Doe v. Trinity Logistics, Inc. et al

REPLY BRIEF re Motion to Dismiss and/or Strike Class Claims

D. Del.September 25, 2017

IN THE UNITED STATES DISTRICT COURT DISTRICT OF DELAWARE JANE DOE, : Individually and on behalf of all others : Similarly situated : : Plaintiff, : : v. : : TRINITY LOGISTICS, INC., : Civil No. 1:17-cv-00053RGA a Delaware corporation, : : PINKERTON CONSULTING AND : INVESTIGATIONS, : JURY DEMAND a Delaware limited liability company, : : Defendants. : BRIEF OF DEFENDANT, TRINITY LOGISTICS, INC., IN REPLY TO THE RESPONSE OF PLAINTIFF TO TRINITY’S PARTIAL MOTION TO DISMISS THE SECOND AMENDED COMPLAINT AND/OR STRIKE CLASS CLAIMS LITCHFIELD CAVO LLP Michael C. Heyden, Jr. DE Bar No. 5616 1515 Market Street, Ste 1220 Philadelphia, PA 19103 heyden@litchfieldcavo.com Attorneys for defendant, Trinity Logistics, Inc. Case 1:17-cv-00053-RGA Document 55 Filed 09/25/17 Page 1 of 12 PageID #: 724 TABLE OF CONTENTS I. The § 1681b(b)(3) Notice Class Is A Fail Safe Class……………………………………..1 II. Plaintiff Cannot Seek Actual Damages In A Class Action…..……………………………2 III. Plaintiff Has Not Alleged A Violation Of § 1681(b)(f)………………..…………………5 IV. Conclusion………………………………………………………………………...………7 Case 1:17-cv-00053-RGA Document 55 Filed 09/25/17 Page 2 of 12 PageID #: 725 ii TABLE OF AUTHORITIES CASES PAGES Messner v. Northshore University Health System, 669 F.3d 802, 825 (7 th Cir.2012)……………………………………………………………….....1 Zarichny v. Complete Payment Recovery Servs., Inc., 80 F. Supp. 3d 610, 624 (E.D. Pa. 2015)….………………………………………………………1 Murray v. GMAC Mort’g Corp., 434 F.3d 948, 953 (7 th Cir. 3002)…………………………………….…………………………...2 Chakejian v. Equifax Info. Serv. LLC, 256 F.R.D. 492 (E.D. Pa. 2009) …………………………..……………………..………..……3, 5 Harper v. Trans Union, LLC, No. 04-3510, 2006 U.S. Dist. LEXIS 91813 (E.D. Pa. Dec. 20,2006)……………..……..………3 Clark v. Experian Info. Solutions, Inc., No. 8:00-1217-24, No. 8:00-1218-24, No. 8:00-1219-24, 2001 U.S. Dist. LEXIS 20024 (D.S.C. Mar. 19, 2001)…………..…………………………...…..3 Legge v. Nextel Communications, Inc., No. CV 02-8676 DSF, 2004 U.S. Dist. LEXIS 30333 (C.D. Cal. June 25, 2004) ………….……………...………..…...3 Barnett v. Experian Info. Solutions, Inc., No. 2:00CV174, 2004 U.S. Dist. LEXIS 28855 (E.D. Tex. Sept. 30, 2004); ……………..…….3 Williams v. Telespectrum, Inc., No. 3:05-cv-853, 2007 U.S. Dist. LEXIS 78415 (E.D. Va. June 1, 2007)() …………………..…3 Gates v. Rohm & Haahs Co., 655 F.3d 272 (3d. Cir. 2011). …………………………………………………..…………………4 Hohider v. United Parcel Service, Inc., 574 F.3d 169 (3d Circ. 2009)…………………..……………………………….…………………4 Cannon v. Cherry Hill Toyota, Inc., 184 F.R.D. 540 (D.N.J. 1999)………………………………………...…….….………………….4 Stephenson v. Bell Atl. Corp., 177 F.R.D. 279 (D.N.J. 1997)……………………………… ……………..…………………...….5 Case 1:17-cv-00053-RGA Document 55 Filed 09/25/17 Page 3 of 12 PageID #: 726 iii Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 441 (4 th Cir. 2003)…………………………………………………………………5 Case 1:17-cv-00053-RGA Document 55 Filed 09/25/17 Page 4 of 12 PageID #: 727 iv OTHER AUTHORITIES 15 U.S.C. § 1681b ……………………………………………..……………….……………1, 5, 6 15 U.S.C. § 1681o………………………….……………………………………………...……2, 5 Case 1:17-cv-00053-RGA Document 55 Filed 09/25/17 Page 5 of 12 PageID #: 728 I. THE § 1681b(b)(3) NOTICE CLASS IS A FAIL SAFE CLASS While plaintiff has offered a lengthy response to Trinity’s argument pertaining to plaintiff’s fail-safe class allegations, she has failed to touch upon the defining issue of a fail-safe- class: it is defined in such a way as class membership depends on whether a plaintiff has a valid claim. See Messner v. Northshore University HealthSystem, 669 F.3d 802, 825 (7th Cir.2012). Here, plaintiff fails to explain what, if any determination, will be made after class certification. Thus, it bears repeating that plaintiff intends to seek a determination that (a) putative plaintiffs were entitled to a copy of a consumer report and statement of rights under the FCRA, (b) that these items were not provided to the putative plaintiffs in a timely manner, and (c) that an employment decision was made which was adverse to the putative plaintiffs. This means that the entirety of a determination as to whether any putative class member has a valid claim will be determined at the class certification