typical, and common issues predominate | Not opposed at this stage | Court conditionally certified both settlement classes |
Key Cases Cited
- Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir. 2005) (compromise of complex class litigation favored by public policy)
- Cordes & Co. Fin. Servs. v. A.G. Edwards & Sons, Inc., 502 F.3d 91 (2d Cir. 2007) (adequacy of representation resides in lack of antagonism and skilled counsel)
- Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) (FCRA willfulness requirement interpreted)
- McDaniel v. Cnty. of Schenectady, 595 F.3d 411 (2d Cir. 2010) (fee awards in class actions may use different methods; court must independently assess)
- City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) (establishes factors for evaluating class action settlements)