MEMORANDUM DECISION AND ORDER

B. Lynn Winmill, U.S. District Court Judge.

INTRODUCTION

Before the Court is Winco Foods LLC's Motion to Dismiss Plaintiff's Second Amended Complaint. Dkt. 49. For the reasons set forth herein, the Court will GRANT IN PART and DENY IN PART Winco's Motion.

PROCEDURAL BACKGROUND

The Court previously dismissed Plaintiff Gloria Mitchell's First Amended Complaint after concluding that Mitchell failed to adequately allege "concrete injury," thereby denying this Court jurisdiction under Article III of the Constitution. Dkt. 28. The United States Court of Appeals for the Ninth Circuit affirmed this Court's decision with respect to the Article III inquiry but ordered the Court to provide Mitchell the opportunity to amend her complaint. Dkt. 42. Mitchell subsequently filed a Second Amended Complaint. Dkt. 46. Apparently satisfied that the Second Amended Complaint adequately alleged facts establishing that Mitchell has standing to pursue her claims, WINCO has filed this motion to dismiss — alleging other grounds why the complaint should be dismissed under Rule 12(b)(6).

LEGAL STANDARD

Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to "give the defendant fair notice of what the... claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). While a complaint attacked by a Rule 12(b)(6) motion to dismiss "does not need detailed factual allegations," it must set forth "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id.

The Supreme Court identified two "working principles" that underlie Twombly in Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). First, the court need not accept legal conclusions that are couched as factual allegations as true; the trial court "can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. Rule 8 does not "unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 678-79, 129 S.Ct. 1937. Second, to survive a motion to dismiss, a complaint must state a plausible claim for relief. Id. at 679, 129 S.Ct. 1937. "Determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.

ANALYSIS

1. The Fair Credit Reporting Act's Statutory Scheme

The Fair Credit Reporting Act provides an intricate set of requirements for employers who seek to obtain information about their potential employees. To begin with, the FCRA contains a clear distinction between "consumer reports" and "investigative consumer reports." The FCRA defines "consumer reports" as:

15 U.S.C. § 1681a(d)(1). The FCRA defines "investigative consumer reports" as:

15 U.S.C. § 1681a(e).

The distinction between consumer reports and investigative consumer reports is important when considered within the context of the disclosures required under the FCRA. Section 1681b(b)(2)(A) provides:

(emphasis added). Unlike the disclosure requirement for consumer reports, the disclosure requirement for investigative consumer reports does not contain a requirement that the disclosure pertain solely to the investigative consumer report. See 15 U.S.C. § 1681d(a). Instead, section 1681d(a) requires that:

(emphasis added). Thus, the FCRA provides for different disclosure requirements depending upon whether the employer is seeking a consumer report or an investigative consumer report. Critically, for purposes of this case, an employer that intends to obtain a consumer report as it is defined in the Act must provide to prospective employee with "a document that consists solely of the disclosure[ ] that a consumer report may be obtained for employment purposes." 15 U.S.C. § 1681b(b)(2)(A)(i). It is this language that forms the crux of the dispute between Mitchell and Winco.

2. The Winco Disclosure

Specifically, Mitchell alleges that the Disclosure for Background Check (hereinafter, the "Winco Disclosure") Winco provided to Mitchell "confused Mitchell and other applicants, and stripped Mitchell and others of their respective abilities to meaningfully authorize their reports." Dkt. 46 at ¶ 53. The Winco Disclosure, which Mitchell attached as Exhibit B to her Second Amended Complaint, reads as follows:

Dkt. 46-1 at 3.

3. Mitchell Has Plausibly Alleged that the Winco Disclosure Violates the Separate Disclosure Requirement in Section 1681b(b)(2)(A)(i)

The Court disagrees with Winco's argument that Mitchell has failed to plausibly allege that the Winco Disclosure fails to comply with the FCRA's statutory requirements. Section 1681b(b)(2)(A)(i) requires that any request for a consumer report, as it is defined in the statute, must be "in a document that consists solely of the disclosure." The Ninth Circuit made clear in Syed v. M-I LLC, 853 F.3d 492, 500 (9th Cir. 2017) the word "solely" means what it says. A disclosure that an employer is seeking a consumer report must contain solely that information; it cannot be intermingled with additional details, clearly written or not. See, Syed, 853 F.3d at 502 ("Whether the disclosure is "clear and conspicuous" is irrelevant to the analysis.").

Here, the Winco Disclosure combines two different disclosures. It simultaneously provides applicants with notice that that Winco will obtain both a consumer report (as it is defined by the FCRA at section 1681a(d)(1)) and an investigative consumer report (as it is defined by the FCRA at section 1681d(a)). This violates the FCRA's separate disclosure requirement.

