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DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S FIRST AMENDED COMPLAINT PURSUANT TO FEDERAL

RULES OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6)

CASE NO. 3:17-CV-00152-VC

39026016v.8

SEYFARTH SHAW LLP

Eric Michael Lloyd (SBN 254390)

elloyd@seyfarth.com

560 Mission Street, Suite 3100

San Francisco, California 94105

Telephone: (415) 397-2823

Facsimile: (415) 397-8549

SEYFARTH SHAW LLP

Frederick T. Smith (admitted pro hac vice)

fsmith@seyfarth.com

Esther Slater McDonald (admitted pro hac vice)

emcdonald@seyfarth.com

1075 Peachtree Street, N.E., Suite 2500

Atlanta, Georgia 30309-3958

Telephone: (404) 885-1500

Facsimile: (404) 892-7056

Attorneys for Defendant

FIRST ADVANTAGE BACKGROUND SERVICES CORP.

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

MARCUS CHISM, on behalf of himself, all others

similarly situated,

Plaintiff,

v.

PEPSICO, INC., a North Carolina Corporation;

FRITO-LAY, INC., a Delaware Corporation;

FIRST ADVANTAGE BACKGROUND

SERVICES CORP., a Florida Corporation; and

DOES 1 through 100, Inclusive,

Defendants.

Case No. 3:17-cv-00152-VC

DEFENDANT FIRST ADVANTAGE

BACKGROUND SERVICES CORP.’S

NOTICE OF MOTION, MOTION TO

DISMISS PLAINTIFF’S FIRST AMENDED

COMPLAINT PURSUANT TO FEDERAL

RULES OF CIVIL PROCEDURE 12(B)(1)

AND 12(B)(6), AND MEMORANDUM OF

POINTS AND AUTHORITIES IN SUPPORT

THEREOF

Date: June 15, 2017

Time: 10:00 a.m.

Courtroom: 4

Complaint Filed: January 12, 2017

Complaint Served: January 23, 2017

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TABLE OF CONTENTS

NOTICE OF MOTION AND MOTION .................................................................................................... 1

RELIEF SOUGHT...................................................................................................................................... 1

MEMORANDUM OF POINTS AND AUTHORITIES ............................................................................ 2

STATEMENT OF ISSUES TO BE DECIDED ......................................................................................... 2

INTRODUCTION ...................................................................................................................................... 2

BACKGROUND ........................................................................................................................................ 4

LEGAL STANDARD................................................................................................................................. 4

I. PLAINTIFF’S FIRST AMENDED COMPLAINT IS SUBJECT TO DISMISSAL FOR

LACK OF SUBJECT MATTER JURISDICTION. ....................................................................... 4

II. PLAINTIFF’S FIRST AMENDED COMPLAINT IS SUBJECT TO DISMISSAL FOR

FAILURE TO STATE A CLAIM. ................................................................................................. 5

ARGUMENT.............................................................................................................................................. 5

I. PLAINTIFF LACKS ARTICLE III STANDING. ......................................................................... 5

A. The Supreme Court’s Decision In Spokeo.......................................................................... 6

B. Plaintiff Fails To Allege A Concrete Injury Tied To First Advantage’s Conduct.............. 7

II. PLAINTIFF FAILS TO STATE A CLAIM UNDER SECTION 1681B(B)(1)............................. 9

III. PLAINTIFF DOES NOT ALLEGE FACTS TO SUPPORT HIS CLAIM OF

WILLFULNESS. .......................................................................................................................... 11

IV. PLAINTIFF’S CLASS CLAIM AGAINST FIRST ADVANTAGE SHOULD BE

DISMISSED BECAUSE PLAINTIFF FAILS TO ALLEGE SUFFICIENT FACTS OF A

SYSTEMIC VIOLATION OF THE FCRA. ................................................................................ 12

CONCLUSION......................................................................................................................................... 13

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RULES OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6)

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TABLE OF AUTHORITIES

Page(s)

Federal Cases

Alexander v. Certegy Check Servs., Inc.,

No. 8:16-CV-859-17JSS, 2016 WL 7478961 (M.D. Fla. Dec. 29, 2016) ...........................................12

Ashcroft v. Iqbal,

556 U.S. 662 (2009).....................................................................................................3, 5, 9, 10, 11, 12

Bell Atlantic Corp. v. Twombly,

550 U.S. 544 (2007).....................................................................................................3, 5, 9, 10, 11, 12

Byrd v. Masonite Corp.,

No. 16-35, 2016 WL 756523 (C.D. Cal. Feb. 25, 2016) .....................................................................13

In re Century Aluminum Co. Sec. Litig.,

729 F.3d 1104 (9th Cir. 2013) .........................................................................................................9, 10

Cirillo v. Valley Baptist Health Sys.,

No. 13-1002, 2014 WL 1347362 (Bankr. S.D. Tex. Apr. 3, 2014) .....................................................13

Coleman v. Kohl's Dep’t Stores, Inc.,

No. 15-cv-02588-JCS, 2015 WL 5782352 (N.D. Cal. Oct. 5, 2015) ..................................................12

