19751493v.6

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

LASANDRA HILLSON, STEVEN

BOHLER, and ASHLEY SCHMIDT,

individually and as representatives of

the class,

Plaintiffs,

v.

KELLY SERVICES, INC.,

Defendant.

Case No. 2:15-CV-10803-LJM-APP

Honorable Laurie J. Michelson

Magistrate Judge Anthony P. Patti

DEFENDANT’S MOTION TO STAY

Defendant Kelly Services, Inc. (“Kelly” or “Defendant”) hereby moves the

Court for an order staying all proceedings in this matter pending the decision of the

U.S. Supreme Court in Spokeo, Inc. v. Robins, for which certiorari was granted on

April 27, 2015. The Spokeo petition presents a proposition of law that — if agreed

with by the Supreme Court — will dispose of Plaintiffs’ claims in the instant case.

Thus, in the interests of judicial efficiency and the litigants’ private interests, this

action should be stayed.

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Pursuant to Local Rule 7.1(a), counsel for Defendant conferred with

Plaintiffs’ counsel by telephone and email about this Motion. By and through

counsel, Plaintiffs oppose the relief sought in this Motion.

Respectfully submitted,

Dated: May 22, 2015 SEYFARTH SHAW LLP

By:/s/ Gerald L. Maatman, Jr.

Gerald L. Maatman, Jr. (Admitted)

gmaatman@seyfarth.com

David J. Rowland (Admitted)

drowland@seyfarth.com

Pamela Q. Devata (Admitted)

pdevata@seyfarth.com

131 South Dearborn Street

Suite 2400

Chicago, Illinois 60603

Telephone: (312) 460-5000

Facsimile: (312) 460-7000

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19751493v.6

Laura J. Maechtlen (Admitted)

lmaechtlen@seyfarth.com

Michael W. Stevens (Admitted)

mwstevens@seyfarth.com

Shireen Yvette Wetmore (Admitted)

swetmore@seyfarth.com

SEYFARTH SHAW LLP

560 Mission Street, 31st Floor

San Francisco, California 94105

Telephone: (415) 397-2823

Facsimile: (415) 397-8549

Michael L. Weissman (P51437)

mweissman@fwslaw.com

FINKEL WHITEFIELD SELIK

32300 Northwestern Highway

Suite 200

Farmington Hills, MI 48334-1567

Telephone : (248) 855-6500

Facsimile: (248) 855-6501

ATTORNEYS FOR DEFENDANT

KELLY SERVICES, INC.

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19751493v.6

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

LASANDRA HILLSON, STEVEN

BOHLER, and ASHLEY SCHMIDT,

individually and as representatives of

the class,

Plaintiffs,

v.

KELLY SERVICES, INC.,

Defendant.

Case No. 2:15-CV-10803-LJM-APP

Honorable Laurie J. Michelson

Magistrate Judge Anthony P. Patti

DEFENDANT’S BRIEF IN SUPPORT OF MOTION TO STAY

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ii

ISSUE PRESENTED

Should the Court stay all proceedings in this matter pending the decision of

the U.S. Supreme Court in Spokeo, Inc. v. Robins, No. 13-1339, a decision that will

likely provide controlling precedent regarding whether Plaintiffs have standing to

pursue their claims?

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iii

PRINCIPAL AUTHORITIES

1. Landis v. N. Am. Co., 299 U.S. 248 (1936)

2. Michael v. Ghee, 325 F. Supp. 2d 829 (N.D. Ohio July 12, 2004)

3. Beydoun v. Holder, No. 14-cv-13812, 2015 WL 631948 (E.D. Mich. Feb.

13, 2015)

4. Monaghan v. Sebelius, No. 12-15488, 2013 WL 3212597 (E.D. Mich. June

26, 2013)

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iv

TABLE OF CONTENTS

Page

I. INTRODUCTION...............................................................................................1

II. RELEVANT PROCEDURAL HISTORY AND BACKGROUND ..................3

A. Procedural History Of The Instant Case ...............................................3

B. The Supreme Court’s Pending Decision In Spokeo..............................4

III. LEGAL ARGUMENT.....................................................................................6

A. Legal Standard.......................................................................................7

B. A Stay Is Warranted Here .....................................................................8

1. Spokeo Will Have A Dispositive Effect On Plaintiffs’

Claims .........................................................................................8

2. A Stay Serves The Interests Of Judicial Economy...................12

3. The Public Interest Is Served By A Stay ..................................14

4. The Plaintiffs Do Not Suffer Prejudice From A Stay...............14

5. Kelly Would Suffer Substantial Prejudice Absent A Stay .......16

IV. CONCLUSION..............................................................................................19

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v

TABLE OF AUTHORITIES

Page(s)

