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Branch v. Government Employees Insurance Co.

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

December 18, 2017

TIFFANIE BRANCH, individually and on behalf of all others similarly situated, Plaintiff,


          Robert E. Payne Senior United States District Judge

         This matter is before the Court on GEICO'S MOTION FOR SUMMARY JUDGMENT (ECF No. 39). For the reasons set forth below, the motion will be denied.


          A. Procedural Background

         On December 30, 2016, Tiffanie Branch ("Branch") filed a Class Action Complaint on behalf of herself and all others similarly situated, alleging that Government Employees Insurance Company ("GEICO") violated Section 1681b (b) (3) (A) of the Fair Credit Reporting Act ("FCRA"). ECF No. 1. Branch then filed an Amended Class Action Complaint on April 11, 2017, which is the operative complaint here. ECF No. 23.

         The parties' initial briefing on GEICO's motion concerned the class that Branch originally proposed, composed of individuals who were assigned a "Fail" grade by GEICO because of any deficiency in their background reports. Id. ¶ 56. However, at oral argument, Branch's counsel indicated that Branch would narrow the class to those individuals who were assigned a "Fail" grade by GEICO specifically because of the criminal history in their background reports. October 3, 2017 Transcript (ECF No. 60) at 42:16-20; September 27, 2017 Transcript (ECF No. 56) at 5:21-6:5. As a result, the parties filed supplemental briefs addressing the summary judgment issues in the context of the narrowed class, ECF No. 65, and this opinion addresses only that class.

         B. Factual Background

         1. Branch's Application to GEICO

         Branch applied for employment with GEICO, and, on August 26, 2016, Branch accepted GEICO's offer to join the company as a Liability Claims Representative, which was contingent on a background check. Around the same time, Branch also completed GEICO's Supplemental Information Form for use in connection with the background check. On that form, Branch listed, as her only criminal conviction a December 2015 conviction for petit larceny.

         On September 2, GEICO requested a background check on Branch from a consumer reporting agency, General Information Services ("GIS"). GIS completed Branch's background report ("the Report") and sent it to GEICO on September 21. The Report indicated that Branch had two criminal convictions on her record: the December 2015 misdemeanor petit larceny conviction, as well as, inaccurately, a 2011 felony petit larceny conviction. Camacho Decl. (ECF No. 40-4), Ex. 2 at 10. On September 21, after reviewing the Report, a GEICO employee, Brit Collins, assigned it a preliminary grade of "Fail."[1]

         Later that day, another GEICO employee, Latoria Parker ("Parker"), called Branch regarding the contents of the Report. The exact details of the conversation are disputed. Branch said that Parker told her that GEICO's job offer was rescinded because of the 2011 felony conviction in the Report. Parker, on the other hand, testified that she informed Branch that she would receive a letter from GIS about the Report because GEICO had concluded that Branch's criminal history would preclude her from employment at GEICO, and that she could dispute the accuracy of the Report. The parties agree, however, that Branch told Parker that the 2011 conviction was a misdemeanor petit larceny conviction, not a felony. That night, Branch e-mailed Parker, further explaining that she had been charged with felony grand larceny but that she had pled guilty to a reduced misdemeanor charge.

         On September 22, 2016, on GEICO's behalf, GIS sent Branch a letter containing the Report and a summary of Branch's FCRA rights ("the Pre-Adverse Action Letter"). Branch could not recall whether she ever initiated a dispute with GIS about the accuracy of her Report. But, the record is that, by October 3, neither GIS nor GEICO had heard from Branch, so GIS sent Branch a letter stating that GEICO would not be hiring her based on the contents of the Report ("the Adverse Action Letter").

         2. GEICO's Job Application Process

         GEICO's background check process is described in its Adjudication Process for Background Checks ("the Adjudication Process"), Camacho Decl., Ex. 1, which was GEICO's official policy for the use of background reports during the class period, Camacho Decl. ¶ 4. Once GEICO extends a conditional job offer to an applicant, the applicant must complete a Supplemental Information Form, which contains information that a GEICO employee enters into GIS's system. Adjudication Process at 3-5. GIS then generates a background report and marks each portion of the report as either "Pass" or "Review, " depending on whether that part satisfies GEICO's employment eligibility requirements. Once GIS completes the background report, a GEICO employee reviews it and assigns it a grade of "Pass" or "Fail, " based on whether the report meets GEICO's eligibility requirements.[2] Adjudication Process at 6. This review occurs in all cases, even if GIS has given the report a notation of "Pass." GEICO's "Fail" grade may be appropriate if the report contains felony convictions or certain misdemeanor convictions, or if the report shows a conviction that was not disclosed on the Supplemental Information Form.