In re Darvocet, Darvon, & Propoxyphene Prods. Liab. Litig.,

756 F.3d 917 (6th Cir. 2014) ...............................................................................................................11

Disalvo v. Intellicorp Records, Inc.,

No. 1:16 CV 1697, 2016 WL 5405258 (N.D. Ohio Sept. 27, 2016) .....................................................7

Dreher v. Experian Info. Sols., Inc.,

--- F.3d ---, No. 15-2119, 2017 WL 1948916 (4th Cir. May 11, 2017).................................................8

Dutta v. State Farm Mut. Auto. Ins. Co.,

No. 3:14-cv-04292-CRB, 2016 WL 6524390 (N.D. Cal. Nov. 3, 2016)...............................................8

Eclectic Props. E., LLC v. The Marcus & Millichap Co.,

751 F.3d 990 (9th Cir. 2014) .....................................................................................................9, 10, 11

Khalili v. Comerica Bank,

No. 11-759, 2011 WL 2445870 (N.D. Cal. June 16, 2011).................................................................13

Kirchner v. Shred-It USA Inc.,

No. CV 2:14-1437 WBS EFB, 2016 WL 6766944 (E.D. Cal. Nov. 14, 2016)...........................7, 8, 10

Larroque v. First Advantage LNS Screening Sols., Inc.,

No. 15-CV-04684 JSC, 2016 WL 4577257 (N.D. Cal. Sept. 2, 2016)..................................................7

Case 3:17-cv-00152-VC Document 46 Filed 05/22/17 Page 3 of 19
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Lee v. Hertz Corp.,

No. 15-cv-04562-BLF, 2016 WL 7034060 (N.D. Cal. Dec. 2, 2016)...................................................8

Nokchan v. Lyft, Inc.,

No. 15-cv-03008-JCS, 2016 WL 5815287 (N.D. Cal. Oct. 5, 2016) ....................................................8

Safe Air for Everyone v. Meyer,

373 F.3d 1035 (9th Cir. 2004) ...............................................................................................................5

Shaw v. Nissan N. Am.,

Inc., No. CV164372DDPRAOX, 2016 WL 6205752 (C.D. Cal. Oct. 24, 2016)................................11

Smith v. Experian Info. Sols., Inc.,

No. 16-cv-04651-BLF, 2017 U.S. Dist. LEXIS 63548 (N.D. Cal. Apr. 26, 2017) .............................12

Spokeo, Inc. v. Robins,

136 S. Ct. 1540 (2016)...................................................................................................................3, 6, 7

Steel Co. v. Citizens for a Better Env’t,

523 U.S. 83 (1998).............................................................................................................................5, 6

Syed v. M-I, LLC,

853 F.3d 492 (9th Cir. 2017) .................................................................................................................8

Thompson v. McCombe,

99 F.3d 352 (9th Cir. 1996) ...................................................................................................................5

Warren v. Fox Family Worldwide, Inc.,

328 F.3d 1136 (9th Cir. 2003) ...............................................................................................................5

Whitmore v. Arkansas,

495 U.S. 149 (1990)...............................................................................................................................5

Yeska v. Experian Info. Sols., Inc.,

No. 16-12395, 2016 WL 7674783 (E.D. Mich. Dec. 21, 2016) ..........................................................12

Zolensky v. Am. Medflight, Inc.,

No. 216CV00788KJMKJN, 2017 WL 1133926 (E.D. Cal. Mar. 27, 2017) .......................................11

Federal Statutes

15 U.S.C. § 1681b(b)(1) .................................................................................................................... passim

15 U.S.C. § 1681n(a)(1)(A) .......................................................................................................................11

Rules

Fed. R. Civ. P. 8(a)(2)..................................................................................................................................5

Fed. R. Civ. P. 12(b)(1)........................................................................................................................1, 2, 4

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Fed. R. Civ. P. 12(b)(6)............................................................................................................................1, 2

Rule 8.........................................................................................................................................................13

Constitutional Provisions

U.S. Const. art. III, § 2 .................................................................................................................................5

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DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S FIRST AMENDED COMPLAINT PURSUANT TO FEDERAL

RULES OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6)

CASE NO. 3:17-CV-00152-VC

39026016v.8

NOTICE OF MOTION AND MOTION

TO ALL PARTIES AND THEIR COUNSEL OF RECORD:

PLEASE TAKE NOTICE that on June 15, 2017, at 10:00 a.m. in Courtroom 4 of this Court,

located at 450 Golden Gate Avenue, San Francisco, California 94102, Defendant FIRST ADVANTAGE

BACKGROUND SERVICES CORP. will and hereby does move this Court for an Order under Federal

Rules of Civil Procedure 12(b)(1) and 12(b)(6) dismissing Plaintiff’s First Amended Complaint against

First Advantage. This Motion is based on this Notice of Motion and Motion, the below Memorandum

of Points and Authorities, oral argument of counsel, and any other documents, files, pleadings or matters

of which the Court may take judicial notice.

RELIEF SOUGHT

First Advantage seeks an Order pursuant to Federal Rules of Civil Procedure 12(b)(1) and

12(b)(6) dismissing Plaintiff’s First Amended Complaint against First Advantage. Plaintiff lacks

standing to sue First Advantage because he has not alleged that he suffered an injury in fact traceable to

First Advantage’s alleged violation of Section 1681b(b)(1) of the Fair Credit Reporting Act, 15 U.S.C.