CASES

Beaudry v. TeleCheck Servs., Inc.,

579 F.3d 702 (6th Cir. 2009) ..........................................................................5, 15

Beydoun v. Holder,

No. 14-cv-13812, 2015 WL 631948 (E.D. Mich. Feb. 13, 2015) ..........11, 12, 13

David v. Alphin,

704 F.3d 327 (4th Cir. 2013) ................................................................................6

Doe v. Nat’l Bd. of Medical Examiners,

199 F.3d 146 (3d Cir. 1999) .................................................................................6

Fontenot v. McCraw,

777 F.3d 741 (5th Cir. 2015) ................................................................................5

Johns v. Evergreen Presbyterian Ministries, Inc.,

826 F. Supp. 1050 (E.D. Tex. 1993)...................................................................10

Kendall v. Employees Retirement Plan of Avon Prods.,

561 F.3d 112 (2d Cir. 2009) .............................................................................5, 6

Landis v. N. Am. Co.,

299 U.S. 248 (1936)..............................................................................7, 8, 15, 16

LaSala v. Needham & Co., Inc.,

399 F. Supp. 2d 421 (S.D.N.Y. 2005) ............................................................7, 16

Marshel v. AFW Fabric Corp.,

552 F.2d 471 (2d Cir. 1977) .................................................................................7

Michael v. Ghee,

325 F. Supp. 2d 829 (N.D. Ohio July 12, 2004)..........................................passim

Monaghan v. Sebelius,

No. 12-15488, 2013 WL 3212597 (E.D. Mich. June 26, 2013)...................10, 11

Murray v. GMAC Mortgage Corp.,

434 F.3d 948 (7th Cir. 2006) ................................................................................5

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vi

Ohio Envtl. Council v. U.S. Dist. Court,

565 F.2d 393 (6th Cir. 1977) ................................................................................7

Peters v. St. Joseph Servs. Corp.,

No. 4:14-cv-2872, 2015 WL 589561 (S.D. Tex. Feb. 11, 2015) .........................5

Raines v. Byrd,

521 U.S. 811 (1997)..............................................................................................6

Robins v. Spokeo, Inc.,

742 F.3d 409 (9th Cir. 2014) ............................................................................4, 5

Robins v. Spokeo, Inc.,

No. CV10-05306 ODW (AGRx), 2011 WL 11562151 (C.D. Cal. Sep. 19,

2011) .....................................................................................................................4

Sikhs for Justice v. Nath,

893 F. Supp. 2d 598 (S.D.N.Y. 2012) ................................................................10

Singleton v. Domino’s Pizza,

Civ. No. 11-1823, 2012 WL 245965 (D. Md. Jan. 25, 2012) ............................13

Smith et al. v. Triad of Alabama,

No. 1:14-cv-324-WKW-PWG (M.D. Ala. May 1, 2015) ............................15, 16

Smith v. Waverly Partners,

Civ. No. 3:10-CV-00028-RLV-DSC, 2012 WL 3645324 (W.D.N.C. Aug.

23, 2012) .......................................................................................................12, 13

Speer v. Whole Food Market Group, Inc.,

No. 8:14-cv-3035-T-26TBM, 2015 WL 2061665 (M.D. Fla. Apr. 29,

2015) ...................................................................................................................15

Spokeo, Inc. v. Robins,

No. 13-1339 .................................................................................................passim

STATUTES

15 U.S.C. § 1681b(b)(2) ............................................................................................3

42 U.S.C. § 1983........................................................................................................9

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I. INTRODUCTION

Defendant respectfully moves the Court to stay all proceedings in this action

pending the upcoming decision of the U.S. Supreme Court in Spokeo, Inc. v.

Robins, No. 13-1339. The question presented by the petitioners in Spokeo involves

a dispositive issue for the Plaintiffs in the instant case: whether a party who

suffered no concrete harm under the Fair Credit Reporting Act (“FCRA”) has

Article III standing. The key fact to consider in deciding this Motion is that

Plaintiffs in the instant case claim no actual damages. If the Supreme Court

reverses the Ninth Circuit, it is a near certainty that Plaintiffs will fall into the

category of those individuals who cannot avail themselves of federal court

jurisdiction merely by claiming a technical violation of a statute (without

allegations of concrete harm).

Because of the substantial risk that the law governing the Plaintiffs’ ability

to prosecute their claims may change, this Court should exercise its inherent power

to stay the proceedings in the interests of judicial economy and the private interests

of the litigants. Three key reasons decisively favor a stay. First, the judicial

resources of this Court should not be wasted on a case where there is at least a 50-

50 probability that a higher court will rule within six months to a year that

Plaintiffs do not have standing. If this litigation proceeds while we await a ruling

from the Supreme Court, this Court will likely address discovery disputes, and

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2

depending on the case schedule, may even address dispositive motions and class

certification issues. Should the Spokeo petitioners prevail, all of those spent

judicial and party resources, which will be substantial, will have been wasted.