Winco cites to two district court decisions from this circuit which found that a combined disclosure does not violate the statutory requirement. Walker v. Fred Meyer, Inc., No. 3:17-CV-01791-YY, 2018 WL 2455915, at *5 (D. Or. May 7, 2018), report and recommendation adopted in part, No. 3:17-CV-1791-YY, 2018 WL 3090199 (D. Or. June 21, 2018) (adopting the court's holding regarding the disclosure) and Coleman v. Kohl's Dep't Stores, Inc., No. 15-CV-02588-JCS, 2015 WL 5782352 (N.D. Cal. Oct. 5, 2015). In terms of the policy reasons underlying the statutory requirement, the Court finds those cases persuasive. However, the Court concludes that they are inconsistent with the unambiguous decisions of the Ninth Circuit in Syed and Gilberg v. California Check Cashing Stores, LLC, 913 F.3d 1169 (9th Cir. 2019). In both cases, the Ninth Circuit concluded that adding additional information to the consumer report disclosure violated the FCRA. Although Winco is correct that neither case involved combining just the consumer report disclosure and the investigative consumer report disclosure-Gilberg involved combining a waiver with the consumer report disclosure and Syed involved combining state law with the consumer report disclosure-the logic and language of the Ninth Circuit's opinions apply with equal force here. The statute's text, combined with the Ninth Circuit's decisions in Syed and Gilberg, foreclose Winco's arguments that FCRA allows employers to combine the consumer report and investigative consumer report disclosures. See Gilberg, 913 F.3d at 1175 ("Syed considered the standalone requirement with regard to any surplusage." (emphasis added)). Thus, Mitchell has adequately alleged a violation of the standalone disclosure requirement in Section 1681b(b)(2)(A)(i).1

4. The Winco Disclosure Is Clear and Conspicuous

Although the violation of the standalone disclosure requirement is sufficient, in and of itself, for Mitchell's claim to proceed, the Court will briefly add that the Winco Disclosure meets the statute's "clear and conspicuous" requirements. In the Ninth Circuit, a disclosure is "clear" under the FCRA when it is "reasonably understandable." Rubio v. Capital One Bank, 613 F.3d 1195, 1200 (9th Cir. 2010).2 And a disclosure is conspicuous when it is "noticeable to the consumer." Gilberg, 913 F.3d at 1176 (internal quotation and citation omitted). The Ninth Circuit has analyzed each prong separately and has "assume[d]..., without deciding, that clarity and conspicuousness under FCRA present questions of law rather than fact." Id. at 1177.

Beginning with the inquiry regarding whether the document is "clear," the Court acknowledges, as it has discussed above, that the Winco Disclosure impermissibly combines the consumer report and investigative consumer report disclosures. The Ninth Circuit in Gilberg found that the disclosure at issue was unclear because (1) "the disclosure form contains language that a reasonable person would not understand" and (2) "the disclosure would confuse a reasonable reader because it combines federal and state disclosures." Id. Thus, under Gilberg, Mitchell has successfully alleged facts analogous to the second half of Gilberg's test.

But, the Winco Disclosure is distinguishable from the disclosure in Gilberg because it does not "contain[] language that a reasonable person would not understand." Id. To the contrary, the Winco Disclosure, with the exception of its use of the term "and/or," is a model of clarity. It contains eight concise sentences that (1) indicate that Winco will be collecting information on the applicant, (2) informs the applicant who will be collecting the information, (3) details what and how the information will be obtained, and (4) notifies the applicant that he or she has a right to request the data collected. Dkt. 46-1 at 3. All of that information is necessary to sufficiently disclose to the applicant the scope of the data collection activity and their rights with respect to what is collected.3 Unlike the Gilberg disclosure which contained vague phrases like "all encompassing," Gilberg, 913 F.3d at 1177, the sole potentially ambiguous term in the Winco Disclosure is the word "report" which was likely left intentionally undefined so as to make clear that it covered both consumer reports and investigative consumer reports. Also, unlike the Gilberg disclosure, there are no incomplete sentences in the Winco Disclosure. Id. Thus, as a matter of law the Court concludes that the Winco Disclosure was "reasonably understandable," Rubio, 613 F.3d at 1200, and therefore "clear" under Section 1681b(b)(2)(A)(i) of the FCRA.4

The Court also finds that the Winco Disclosure was "conspicuous" as a matter of law pursuant to Section 1681b(b)(2)(A)(i) of the FCRA. Mitchell does not appear to seriously contest this in her briefing, but for the sake of completeness the Court notes that the Winco Disclosure is contained within a single form with a bold all caps header labeling the document as a disclosure. Dkt. 46-1 at 3. The paragraphs sensibly break out the different topics addressed and provide sufficient whitespace such that the Winco Disclosure does not appear cluttered or intimidating to the reader. Id. Accordingly, the Winco Disclosure is "conspicuous" in accordance with Section 1681b(b)(2)(A)(i).

