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Manuel v. Wells Fargo Bank, National Association

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

March 15, 2016

TERRELL MANUEL, et al, Plaintiffs,



This matter comes before the Court on the consent of the parties pursuant to 28 U.S.C. § 636(c)(1) on Plaintiffs' Motion for Final Approval of Class Action Settlement, Application for Service Award to the Class Representative, and Application for Award of Attorneys' Fees (ECF No. 128) filed on March 4, 2016. The Court held a Final Fairness Hearing on March 15, 2016. For the reasons set forth below, the Court hereby GRANTS Plaintiffs' Motion.


The Motion for Final Approval represents the culmination of nearly two years of hotly contested litigation and negotiations between the parties. The parties now seek the Court's final approval of the Settlement Agreement and dismissal of this lawsuit.

a. Allegations

On April 1, 2014, Plaintiff Terrell Manuel ("Manuel") commenced this class action on behalf of himself and all others similarly situated, alleging that Defendant Wells Fargo willfully failed to comply with the pre-adverse action notification requirements of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681b(b)(3), before taking an adverse employment action against him. The Third Amended Complaint (ECF No. 41), now acting as the operative complaint, added an additional claim alleging that Defendant willfully failed to comply with the disclosure and authorization requirements set forth in 15 U.S.C. § 1681b(b)(2) before obtaining a consumer report about him for employment purposes.

The FCRA provisions at issue in Count One require that "a person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless: (i) a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes; and, (ii) the consumer has authorized in writing (which authorization may be made on the document referred to in clause (i)) the procurement of the report by that person." 15 U.S.C. § 1681b(b)(2)(A).

Count Two alleges that Wells Fargo also violated § 1681b(b)(3)(A)(i) of the FCRA, which requires that "in using a consumer report for employment purposes, before taking any adverse action based in whole or in part on the report, the person intending to take such adverse action shall provide to the consumer to whom the report relates: (i) a copy of the report; and, (ii) a description in writing of the rights of the consumer under this subchapter, as presented by the Bureau under section 1681g(c)(3) of this title." 15 U.S.C. § 1681b(b)(3)(A)(i).

The FCRA imposes liability for punitive or statutory damages only upon a finding of the defendant's negligence or willful failure to comply. 15 U.S.C. §§ 1681n, 1681o. Without a finding of willful non-compliance, Plaintiffs must establish actual damages. 15 U.S.C. § 1681o.

a. Litigation History

The parties have zealously litigated this case since its inception. This includes aggressive early discovery, depositions, discovery disputes, summary judgment, certification, cross-motions to strike and a motion to stay. As with any class action lawsuit, summary judgment and class certification marked the pivotal points in the litigation.

On August 19, 2015, Judge Payne issued two orders, one denying Wells Fargo's Motion for Summary Judgment (ECF No. 94), and the other granting in part Plaintiffs' Motion for Class Certification (ECF No. 96).

In denying Defendant's summary judgment motion with respect to Plaintiffs' "willfulness" claim, the Court expressed its doubt in the strength of that claim. Specifically, the Court cited the conflicting precedent on the issue of whether a waiver in a disclosure violates the FCRA, tilting the analysis in favor of Wells Fargo's position that it did not act willfully. Manuel v. Wells Fargo Bank, N.A., 2015 WL 4994538, at *18 (E.D. Va. Aug. 19, 2015). However, the lack of evidence that anyone at Wells Fargo relied on that precedent precluded the Court from granting summary judgment with respect to Wells Fargo's willfulness. Id.

The Certification Order certified two separate classes of consumers, the "Impermissible Use Class" and the "Adverse Action Class" (together, the "Settlement Class"). ...

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