Second, the respective hardships to the parties favor Kelly’s position. Based

on information currently available to Defendant, this case involves an

extraordinarily large pool of potential putative class members (likely approaching

up to 300,000 individuals). For reasons that will be explained below, determining

who is or is not a putative class member will be an incredibly burdensome and

expensive undertaking. In other words, by proceeding in this litigation, Kelly will

be required to expend hundreds of thousands (if not millions) of dollars defending

this case and attempting to determine the identity of putative class members,

conducting electronic discovery, and preparing an opposition to class certification

in this action involving hundreds of thousands of putative class members. All of

those resources will be expended for naught if the Supreme Court finds that

Plaintiffs lack standing. The Plaintiffs, on the other hand, cannot identify any real

hardship from stay. To wit, they claim no concrete harm. Thus, having to wait

another six months or a year to vindicate their claim is not prejudicial when they

have suffered no actual damages to begin with.

Third, the public interest also favors Kelly’s position. Although there is

admittedly a public interest in plaintiffs being able to expeditiously prosecute their

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3

cases, the countervailing public interest is in saving limited judicial resources in

cases such as this, where Plaintiffs may lack standing to assert their claims at all.

Balancing these factors, this Court should enter a stay of proceedings in this case

pending the Supreme Court’s resolution of Spokeo.

II. RELEVANT PROCEDURAL HISTORY AND BACKGROUND

A. Procedural History Of The Instant Case

Plaintiffs filed their initial Complaint in the Northern District of California

on July 18, 2014. See No. 3:14-CV-03256-VC (N.D. Cal. Dkt. 1). They

subsequently filed their operative First Amended Complaint (“FAC”) on August

19, 2014, id. Dkt. 10, and Defendant answered the FAC on October 14, 2014. Id.

Dkt. 35. Pursuant to a forum selection clause, this case was transferred to the

Eastern District of Michigan on March 3, 2015. Id. Dkt. 52.

Plaintiffs allege that Defendant violated 15 U.S.C. § 1681b(b)(2) by

including allegedly extraneous text on Kelly’s Background Screening Notice,

Disclosure, and Authorization form (“Form e336”), which gives notice to

applicants and employees that Kelly may procure a consumer report on them and

obtains their authorization to do the same. See FAC ¶¶ 18, 23, 28 and its Exs. A,

B, C. Specifically, for approximately two years, certain versions of Form e336 in

circulation contained a liability release related to the procurement of consumer

reports, and a statement that the form did not constitute an employment contract.

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4

Plaintiffs allege that this language violated the FCRA’s purported requirement that

a disclosure form consist “solely” of the disclosure. See FAC ¶ 38.

Plaintiffs claim statutory and punitive damages and attorneys’ fees, FAC ¶

47, but have not stated an injury-in-fact, claim no concrete harm, and seek no

actual damages.

B. The Supreme Court’s Pending Decision In Spokeo

On April 27, 2015, the U.S. Supreme Court granted certiorari in Spokeo, Inc.

v. Robins, No. 13-1339, and the Supreme Court will thereby address a legal

question potentially dispositive of this action: whether Congress may confer

Article III standing upon a plaintiff who suffers no concrete harm and who

therefore could not otherwise invoke the jurisdiction of a federal court, by

authorizing a private right of action based on a bare violation of a federal statute.

The Supreme Court’s decision in Spokeo will directly address whether a plaintiff

has standing to seek statutory damages under the FCRA, in the complete absence

of any actual damages.

The district court dismissed the action in Spokeo, holding that a plaintiff

does not have standing “where no injury in fact is properly pled.” Robins v.

Spokeo, Inc., No. CV10-05306 ODW (AGRx), 2011 WL 11562151, at *1 (C.D.

Cal. Sep. 19, 2011) (Exhibit A). However, the Ninth Circuit reversed, holding that

the “violation of a statutory right is usually sufficient injury in fact to confer

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5

standing” and that “a plaintiff can suffer a violation of the statutory right without

suffering actual damages.” Robins v. Spokeo, Inc., 742 F.3d 409, 412-13 (9th Cir.

2014).

In granting certiorari, the Supreme Court is poised to resolve a circuit split

on this question. At present, the Fifth, Sixth, and Seventh Circuits agree with the

Ninth Circuit’s decision in Spokeo, and permit plaintiffs to maintain lawsuits

without “injury-in-fact,” based solely on an alleged statutory violation. See, e.g.,

Fontenot v. McCraw, 777 F.3d 741, 746 (5th Cir. 2015) (“the maintenance of

accurate DPS driving records is a cognizable interest the invasion of which confers

standing”); but see Peters v. St. Joseph Servs. Corp., No. 4:14-cv-2872, 2015 WL

589561, at *5 (S.D. Tex. Feb. 11, 2015) (Exhibit B) (plaintiff’s speculation that she

suffers a risk of future harm is not sufficient for Article III standing in FCRA

case); Beaudry v. TeleCheck Servs., Inc., 579 F.3d 702, 705-07 (6th Cir. 2009)

(allowing plaintiff to proceed with FCRA action despite lack of injury); Murray v.

