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Clark v. Trans Union, LLC

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

March 1, 2017

CAROLYN CLARK, on behalf of herself and all similarly situated individuals, Plaintiffs,
v.
TRANS UNION, LLC, Defendant

          MEMORANDUM OPINION

          M. Hannah Lauck United States District Judge

         This matter comes before the Court on the Motion for Class Certification filed by Plaintiff Carolyn Clark, on behalf of herself and all similarly situated individuals. (ECF No. 66.) Defendant Trans Union, LLC ("TransUnion") has responded to the Motion for Class Certification, (ECF No. 82), and Clark has replied, (ECF No. 104). The Court heard oral argument on February 23, 2017. Accordingly, the matter is ripe for disposition. The Court exercises jurisdiction pursuant to 28 U.S.C. § 1331.[1] For the reasons that follow, the Court will grant the Motion for Class Certification.

         I. Procedural and Factual Background[2]

         A. Procedural Background

         Clark, the named plaintiff, asserts six counts against TransUnion: one proposed class claim and five individual claims. Count I, the "Disclosure of Sources Claim" or the "Class Claim" alleges a putative class action arising out of TransUnion's violations of 15 U.S.C. § 1681g(a)(2)[3] of the FCRA, which requires that consumer reporting agencies "clearly and accurately" disclose to consumers "[t]he sources of information" in their credit files. 15 U.S.C. § 1681g(a)(2). Clark alleges that TransUnion's violations of § 1681g(a)(2) entitle each consumer who received his or her credit file with incorrect source information to statutory damages under § 1681n(a) between $100 and $1, 000.[4]

         Following the Supreme Court of the United States' opinion in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016), as revised (May 24, 2016), TransUnion moved to dismiss this case on the grounds that Clark and the proposed class lack standing. In its December 2016 Opinion, the Court denied TransUnion's motion, explicitly rejecting TransUnion's contention that each class member would need to prove individualized injury in fact based on harm suffered beyond the violation of § 1681g(a)(2) itself. Clark, 2016 WL 7197391, at *11; see also Thomas v. FTS USA, LLC, No. 3:13cv825, 2016 WL 3653878 (E.D. Va. June 30, 2016). The Court explained:

Thomas correctly acknowledged that Congress enacted several substantive, and not merely procedural or technical, rights to protect specific information in the FCRA. Analyzing § 1681b(b)(2) and an unauthorized disclosure of personal information, the Thomas court aptly quoted Spokeo's reliance on Akins and Public Citizen when stating that "the violation of a procedural right granted by statute can be sufficient in some circumstances to establish an injury in fact." 2016 WL 3653878, at *11. "In other words, " the Thomas court explained, "a plaintiff in such a case need not allege any additional harm [e.g., actual damages] beyond the one Congress has identified." Id. (quoting Spokeo, 136 S.Ct. at 1549) (emphasis in original). Again relying directly on Spokeo, the Thomas court also confirmed that even a risk of real harm might satisfy the concreteness requirement. Id. (citing Spokeo, 136 S.Ct. at 1549) (emphasis added). This Court agrees with Thomas that a consumer need not necessarily prove any more harm than that suffered as a result of the deprivation of FCRA information to which he or she is entitled. The purpose of the FCRA as articulated in legislative history supports this point.

Clark, 2016 WL 7197391, at *9. In a footnote, the Court continued: "Mere factual differences ... do not end the analysis. The finding of injury in fact in these decisions rests in large part on the consumer's inability to monitor his or her file for falsity when not provided the relevant information." Id. at *10 n.20 (citing Patel v. TransUnion, LLC, No. 14cv00522-LB, 2016 WL 6143191, at *4 (N.D. Cal. Oct. 21, 2016) ("[A] consumer cannot monitor [his or] her file for falsity if [he or] she is not given the relevant information. That impediment, that non-disclosure, is thus a real injury. At the very least, preventing a consumer from monitoring [his or] her file presents a 'risk of real harm' of exactly the type that [the] FCRA seeks to prevent (i.e., the dissemination of incorrect information); and this risk can itself'satisfy the requirement of concreteness.'")).

