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Green v. RentGrow, Inc.

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

December 19, 2016

WALTER GREEN, III, Plaintiff,
v.
RENTGROW, INC., and TRANS UNION, LLC, Defendants.

          UNITED STATES MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

          Robert J. Krask, United States Magistrate Judge

         By order of reference dated September 15, 2016, ECF No. 10, this case was referred to the undersigned United States Magistrate Judge for a report and recommendation on defendant RentGrow, Inc.'s motion to dismiss, ECF No. 6, pursuant to the provisions of 28 U.S.C. § 636(b)(1)(B) and (C) and Rule 72(b) of the Federal Rules of Civil Procedure.

         For the reasons stated herein, the Court RECOMMENDS that defendant's motion to dismiss be DENIED.

         I. PROCEDURAL HISTORY

         On July 8, 2016, plaintiff Walter Green, III ("Green"), filed a complaint against defendants RentGrow, Inc. ("RentGrow") and Trans Union, LLC ("Trans Union"), seeking relief for violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. Compl., ECF No. 1. The complaint alleges that RentGrow "obtain[ed] and us[ed] the Plaintiffs consumer reports without a permissible purpose to do so, " in violation of 15 U.S.C. § 1681b(f) (count one).[1] Compl. ¶ 14. Green claims to have suffered "actual damages, including a diminished credit score, " as a result of RentGrow's conduct. Compl. ¶ 15. The complaint further alleges that RentGrow's conduct was willful, and seeks punitive damages pursuant to 15 U.S.C. § 1681n. Compl. ¶ 15. Green also argues in the alternative that RentGrow was negligent, entitling him to recover under 15 U.S.C. § 1681 o. Compl. ¶ 16.

         On August 23, 2016, RentGrow moved to dismiss the complaint for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. Mot. Dismiss, ECF No 6. RentGrow argues that Green lacks standing to pursue the claim. Id. Green filed a memorandum in opposition to the motion to dismiss, ECF No. 8, and RentGrow replied thereto, ECF No. 9. The motion to dismiss is now ripe for consideration.

         II. FACTUAL BACKGROUND

         The complaint alleges the following facts, among others. Green resides in Virginia and, at all times relevant to the complaint, was a "consumer" as defined by section 1681a(c) of the FCRA. Compl. ¶ 3. RentGrow is a foreign corporation doing business in Virginia and, at all times relevant to the complaint, was a "user" as defined by the FCRA. Compl. ¶ 6. In April 2016, Green's credit-monitoring service alerted him that, on or around September 25, 2015, RentGrow received a copy of his Trans Union credit report. Compl. ¶ 7. Green "immediately became extremely concerned" that identity thieves had accessed his personal information. Compl. ¶ 8. Green learned, upon investigation, that RentGrow accessed his credit report in relation to "a rental application for an apartment complex located in Wisconsin." Compl. ¶ 9. The complaint states that Green did not apply for an apartment in Wisconsin, and that he does not live in Wisconsin. Compl. ¶ 10. Further, Green asserts that he "never gave Defendant RentGrow permission to access his credit report, nor did Defendant RentGrow have a permissible purpose under the FCRA to obtain the Plaintiffs credit reports in conjunction with this access of his credit report." Compl. ¶ 11.

         Section 1681b of the FCRA lists the circumstances under which a consumer reporting agency may furnish a consumer report. 15 U.S.C. § 1681b(a). The same section also prohibits a person from "us[ing] or obtain[ing] a consumer report unless ... the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished under this section" and the prospective user appropriately certifies the purpose. 15 U.S.C. § 1681b(f).

         III. LEGAL FRAMEWORK

         Federal Rule of Civil Procedure 12(b)(1) permits a defendant to move for dismissal of a claim based on a court's lack of subject-matter jurisdiction. A.W. ex rel Wilson v. Fairfax Cty. Sch. Bd, 548 F.Supp.2d 219, 221 (E.D. Va. 2008). As provided by Article III of the Constitution, federal courts have subject-matter jurisdiction over justiciable cases or controversies. Lujan v. Defs. of Wildlife, 504 U.S. 555, 559-60 (1992). The doctrine of standing is one component of justiciability, "serv[ing] to identify those disputes which are appropriately resolved through the judicial process." Id. at 560 (citing Whitmore v. Arkansas, 495 U.S. 149, 155 (1990)). The standing issue - that is, "whether the plaintiff has 'alleged such a personal stake in the outcome of the controversy' as to warrant his invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers on his behalf, " Warth v. Seldin, 422 U.S. 490, 498-99 (1975) (quoting Baker v. Carr, 369 U.S. 186, 204 (1962)), presents "a threshold question in every federal case." Id. at 498.

In order to satisfy the standing requirements of Article III of the Constitution, a plaintiff must demonstrate that: (1) [he] has suffered an injury in fact; (2) the asserted injury in fact is fairly traceable to, or caused by, the challenged action of the defendant; and (3) it is likely rather than just conjectural that the asserted injury in fact will be redressed by a decision in the plaintiffs favor.

Taubman Realty Grp. Ltd P'ship v. Mineta, 320 F.3d 475, 480 (4th Cir. 2003) (citing Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 180-81 (2000)).

         The Supreme Court has defined the first element of standing - an "injury in fact" - as "an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical." Lujan, 504 U.S. at 560 (citations and internal quotations omitted). In a recent decision addressing FCRA claims, the Court further explained the contours of the injury-in-fact requirement. See Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016).

         In Spokeo, the plaintiff, Robins, brought a class-action suit against the operator of a website that allows users to search for personal information about other individuals. Id. In response to an inquiry from a user, the website searches multiple databases and generates a profile of the inquiry's subject. Id. at 1546. The profile can contain information about an individual's "address, phone number, marital status, approximate age, occupation, hobbies, finances, shopping habits, and musical preferences." Id. Robins discovered that his profile contained inaccurate information about his age, marital status, education, and employment, among other things. Id. Robins alleged that the website operator willfully failed to comply with several FCRA provisions relating to the use of consumer reports. Id. The district court dismissed Robins's complaint, finding that he failed to properly plead an injury in fact for purposes of standing. Id. The Ninth Circuit reversed, concluding that Robins did sufficiently allege such an injury. Id. The Supreme Court vacated and remanded. Id.

         The Court emphasized that "an injury in fact must be both concrete and particularized." Id. at 1548. In order for an injury to be "concrete, " the injury "must actually exist." Id. Both tangible and intangible injuries can be concrete. Id. at 1549. When determining whether an intangible harm constitutes injury in fact, courts should consider "whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts." Id. (citing Vermont Agency of Nat. Res. v. United States ex rel Stevens,529 U.S. 765, 775-77 (2000)). The judgment of Congress is also "instructive and important, " as Congress "may 'elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.'" Id. (quoting Lujan, 504 U.S. at 578). A plaintiff, however, does not automatically satisfy the injury-in-fact requirement whenever Congress has granted a statutory right, because "Article III standing requires a concrete injury even in the context of a statutory violation." Id. Accordingly, a plaintiff cannot satisfy the injury-in-fact requirement by "alleg[ing] a bare procedural violation, divorced from any concrete harm." Id. Still, "the violation of a procedural right granted by statute can be sufficient in some ...


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