§ 1681 et seq. (“FCRA”). Even if Plaintiff had standing (and he does not), Plaintiff’s claim would fail

because he has not alleged sufficient facts to show a violation of Section 1681b(b)(1), and he has not

made any showing that First Advantage willfully violated the FCRA. Additionally, Plaintiff has not

stated a class claim against First Advantage because he fails to allege sufficient facts of a systemic

violation of the FCRA. For these reasons, the Court should dismiss Plaintiff’s First Amended

Complaint with respect to First Advantage.

Case 3:17-cv-00152-VC Document 46 Filed 05/22/17 Page 6 of 19
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DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S FIRST AMENDED COMPLAINT PURSUANT TO FEDERAL

RULES OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6)

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MEMORANDUM OF POINTS AND AUTHORITIES

STATEMENT OF ISSUES TO BE DECIDED

1. Whether Plaintiff’s First Amended Complaint should be dismissed under Fed. R. Civ. P.

12(b)(1) with respect to First Advantage based on lack of standing because Plaintiff has not alleged that

he suffered any injury in fact traceable to First Advantage’s conduct.

2. Whether Plaintiff’s First Amended Complaint should be dismissed under Fed. R. Civ. P.

12(b)(6) with respect to First Advantage because Plaintiff fails to allege sufficient facts of a violation of

Section 1681b(b)(1).

3. Whether Plaintiff’s First Amended Complaint should be dismissed under Fed. R. Civ. P.

12(b)(6) with respect to First Advantage because Plaintiff does not allege facts sufficient to support his

claim of willfulness.

4. Whether the class claim and class allegations in Plaintiff’s First Amended Complaint

should be dismissed under Fed. R. Civ. P. 12(b)(6) with respect to First Advantage because Plaintiff

fails to allege sufficient facts of a systemic violation of the FCRA.

INTRODUCTION

First Advantage Background Services Corp., a consumer reporting agency (“CRA”), furnished a

background report on Plaintiff Marcus Chism in connection with his application for employment with

PepsiCo, Inc. and Frito-Lay, Inc. (collectively, “Co-Defendants”). At first, Plaintiff alleged that First

Advantage violated the FCRA by obtaining his report for employment purposes without his written

authorization and without giving him a proper disclosure and summary of rights. (Compl. ¶¶ 27-29, 31,

35, 63, 78.) Thereafter, First Advantage notified Plaintiff that he had not applied for employment with

First Advantage, that it had furnished his report rather than obtaining it, and that the claims Plaintiff

asserted could not be stated against a CRA. When Plaintiff would not dismiss his claims, First

Advantage moved to dismiss, and, in response, Plaintiff promptly withdrew his claims and filed a First

Amended Complaint. In the First Amended Complaint, Plaintiff alleges, “upon information and belief,”

that First Advantage violated Section 1681b(b)(1) of the FCRA by failing to have Co-Defendants certify

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that they had disclosed to Plaintiff that they would obtain his background report for employment

purposes and had obtained his written authorization to do so.

Plaintiff lacks standing to bring a Section 1681b(b)(1) claim against First Advantage because he

has failed to allege that he suffered a concrete injury traceable to First Advantage’s conduct as required

by Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). Plaintiff alleges only that Co-Defendants’ “illegal

procurement” of his background report injured him. (First Am. Compl. (“Am. Compl.”) ¶¶ 37, 65, 80,

pp. 8, 13, 15.) 1 He does not allege that First Advantage’s conduct harmed him. (See id. ¶¶ 91, p. 17

(declining to request actual damages as relief).) In fact, given that Plaintiff was subsequently hired by

Co-Defendants, he cannot allege that he was harmed by the report in any way.

The First Amended Complaint should also be dismissed with respect to First Advantage because

Plaintiff has failed to state a claim under Section 1681b(b)(1). Plaintiff does not offer any details about

the certification at issue nor does he allege any specific facts demonstrating that First Advantage did not

obtain a certification from Co-Defendants. Instead, Plaintiff asserts that it is reasonable to believe that

First Advantage did not obtain a certification because no one had given him a copy of the certification

and because First Advantage “may” have required a “blanket” certification in a contract that it may or

may not have had with Co-Defendants. (Am. Compl. ¶¶ 89-90, p. 17.) Such allegations fail to satisfy

the threshold pleading requirements of Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atlantic Corp. v.

Twombly, 550 U.S. 544 (2007).

Moreover, Plaintiff does not allege (even in a conclusory manner) that First Advantage’s failure

to obtain a certification was negligent or willful as required for relief under the FCRA. Further, even

assuming that the First Amended Complaint meets the threshold pleading requirements with respect to

Plaintiff’s claim against First Advantage (which it does not), Plaintiff’s class claim should be dismissed

because Plaintiff fails to allege that First Advantage systemically violated the FCRA. For these reasons,

Plaintiff’s First Amended Complaint should be dismissed in its entirety with respect to First Advantage.