         When highlighting the remedial purpose of the FCRA, the Court noted that "Congress intended that the FCRA be construed to promote the credit industry's responsible dissemination of accurate and relevant information and to maintain the confidentiality of consumer reports." Id. at * 8 (citing Thomas, 2016 WL 3653878, at *7-8). Moreover, "Congress sought 'to establish [ ] the right of a consumer to be informed of investigations into his [or her] personal life.'" Id. (citing Thomas, 2016 WL 3653878, at *8). With respect to disclosure provisions in particular, including § 1681g(a), the Court concluded that the FCRA "promotes consumer oversight of compliance ... by informing consumers of the source of the reported information, thereby advancing the broader purposes of 'fair and accurate credit reporting."' Id. (quoting Gillespie v. Equifax Info. Servs., LLC, 484 F.3d 938, 941 (7th Cir. 2007)). Looking to these purposes of the FCRA, the Court ultimately reasoned that the "failure to reveal source information reflects the type of harm, or injury in fact, that Spokeo recognizes as 'concrete' and 'particularized.'" Id. at *9.

         Despite this Court's December 2016 Opinion, TransUnion relentlessly pursues its preferred interpretation of Spokeo's effect on defining a "concrete" injury. (See, e.g., Opp'n Mot. Strike 10, ECF No. 117 (“Spokeo clarified that a plaintiff does not satisfy the 'injury-in-fact requirement by merely alleging a violation of a statutory right, but must demonstrate a concrete injury even in the context of a statutory violation." (citations omitted)).) As discussed below, to the extent TransUnion proffers more recent cases that have interpreted Spokeo differently, none persuade the Court to reconsider its December findings.

         In re Michaels Stores. Inc.

         For instance, TransUnion suggests that In re Michaels Stores, Inc., No. 2:15cv2547, 2017 WL 354023 (D.N.J. Jan. 24, 2016), concluded that bare procedural violations of the FCRA do not satisfy the injury-in-fact requirement of a standing analysis. But the Michaels Stores decision provides no analysis on the legislative history of the FCRA, or the purpose of the statutory provision at issue. It thus ignores Spokeo's requirement to consider the judgment of Congress when evaluating whether an intangible injury satisfies the "concreteness" requirement. Spokeo, 136 S.Ct. at 1549. Spokeo recognized that Congress '"has the power to define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before."' Id. (quotation omitted). But Michaels Stores, without elaboration, unpersuasively dismisses Spokeo's guidance in conclusory fashion. 2017 WL 354023, at *7. And Michaels Stores differs factually in an important way: those plaintiffs "concede[d] that they d[id] not plead any concrete harm." Id. at *3. Perhaps in view of this pleading error, the Michaels Stores court permitted plaintiffs leave to file amended complaints. Id. at *12.

         Cruper-Weinmann v. Paris Baguette America, Inc.

         Relying on Cruper-Weinmann v. Paris Baguette America, Inc., No. 13 CIV. 7013, 2017 WL 398657, at *3 (S.D.N.Y. Jan. 30, 2017), TransUnion next contends that Spokeo created a two-part test to establish concrete injury: (1) that the case involves a specific right created by "Congress ... to protect a concrete interest of the plaintiff'; and, (2) that "the alleged violation of [a] right presented a material risk of harm to that concrete interest." (Opp'n Mot. Strike 10.) However, TransUnion cites no Fourth Circuit cases performing such a two-step inquiry, and the Court sees none. But even assuming that Cruper-Weinmann's test for informational injury was sound, Clark likely would satisfy it. This Court has recognized that Clark, and anyone not notified that LexisNexis was a source of public records information, has suffered the violation of a right created by Congress. See Clark, 2016 WL 7197391, at *11. The violation of that right creates "a material risk that LexisNexis could... report inaccurate information to others in the future." Id. (emphasis added).

         In Cruper-Weinmann, on the other hand, the plaintiff could not assert standing under the Fair and Accurate Credit Transactions Act (the "FACTA") because she did not suffer a risk of harm after a restaurant printed a receipt that displayed the expiration date of her credit card. The court explained:

In 2007, FACTA was amended in order to provide a retrospective safe harbor to persons who had previously printed an expiration date on a receipt but otherwise complied with FACTA's requirements. Credit and Debit Card Receipt Clarification Act of 2007, Pub. L. No. 110-241, 122 Stat. 1565. That amendment contained Congress's finding that "[e]xperts in the field agree that proper truncation of the card number, by itself as required by [FACTA], regardless of the inclusion of the expiration date, prevents a potential fraudster from perpetrating identity theft or credit card fraud." § 2(a)(6).