GMAC Mortgage Corp., 434 F.3d 948, 952-53 (7th Cir. 2006) (statutory damages

are available under the FCRA “without proof of injury.”).

Comparatively, the Second, Third, and Fourth Circuits have held, consistent

with the Supreme Court, that Congress cannot create standing by statute alone, and

the mere deprivation of a statutory right is insufficient to confer standing. See,

e.g., Kendall v. Employees Retirement Plan of Avon Prods., 561 F.3d 112, 121 (2d

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6

Cir. 2009) (in ERISA matter, rejecting argument that deprivation of entitlement to

fiduciary duty constitutes an injury-in-fact for purposes of standing); David v.

Alphin, 704 F.3d 327, 338-39 (4th Cir. 2013) (rejecting the premise that mere

deprivation of a statutory right is sufficient to constitute an injury-in-fact for

Article III standing in ERISA matter); Doe v. Nat’l Bd. of Medical Examiners, 199

F.3d 146, 153 (3d Cir. 1999) (“The proper analysis of standing focuses on whether

the plaintiff suffered an actual injury . . . Congress . . . cannot confer standing by

statute alone.”).1See also Raines v. Byrd, 521 U.S. 811, 820 n.3 (1997)

(“Congress cannot erase Article III’s standing requirements by statutorily granting

the right to sue to a plaintiff who would not otherwise have standing.”)

III. LEGAL ARGUMENT

The Supreme Court’s imminent decision in Spokeo could prove dispositive

of Plaintiffs’ claims. Considering the substantial possibility that an upcoming

change in law will block Plaintiffs’ ability to bring their claims, this case should be

stayed to promote judicial efficiency and conserve the litigants’ resources.

Because Plaintiffs do not allege concrete harm and seek only statutory damages,

they cannot credibly claim prejudice from a stay.

1

/ To the extent Plaintiffs dispute the applicability of these opinions to the

instant case, these decisions form one half of the circuit split identified by the

petitioners in Spokeo. See Spokeo, Inc. v. Robins, No. 13-1339, Pet. for Writ of

Certiorari at 10-11 (May 2014) (Exhibit C) (discussing Kendall, David, and Doe).

In other words, the Supreme Court granted certiorari based on citation to these

same authorities, indicating its perception of a precedential split.

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A. Legal Standard

“[T]he power to stay proceedings is incidental to the power inherent in every

court to control the disposition of the causes on its docket with economy of time

and effort for itself, for counsel, and for litigants. How this can best be done calls

for exercise of judgment, which must weigh competing interests and maintain an

even balance.” Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936). “[T]he entry

of such an order ordinarily rests with the sound discretion of the District Court.”

Ohio Envtl. Council v. U.S. Dist. Court, 565 F.2d 393, 396 (6th Cir. 1977). A

district court may stay proceedings in order to allow a higher court in a separate

case to settle questions of law that bear upon the matter to be stayed. See, e.g.,

Marshel v. AFW Fabric Corp., 552 F.2d 471, 472 (2d Cir. 1977); LaSala v.

Needham & Co., Inc., 399 F. Supp. 2d 421, 427 & n.39 (S.D.N.Y. 2005) (a court

may, “in the interest of judicial economy, enter a stay pending the outcome of

proceedings which bear upon the case, even if such proceedings are not necessarily

controlling of the action that is to be stayed.”).

Courts in the Sixth Circuit have interpreted Landis to focus on four factors to

determine whether a stay is appropriate: “[1] the potentiality of another case

having a dispositive effect on the case to be stayed, [2] the judicial economy to be

saved by waiting on a dispositive decision, [3] the public welfare, and [4] the

hardship/prejudice to the party opposing the stay, given its duration.” Michael v.

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Ghee, 325 F. Supp. 2d 829, 831 (N.D. Ohio July 12, 2004) (granting stay of

proceedings pending Supreme Court review of another case because Supreme

Court decision could mean that “plaintiffs’ claims will be subject to dismissal in

their entirety.”). In addition to these four factors, the moving party “must make out

a clear case of hardship or inequity in being required to go forward.” Landis, 299

U.S. at 255.

