JOSEPH C. SPERO, Magistrate Judge.
Plaintiffs Kayonie Coleman and Diane Pemberton bring this putative class action against Defendant Kohl's Department Stores, Inc. ("Kohl's"), alleging that Kohl's violated certain state and federal credit reporting statutes in the course of conducting pre-employment background checks. Kohl's moves to transfer venue and also to dismiss the First Amended Complaint ("FAC") pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons discussed below, the Motion to Transfer Venue is DENIED, and the Motion to Dismiss is GRANTED.
Plaintiffs are former hourly, non-exempt employees of Kohl's Department Stores. Kohl's employed Coleman in a California store location from October 2012 to June 2013. Kohl's employed Pemberton in a Kissimmee, Florida store location from mid-2014 to January 15, 2014.
Plaintiffs allege, on behalf of themselves and all others similarly situated, that Kohl's unlawfully acquired applicants' consumer reports in the course of the hiring process. Specifically, they allege that Kohl's provided two forms for the application process—a document entitled "Employment Application," and another document entitled "Consent and Disclosure for Acquisition of Consumer Report(s)" ("Consent and Disclosure Form"). Declaration of Jennifer Turzenski ("Turzenski Decl."), Dkt. No. 31, Ex. 1 ("Pemberton App."), Ex. 3 ("Coleman App.").
Both Plaintiffs received identical Employment Applications. The document consists of two pages presented in landscape format. The title, "Employment Application," appears at the top of the first page of the document, and both pages have the form code, "AR-017E," listed in the lower right hand corner. The first page of the Employment Application requires the applicant to fill out identifying information (e.g., name, address, telephone number, age), the employment position sought, shift availability, and information related to the applicant's employment history. The second page requests the applicant to disclose his or her criminal history, if any. At the bottom of this second page, above the applicant signature line, the Employment Application contains the following "Applicant's Statement" regarding Kohl's pre-employment check:
Pemberton App. at 1; Coleman App. at 1 (emphasis added). The Applicant's Statement includes a release of liability resulting from injuries sustained in connection with the pre-employment check. Pemberton's and Coleman's signatures appear on the signature line below this Applicant's Statement, and are dated June 11, 2013 and October 15, 2012, respectively.
Next, Plaintiffs were also given a Consent and Disclosure Form. Turzenski Decl., Ex. 2 ("Pemberton Form"); Ex. 4 ("Coleman Form"). Pemberton's Consent and Disclosure Form differed slightly from Coleman's; however, they are substantively identical.
For both Pemberton and Coleman, their Consent and Disclosure Forms consist of one page, and is presented in portrait layout. In the upper boxed portion of the document, the form requests the applicant's identifying information (e.g., name, date of birth, social security number, driver's license number, and present and previous addresses). The lower boxed portion discloses certain information (the "disclosure statement"): (1) that Kohl's would use a consumer reporting agency to obtain consumer reports or investigative consumer reports on the applicant; (2) that the report could include personal information such as criminal history, past employment, personal references, drug offenses, and sex offender status; (3) the name, address, and contact information for the consumer reporting agency; (4) the method by which the applicant may dispute the report; (5) and that Kohl's may rely, in whole or in part, on the information gathered in the report to make hiring decisions. Pemberton's and Coleman's signatures appear on the signature line below this disclosure, dated June 11, 2013 and October 15, 2012, respectively.
On April 3, 2015, Pemberton filed a complaint against Kohl's in the Middle District of Florida alleging violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681-1681x. Pemberton v. Kohl's Dep't Stores, Inc., No. 15-cv-1037-EAK (AEP), Dkt. No. 1. On July 10, 2015, Coleman separately filed a complaint against Kohl's in the Northern District of California alleging similar claims in addition to state claims. Dkt. No. 1 (Compl.). Pemberton voluntarily dismissed her Florida lawsuit on July 21, 2015, and two days later on July 23, 2015, Coleman filed the present FAC adding Pemberton as a plaintiff. Dkt. No. 21. The five-count FAC pled FCRA claims in Counts One, Two, and Three; a California Investigative Consumer Reporting Agencies Act ("ICRAA"), Cal. Civ. Code §§ 1786 et seq., claim in Count Four; and a California Consumer Credit Reporting Agencies Act ("CCRAA"), Cal. Civ. Code §§ 1785.1 et seq., claim in Count Five.
Kohl's moves to transfer venue to the Eastern District of Wisconsin, or in the alternative, to the Middle District of Florida. Dkt. No. 31. For the reasons stated on the record at the hearing, the Motion to Transfer Venue is DENIED.
Kohl's moves to dismiss all claims under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted.
"The purpose of a Rule 12(b)(6) motion to dismiss is to test the legal sufficiency of the complaint." N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). The complaint need only satisfy the Rule 8(a) standard, which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A plaintiff need not plead a prima facie case in order to survive a motion to dismiss pursuant to Rule 12(b)(6). Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514-15 (2002). However, the complaint must "contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 562 (2007) (citing Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1984)); Prosser v. Navient Solutions, Inc., No. 15-cv-01036-SC, 2015 U.S. Dist. LEXIS 118018, at *5-7 (N.D. Cal. Sept. 3, 2015) ("The allegations made in a complaint must be `sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively' and `must plausibly suggest an entitlement to relief' such that `it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.'" (quoting Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011)). In ruling on a Rule 12(b)(6) motion to dismiss, the court analyzes the complaint and takes "all allegations of material fact as true and construe[s] them in the light most favorable to the non-moving party." Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995).
As an initial matter, Kohl's argues that Coleman's claims are barred under the applicable statute of limitations.
If the expiration of the applicable statute of limitations is apparent from the face of the complaint, the defendant may raise a statute of limitations defense in a Rule 12(b)(6) motion to dismiss. Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 1980). This is true even though expiration of the limitations period is an affirmative defense, because Federal Rule of Civil Procedure 9(f) "makes averments of time and place material for the purposes of testing the sufficiency of a complaint." Suckow Borax Mines Consol. v. Borax Consol., 185 F.2d 196, 204 (9th Cir. 1950). When a motion to dismiss is based on the running of the statute of limitations, "it can be granted only if the assertions of the complaint, read with the required liberality, would not permit the plaintiff to prove that the statute was tolled." Jablon, 614 F.2d at 682. In contrast, where the statute of limitations question turns on factual issues that may be disputed, the question is more appropriately addressed at a later stage of the proceeding. See id.
Kohl's asserts that Coleman's claims in the FAC should be dismissed because they are barred under the applicable statute of limitations. To prevail on this argument, Kohl's must establish that it is apparent from the face of the FAC both that the limitations period has passed and that Coleman could not prove that the respective statutes were tolled. Kohl's has not met that burden.
An action under the FCRA may be brought "not later than the earlier of (1) 2 years after the date of discovery by the plaintiff of the violation that is the basis for such liability; or (2) 5 years after the date on which the violation that is the basis for such liability occurs." 15 U.S.C. § 1681p. Similarly, under the ICRAA, "[a]n action to enforce any liability created under this title may be brought in any appropriate court of competent jurisdiction within two years from the date of discovery." Cal. Civ. Code § 1786.52.
Here, it is not obvious from the face of the FAC that Coleman's claims are barred by the applicable limitations periods. Kohl's argues that Coleman became aware of the facts constituting the alleged violations on the date she signed the Employment Application and Consent and Disclosure Form in October 2012, and contends she was therefore required to sue within two years of that "date of discovery." But, Kohl's did not necessarily violate the FCRA or the ICRAA on the date Coleman signed those forms. Both statutes make it unlawful to "procure" a report without first providing the proper disclosure and receiving the consumer's written authorization. Therefore Kohl's could not have violated those statutes until it procured a report on Coleman.
The FAC does not make clear when Kohl's procured the relevant report. Rather, the FAC and exhibits provided by Kohl's refer only to October 15, 2012, the date Coleman signed her forms. That date does not necessarily start the clock on her claims. Accordingly, the motion to dismiss on statute of limitations grounds is denied. See Supermail Cargo, Inc. v. United States, 68 F.3d 1204, 1207 (9th Cir. 1995) ("[A] complaint cannot be dismissed [on limitations grounds] unless it appears beyond doubt that the plaintiff can prove no set of facts that would establish the timeliness of the claim.").