Cruper-Weinmann, 2017 WL 398657, at *1. As such, the statutory violation in Cruper-Weinmann, unlike TransUnion's alleged violations of § 1681g(a)(2), resulted in no risk of harm to the plaintiff. Accordingly, even were TransUnion's standing argument before this Court properly, it likely would fail.

         TransUnion also had sought to strike class certification in its Motion to Dismiss. In the December 2016 Opinion, the Court rejected that challenge as untimely because class certification would be "more appropriately [brought] on the more complete record than the parties' briefing" then provided. Clark, 2016 WL 7197391, at *5. Although discovery disputes continue to plague this litigation, [5] the Court now considers the Motion for Class Certification.[6]

         B. Factual Background

         As noted in the December 2016 Opinion, although the Motion for Class Certification pertains exclusively to Clark's ability to certify the class and advance the Class Claim, Clark's five individual counts provide context to the entire action. Accordingly, the Court outlines the Class Claim, Clark's individual claims, and the facts framing all allegations below.

         1. The Named Plaintiffs Individual Claims (Counts II through VI)

         Clark alleges that on August 7, 2014, TransUnion provided to her a copy of her credit file that incorrectly listed two civil judgments entered against her. TransUnion listed the sources of the two judgments as "Henrico District Court" and "Virginia Federal Court, " respectively. (First Am. Class Compl. ¶ 27.) Clark contends that another source of the judgments was LexisNexis, the third-party vendor that retrieved the data.

         Quik Cash allegedly entered one of the judgments against Clark in November 2008 in the amount of $575, even though that judgment had been appealed and dismissed. Clark submitted multiple demand letters requesting that TransUnion correct its error. TransUnion, however, purportedly failed to conduct a "timely and reasonable reinvestigation" and continued to report the Quik Cash judgment as unpaid. (Id. ¶ 35.)

         These events, according to Clark, give rise to five individual claims. Count II, the "Reasonable Procedure Claim, " proceeds under 15 U.S.C. § 1681e(b).[7] Count III, the "Reasonable Reinvestigation Claim, " invokes 15 U.S.C. § 1681i(a)(1).[8] Count Four, the "Failure to Send Furnisher all Relevant Information Claim, " cites 15 U.S.C. § 1681i(a)(2).[9] Count Five, the "Failure to Review Consumer Communication Claim" relies upon 15 U.S.C. § 1681i(a)(4).[10]Finally, Count Six, the "Failure to Delete Claim, " proceeds under 15 U.S.C. § 1681(a)(5).[11] For each of these five individual claims, Clark seeks actual damages, statutory damages, punitive damages, costs, and attorneys' fees under §§ 168In and 1681o.[12]

         2. The Class Claim (Count I)

         In the Class Claim, Clark alleges that TransUnion violated § 1681g(a)(2) by failing to convey on her credit file that LexisNexis was a source of the judgment information. To advance the claims of similarly situated individuals, Clark proposes to certify a class as follows:

All natural persons residing in the Fourth Circuit[:] (a) who requested their consumer file from Trans Union or any of its affiliated companies, subsidiaries, or any other Trans Union entity, (b) within five years preceding this filing of this action and during its pendency, and[J (c) to whom Trans Union provided a response that did not include any reference to its public records vendor as the source of public records information within the consumer's file disclosure. Excluded from the class definition are any employees, officers, or directors of Trans Union, any attorney appearing in this case, and any judge assigned to hear this action.

         (First Am. Class Compl. ¶ 62.) Clark seeks statutory and punitive damages in the amount of not less than $100 and not more than $1, 000 per violation per class member, as set forth in 15 U.S.C. § 1681n(a).

         II. Analysis

         Clark seeks to certify a class comprised of individuals who received credit reports from TransUnion "that did not include any reference to its public records vendor as the source of public records information within the consumer's file disclosure." (First Am. Class Compl. ¶ 62.) At the heart of the Class Claim rests the straightforward allegation that TransUnion has a systemic procedure of willfully omitting its source of public records information in its consumer reports. In spite of this direct theory of liability, TransUnion opposes certification.