1

The First Amended Complaint erroneously contains duplicate paragraph numbers in the Fourth and

Fifth Causes of Action. Accordingly, this Motion cites the relevant paragraph, page number, and Cause

of Action, where necessary, with respect to references to the First Amended Complaint.

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BACKGROUND2

Plaintiff applied for employment with Co-Defendants. (Am. Compl. ¶ 81, p. 16.) During the

application process, First Advantage issued a consumer report on Plaintiff to Co-Defendants. (Id.)

Plaintiff was subsequently employed by “Defendant,” namely Frito-Lay, from approximately October

2015 to September 2016. (Id. ¶ 6, p. 2; Co-Defendants’ Answer ¶ 6 (admitting that Frito-Lay employed

Plaintiff).)

In his Fifth Cause of Action, Plaintiff alleges that he “believe[s]” that First Advantage did not

obtain a Section 1681b(b)(1) certification from Co-Defendants. (Am. Compl. ¶ 82, p. 16.)3Plaintiff

states that his belief is based on the following:

• Plaintiff’s employee file did not include a copy of the certification.

• First Advantage did not give Plaintiff a copy of the certification before

the First Amended Complaint was filed.

• Plaintiff’s background report references the certification requirement

but does not include a certification by Co-Defendants.

• First Advantage may require its clients to agree that they will comply

with the FCRA’s disclosure and authorization requirements and may

not obtain a certification each time a background report is requested.

(Id. ¶¶ 82-89, pp. 16-17.) Plaintiff seeks statutory and punitive damages. (Id. ¶ 91, p. 17.) Plaintiff

does not seek actual damages, and he does not allege that he suffered any harm based on First

Advantage’s purported failure to obtain a certification. (See generally id. ¶¶ 78-91, pp. 16-17.) Plaintiff

does not allege that First Advantage failed to obtain a certification for anyone else. (See generally Am.

Compl.)

LEGAL STANDARD

I. PLAINTIFF’S FIRST AMENDED COMPLAINT IS SUBJECT TO DISMISSAL FOR

LACK OF SUBJECT MATTER JURISDICTION.

A motion under Rule 12(b)(1) challenges the Court’s subject matter jurisdiction. See Fed. R. Civ.

P. 12(b)(1). If the determination of jurisdiction requires resolution of a factual dispute, the Court may

2

First Advantage accepts the truth of the facts as pled in Plaintiff’s First Amended Complaint solely for

purposes of this Motion.

3

The remaining causes of action are only filed against Co-Defendants and not First Advantage. (See

generally Am. Compl. ¶¶ 21-82, pp. 5-16.)

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review evidence beyond the complaint. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.

2004). The Court is not required “to accept as true conclusory allegations which are contradicted by

documents referred to in the complaint” or to “assume the truth of legal conclusions merely because they

are cast in the form of factual allegations.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139

(9th Cir. 2003) (internal quotations and citations omitted). Plaintiff bears the burden of demonstrating

that the Court has jurisdiction to proceed with his lawsuit. Thompson v. McCombe, 99 F.3d 352, 353

(9th Cir. 1996).

II. PLAINTIFF’S FIRST AMENDED COMPLAINT IS SUBJECT TO DISMISSAL FOR

FAILURE TO STATE A CLAIM.

To survive a motion to dismiss, a complaint must contain “a short and plain statement of the

claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A court must accept all of

the complaint’s well-pleaded facts as true but may disregard any conclusions, legal or otherwise. See

Iqbal, 556 U.S. at 667-68. A plaintiff must allege facts sufficient “to raise a right to relief above the

speculative level” in order to assert a claim that is “plausible on its face” rather than one that is merely

“conceivable.” Twombly, 550 U.S. at 555, 570. A claim is plausible “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 (citing Twombly, 550 U.S. at 556). “Where a complaint

pleads facts that are merely consistent with a defendant’s liability, it stops short of the line between

possibility and plausibility of entitlement to relief.” Id. (citation omitted).

ARGUMENT

I. PLAINTIFF LACKS ARTICLE III STANDING.

Plaintiff lacks standing to bring this action against First Advantage because he has not alleged

that he was harmed by First Advantage’s conduct. Standing is a doctrine rooted in the U.S.

Constitution’s “case or controversy” requirement. U.S. Const. art. III, § 2. To plead standing, a plaintiff

must “clearly and specifically set forth facts sufficient to satisfy [the] Article III standing requirements.”

Whitmore v. Arkansas, 495 U.S. 149, 155-56 (1990). Absent standing, a court “cannot proceed at all.”

Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998) (quotation marks omitted).

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To establish standing, a plaintiff must show: (1) he suffered a concrete harm; (2) the defendant

caused the harm suffered by plaintiff; and (3) the requested relief will redress plaintiff’s harm. Id. at

102-04. A concrete harm must be “‘de facto’; that is, it must actually exist.” Spokeo, 136 S. Ct. at 1548.

A “concrete” injury is one that is “‘real,’ and not ‘abstract.’” Id. A plaintiff must “clearly ... allege

facts” demonstrating each element — harm, causation, and redressability. Id. at 1547 (quotation marks

omitted). Because Plaintiff has not alleged that he suffered a concrete harm traceable to First

Advantage’s alleged failure to obtain a certification, his First Amended Complaint must be dismissed

with respect to First Advantage for lack of standing.