B. A Stay Is Warranted Here

1. Spokeo Will Have A Dispositive Effect On Plaintiffs’ Claims

The Supreme Court’s upcoming decision in Spokeo will decide, one way or

the other, whether Plaintiffs have standing to pursue their claims. The question

presented is directly on point: “Whether Congress may confer Article III standing

upon a plaintiff who suffers no concrete harm, and who therefore could not

otherwise invoke the jurisdiction of a federal court, by authorizing a private right

of action based on a bare violation of a federal statute.” Spokeo, Inc. v. Robins,

Pet. for Writ of Certiorari at i (Exhibit C). The plaintiff in Spokeo, like the instant

Plaintiffs, sought statutory damages under the FCRA.2Should the Court reverse

2

/ Plaintiffs may attempt to distinguish Spokeo by claiming that some

“informational injury” is sufficient to constitute a “concrete harm” and create

standing for Plaintiffs in the instant case. That distinction is unavailing in light of

the question presented by the Spokeo petition and the circuit split being resolved by

that case. In addition, such an argument is belied by the Plaintiffs’ complaint

itself, even if Plaintiffs claim they did not receive the disclosure notice in a form to

which they were supposedly statutorily entitled. Nowhere in their FAC do

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the Ninth Circuit, Plaintiffs will not be able to pursue FCRA claims, absent proof

of actual damages.

On this point, Michael v. Ghee is instructive. The plaintiffs in that case

brought a class action pursuant to 42 U.S.C. § 1983, challenging aspects of a

parole system in Ohio. 325 F. Supp. 2d at 832. The Sixth Circuit had previously

held that a certain procedural requirement was not a barrier to the plaintiffs’

claims, but that decision was on review before the Supreme Court. Id. The district

court in Michael found that the grant of certiorari could dispositively affect the

plaintiffs’ claims: “If the Sixth Circuit’s decision . . . is correct, then plaintiffs’

claims are not subject to dismissal on this ground. If, however, the Supreme Court

reverses the Sixth Circuit, then plaintiffs’ claims will be subject to dismissal in

their entirety.” Id. So too here: if the Supreme Court reverses the Ninth Circuit’s

decision in Spokeo, the individual Plaintiffs’ claims will be subject to dismissal,

mooting their claims and those of the class they purport to represent.

Other district courts have reached the same conclusion, issuing stays after

the U.S. Supreme Court has granted certiorari in other cases on dispositive legal

Plaintiffs claim they were unaware that a consumer report would be obtained on

them, or that they did not provide authorization. Rather, the gravamen of their

allegations is a “bare violation of a federal statute,” the question squarely to be

addressed in Spokeo. If Plaintiffs claim a “concrete harm” by virtue of an alleged

statutory violation that caused no actual injury, they are engaged in the “circular

approach to injury” that the Supreme Court will resolve in Spokeo. Pet. for Writ of

Certiorari at 21 (Exhibit C) (“Congress may not create the necessary underlying

injury by fiat”).

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issues. See, e.g., Sikhs for Justice v. Nath, 893 F. Supp. 2d 598, 622 (S.D.N.Y.

2012) (staying district court action pending U.S. Supreme Court review of

common question of law on the reach of the Alien Tort Statute). Likewise, in

Johns v. Evergreen Presbyterian Ministries, Inc., 826 F. Supp. 1050 (E.D. Tex.

1993), the district court was faced with a question of whether the Civil Rights Act

applied retroactively. Id. at 1051. The Supreme Court had recently granted

certiorari in another case to decide whether the Act applied to cases “pending . . .

when the Act became law.” Id. at 1051 n.1. The court analyzed the likely impact

of the pending Supreme Court decision in providing guidance to an “unsettled”

area of the law, id. at 1058, and held that “simple prudence compel[s] the Court to

stay this action until the Supreme Court renders its . . . decision next Term.” Id. at

1061. Given Spokeo’s potential to settle the law in this case, a stay is warranted.

Similarly, the Eastern District of Michigan has relied on Michael to grant

stays when higher courts are reviewing common questions of law. See Monaghan

v. Sebelius, No. 12-15488, 2013 WL 3212597, at *1 (E.D. Mich. June 26, 2013)

(Exhibit D). In Monaghan, the defendants sought a stay because two other cases

were pending before the Sixth Circuit where “the factual circumstances and central

legal issues in both cases [were] substantially similar to those in this case.” Id.

The district court granted the motion to stay, notwithstanding the “potential

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differences” between the cases identified by the plaintiff. Id. The court reasoned

that the “substantial[] similar[ity]” between the cases meant that the

Sixth Circuit’s decision in either [case on review] will likely provide

guidance in the Court’s decisions in this case and will narrow the

issues the Court must resolve. [] Given this, it would be at odds with

notions of judicial economy for this Court to proceed in this case and

risk reaching an ultimate resolution that is inconsistent with precedent

the Sixth Circuit creates shortly thereafter.

Id. at *1-*2. Plaintiffs’ claims in the instant case are more than “substantially

similar; they are identical to the extent they implicate the same provision of the

FCRA and a central legal issue (i.e., whether plaintiffs have standing in either case

because plaintiffs in both cases do not allege, nor can they evidence, concrete

harm).

