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Milbourne v. JRK Residential America, LLC

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

October 31, 2014

DERRICK A. MILBOURNE, on behalf of Himself and All Others Similarly Situated, Plaintiff,
v.
JRK RESIDENTIAL AMERICA, LLC, Defendant.

MEMORANDUM OPINION

ROBERT E. PAYNE, Senior District Judge.

This matter is before the Court on PLAINTIFF'S MOTION FOR CLASS CERTIFICATION (Docket No. 35). For the reasons set forth below, the motion is granted in part. The Impermissible Use Class and Adverse Action Class are certified pursuant to a class definition that limits the class to those members whose claims arose within the two years before the date on which this action was filed.

BACKGROUND

A. The Proposed Class and Class Claims

In PLAINTIFF'S MEMORANDUM IN SUPPORT OF MOTION FOR CLASS CERTIFICATION (Docket No. 6), Milbourne seeks to certify two classes.[1] The first class, which Milbourne calls the "Impermissible Use Class", is defined as follows:

All natural persons residing in the United States (including all territories and other political subdivisions of the United States), (a) who applied for an employment position with Defendant or any of its subsidiaries, (b) as part of this application process were the subject of a consumer report obtained by Defendant during the five years proceeding [sic] the filing of the Complaint, (c) where Defendant used a form to make its disclosures pursuant to 15 U.S.C. § 1681b(b)(2) that contained a release and/or waiver of the signing consumer's claims and/or rights.

Pl.'s Mem. in Sup. of Mtn. for Class Cert., Docket No. 35, at 8-9. Count Two of the Class Complaint is asserted on behalf of this "Impermissible Use Class" and alleges:

• "JRK violated the FCRA by procuring consumer reports relating to Plaintiff and other Impermissible Use Class members without first making proper disclosures and receiving written consent in the format required by 15 U.S.C. §1681b(b)(2)(A)."
• "The foregoing violations were willful. JRK acted in deliberate or reckless disregard of its obligations and the rights of Plaintiffs and other Impermissible Use Class members under 15 U.S.C. §1681b(b)(2)(A)(i)."
• "Plaintiff and Impermissible Use Class are entitled to statutory damages of not less than $100 and not more than $1, 000, and punitive damages, for each and every one of these violations, pursuant to 15 U.S.C. §1681n."
• "Plaintiff and the Impermissible Use Class are further entitled to recover their costs and attorneys' fees, pursuant to 15 U.S.C. §1681n(a)(3)."

Class Complaint, Docket No. 1, at ¶¶ 50-53.

The second proposed class, which Milbourne calls the "Adverse Action Class" is defined as follows:

All natural persons residing in the United States (including all territories and other political subdivisions of the United States), (a) who applied for an employment position with Defendant or any of its subsidiaries, (b) as part of this application process were the subject of a consumer report background check obtained by Defendant on or after the date five years proceeding [sic] the filing of the Complaint, (c) where Defendant's records show that the applicant was denied employment because of the background check, (d) and to whom Defendant did not provide a copy of the consumer report and other disclosures stated at 15 U.S.C. §1681b(b)(3)(A)(ii) at least five business days before the date the employment decision is first noted in Defendant's records.

Pl.'s Mem. in Sup. of Mtn. for Class Cert., Docket No. 36, at 9. Count One of the Class Complaint is asserted on behalf of the "Adverse Action Class" and alleges:

• "JRK used a consumer report, ' as defined by the FCRA, to take adverse employment action against Plaintiff and other members of the Adverse Action Class."
• "JRK violated the FCRA by failing to provide Plaintiff and other Adverse Action Class members with a copy of the consumer report that was used to take adverse employment action against them. See 15 U.S.C. §1681b(b)(3)(A)."
• "JRK violated the FCRA by failing to provide Plaintiffs and other Adverse Action Class members with a copy of the consumer report that was used to take adverse employment action against them at least five (5) business days before doing so. See 15 U.S.C. §1681(b)(3)(A)."
• "JRK willfully violated the FCRA, 15 U.S.C. §1681(b)(3)(A)(ii), because it failed to provide Plaintiff and all similarly situated applicants and employees an accurate and current summary of rights required by this section of the FCRA before taking an adverse action that was based in whole or in part on the consumer report."
• "The foregoing violations were willful. JRK acted in deliberate or reckless disregard of its obligations and the rights of Plaintiff and other Adverse Action Class members under 15 U.S.C. §1681b(b)(3)(A)."
• "Plaintiff and the Adverse Action Class are entitled to statutory damages of not less than $100 and not more than $1, 000 for each and every one of these violations, and punitive damages, pursuant to 15 U.S.C. §1681b."
• "Plaintiff and the Adverse Action Class are further entitled to recover their costs and attorneys' fees, pursuant to 15 U.S.C. §1681n(a)(3)."

Class Complaint, Docket No. 1, at ¶¶42-48.

B. JRK's Procurement and Use of Consumer Reports

JRK is a Delaware limited liability company doing business in Virginia. JRK has a practice of procuring consumer reports for employment purposes and uses those reports in making its hiring decisions. Since 2009, JRK has used the services of U.S. Background Screening to run background checks on those who apply for jobs with JRK. Before JRK implemented its practices, it consulted with U.S. Background Screening's legal and compliance teams with a view to ensuring compliance with the FCRA. Def.'s Opp. to Pl.'s Mtn. for Class Cert., Docket No. 38, at 4.

Milbourne alleges that, when he applied for a job at JRK in November of 2010, he was asked to, and did, sign a background check disclosure form presented to him by JRK. That form notified the applicant that JRK might run a background check and requested authorization to do so. The form also included a liability waiver and release inuring to the benefit of JRK and other related parties. The form was the "single standard FCRA authorization and disclosure form used by Defendant for the putative class." Pl's Mem. in Sup. of Mtn. for Class Cert., Docket No. 36, at 6. Milbourne claims that the form violates The Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §1681b(b)(2)[2], because the disclosure form contained more information than permitted by the statute. Id. at 3-6.

Milbourne applied, signed the disclosure form at issue, and was hired by JRK on a conditional basis on November 19, 2010. JRK received the completed background check results on November 22, 2010 which showed two misdemeanor convictions and several other charges. Because of administrative follow-up and the Thanksgiving holiday, Milbourne's employment was not terminated until December 7, 2010. On December 8, 2010, U.S. Background Screening sent Milbourne an adverse action letter on behalf of JRK. That letter included a copy of the background check report and a description of his FCRA rights. Milbourne alleges that this conduct also violates the FCRA, 15 U.S.C. §1681b(b)(3)(A)[3] which requires that the "employer must provide a copy of the report a sufficient amount of time before it takes adverse action so that the consumer may rectify any inaccuracies in the report." Beverly v. Wal-Mart Stores, Inc., 2008 U.S. Dist. LEXIS 2266 (E.D. Va. 2008) (internal quotations omitted).

C. Class Representative - Derrick A. Milbourne

Derrick A. Milbourne is a Virginia resident who applied for a job with JRK in November 2010. He completed the new hire paperwork, which included the background check form, and was hired on a temporary basis. When his background check was returned to JRK, the company terminated him based on ...


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