Plaintiffs seek statutory damages for Kohl's alleged FCRA violations under 15 U.S.C. § 1681n.
Count One of the FAC alleges that the forms Kohl's provided Plaintiffs to obtain consumer reports violated § 1681b(b)(2)(A)(i) of the FCRA. That provision reads as follows:
15 U.S.C. § 1681b(b)(2) (emphasis added). Therefore, § 1681b(b)(2)(A)(i) requires that before seeking a consumer report, Kohl's must first give "a clear and conspicuous" disclosure that it may obtain such a report for employment purposes, "in a document that consists solely of the disclosure" (the "standalone requirement").
Plaintiffs' theory is that the Employment Application and Consent and Disclosure Form are, in actuality, one document as "part of the same employment packet." As a result, they argue, this document violates § 1681b(b)(2)(A)(i) because the disclosure contained in the Consent and Disclosure Form now appears together with "other extraneous information" in the Employment Application, such as a release of liability provision. Plaintiffs argue that this violates the "clear and conspicuous" and standalone requirements in § 1681b(b)(2)(A)(i). Kohl's disputes this characterization and argues that the documents cannot be read together because they are two separate forms serving two separate functions in the company's applicant screening process. In support, Kohl's argues that the forms contain different and distinct formatting, as well as separate titles identifying the different function each serves.
Based on the pleadings presented, the Court finds that Plaintiffs have not sufficiently alleged Kohl's failure to comply with the statute. To an extent, Plaintiffs themselves acknowledge in their FAC that the Employment Application and Consent and Disclosure Form comprise "two separate documents." See FAC ¶ 29. In addition, the exhibits attached to Kohl's motion papers also support this interpretation. Each form separately bears Pemberton's and Coleman's signature. The Employment Application is formatted in landscape, bears a separate title, and contains a separate form code. More importantly, the Employment Application appears to serve a different and distinct function. It requests certain employment-related information about the applicant such as basic identifying information, criminal history, and authorization and release for the company to "contact . . . employment references and personal references, as well as education institutions." In contrast, the Consent and Disclosure Form is formatted in portrait, and bears a distinct title and form code. Neither party disputes that the purpose of this document relates to consumer reports only. It contains a disclosure and authorization provision, and also identifies other relevant information such as the consumer reporting agency and the consumer's right to review the report obtained. Accordingly, on the face of these pleadings, Kohl's appears to have provided two separate documents to Plaintiffs, in compliance with the FCRA.
Plaintiffs also argue that the Employment Application and the Consent and Disclosure Form comprise one document because they were presented together at the same time. However, the Court is not aware of any authority supporting this contention that merely presenting these documents together violates § 1681b(b)(2)(A)(i), and the two cases to which Plaintiffs cite lend no support either. Opp. at 1, 2, 18 (citing Speer v. Whole Food Mkt. Grp., Inc., No. 8:14-CV-3035-T-26TBM, 2015 U.S. Dist. LEXIS 40462 (M.D. Fla. Mar. 30, 2015) and Avila v. NOW Health Grp., Inc., No. 14 C 1551, 2014 U.S. Dist. LEXIS 99178 (N.D. Ill. July 17, 2014)). In both of those cases, the employer presented a release of liability with either a disclosure or authorization provision together in the same document. See Speer, 2015 U.S. Dist. LEXIS 40462 at *2-3; Avila, 2014 U.S. Dist. LEXIS 99178 at *5-6. Here, in contrast, the disclosure and authorization provisions appear in one document (the Consent and Disclosure Form) while a release of liability appears in a separate document (the Employment Application). Plaintiffs have not cited cases addressing the facts presented here, and neither Speer nor Avila lends support for their assertion.
For these reasons, the Court finds that Plaintiffs have not set forth sufficient factual allegations that Kohl's violated § 1681b(b)(2)(A)(i) of the FCRA. Kohl's Motion to Dismiss Count One is therefore GRANTED with leave to amend the FAC, if Plaintiffs can show that the forms presented here violated the FCRA.