Moreover, stays may be appropriate even where the case pending before a

higher court would not entirely dispose of the instant Plaintiffs’ claims. See

Beydoun v. Holder, No. 14-cv-13812, 2015 WL 631948, at *3-4 (E.D. Mich. Feb.

13, 2015) (Exhibit E). In Beydoun, the court granted a stay of a case challenging

certain aspects of the Transportation Security Administration’s (“TSA”) security

directives for airline passenger screening. The district court stayed the case,

however, because another case was pending before the Sixth Circuit regarding

jurisdiction for challenging TSA determinations. Id. at *2. In opposing the motion

to stay, the plaintiff asserted that the allegations were “sufficiently distinguishable

from those in [the case on review before the Sixth Circuit],” but the court rejected

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this argument, finding that a “significant portion of [plaintiff’s] complaint”

overlapped. Id. at *3. Further, the court found that even if the case before the

Sixth Circuit “fails to be dispositive of all issues in this case, its ruling is still likely

to significantly simplify this case.” Id. at *4.

Considering the question presented by the Spokeo petition, and the overlap

in FCRA claims for statutory damages between Spokeo and the instant case,

Plaintiffs cannot avoid the fact that a Spokeo ruling will almost certainly affect

their ability to bring their claims. Even if, in opposing this Motion, Plaintiffs

attempt to distinguish a possibly adverse Spokeo ruling from this case (an effort

that in any event will be fruitless), Beydoun demonstrates that the legal issues to be

resolved by an impending higher court ruling need not be identical in order to

justify a stay.

2. A Stay Serves The Interests Of Judicial Economy

In order to promote judicial efficiency, cases that are “massive and

complex” are particularly well-suited to stays pending higher court review of

shared legal questions. Michael, 325 F. Supp. 2d at 832. This case involves a

huge potential class, and will implicate substantial questions of ascertainability.

See Sec. III.B.5, infra. Moreover, apart from the standing question presented by

Spokeo, this case will implicate a legal question of whether Plaintiffs’ allegations

even state a claim for relief. Compare Smith v. Waverly Partners, Civ. No. 3:10-

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CV-00028-RLV-DSC, 2012 WL 3645324, at *5-6 (W.D.N.C. Aug. 23, 2012)

(Exhibit F) (holding that a liability release was unenforceable but did not mean the

disclosure violated the FCRA) with Singleton v. Domino’s Pizza, Civ. No. 11-

1823, 2012 WL 245965, at *9 (D. Md. Jan. 25, 2012) (Exhibit G) (holding that

liability release does violate the FCRA).

Stated differently, if this case is not stayed, the next six months to a year will

absorb a substantial amount of the Court’s time and resources on discovery

disputes, and depending on the case schedule, perhaps even dispositive motions

and class certification motions. As the court in Michael noted, “[t]he Supreme

Court’s answer to the question of law before it could negate the need for this Court

to delve into the vast majority of the legal issues presented in those filings. It

makes little sense to undertake the herculean task of plodding through the

motions when one decision by the Supreme Court could invalidate the entire

case.” 325 F. Supp. 2d at 832-33 (emphasis added). Where a higher court’s ruling

will “have precedential effect . . . [and] resolve at least some of the claims before

the Court,” judicial economy favors the stay. Cf. Beydoun, 2015 WL 631948 at *4

(Exhibit E). This Court should not spend its time on this case when the impending

decision in Spokeo could establish that Plaintiffs have no standing.

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3. The Public Interest Is Served By A Stay

The public interest is likewise best served by a stay. The public interest is

vindicated by conserving limited judicial resources and avoiding adjudication of

cases that may soon be disposed of by a higher court ruling. This is particularly so

with a large and complicated case that could consume substantial amounts of this

Court’s time and energy. Admittedly, the public has an interest in plaintiffs

receiving expeditious adjudication of their claims, but this Motion does not seek an

indefinite stay, or a stay pending review by a circuit court that could take years to

complete. Rather, the Supreme Court will hear Spokeo next term, and in all

likelihood a decision will be published less than a calendar year from now.

Moreover, the public has an interest in consistency in judicial determinations.

Without granting the requested stay, this Court may be asked to rule on substantive

issues based on current Sixth Circuit law, only to see that precedent overturned

months or even weeks later.

4. The Plaintiffs Do Not Suffer Prejudice From A Stay

Plaintiffs cannot credibly claim prejudice from having to wait slightly longer

to pursue their claims, because they claim no concrete harm to begin with.

Plaintiffs do not seek actual damages, but rather, statutory and punitive damages.

FAC ¶ 47. The FAC thus seeks only to vindicate an alleged technical violation of

the FCRA that caused no harm. In the absence of redressing concrete harm, a

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short stay of a reasonably knowable duration — likely to be no more than six

months, and unlikely to exceed a year — does not constitute unfair prejudice to

Plaintiffs. “[T]he individual may be required to submit to delay not immoderate in

extent and not oppressive in its consequences if the public welfare or convenience

will thereby be promoted.” Landis, 299 U.S. at 256.