         As in Branch's case, after GEICO assigns a "Fail" grade, GIS sends the Pre-Adverse Action Letter, initiating a seven-business-day "cure period" during which the applicant can address the deficiency in the report that led to the "Fail" grade. When the "Fail" grade relates to the report's criminal history, the applicant must contact GIS directly to dispute the report's accuracy. Nonetheless, a GEICO employee must review the GIS system throughout the cure period to see if the applicant has addressed with GIS the deficiency leading to the "Fail" grade. If the applicant has done so, that employee is required to change the grade from "Fail" to "Pass." Id. at 7.

         GIS then mails an Adverse Action Letter to any applicant whose background report still has a "Fail" grade at the end of the cure period, either because the applicant could not, or failed to, cure the inaccuracy. After GIS sends that letter, a GEICO employee informs the applicant that GEICO has rescinded the offer. The Adjudication Process precludes informing the applicant of the rescission before that point. Id. at 7-8.

         During the class period, GEICO assigned a "Fail" grade based on criminal history to the background reports of 426 applicants.[3] The final grades for the reports of 96 individuals were eventually changed to "Pass." In addition, the final grades for the reports of 14 applicants were eventually changed to "No Grade." Suppl. Camacho Decl. (ECF No. 68-1) ¶ 8.a-.b. This change would have occurred because the applicant did not proceed with the application process for reasons unrelated to the background report, such as failing the drug screening or withdrawing from consideration for a position. Adjudication Process at 8. Finally, the final grades for the reports of 316 applicants from the putative class remained "Fail" at the end of the cure period. Suppl. Camacho Decl. ¶ 8.b.


         I. Legal Standard

         Under Fed.R.Civ.P. 56, a court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In Celotex Corp. v. Catrett, 477 U.S. 317 (1986), the Supreme Court stated that Rule 56 requires the entry of summary judgment "after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322. To enter summary judgment, "there can be no genuine issue as to any material fact, since a complete failure of proof concerning an essential element of the nonmoving party's case renders all other facts immaterial." Id. at 323 (internal quotations omitted).

         When reviewing a motion for summary judgment, a court must interpret the facts and any inferences drawn therefrom in the light most favorable to the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Lee v. Town of Seaboard, 863 F.3d 323, 327 (4th Cir. 2017). To successfully oppose a motion for summary judgment, the nonmoving party must demonstrate to the court that there are specific facts that would create a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). However, "* [c]onclusory or speculative allegations do not suffice' to oppose a properly supported motion for summary judgment, Anor does a mere scintilla of evidence.'" Matherly, 859 F.3d at 280 (quoting Thompson v. Potomac Elec. Power Co., 312 F.3d 645, 649 (4th Cir. 2002)). "Where . . . the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, disposition by summary judgment is appropriate." United States v. Lee, 943 F.2d 366, 368 (4th Cir. 1991).

         II. Admissibility of Information from GEICO's Spreadsheet

         It is first necessary to address Branch's argument that, in deciding GEICO's motion, the Court cannot consider certain information provided by GEICO about the applicants whose reports received a "Fail" grade during the relevant time period because that information is inadmissible hearsay.

         A. Legal Standard

         Rule 56 limits the type of evidence that can be considered on a motion for summary judgment. Under that rule, "[a] party asserting that a fact cannot be . . . genuinely disputed must support the assertion by . . . citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . ., admissions, interrogatory answers, or other materials." Fed.R.Civ.P. 56(c)(1)(A). However, "[a] party may object that the material cited to support ... a fact cannot be presented in a form that would be admissible in evidence." Id. 56(c)(2). For the non-objecting party to then have that evidence considered, that party must “identif[y] facts that could be put in admissible form." Jones v. W. Tidwater Reg'1 Jail, 187 F.Supp.3d 648, 654 (E.D. Va. 2016) (internal quotations omitted) (emphasis in original).

         B. Parties' Arguments

         In paragraphs 25-30 of its Statement of Material Undisputed Facts, GEICO presented information from a spreadsheet that it produced to Branch, which contained details about all individuals whose background reports were assigned a "Fail" grade at any time during the hiring process between December 29, 2014 and January 15, 2017. GEICO did not include the spreadsheet as an exhibit, but a GEICO employee, Karen Camacho ("Camacho"), provided a declaration with details from the spreadsheet. Camacho Decl. ¶¶ 11-12. Camacho has given similar information for the individuals in the narrowed class in a supplemental declaration, and the corresponding spreadsheet is attached thereto. Suppl. Camacho Decl. ¶ 8. GEICO relies on this evidence to show that applicants assigned a "Fail" grade have a meaningful opportunity to change that grade during the subsequent cure period.

         Branch contends that the spreadsheet is hearsay that the Court cannot consider here. Camacho's statements based on the spreadsheet are therefore also hearsay. GEICO concedes that the spreadsheet is hearsay, but asserts that it can be presented in an admissible form at trial through Fed.R.Evid. 803(6) or 1006, thereby satisfying Rule ...

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