5. Mitchell Fails to Plausibly Allege that Winco's Disclosure Is a Willful Violation of the Statutory Scheme

Mitchell fails to adequately allege that Winco willfully violated § 1681b(b)(2)(A)(i). Paragraph 56 of Mitchell's Second Amended Complaint contains the information relevant to Mitchell's allegation of willfulness. Dkt. 46. In summary, Mitchell alleges that Winco's failure to comply with the statute was willful because (1) the FCRA's disclosure requirement was unambiguous, (2) Winco is a large corporation with sophisticated counsel, and (3) Winco had access to judicial and administrative guidance that made it objectively unreasonable to combine the consumer report disclosure and the investigative report disclosure. Id. at ¶ 56.

Under the FCRA, statutory damages are allowed where the defendant "willfully fails to comply with any requirement imposed." § 1681n(a). A defendant acts willfully where it either knowingly or recklessly fails to comply with an FCRA requirement. Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007). The United States Supreme Court in Safeco defined the inquiry regarding recklessness in the following way:

Id. at 69. In short, to obtain damages under section 1681n(a), a plaintiff must plausibly allege that the erroneous interpretation used by the defendant was "objectively unreasonable"5 in light (1) guidance from the judiciary, (2) guidance from the Federal Trade Commission, and (3) the clarity of the statutory text. Alleging mere negligence is insufficient to plausibly allege willfulness. Syed, 853 F.3d at 505. The Court decides this issue as a matter of law. Id.

In determining the issue of willfulness, it is significant that no district or appellate court in the United States has held that combining just the consumer report and investigative report disclosures into a single document violates § 1681b(b)(2)(A)(i) of the FCRA. To the contrary, at least one district court has specifically found that combining the two disclosures does not violate the statute. See Walker v. Fred Meyer, Inc., No. 3:17-CV-1791-YY, 2018 WL 3090199, at *2 (D. Or. June 21, 2018) appeal docketed No. 90-567 (9th Cir. July 20, 2018). Furthermore, it is persuasive that the disclosures in Syed and Gilberg both combined the consumer report disclosure and investigative consumer report disclosure. See Gilberg, 913 F.3d at 1178 (Disclosure included as Appendix A.); Syed, 853 F.3d at 508 (Disclosure included as Appendix A.). In neither case did the panel find that such a combination violated § 1681b(b)(2)(A)(i).6

Guidance issued from a staff member of the Federal Trade Commission also weighs heavily in Winco's favor. Mitchell relied in her briefing on FTC Advisory Opinion to Willner (Mar. 25, 1999) available at https://www.ftc.gov/policy/advisory-opinions/advisory-opinion-willner-03-25-99. That advisory opinion did suggest that "the surest way for an employer to comply, of course, would be to provide the [consumer report] notice and the [investigative consumer report] notice in separate documents." Id. However, the advisory opinion also indicates that "we believe that an employer may combine only a very limited [investigative consumer report disclosure] with the general [consumer report disclosure] without running afoul of the latter section's requirement that the required disclosure be in a stand-alone document." Id. Thus, Winco's investigative report disclosure satisfied the FTC's guidance and interpretation of the statute, if it was "very limited" and did not overshadow the consumer report disclosure. An employer, positioned as Winco was in 2015, cannot be deemed to have acted willfully in concluding, correctly or incorrectly, that the investigative report disclosure that it added to the consumer report disclosure was "very limited" and therefore satisfied the FTC's guidance.

Finally, Safeco instructs the Court to turn to the text of the statute to determine if it was clear or, in Justice Souter's words, "pellucid." 551 U.S. at 70, 127 S.Ct. 2201. The Court agrees with Mitchell that the statute means what it says by including the word "solely." But, the weight of this word was not obvious at the time the Winco Disclosure was drafted. Statutory interpretation is a difficult business. The fact that the Gilberg and Syed panels, Judge Simon in Walker, and the FTC staff member concluded, explicitly or implicitly, that the word "solely" does not preclude combining the two disclosures, assuredly immunizes Winco from any claim that it acted willfully or recklessly in reaching the same conclusion. At the very most, Winco's failure to appreciate the impact of the word "solely" could be considered negligent. Negligence, however, is insufficient to plausibly allege willfulness. Syed, 853 F.3d at 505. Accordingly, the Court concludes as a matter of law that Winco did not act willfully in violating the FCRA.

ORDER

IT IS HEREBY ORDERED: