COLLEEN KOLLAR-KOTELLY, UNITED STATES DISTRICT JUDGE.
Plaintiff Gennaro Mattiaccio filed suit on July 30, 2012, alleging defamation by Defendants Ami Getu, David Hale, and DHA Group, Inc. See Compl. ECF No. [1]. The Plaintiff also asserted three claims under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., one count against each Defendant, arising out of a post-employment background check of the Plaintiff. On August 9, 2013, the Plaintiff sought leave to bring in several new defendants and eleven new claims, including a Fair Credit Reporting Act claim against new defendant Nelson Blitz, the attorney who had performed the background check on Plaintiff. Pl.'s Mot. for Enlargement of Time to File Am. Compl., ECF No. [46]. In a September 16, 2013 [53] Order, the Court granted in part and denied in part Plaintiff's Motion. Plaintiff was allowed to amend his Complaint to include a Fair Credit Reporting Act ("FCRA") claim against Nelson Blitz because he had learned information relevant to these claims in depositions during discovery after the date for amending pleadings had passed. Presently before the Court is Defendant Blitz's Motion to Dismiss the FCRA claim for failure to state a claim, or alternatively, for summary judgment. See Def.'s Mot. to Dismiss, ECF No. [64]. Upon consideration of the pleadings,
For the purposes of Defendant's Motion to Dismiss for failure to state a claim, the Court presumes the following facts pled in the Second Amended Complaint to be true, as required when considering a motion to dismiss. In relevant part, Plaintiff alleges that he was hired as the Lead Proposal Manager for DHA Group in July 2011. Second Am. Compl., ECF No. [55], ¶ 17. Prior to Plaintiff's employment with DHA Group, Plaintiff completed a document authorizing DHA Group to conduct a pre-employment background check, which he passed. Id. ¶ 27.
On or about May 3, 2012, Plaintiff met with Amerete Getu, Manager of Human Resources for DHA Group, to discuss "a complaint against personnel at the company." Id. ¶¶ 33. On May 16, 2012, Plaintiff
Defendant Blitz is a licensed attorney who "performed background checks and employee investigations, among other things for DHA Group Inc." Id. ¶ 6. Plaintiff alleges that Defendant Blitz "regularly and routinely conducts employment screening and addresses employment investigations and FCRA matters." Id. ¶ 38. As part of his background investigation of Plaintiff, Defendant Blitz obtained a printout from a computer database known as U.S. Search, which Plaintiff alleges contained numerous inaccuracies. Id. ¶ 42. On May 30, 2012, DHA Group terminated Plaintiff's employment on the grounds that he was "far less than candid with DHA with respect to important and relevant aspects of [his] background and experience." Id. ¶ 41; Pl.'s Ex. H (5/30/12 Termination Ltr), at 1. Specifically, the termination letter, which included a copy of the background investigation report prepared by Defendant Blitz, asserted that Plaintiff failed to disclose prior convictions. Pl.'s Ex. H (5/30/12 Termination Ltr), at 1; Pl.'s Ex. I (Prelim. Invest. Report). Plaintiff alleges that this report contained numerous inaccuracies, including that he was convicted of Assault and Battery, which Plaintiff contends was "false and misleading." Id. ¶¶ 42; 47.
In his Second Amended Complaint, Plaintiff alleges that Defendant Blitz violated FCRA provisions 15 U.S.C. § 1681b(b)(2)(A) and (b)(3)(A), which state:
Specifically, Plaintiff alleges that Defendant Blitz violated the FCRA when he "improperly and unlawfully obtained Plaintiff's credit report, criminal history, civil history, prior employment information, and attempted to obtain information about drug use by the plaintiff, all without proper authorization from the plaintiff." Second Am. Compl., ¶ 148. Plaintiff also alleges that Defendant Blitz violated the FCRA by failing to provide Plaintiff with a "Summary of Rights under the [FCRA]" or the required "pre adverse action" and "adverse action" notices. Id. ¶ 152. Finally, although he does not cite a corresponding provision in the FCRA, Plaintiff alleges that Defendant Blitz violated the FCRA by failing to "respond to requests to correct erroneous information in his report," id. ¶¶ 150, 154. The Court understands Plaintiff to be referencing § 168 1 i(a)(1)(A), which states:
Defendant Blitz now moves to dismiss Plaintiff's FCRA claim against him for failure to state a claim. In the alternative, Defendant Blitz moves the Court for summary judgment. As the Court is not relying on any information outside of Plaintiff's Complaint and the documents attached to or referenced therein, the Court shall treat Defendant's Motion as a motion to dismiss.
Federal Rule of Civil Procedure 12(b)(6) provides that a party may challenge the sufficiency of a complaint on the grounds it "fail[s] to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). "[A] complaint [does not] suffice if it tenders `naked assertion[s]' devoid of `further factual enhancement.'" Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Rather, a complaint must contain sufficient factual allegations that, if accepted as true, "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570, 127 S.Ct. 1955. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. In deciding a Rule
Defendant Blitz effectively makes three arguments as to why this Court should dismiss Plaintiff's FCRA claim against him: (1) the background investigation report Defendant Blitz prepared was not a "consumer report" and is thus exempt from the FCRA's requirements; (2) Plaintiff authorized the background investigation Defendant Blitz conducted; and (3) Defendant Blitz is not a "consumer reporting agency," but an attorney-agent, and thus could not violate the FCRA. The Court addresses each argument in turn and finds that only Defendant's third argument has merit.
Defendant Blitz first argues that Plaintiff fails to state a claim that he violated the FCRA because the "communications contained in Mr. Blitz's report do not constitute a `consumer report' as governed by the FCRA." Def.'s Mot. at 4. Defendant notes that communications are excluded from the FCRA's definition of consumer reports if "the communication is made to an employer in connection with an investigation of . . . suspected misconduct relating to employment." 15 U.S.C. § 1681a(y)(1)(B)(i). Defendant claims that Plaintiff "acknowledges that the background investigation conducted by Mr. Blitz and the resulting report were requested after DHA came to believe that the Plaintiff may have previously been convicted of perjury." Def.'s Mot. at 4. Consequently, Defendant Blitz argues, he cannot be held liable for any of his actions or inactions in "procuring a consumer report" because, by definition, he was not procuring a consumer report. Id.
In so arguing, however, Defendant Blitz asks the Court to make a factual determination that is inappropriate for the Court to make at the motion to dismiss stage. In his Complaint, Plaintiff alleges that Defendant Blitz conducted the investigation into Plaintiff's background around the same time that DHA's Human Resources Manager received information indicating that Plaintiff had previously been convicted of perjury. Second Am. Compl. ¶¶ 34, 38. If this were Plaintiff's only allegation, Defendant Blitz is correct that Plaintiff's Complaint must be dismissed for failure to state a claim under the FCRA because the creation or procurement of a report based on suspected misconduct relating to employment is exempt from the FCRA's requirements. See 15 U.S.C. § 1681a(y)(1)(B)(i). However, Plaintiff also alleges that the investigation was begun the shortly after Plaintiff met with DHA's Human Resources Manager to discuss his concerns about the conduct of certain DHA employees. Id. ¶¶ 33, 38. Moreover, Plaintiff alleges that "despite being told by [an individual] about his past in January 2012, Defendant DHA, David Hale and Amerete Getu did not conduct an investigation of Plaintiff, until May 2012 when Plaintiff made a complaint against the company." Id. ¶ 60. The Court can reasonably infer from Plaintiff's allegations that Defendant Blitz conducted the investigation not because of suspected misconduct, but in retaliation for Plaintiff's complaints against DHA management. This is indeed the interpretation of his Complaint
Defendant Blitz next argues that the information he reported to DHA Group from his investigation into Plaintiff's background did not violate the FCRA because Plaintiff authorized the background check. Defendant Blitz points to the language in 15 U.S.C. § 1681b(b)(2)(A), which states that a person may cause a consumer report to be procured for employment purposes if "a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured," and "the consumer has authorized in writing the procurement . . . of the report." Def.'s Mot. at 5 (emphasis added). Defendant argues that since Plaintiff states in his Complaint that he signed a document authorizing a background check prior to his employment with DHA Group, Plaintiff authorized Defendant Blitz's post-employment background investigation and cannot now allege that Defendant Blitz conducted an "unauthorized" background check in violation of the FCRA. In his Opposition, Plaintiff argues that he only authorized