         TransUnion's opposition to the Motion for Class Certification repeatedly highlights the factual differences regarding the purported inaccuracies on the class members' consumer reports. TransUnion proffers this argument in several ways, ultimately contending that these disparities necessarily mean that the class members suffered different injuries. According to TransUnion, such dissimilarities cannot survive the rigorous analysis this Court must undertake before certifying a class under Federal Rule of Civil Procedure 23.[13] In so arguing, TransUnion either continues to dispute this Court's ruling on standing[14] or it erroneously adds an element of accuracy to § 1681g(a)(2)'s plain language. Both of TransUnion's arguments founder. The Class Claim seeks redress not for inaccurate public records information, but for TransUnion's failure to disclose the sources of public records information on the class members' consumer reports-irrespective of the accuracy of the information those sources provide.

         For the reasons stated below, Clark readily meets the Rule 23 requirements. The Court will certify the class.

         A. Standard for Class Certification

         Clark, as plaintiff, bears the burden of proving all requirements of Rule 23. Lienhart v. Dryvit Sys., Inc., 255 F.3d 138, 146 (4th Cir. 2001). First, her proposed class must satisfy the four requirements of Federal Rule of Civil Procedure 23(a).[15] Those requirements are that: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the class representative's claims or defenses are typical of those of the class; and, (4) the class representative will fairly and adequately represent the interests of the class. See Broussardv. Meineke Disc. Muffler Shops, Inc., 155 F.3d 331, 337 (4th Cir. 1998).

         Second, Clark's proposed class must align with at least one of the types of class actions delineated in Federal Rule of Civil Procedure 23(b), [16] and meet the corresponding prerequisites for certification. Here, Clark moves for certification under Rule 23(b)(3). A court may certify a class under Rule 23(b)(3) when it finds that: (1) questions of law or fact common to the members of the class predominate over any questions affecting only individual members; and, (2) a class action is superior to other available methods for the fair and efficient adjudication of the controversy.

         As the United States Court of Appeals for the Fourth Circuit has explained, courts need not "accept plaintiffs' pleadings when assessing whether a class should be certified." Gariety v. Grant Thornton, LLP, 368 F.3d 356, 365 (4th Cir. 2004). Rather, "the district court must take a 'close look' at the facts relevant to the certification question and, if necessary, make specific findings on the propriety of certification." Thorn v. Jefferson-Pilot Life Ins. Co., 445 F.3d 311, 319 (4th Cir. 2006) (quoting Gariety, 368 F.3d at 365). "Such findings can be necessary even if the issues tend to overlap into the merits of the underlying case, " but "[t]he likelihood of the plaintiffs' success on the merits ... is not relevant to the issue of whether certification is proper." Id. (internal citations omitted).

         The Supreme Court recently elaborated on a district court's ability to make factual determinations at the class certification stage in Wal-Mart Stores, Inc. v. Dukes, 541 U.S. 338 (2011). In Dukes, the Supreme Court explained:

Rule 23 does not set forth a mere pleading standard. A party seeking class certification must affirmatively demonstrate his compliance with the Rule-that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc. We recognized in Falcon that "sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question, " and that certification is proper only if "the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied."

541 U.S. at 350 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160-61 (1982) (emphasis in original)). "Frequently that 'rigorous analysis' will entail some overlap with the merits of the plaintiff s underlying claim. That cannot be helped."[17] Mat 351.

         B. Clark Satisfies the Requirements of Rule 23

         As delineated above, Clark must satisfy the numerous requirements of Rule 23 before this Court may certify the proposed class. Upon review, the Court determines that Clark has done so. The Court will address the requirements of Rule 23(a) and Rule 23(b) seriatim.

         1. Clark Satisfies the Four Requirements of Rule 23(a)

         Clark's class satisfies the four requirements of Rule 23(a): (1) numerosity of the class makes joinder of all members impracticable; (2) there are questions of law or fact common to the class; (3) Clark's claims typify those of the class; and, (4) Clark will fairly and adequately represent the interests of the class. See Broussard, 155 F.3d at 337.

         a. Clark's Class is So Numerous That Joinder of All Members is Impracticable

         Appropriately, TransUnion does not oppose Clark's assertion that numerosity makes joinder of all class members impracticable. Clark easily satisfies this requirement. Although no there is no minimum number of potential class members needed to fulfill the numerosity requirement, see Holsey v. Armour & Co.,743 F.2d 199, 217 (4th Cir. 1984), joinder usually becomes impracticable where the class exceeds 40 members, see Kennedy ...


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