A. The Supreme Court’s Decision In Spokeo.

In Spokeo, the plaintiff alleged that the defendant violated the FCRA by furnishing a consumer

report that contained inaccurate information about him, including that he was married, had children, was

in his 50s, had a job, was affluent, and held a graduate degree. Id. at 1546. The district court dismissed

the action for lack of standing, but the Ninth Circuit reversed, holding that the plaintiff had suffered an

injury in fact because he alleged a violation of his statutory rights and because his claim was

individualized. Id. at 1544.

On review, the United States Supreme Court vacated the decision. Id. at 1545. The Supreme

Court held that the Ninth Circuit’s analysis was incomplete because it only considered the first element

of injury in fact — that the injury affected the plaintiff in a “personal and individual way” — and failed

to additionally analyze whether there was a concrete injury. Id. at 1545, 1548 (internal citations

omitted). Because “Article III standing requires a concrete injury even in the context of a statutory

violation,” the Supreme Court ruled that a plaintiff “cannot satisfy the demands of Article III by alleging

a bare procedural violation” because “a violation of one of the FCRA’s procedural requirements may

result in no harm.” Id. at 1550. In support of its ruling, the Supreme Court stated that a “concrete injury”

must be “‘de facto’; that is, it must actually exist. When we have used the adjective ‘concrete,’ we have

meant to convey the usual meaning of the term — ‘real,’ and not ‘abstract.’” Id. at 1548. Because the

Ninth Circuit did not consider “concrete injury,” the matter was remanded. Id. at 1549.

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Spokeo makes clear that a “bare procedural violation, divorced from any concrete harm” is

insufficient to create Article III standing. Id. Thus, “[a] violation of one of the FCRA’s procedural

requirements may result in no harm,” such as where “even if a consumer reporting agency fails to

provide the required notice to a user of the agency’s consumer information, that information regardless

may be entirely accurate.” Id. at 1550.

B. Plaintiff Fails To Allege A Concrete Injury Tied To First Advantage’s Conduct.

Like the plaintiff in Spokeo, Plaintiff alleges nothing beyond a bare procedural violation with

respect to his allegations against First Advantage. (See generally Am. Compl. ¶¶ 78-91, pp. 16-17.)

Plaintiff does not allege that he suffered any type of actual harm caused by First Advantage. Rather, the

only mention of “injury” relates to the Co-Defendants. Plaintiff alleges that he was “injured” by CoDefendants’ purported “illegal procurement of credit and background reports by way of their inadequate

disclosures.” (Id. ¶ 37, p.8; see also id. ¶¶ 65, 80, pp. 13, 15 (same).) This allegation is insufficient to

show that Plaintiff suffered a concrete injury caused by First Advantage’s alleged failure to obtain a

certification. See Kirchner v. Shred-It USA Inc., No. CV 2:14-1437 WBS EFB, 2016 WL 6766944, at

*2-3 (E.D. Cal. Nov. 14, 2016) (distinguishing between injuries caused by Section 1681b(b)(1) and

(b)(2) violations).

Plaintiff’s theory of liability was recently rejected by the court in Kirchner, an action cited in

Plaintiff’s First Amended Complaint. (See Am. Compl. ¶¶ 87-88, p. 17.) In Kirchner, the plaintiff

alleged that First Advantage had failed to obtain a valid certification under Section 1681b(b)(1). 2016

WL 6766944 at *1. In dismissing the plaintiff’s claim, the court held that the plaintiff did not allege that

the improper certification (as opposed to the user’s improper consent form) resulted in any adverse

consequences to the plaintiff. Id. at *2 ; see also Larroque v. First Advantage LNS Screening Sols., Inc.,

No. 15-CV-04684 JSC, 2016 WL 4577257, at *7-8 (N.D. Cal. Sept. 2, 2016) (dismissing plaintiff’s

Section 1681b(b)(1) claim for lack of standing because plaintiff had “alleged nothing more than a bare

procedural violation of the FCRA” and the complaint contained no allegations of any type of harm);

Disalvo v. Intellicorp Records, Inc., No. 1:16 CV 1697, 2016 WL 5405258, at *3 (N.D. Ohio Sept. 27,

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DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S FIRST AMENDED COMPLAINT PURSUANT TO FEDERAL

RULES OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6)

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2016) (ruling that plaintiff lacked standing to pursue Section 1681b(b)(1) claim when, in relevant part,

he failed to allege that the background report contained inaccurate information).