Count Two alleges that Kohl's violated § 1681b(b)(2)(A)(ii) of the FCRA because it failed to obtain proper authorization to request Plaintiffs' consumer reports. Plaintiffs' argument is that because the Employment Application and Consent and Disclosure Form were defective (for the reasons they allege in Count One), so too were their signatures authorizing Kohl's to request consumer reports. As discussed above however, Plaintiffs fail to sufficiently allege that those forms violated the FCRA. Accordingly, Plaintiffs also fail to sufficiently allege that the authorizations were defective. Kohl's Motion to Dismiss Count Two is therefore GRANTED with leave to amend.
In Count Three, Plaintiffs allege that Kohl's violated the FCRA provisions contained in 15 U.S.C. § 1681d(a). It provides in relevant part:
Thus, § 1681d(a) requires, among other things, that whenever an employer requests a consumer report, it must notify the consumer in writing within three days of the request. It also requires that the notification include a "written summary of . . . rights," that discloses certain information detailed in § 1681g(c). That written summary of rights must contain certain disclosures, such as the consumer's right to obtain a copy of the consumer report, dispute information contained in the report, and obtain a credit score from the consumer reporting agency. See generally 15 U.S.C. § 1681g(c).
Here, Plaintiffs have not set forth sufficient factual allegations to withstand dismissal. To prevail on their claim, Plaintiffs need to specifically allege that Kohl's violated the statutes in question, and did so willfully. 15 U.S.C. § 1681n; see Ashcroft v. Iqbal, 556 U.S. 662, 662 (2009); Fed. R. Civ. P. 8(a). However, the extent of Plaintiffs' allegations with respect to § 1681d(a)(1) consists of the following one sentence: "Defendants [sic] did not comply with Section 1681d(a)(1)." FAC ¶ 58. Likewise, their allegations with respect to § 1681g(c) consist of the following one sentence: "Defendant did not comply with 1681g(c)." FAC ¶ 60. As to the willfulness element, Plaintiffs fail to allege any facts at all. These assertions are insufficient to survive dismissal, and Kohl's Motion to Dismiss is therefore GRANTED with leave to amend.
Count Four brings a claim on behalf of "Coleman only and the ICRAA Class," alleging that Kohl's violated § 1786.16(a)(2)(B) of the ICRAA. FAC ¶¶ 63, 72-75, 79; see also Cal. Civ. Code § 1786.50 (creating an ICRAA cause of action). The relevant portions of § 1786.16(a)(2)(B) require disclosures to be "clear and conspicuous" and stand alone in a document, similar to the disclosure requirements set forth in § 1681b(b)(2)(A)(i) of the FCRA. They provide as follows:
Cal. Civ. Code § 1786.16(a) (emphasis added).
Similar to their disclosure allegations in Count One, here in Count Four, Plaintiffs allege that the disclosure forms Kohl's provided contained both a disclosure statement and "other extraneous information," in violation of the "clear and conspicuous" and standalone requirements in § 1786.16(a)(2)(B). Id. ¶¶ 72-74. For the same reasons discussed in Count One, the Court finds that Plaintiffs' disclosure allegations here under the ICRAA do not survive a motion to dismiss because they have not set forth sufficient factual allegations that Kohl's violated the statute. Rather, on the face of the pleadings, Kohl's appears to have provided forms to Plaintiffs that complied with the ICRAA.
For the reasons discussed above, the Motion to Transfer Venue is DENIED. The Motion to Dismiss is GRANTED with leave to amend as to Counts One, Two, Three, and Four. The Motion to Dismiss is GRANTED without leave to amend as to Count Five.
Here, first, Plaintiffs' FAC refers to the documents. The FAC refers to an "Exhibit A" (presumably the Employment Application) and an "Exhibit B" (presumably the Consent and Disclosure Form); however, it does not have any exhibits attached. Second, the documents form a central component in Plaintiffs' theories of liability against Kohl's. And third, neither Kohl's, who provided the exhibits, nor Plaintiffs, who refer to the exhibits in their Opposition brief, has contested the authenticity of the documents. Accordingly, the Court finds it proper to consider the exhibits provided.
Accordingly, Count Five is dismissed with prejudice.