Plaintiffs are likely to argue that, under current Sixth Circuit law, they have

standing to proceed. See Beaudry, 579 F.3d at 705-07. Hence, they would argue, a

stay would prejudice them by preventing them from proceeding with litigation that

they currently have a right to pursue. That argument, however, runs squarely into

the fact that the Supreme Court is about to decide whether plaintiffs who lack

concrete harm have standing. If Plaintiffs’ claims were attempting to redress

concrete harm, reliance on current Sixth Circuit law would be more convincing.

But denying this Motion and permitting the Plaintiffs to proceed would be nothing

more than allowing them to attempt to “run the clock” on a potentially adverse

Supreme Court decision when their standing in federal court is tenuous.3

3

/ Plaintiffs may point to the recent decision by a Florida district court not to

stay an FCRA case pending Spokeo, on the grounds that Spokeo does not yet

represent a change in the law. See Speer v. Whole Food Market Group, Inc., No.

8:14-cv-3035-T-26TBM, 2015 WL 2061665, at *1 (M.D. Fla. Apr. 29, 2015)

(Exhibit H). However, given the uncertainty in the law, the superior approach

under these circumstances is caution and the conservation of judicial resources.

Indeed, other courts considering FCRA claims have recently, sua sponte, sought

additional briefing from the parties regarding whether the lack of an injury-in-fact

is fatal to plaintiffs’ claims. See, e.g., Smith et al. v. Triad of Alabama, No. 1:14-

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Furthermore, a stay is less likely to prejudice Plaintiffs because the

discovery process has just begun. See LaSala, 399 F. Supp. 2d at 421 (stay

appropriate in part because non-moving party had “not yet incurred significant cost

or expended much effort in this action, as proceedings have barely begun.”).4 And

although Plaintiffs are likely to dispute this, the most likely scenario is that their

interests are protected, rather than prejudiced, by a stay. Considering the

substantial amount of resources that will go into this case in the next six-to-twelve

months if not stayed, likely including extensive motions practice, Plaintiffs and

their counsel could invest significant time and money in a case that ultimately has

to be dismissed for lack of standing. A short stay to await a precedential ruling is

thus in each party’s interest.

5. Kelly Would Suffer Substantial Prejudice Absent A Stay

Under Landis, this Court must also evaluate the “hardship or inequity” on

the moving party if a stay is denied. 299 U.S. at 255. Here, if a stay is denied,

cv-324-WKW-PWG, Dkt. 32 (M.D. Ala. May 1, 2015) (Exhibit I). This

demonstrates a concern among district courts regarding the viability of claims like

those in the instant case, which cuts in favor of staying this case pending further

guidance from the Supreme Court.

4

/ To the extent Plaintiffs claim that prejudice could occur because a delay in

conducting discovery could lead to degraded evidence, two mitigating factors

apply. First, a litigation hold is in effect at Kelly, and second, the stay will be

short. Waiting an additional six-to-twelve months is unlikely to meaningfully

affect the quality of evidence. Regardless, Kelly would be agreeable to meeting

and conferring with Plaintiffs to ensure that any evidence not yet identified by

Plaintiffs as important to their case, and that is within Kelly’s possession, custody

or control is adequately preserved during the period of a stay.

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Kelly will be forced to defend a massive class action, with the substantial

possibility that any “interim victor[ies] plaintiffs might have reached here in the

meantime would have been temporary and meaningless.” Michael, 325 F. Supp.

2d at 833. Defending against a case of this size and complexity works a hardship

on Kelly if, a mere six months from now, Plaintiffs are found to lack standing.

Several factors affect the complexity of Kelly’s defense of this case.

First, the potential putative class size is enormous. Between July 18, 2012

(the start of the putative Class Period, FAC ¶ 39) and January 23, 2014 (the date

after which Kelly would not, in the ordinary course of business, be using a Form

e336 that contained the allegedly extraneous language), Kelly procured consumer

reports on nearly 300,000 individuals for temporary staffing purposes.5

Declaration of Melissa Hammond (“Hammond Decl.”) (Exhibit J) ¶ 5; Declaration

of Linda Bartalucci-Phelps (“Bartalucci-Phelps Decl.”) (Exhibit K) ¶ 3. As

explained further below, it is extremely difficult for Defendant to determine which

of those individuals meet the qualifications for putative class members, but

nevertheless, Defendant avers that hundreds of thousands of those individuals may

be considered putative class members. Defending a class action of that size will

5

/ Based on the timing of when Kelly removed the allegedly extraneous

language from its Form e336, Kelly believes the putative class size would not

exceed 300,000. However, determining membership based on the definition of the

putative class proposed in the FAC implicates closer to a half-million individuals.

Bartalucci-Phelps Decl. ¶ 2.