Numerous other post-Spokeo decisions have held that “[a] plaintiff who alleges a bare procedural

violation of the FCRA, divorced from any concrete harm, fails to satisfy Article III’s injury-in-fact

requirement.” Syed v. M-I, LLC, 853 F.3d 492, 499 (9th Cir. 2017) (quotation marks omitted); see also

Dreher v. Experian Info. Sols., Inc., --- F.3d ---, No. 15-2119, 2017 WL 1948916, at *2 (4th Cir. May 11,

2017) (holding that “where an individual fails to allege a concrete injury stemming from allegedly

incomplete or incorrect information listed on a credit report, he or she cannot satisfy the threshold

requirements of constitutional standing”); Lee v. Hertz Corp., No. 15-cv-04562-BLF, 2016 WL 7034060,

at *4-6 (N.D. Cal. Dec. 2, 2016) (dismissing claim where plaintiff alleged only bare procedural

violations of the FCRA); Dutta v. State Farm Mut. Auto. Ins. Co., No. 3:14-cv-04292-CRB, 2016 WL

6524390, at *3 (N.D. Cal. Nov. 3, 2016) (holding that plaintiff’s b(b)(3) claim was “a textbook example”

of a bare procedure violation without harm where plaintiff’s report was accurate).

For example, in Nokchan v. Lyft, Inc., an action filed by Plaintiff’s counsel, this Court held that

the plaintiff lacked Article III standing where he did not allege “that he was harmed by the background

check in any way” but rather “was hired ... after he successfully completed [the] background

investigation.” No. 15-cv-03008-JCS, 2016 WL 5815287, at *4 (N.D. Cal. Oct. 5, 2016). Given these

facts, the Court reasoned that it could “find no real harm” that would give the plaintiff standing and,

consequently, dismissed the action. Id.

Once again, Plaintiff’s counsel has filed a claim alleging nothing more than a bare procedural

violation without any resulting harm. Like the plaintiffs in Kirchner and Nokchan, Plaintiff does not

allege that his background report was inaccurate, contained errors, or had a negative impact on an

employment opportunity. Indeed, given that Plaintiff was subsequently hired by Frito-Lay, he cannot

allege that he was harmed by the consumer report in any way. (Am. Compl. ¶ 6, p. 2; Co-Defendants’

Answer ¶ 6.) Because Plaintiff has not alleged any harm resulting from First Advantage’s conduct, his

Section 1681b(b)(1) claim must be dismissed for lack of standing.

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RULES OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6)

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II. PLAINTIFF FAILS TO STATE A CLAIM UNDER SECTION 1681B(B)(1).

Even assuming that Plaintiff has standing to bring this action against First Advantage (which he

does not), Plaintiff fails to state a claim with respect to First Advantage because it is not plausible to

infer from Plaintiff’s allegations that First Advantage violated Section 1681b(b)(1). Where a complaint

alleges facts that are “merely consistent with a defendant’s liability, [that complaint] stops short of the

line between possibility and plausibility of entitlement to relief.” Iqbal, 129 S. Ct. at 1950 (emphasis

added). Consequently, when considering plausibility “courts must also consider an ‘obvious alternative

explanation’ for defendant’s behavior.” Eclectic Props. E., LLC v. The Marcus & Millichap Co., 751

F.3d 990, 996 (9th Cir. 2014) (quoting Iqbal, 556 U.S. at 682). When a defendant offers a plausible

explanation for its conduct, “plaintiffs cannot offer allegations that are ‘merely consistent with’ their

favored explanation but are also consistent with the alternative explanation.” In re Century Aluminum

Co. Sec. Litig., 729 F.3d 1104, 1108 (9th Cir. 2013). “Something more is needed, such as facts tending

to exclude the possibility that the alternative explanation is true, in order to render plaintiffs’ allegations

plausible within the meaning of Iqbal and Twombly.” Id. (citation omitted). If a plaintiff’s allegations

“do not tend to exclude the possibility” of an alternative explanation, the allegations “remain stuck in

‘neutral territory,’” and fail to cross the line between possibility and plausibility. Id. (citing Twombly,

550 U.S. at 557).

Plaintiff offers no real detail about the certification at issue in his First Amended Complaint and

does not present any specific facts demonstrating that First Advantage did not obtain a certification from

Pepsico and Frito Lay. Such allegations fail to satisfy the threshold pleading requirements of Iqbal and

Twombly. See Iqbal , 556 U.S. at 678 (“Threadbare recitals of the elements of a cause of action,

supported by mere conclusory statements, do not suffice.”); Twombly, 550 U.S. at 555 (“[A] plaintiff’s

obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and

conclusions, and a formulaic recitation of the elements of a cause of action will not do.”) (internal

citations omitted).

Instead, Plaintiff argues that a certification must not exist because his employment file did not

contain a certification form and First Advantage purportedly refused to provide Plaintiff with a copy of

the certification. (Am. Compl. ¶¶ 83-84, p. 16.) Plaintiff ignores the fact, however, that there is an

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DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S FIRST AMENDED COMPLAINT PURSUANT TO FEDERAL

RULES OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6)

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“obvious alternative explanation” as to why he does not allegedly possess a copy of the certification

form — the FCRA does not require that a certification be in writing or that it be maintained in a

personnel file. Eclectic, 751 F.3d at 996. Indeed, the FCRA permits First Advantage to obtain

certifications electronically or verbally, and there are no FCRA provisions requiring Co-Defendants to

retain a copy of the certification at issue, either in Plaintiff’s personnel file or in any other format.

Likewise, there are no statutory provisions, under the FCRA or any other statute, requiring a CRA to

provide a certification to a consumer upon his/her request prior to the commencement of a lawsuit.

Given these alternative explanations, Plaintiff’s theory is not a plausible conclusion. See, e.g., In re

Century, 729 F.3d at 1108.

The remaining bases for Plaintiff’s belief that First Advantage did not obtain a certification from

Co-Defendants rests on two publications. First, Plaintiff claims that the following boilerplate language

on his consumer report does not constitute a certification or require affirmative action by Co-Defendants

and thus must mean that there was no certification prior to First Advantage issuing the report:

Client certifies that it has complied with the Fair Credit Reporting Act (FCRA) and that it has

provides [sic] a clear disclosure in compliance with the FCRA to the

consumer/applicant/candidate/employee and obtained consent and authorization.

(Am. Compl. ¶¶ 85-86, pp. 16-17.) Second, Plaintiff alleges that documents in Kirchner indicate that

First Advantage “may rely on purported prospective blanket certification” rather than obtaining a

certification each time a background check is requested. (Id. ¶¶ 87-89, p. 17) (emphasis added).

These conclusory allegations, however, fail to satisfy the threshold pleading requirements of

Iqbal and Twombly. Indeed, Plaintiff does not explain why the boilerplate language purportedly

demonstrates that there was no certification prior to First Advantage issuing the report.4See Iqbal, 556

U.S. at 667-68. Moreover, Plaintiff’s use of the term “may” with respect to his prospective blanket

certification claim clearly indicates that First Advantage may have used other certification methods with

4 Notably, the FCRA does not require certifications to be included on consumer reports, and common

sense suggests that a statement from a CRA to a user is not intended to be a certification from a user to a

CRA.

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DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S FIRST AMENDED COMPLAINT PURSUANT TO FEDERAL

RULES OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6)

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other users and their requests for background reports. There can be no doubt that Plaintiff’s claim is

based on nothing more than improper speculation. See id. at 678; Twombly, 550 U.S. at 555.

Regardless, there is an innocuous, “obvious alternative explanation” for First Advantage’s

written publications. Eclectic, 751 F.3d at 996. Specifically, throughout the consumer reporting process,

First Advantage repeatedly takes steps to ensure that clients are aware of their responsibilities under

FCRA. See, e.g., Shaw v. Nissan N. Am., Inc., No. CV164372DDPRAOX, 2016 WL 6205752, at *6

(C.D. Cal. Oct. 24, 2016) (refusing to infer an anticompetitive agreement when factual allegations “just

as easily suggest[ed] rational, legal business behavior”); Zolensky v. Am. Medflight, Inc., No.

216CV00788KJMKJN, 2017 WL 1133926, at *5 (E.D. Cal. Mar. 27, 2017) (dismissing complaint when

facts suggested “ordinary business activity on the part of the relevant actors”). The fact that First

Advantage maintains a robust compliance program to ensure that clients comply with the FCRA simply

does not support an inference that First Advantage violated Section 1681b(b)(1).

In summary, although Plaintiff offers a host of miscellaneous reasons as to why he believes First

Advantage did not obtain a certification from Co-Defendants, this speculation stops well “short of the

line between possibility and plausibility of entitlement to relief.” Iqbal, 556 U.S. at 678 (quoting

Twombly, 550 U.S. at 557 (internal quotation marks omitted)). In other words, “[t]he mere fact that

[Plaintiff] believes something to be true does not create a plausible inference that it is true.” In re

Darvocet, Darvon, & Propoxyphene Prods. Liab. Litig., 756 F.3d 917 (6th Cir. 2014). Accordingly,

Plaintiff’s First Amended Complaint falls woefully short of the Twombly and Iqbal pleading standards

and should be dismissed.

III. PLAINTIFF DOES NOT ALLEGE FACTS TO SUPPORT HIS CLAIM OF

WILLFULNESS.

Even if the Court finds that First Advantage technically failed to comply with

Section 1681b(b)(1) (and it did comply), Plaintiff’s claim against First Advantage still fails. Plaintiff

does not allege that he suffered any actual damages as a result of the alleged FCRA violation. Instead,

he contends that he is entitled to statutory and punitive damages (Am. Compl. ¶ 91), which are only

available under the FCRA if First Advantage’s conduct was willful. 15 U.S.C. § 1681n(a)(1)(A).

Plaintiff, however, has not alleged that First Advantage willfully violated the FCRA.

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DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S FIRST AMENDED COMPLAINT PURSUANT TO FEDERAL

RULES OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6)

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To establish a willful violation of the FCRA, Plaintiff must demonstrate that First Advantage

“knowingly or recklessly disregard[ed] its statutory rights.” Smith v. Experian Info. Sols., Inc., No. 16-

cv-04651-BLF, 2017 U.S. Dist. LEXIS 63548, at *20 (N.D. Cal. Apr. 26, 2017). Critically, Plaintiff’s

Fifth Cause of Action is bereft of any facts supporting his claim that First Advantage acted willfully.