a "pre-employment background check," and that there was no clause in the authorization "permitting the defendants to conduct a background check on the plaintiff before and during employment." Pl.'s Opp'n. at 5. As both parties rely on the authorization in their pleadings and Plaintiff repeatedly references the authorization in his Complaint, the Court requested Defendant produce the authorization form to Plaintiff and the Court. See Notice, ECF No. [81]. Upon review of the authorization form allegedly signed by Plaintiff, the Court finds that Defendant's characterization of that authorization is the accurate characterization. The text of the authorization is not limited to the pre-employment context, but states broadly that the employee is "authoriz[ing] DHA to thoroughly investigate [his] background, references, employment record and other matters related to [his] suitability for employment." Id. Courts have found such broad authorizations obtained from the employee at any time prior to the procurement of the consumer report sufficient to satisfy the FCRA's authorization requirements. See, e.g., Kelchner v. Sycamore Manor Health Center, 305 F.Supp.2d 429, 434 (M.D.Pa. 2004), aff'd, 135 Fed.Appx. 499 (3rd Cir. 2005) ("Based on the [the plain language of the FCRA, the FCRA House Report, and the FTC advisory opinion], we are confident that it is well within an employer's rights under the FCRA to require its employees to sign a blanket authorization to procure consumer reports" and need not "go through the disclosure/authorization process each time a report is requested.").
However, the Court also requested Plaintiff file a notice with the Court indicating whether the authorization form produced by Defendant was in fact the authorization form he signed. In Plaintiff's Notice to the Court, Plaintiff alleges that the authorization form produced by Defendant includes incorrect information that was not authored by Plaintiff and a forged signature. See Pl.'s Resp. to Notice, at 1. Plaintiff also contends that the authorization
Defendant Blitz's final argument is that the background investigation he conducted did not violate the FCRA because in conducting the investigation he acted as an attorney-agent, not as a "consumer reporting agency" as defined by the FCRA. Def.'s Mot. at 6-7. According to Defendant Blitz, "[t]his Court has recognized that a mere `user' of consumer information, rather than a `consumer reporting agency' cannot violate section 1681b." Def.'s Mot. at 6 (citing to Wiggins v. Philip Morris, Inc., 853 F.Supp. 470 (D.D.C. 1994)). Defendant Blitz's reliance on Wiggins, however, is misplaced. Wiggins addressed the pre-1996 amendments version of the FCRA in which section 1681b contained only a provision that, by its plain language, applied exclusively to consumer reporting agencies. Id. at 476-77. Contrary to Defendant Blitz's argument, 1681b today includes provisions, notably §§ 1681b(b)(2)(A) and 1681b(b)(3)(A), which impose obligations on "a person" who procures a consumer report or causes a consumer report to be procured. These provisions have been repeatedly interpreted as applying to "users" of consumer reports. See Lagrassa v. Jack Gaughen, LLC, 2011 WL 1257371, at *2 (M.D.Pa. March 30, 2011) (dismissing plaintiff's claims against consumer reporting agency under 15 U.S.C. § 1681b(b)(2) because 1681b(b)(2) "applies only to users of a report, rather than agencies that furnish the report"); Obabueki v. International Business Machines Corp., 145 F.Supp.2d 371, 393 (S.D.N.Y.2001), aff'd, 319 F.3d 87 (2d Cir.) (explaining that the second and third subsections of § 1681b(b) "both affect users."). Thus, Defendant Blitz's argument that he cannot be found to have violated § 1681b because he is not a consumer reporting agency is unavailing. Moreover, in so far as Plaintiff has alleged that Defendant Blitz violated §§ 1681b(b)(2) or (3), Defendant Blitz's argument is irrelevant because the former provision has been interpreted as applying exclusively to users and the latter as applying
