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Henderson v. Corelogic National Background Data, LLC

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

September 1, 2016

TYRONE HENDERSON, et al., Plaintiffs,
v.
CORELOGIC NATIONAL BACKGROUND DATA, LLC, Defendant.

          MEMORANDUM OPINION

          Robert E. Payne Senior United States District Judge.

         This matter is before the Court on DEFENDANT'S MOTION TO STRIKE: (1) PLAINTIFFS' PROPOSED SUBCLASSES; AND (2) THE DECLARATIONS OF ROBERT SMITH AND MICHAEL HOLLANDER (ECF No. 294). For the reasons set forth herein, Defendant's motion will be denied.

         BACKGROUND

         On July 16, 2015, Plaintiffs Tyrone Henderson ("Henderson") and James Hines ("Hines") filed a second amended class action complaint on behalf of themselves and all others similarly situated, alleging that Defendant National Background Data, LLC PNBD") had violated the Fair Credit Reporting Act ("FCRA"). (Second Amended Complaint ("SAC"), ECF No. 189). The SAC presents two claims under the FCRA. Count One alleges, on behalf of the putative nationwide class, that NBD violated the FCRA by failing to send notices to consumers and to "maintain strict procedures" to ensure that the criminal records it provided to its customers were "complete and up to date, " in violation of 15 U.S.C § 1681k(a). Count Two, an individual claim on behalf of Henderson and Hines, alleges that NBD failed to use reasonable procedures to assure maximum accuracy of its reports, in violation of U.S.C. § 1681e(b).

         On August 25, 2015, Plaintiffs filed a renewed motion for class certification, seeking to certify the following class:

All natural persons residing in the United States who (a) were the subject of a report sold by NBD to Verifications, ADP or HR Plus, (b) where NBD's "Results Returned" database indicates that it was furnished for an employment purpose, (c) where NBD's "Results Returned" database showed that the report contained at least one adverse criminal record "hit, " (d) within five years next preceding the filing of this action and during its pendency.

(ECF No. 196) . The Court heard oral argument on that motion on April 18, 2016. At the hearing, the Court expressed concerns that the class definition was overly broad and was not adequately tethered to the element of "incompleteness" that Plaintiffs are required to prove to succeed on their § 1681k claim. See Transcript of Apr. 18, 2016 Hearing ("Hrg. Tr., " ECF No. 279). Therefore, the Court denied Plaintiffs' motion without prejudice and ordered the parties to rebrief the class certification issues, mindful of the Court's concerns expressed at the hearing. (ECF No. 275).

         In accordance with that Order, Plaintiffs filed a third motion for class certification on May 9, 2016. In their memorandum in support of that motion, Plaintiffs argue that the Court should certify the following class:

All natural persons residing in the United States (a) who were the subject of a report sold by NBD to Verifications, ADP or HR Plus, (b) where NBD's Results Returned database indicates that it was furnished for an employment purpose (Code 6), (c) where NBD's Results Returned database showed that the report contained at least one adverse criminal record "Hit, " (d) within five years next preceding the filing of this action and during its pendency...[excluding] any employees, officers, directors of Defendant, any attorney appearing in this case, and any judge assigned to hear this action.

(ECF No. 282).

         Plaintiffs also contend that, should the Court find that the foregoing class does not meet the requirements of Fed.R.Civ.P. 23, the Court should certify one or more of Plaintiffs' three proposed subclasses, defined as follows:

SUBCLASS 1: (i) NBD's Results Returned database shows a criminal record hit from a Virginia General District Court; (ii) NBD did not return a SSN to its customers; and (iii) the computer database of the Executive Secretary of the Supreme Court of Virginia contains a SSN or Drivers License number associated with that criminal record.
SUBCLASS 2: (i) NBD's Results Returned database shows a criminal record hit from a [Pennsylvania] General District Court; (ii) NBD did not return a SSN to its customers; and (iii) the computer database of the Pennsylvania Administrative Office of Pennsylvania Courts (AOPC) contains a SSN associated with that criminal record.
SUBCLASS 3: (i) NBD's Results Returned database show [sic] a criminal record hit from a state Sex Offender Registry; (ii) where the age and/or date of birth provided for that consumer by Verifications, ADP or HR Plus did not match the age and/or date of birth contained in that State's publically accessible Sex Offender Registry.

Id.

         In support of their first and second proposed subclasses, Plaintiffs have offered the declarations of Robert Smith ("Smith") and Michael Hollander ("Hollander"), respectively. Smith is an employee in the Office of the Executive Secretary of the Supreme Court of Virginia. (ECF No. 282-29 ¶ 2) . In his declaration, Smith explains that, based on his review of a sample of General District Court records, most of the records contain Social Security Numbers ("SSNs") and/or operator's license numbers. Id.¶¶4-5. Hollander is a staff attorney at Community Legal Services, Inc., a free legal services program based in Pennsylvania. (ECF No. 282-31, ¶¶ 2-3). Hollander's declaration briefly discusses the operation of the records database maintained by the Administrative Office of Pennsylvania Courts and describes the procedures for accessing that database. Id. ¶¶ 7-10.

         Pursuant to Fed.R.Civ.P. 37(c), NBD has filed a motion to strike Plaintiffs' proposed subclasses and the Smith and Hollander declarations offered in support thereof. First, NBD argues that Plaintiffs' proposed subclasses must be stricken because Plaintiffs' "belated disclosure" of the subclasses was a "complete surprise" and "Plaintiffs had never mentioned the use of any third-party governmental databases to try and achieve class certification in this case, let alone databases that were specific to Virginia, Pennsylvania, or state sex offender websites." (Defendant's Memorandum in Support of Motion to Strike: (1) Plaintiffs' Proposed Subclasses; and (2) the Declarations of Robert Smith and Michael Hollander ("Def. Mem., " ECF No. 295) at 5) . NBD argues that those subclasses represent a completely new legal theory against which NBD is unprepared to defend. Id. Moreover, NBD contends, Plaintiffs are bound by the class definition alleged in their Complaint, and cannot demonstrate good cause to amend the Complaint. Id. at 11. Therefore, NBD concludes, the Court should not consider the proposed subclasses in deciding the motion for class certification.

         Second, NBD argues that the Smith and Hollander declarations should be excluded because Plaintiffs did not disclose these witnesses as required by Fed.R.Civ.P. 26 before attaching the declarations in support of their motion for class certification. Id. at 5. NBD also argues that both declarations are irrelevant because the declarations do not show that SSNs were "publically available" in either database, and the refore have no relevance to the analysis required by § 1681k(a), which pertains only to "public records." Id. at 9-10.

         For the following reasons, it is appropriate for the Court to consider Plaintiffs' proposed subclasses, and NBD's motion will be denied as to them. And, because Smith and Hollander were not disclosed as required by Fed.R.Civ.P. 26, it is appropriate to allow NBD an opportunity to conduct discovery respecting the topics therein presented, and to require briefing on certification of the three subclasses.

         DISCUSSION

         Both facets of NBD's motion proceed under Fed.R.Civ.P. 37(c) which provides that:

If a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the ...

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