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necessarily require Kelly to expend substantial resources. To date, Defendant has

not discovered an automated process by which it could evaluate potential class

members. The discovery process alone will be incredibly burdensome.

Second, despite the size of the potential putative class, not all of those

individuals are putative class members, and ascertaining putative class membership

will be a very difficult process. During the putative Class Period, Kelly had

multiple versions of Form e336 in use, some of which contained the allegedly

extraneous language, and others that did not. Hammond Decl. ¶¶ 3-5. Kelly’s

electronic database, Kelly Staff Net, does not track which version of Form e336 an

individual signed. Id. ¶ 6. Furthermore, some individuals likely signed multiple

forms and possibly multiple versions of Form e336. Id. ¶ 7. Thus, the only way to

determine whether or not individuals are putative class members is to review

hundreds of thousands of individual paper and electronic files and could potentially

require inquiries of Defendant’s branch managers and even branch staff. Id. ¶¶ 8-

10. Should this class be certified,6 Kelly’s undertaking to determine whether a

given individual for whom a consumer report was generated is a putative class

member is going to be tremendously burdensome and expensive. It would be a

substantial hardship and inequitable to require Kelly to expend those resources on

6

/ Kelly will contest class certification at the appropriate time, whether or not a

stay is granted.

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a case where the Supreme Court is poised to find that Plaintiffs cannot bring their

claims.

Third, as mentioned previously, in addition to the legal question of

Plaintiffs’ standing, there is also a question of whether Plaintiffs’ allegations state a

claim. See Sec. III.B.2, supra. As part of its defense, therefore, Kelly will

eventually have to engage in dispositive motion practice (as well as class

certification motions), which may be rendered superfluous by what could be a

nearly contemporaneous Supreme Court ruling in Spokeo.

IV. CONCLUSION

In determining whether to grant a stay, this Court must balance the

likelihood that an impending higher court decision will affect the instant claims,

the judicial economy to be achieved by a stay, and the respective impacts of a stay

on the moving party, the non-moving party, and the public. All of these factors

favor a stay. The Spokeo decision will likely provide binding authority on whether

Plaintiffs have standing, which means there is substantial judicial economy to be

saved by staying these proceedings, which in turn serves the public interest. The

prejudice to Plaintiffs does not exist, or is at most slight, considering that they

claim no concrete harm and the stay would be for a relatively short period. Finally,

the prejudice to Kelly by not staying this case is significant, considering the

substantial resources that would have to be expended defending against a case that

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Plaintiffs may shortly be found to have no right to prosecute. For these reasons,

the Defendant respectfully requests that this Court grant its Motion to stay pending

the Supreme Court ruling in Spokeo.

Respectfully submitted,

Dated: May 22, 2015 SEYFARTH SHAW LLP

By:/s/ Gerald L. Maatman, Jr.

Gerald L. Maatman, Jr. (Admitted)

gmaatman@seyfarth.com

David J. Rowland (Admitted)

drowland@seyfarth.com

Pamela Q. Devata (Admitted)

pdevata@seyfarth.com

131 South Dearborn Street

Suite 2400

Chicago, Illinois 60603

Telephone: (312) 460-5000

Facsimile: (312) 460-7000

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Laura J. Maechtlen (Admitted)

lmaechtlen@seyfarth.com

Michael W. Stevens (Admitted)

mwstevens@seyfarth.com

Shireen Yvette Wetmore (Admitted)

swetmore@seyfarth.com

SEYFARTH SHAW LLP

560 Mission Street, 31st Floor

San Francisco, California 94105

Telephone: (415) 397-2823

Facsimile: (415) 397-8549

Michael L. Weissman (P51437)

mweissman@fwslaw.com

FINKEL WHITEFIELD SELIK

32300 Northwestern Highway

Suite 200

Farmington Hills, MI 48334-1567

Telephone : (248) 855-6500

Facsimile: (248) 855-6501

ATTORNEYS FOR DEFENDANT

KELLY SERVICES, INC.

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CERTIFICATE OF SERVICE

I hereby certify that on May 22, 2015, I electronically transmitted the

attached document to the Clerk of Court using the ECF System for filing and

transmittal of Notice of Electronic Filing to the following ECF registrants:

Ian B. Lyngklip, Esq.

Lyngklip Assoc. Consumer Law

Center, PLC

24500 Northwestern Highway,

Suite 206

Southfield, MI 48075

Telephone: (248) 208-8864

Email:

ian@michiganconsumerlaw.com

E. Michelle Drake, Esq.

Anna P. Prakash, Esq.

NICHOLS KASTER, PLLP

4600 IDS Center

80 South 8th Street

Minneapolis, MN 55402

Telephone: (612) 256-3200

Facsimile: (612) 338-4878

Email: drake@nka.com

/s/ Gerald L. Maatman, Jr.

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