United States District Court, E.D. Virginia, Richmond Division
DERRICK A. MILBOURNE, On his own behalf and on Behalf of those similarly Situated, Plaintiff,
JRK RESIDENTIAL AMERICA, LLC, Defendant.
E. Payne Senior United States District Judge.
matter is before the Court on the parties' joint oral
motion, made at the Final Pretrial Conference, to have the
Court decide, as a matter of law, whether defendant JRK
Residential America, LLC's ("JRK") violation of
15 U.S.C. § 1681b(b)(2) of the Fair Credit Reporting Act
("FCRA") was "objectively reasonable, "
as that concept was defined by the Supreme Court of the
United States in Safeco Ins. Co. of Am. v. Burr, 551
U.S. 47 (2007) . For the reasons set forth below, the Court
finds that: (1) the "objective reasonableness"
analysis set forth in Safeco does not apply because
JRK did not adopt or act on an interpretation of the statute
at the time that the violation occurred; and (2) assuming
that JRK's conduct sufficiently evinces an
"interpretation" of the statute (as JRK contends to
be the case), that interpretation is not objectively
October 26, 2015, Plaintiffs Derrick A. Milbourne
("Milbourne") and Samantha Churcher
("Churcher") (collectively, "Plaintiffs")
filed a First Amended Complaint ("FAC", ECF No.
147) on behalf of themselves and all others similarly
situated, alleging that JRK violated two sections of the
FCRA. In Count One, Plaintiffs alleged that JRK took adverse
action against potential employees without complying with 15
U.S.C. § 1681b(b)(3)(A), 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.
One is sometimes referred to as "the § 1681b(b)(3)
Count Two, Plaintiffs alleged that the disclosure form that
JRK provided to all potential employees ("the Standard
Disclosure Form") violated 15 U.S.C. § 1681b(b) (2)
(A), which provides 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.
Two is sometimes referred to as "the § 1681b(b)(2)
claim." Plaintiffs alleged that the violations alleged
in Counts One and Two were committed "willfully, "
and sought statutory and punitive damages.
Three, filed on behalf of a putative subclass of the class
represented in Count Two, alleged that a second disclosure
form that JRK provided to some potential employees ("the
Standalone Disclosure Form" or "the contingency
form") also violated § 1681b(b)(2)(A).
November 2010, Milbourne applied for, and conditionally
received, a job with JRK pending satisfactory completion of a
background check. (FAC ¶¶ 7-9). Before JRK obtained
a consumer report on Milbourne, he signed two disclosure
forms. Id. at ¶¶ 15-18. The first form,
the "Standard Disclosure Form, " provides in
I certify that the information contained herein is true and
understand that any falsification will result in the
rejection of my application or termination of my employment.
I also understand that the requested information is for the
sole purpose of conducting a background investigation which
may include a check of my identity, work and credit history,
driving records, and any criminal history which may be in the
files of any state or local criminal agency...
I hereby authorize this company, its corporate
affiliates, its employees, its authorized agents, and
representatives...to verify all information contained in this
form or in my application and to inquire into any character,
general reputation, personal characteristics, and mode of
living...I hereby release this company, its
corporate affiliates, its employees, its authorized agents
and representatives and all others involved in this
background investigation from any liability in connection
with any information they give or gather and any decisions
made concerning my employment based on such information.
I understand that any offer of employment I may receive is
contingent upon the successful completion of the background
investigation. I further understand that I have a right,
under Section 606(B) of the Fair Credit Reporting Act, to
make a written request to this company within a reasonable
period of time for a complete and accurate disclosure of the
nature and scope of the investigation requested.
(ECF No. 49-2 at 2) (emphasis added) . Churcher also signed
the Standard Disclosure Form when she applied for employment
with JRK in September 2013. (FAC ¶¶ 27-31).
extensive discovery, it became apparent that Milbourne, along
with 558 other class members (not including Churcher), had
also signed a second disclosure form before JRK obtained
their background checks ("the Standalone Disclosure
form"). That form provides:
I understand that my employment with JRK is subject to the
successful clearance of my background report to acceptable
company standards. The results of my background report will
be reviewed and evaluated by JRK and JRK, in its sole
discretion, will determine whether it is approved.
(ECF No. 150, Exs. 1-650).
was conditionally hired by JRK, contingent upon the
successful clearance of his background check. After receiving
Milbourne's consumer report, which contained two felony
arrest records, JRK terminated Milbourne's employment.
(ECF No. 76-8 ¶¶ 2-3). Milbourne did not receive a
copy of his consumer report or a summary of rights under the
FCRA before JRK informed him of its decision to terminate his
employment. However, Milbourne later received a "Notice
of Adverse Action" accompanied by those materials from
United States ...