However, the Court finds force in Defendant Blitz's argument that the FCRA's requirements do not apply to his actions in this case because he undertook the background investigation as an attorney-agent of his client DHA Group. Def.'s Mot. at 4-5. Plaintiff's Complaint and the parties' pleadings make clear that Defendant Blitz served as outside counsel to DHA Group, providing legal support to the company on a variety of matters including employees' backgrounds. Second Am. Compl. ¶ 6 ("Defendant Blitz is . . . an attorney who performed Background Checks and Employee Investigations, among other things for DHA Group Inc.") (emphasis added); id. ¶ 39 ("[a DHA Group employee] was informed to `stay out of any decisions or matters pertaining to the termination of [Plaintiff]' by Nelson Blitz"); Pl.'s Opp'n. at 10 (describing how Defendant Blitz provided legal advice and employee investigation services to DHA Group and detailing internal investigation into employee misconduct in which Defendant Blitz participated). On the record before the Court, Defendant Blitz was not an attorney hired for the sole purpose of conducting an employee background investigation, but was hired to provide a variety of legal support to DHA Group. Courts have long recognized that an attorney is the agent of his client. See Hartman v. Lisle Park District, 158 F.Supp.2d 869, 876 (N.D.Ill.2001) (citing Steffes v. Stepan Co., 144 F.3d 1070, 1075 (7th Cir.1998)); Shenandoah Associates Ltd v. Tirana, 322 F.Supp.2d 6, 10 (D.D.C.2004) (quoting Virginia Electric and Power Co. v. Bowers, 181 Va. 542, 25 S.E.2d 361 (1943)). Specifically, in the context of the FCRA, several courts have explained that an attorney who conducts an investigation on behalf of an employer-client is not a "third party" in the same way that a credit bureau or detective agency would be. Id.; cf. Norman
Plaintiff contends that the district court's analysis in Hartman is inapposite because the case dealt with an employer's internal investigation of employee misconduct related to the employer while the present case involves an investigation of Plaintiff's background, unrelated to his employment with DHA Group. Pl.'s Opp'n. at 4. Plaintiff is correct that unlike the present case, Hartman exclusively involved an internal investigation into an employer's interactions with an employee. However, the relevant holding in Hartman was that an attorney's agency relationship with an employer-client on whose behalf the attorney is conducting an investigation is such that an attorney should not be considered a third party distinct from the employer for the purposes of the FCRA. Hartman, 158 F.Supp.2d at 876-77. The Court finds that this holding and the principles of attorney-client privilege and fiduciary duty on which it is based stand independent of the facts in Hartman and apply equally to the present case. Accordingly, the Court finds the Hartman analysis persuasive and agrees that there is nothing in the FCRA that would require the imposition of independent FCRA obligations on an attorney-agent to the detriment of the attorney-client relationship.
Here, Defendant Blitz was outside general counsel for DHA Group which "engaged" him to conduct the background investigation into Plaintiff. Second Am. Compl. ¶ 38. Defendant Blitz gathered information on Plaintiff's background, evaluated it, and placed it in a report indicating concerns that the employer might have with Plaintiff's employment in order to assist the employer in making an employment decision. See Pl.'s Ex. I (Prelim. Invest. Report). While courts have been divided as to whether an individual providing a consumer report in such a capacity should be held liable under certain provisions of the FCRA, this Court finds the
Some courts have broadly held that any entity or individual can be liable under the FCRA's adverse action provision "even though the party taking the adverse action did not have the ultimate authority to make the hiring decision" so long as the party made the "decision to furnish a report to an employer" that is detrimental to the employee's employment or employment prospects. See, e.g., Adams v. National Engineering Service Corp., 620 F.Supp.2d 319, 332 (D.Conn.2009) (holding that the staffing agency which forwarded a background check conducted by another entity to the ultimate employer was liable
Likewise, although the court in Adams rejected the analysis in Weidman and imposed liability on a staffing agency for not providing an adverse action notice pursuant to § 1681b(b)(3), the Court finds this opinion of little relevance to the present case because Adams involved a staffing agency, not an attorney with a clear fiduciary and agency relationship to the employer-client at whose behest the attorney-defendant conducted a background investigation. Accordingly, the Court finds that Defendant Blitz was an attorney-agent of DHA Group and not a consumer reporting agency and thus cannot be held independently liable under §§ 1681b or 1681i(a)(1)(A).
For the foregoing reasons, the Court GRANTS Defendant Blitz's Motion to Dismiss. An appropriate Order accompanies this Memorandum Opinion.
