Kirchner v. Shred-It USA, Inc.
2:14-cv-01437
E.D. Cal.Nov 25, 2014Background
- Plaintiff Michael Kirchner applied for employment with Shred-it in 2011 and signed an authorization form; later discovered First Advantage had provided a consumer report to Shred-it.
- Plaintiff alleges First Advantage furnished an employment consumer report without first obtaining the certification from Shred-it required by 15 U.S.C. § 1681b(b)(1).
- Plaintiff seeks statutory and punitive damages under the FCRA, which require a showing that the defendant acted "willfully" (intentional or reckless conduct under Safeco).
- First Advantage moved to dismiss the FAC, submitting documents it says prove it did not furnish a report on Kirchner and that it received the required certification.
- The court declined to consider those proffered documents on the 12(b)(6) motion because their authenticity or applicability was disputed and the complaint did not necessarily rely on them.
- The court denied First Advantage’s motion to dismiss the certification claim; it also denied without prejudice the defendant’s separate "fail-safe" class-claim challenge.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether First Advantage violated 15 U.S.C. § 1681b(b)(1) by furnishing an employment consumer report without first obtaining the employer's certification | Kirchner: First Advantage furnished a report to Shred-it without obtaining the statutorily required certification | First Advantage: Documentary evidence shows it did not furnish a report on Kirchner and it obtained certification from Shred-it | Denied dismissal: Accepting allegations as true, plaintiff plausibly alleged the certification violation; defendant's documents were not properly considered on 12(b)(6) because authenticity/applicability is disputed |
| Whether plaintiff adequately pleaded willfulness (required for statutory/punitive FCRA damages) | Kirchner: Alleged First Advantage acted intentionally or recklessly in violating § 1681b(b)(1) | First Advantage: Implied that any violation was not willful because its interpretation or conduct was reasonable | Court: Safeco requires objective unreasonableness to show recklessness; because the statutory text plainly requires certification, plaintiff's allegation of objective unreasonableness survives dismissal |
| Whether the court may consider defendant’s proffered documents on a 12(b)(6) motion | Kirchner: Documents are inauthentic/misapplied and the complaint does not necessarily rely on them | First Advantage: Documents (report, master agreement) show no violation and authenticate certification | Court: Cannot consider disputed documents on a motion to dismiss; therefore must accept plaintiff's allegations |
| Whether the class allegations are an impermissible "fail-safe" class | Kirchner: Class allegation defines the putative class by those harmed (standard class pleading) | First Advantage: Class is "fail-safe" and should be dismissed | Court: Dismissal on that ground denied without prejudice; defendant may raise at class-certification or via later motion |
Key Cases Cited
- Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) (willfulness under FCRA requires intent or reckless disregard; recklessness means an objectively unreasonable reading of the statute)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (complaint must plead facts sufficient to state a plausible claim)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standards and plausibility review)
- Scheuer v. Rhodes, 416 U.S. 232 (1974) (on a motion to dismiss, allegations must be accepted as true)
- Saucier v. Katz, 533 U.S. 194 (2001) (qualified-immunity framework analogous to Safeco's discussion of objective legal standard)
- Goode v. LexisNexis Risk & Info. Analytics Grp., Inc., 848 F. Supp. 2d 532 (E.D. Pa. 2012) (court considered willfulness and guidance on FCRA at motion-to-dismiss stage)
- Long v. Tommy Hilfiger U.S.A., Inc., 671 F.3d 371 (3d Cir. 2012) (affirming dismissal where defendant’s FCRA interpretation was objectively reasonable)
- Shlahtichman v. 1-800 Contacts, Inc., 615 F.3d 794 (7th Cir. 2010) (same as to objective reasonableness for willfulness inquiry)
- Parrino v. FHP, Inc., 146 F.3d 699 (9th Cir. 1998) (limits on considering extrinsic documents on a 12(b)(6) motion)