Instead, Plaintiff’s Section 1681b(b)(1) claim merely jumps to the conclusion that Plaintiff and the Class

are entitled to statutory and punitive damages. (Am. Compl. ¶¶ 78-91, pp. 16-17.) The only causes of

action in which Plaintiff alleges willful conduct relate to Co-Defendants, not First Advantage. (Id. ¶¶ 34,

34(b), 36, 39, 62, 64, 64(f), 67, 79, 79(i), 82 (4th Cause of Action), pp. 7-8, 12-13, 15-16).

Moreover, although the Introduction to the First Amended Complaint formulaically alleges that

Defendants willfully violated the FCRA (Id. ¶ 2), Plaintiff’s conclusory assertion is not enough to move

this case forward. See, e.g., Iqbal, 556 U.S. at 678-79; Twombly, 550 U.S. at 555; Coleman v. Kohl's

Dep’t Stores, Inc., No. 15-cv-02588-JCS, 2015 WL 5782352, at *7 (N.D. Cal. Oct. 5, 2015) (granting

motion to dismiss complaint filed by Plaintiff’s counsel when, in relevant part, the complaint failed to

allege any facts supporting willfulness); Alexander v. Certegy Check Servs., Inc., No. 8:16-CV-859-

17JSS, 2016 WL 7478961, at *4 (M.D. Fla. Dec. 29, 2016) (dismissing complaint that merely alleged

that violations were “willful”); Yeska v. Experian Info. Sols., Inc., No. 16-12395, 2016 WL 7674783, at

*5 (E.D. Mich. Dec. 21, 2016) (suggesting that claim be dismissed when complaint only stated that

defendant willfully failed to review information and perform its duties).

IV. PLAINTIFF’S CLASS CLAIM AGAINST FIRST ADVANTAGE SHOULD BE

DISMISSED BECAUSE PLAINTIFF FAILS TO ALLEGE SUFFICIENT FACTS OF A

SYSTEMIC VIOLATION OF THE FCRA.

At a minimum, Plaintiff’s class claim against First Advantage should be dismissed because

Plaintiff fails to satisfy the threshold pleading requirements of Twombly and Iqbal with respect to the

purported class. Plaintiff purports to represent himself and “[a]ll of Defendants’ current, former and

prospective applicants for employment in the United States who applied for a job with Defendants (or

were issued a background check by First Advantage).” (Am. Compl. ¶ 14(A), p. 3.) Preliminarily, to

the extent Plaintiff claims that applicants for employment with First Advantage should be included in

the class, such a claim should be dismissed because Plaintiff does not allege that First Advantage failed

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DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S FIRST AMENDED COMPLAINT PURSUANT TO FEDERAL

RULES OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6)

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to obtain a certification from itself with respect to applicants seeking employment at First Advantage.

Rather, Plaintiff solely claims that First Advantage failed to obtain a certification from Frito-Lay and

Pepsico. (Id. ¶¶ 81-82, p. 16.)

Regardless, Plaintiff offers no detail about First Advantage’s alleged certification practices

regarding other applicants. Indeed, aside from Plaintiff’s claim that First Advantage “may rely on

purported prospective blanket certification” — which cannot be considered at the motion to dismiss

stage for the reasons set forth in Section II, supra — Plaintiff’s First Amended Complaint does not

contain any allegations that certification issues have allegedly arisen with other applicants. (Id. ¶¶ 78-91,

pp. 16-17 (emphasis added).) Accordingly, Plaintiff’s threadbare class claim that First Advantage

violated Section 1681b(b)(1) fails to satisfy Rule 8 pleading requirements. Byrd v. Masonite Corp., No.

16-35, 2016 WL 756523, at *4 (C.D. Cal. Feb. 25, 2016) (dismissing class claims regarding overtime

pay under state law when plaintiff did not allege detailed facts showing that defendants had statewide

policies or practices giving rise to plaintiff’s causes of action); Khalili v. Comerica Bank, No. 11-759,

2011 WL 2445870, at *2-3 (N.D. Cal. June 16, 2011) (dismissing FLSA claim that failed to sufficiently

identify policy or practice followed by defendant that resulted in alleged FLSA violation); Cirillo v.

Valley Baptist Health Sys., No. 13-1002, 2014 WL 1347362, at *4-5 (Bankr. S.D. Tex. Apr. 3, 2014)

(dismissing class allegations under Iqbal/Twombly because plaintiff failed to allege sufficient facts that

other putative class members experienced the same alleged statutory violation as the named plaintiff and

thus “it [was] equally possible that [d]efendants simply made a mistake with respect to” the plaintiff

alone).

CONCLUSION

For the reasons stated, the Court should dismiss all claims against First Advantage with prejudice

and should grant any other relief the Court deems necessary and just.

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DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S FIRST AMENDED COMPLAINT PURSUANT TO FEDERAL

RULES OF CIVIL PROCEDURE 12(B)(1) AND 12(B)(6)

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DATED: May 22, 2017 Respectfully submitted,

SEYFARTH SHAW LLP

By: /s/ Eric M. Lloyd

Frederick T. Smith*

Esther Slater McDonald*

Eric M. Lloyd

Attorneys for Defendant

FIRST ADVANTAGE BACKGROUND

SERVICES CORP.

* admitted pro hac vice

Case 3:17-cv-00152-VC Document 46 Filed 05/22/17 Page 19 of 19