stage. Thus, the class certification stage will be dispositive of most of the issues in this matter. This problem has been explained by the Zarichny court, which noted that, in such a circumstance, “either the class members win or, if the defense prevails, no class exists, and the putative class members, unbound by any judgment, are free to pursue individual claims. Class actions are generally binding on absent class members, but such a class impermissibly skirts the bar of res judicata.” Zarichny v. Complete Payment Recovery Servs., Inc., 80 F. Supp. 3d 610, 624 (E.D. Pa. 2015). This is simply not fair to the defendants. That is because, if plaintiff’s claims fail for any of the reasons contained in Rule 23, their claims will fail at the mere certification stage. Thus, there will have been no final adjudication of Trinity’s liability to these putative plaintiffs, and they will be free to seek individual claims. As a result, if plaintiff’s fail-safe class is accepted, Trinity could very well have expended significant costs in litigation fees, have the entirety of Case 1:17-cv-00053-RGA Document 55 Filed 09/25/17 Page 6 of 12 PageID #: 729 2 their employment files subjected to the discovery process, and ultimately wind up in the exact same place it was in before plaintiff ever filed her Complaint, with no final adjudication of plaintiff’s claims. This is exactly why fail-safe classes are not favored, and why plaintiff’s class allegations against Trinity should be stricken. Furthermore, as plaintiff correctly notes, the task that they have proposed is an “arduous” one. This is correct because, as plaintiff would have it, there would be a trial on each and every putative member of the class at the class certification stage. Given that plaintiff’s claims present an arduous certification process and no certainty of a final outcome against Trinity, plaintiff’s class claims should be stricken. II. PLAINTIFF CANNOT SEEK ACTUAL DAMAGES IN A CLASS ACTION Despite previously representing, “Plaintiff is not seeking actual damages as to Counts I and II;” see D.I. 41 at p. 2, plaintiff has now apparently changed tack, and decided that both plaintiff and the putative class members are seeking actual damages in the alternative. While plaintiff makes much ado about her representation that she is only seeking actual damages in the alternative, that is of no moment. The fact of the matter is that plaintiff cannot maintain a claim for actual damages in a class action, regardless of how those allegations are plead. Plaintiff’s class claims for actual damages under § 1681o cannot survive a Motion to Strike. That is because the evaluation of individual damages is too unwieldy for a class action matter. This issue is disposed of with painstaking clarity in a case cited by plaintiff, Murray v. GMAC Mort’g Corp., 434 F.3d 948, 953 (7 th Cir. 3002). Indeed, the Murray court explained, “What each person's injury may be is a question that must be resolved one consumer at a time. Although compensatory damages may be awarded to redress negligence, while statutory damages require willful conduct, introducing the “easier” negligence theory would preclude class Case 1:17-cv-00053-RGA Document 55 Filed 09/25/17 Page 7 of 12 PageID #: 730 3 treatment.” Id. at 952 – 953. The problem here is that plaintiff is seeking actual damages, even if that is in the alternative. Thus, as long as plaintiff continues to state a claim for actual damages, she is not pleading a class action claim that could ever be certified. See, e.g., Chakejian v. Equifax Info. Serv. LLC, 256 F.R.D. 492, 499 (E.D. Pa. 2009) (If the plaintiff were required to pursue actual damages in this case, individual damages issues would quickly overwhelm the common questions and the suit would become unmanageable and uncertifiable.”); Harper v. Trans Union, LLC, No. 04-3510, 2006 U.S. Dist. LEXIS 91813 (E.D. Pa. Dec. 20, 2006) (Same). This consensus is also found outside of this Circuit. See Clark v. Experian Info. Solutions, Inc., No. 8:00-1217-24, No. 8:00-1218-24, No. 8:00-1219-24, 2001 U.S. Dist. LEXIS 20024, at *12 (D.S.C. Mar. 19, 2001) (“[C]laims for actual damages under the FCRA are not suitable for class treatment.”); Legge v. Nextel Communications, Inc., No. CV 02-8676 DSF, 2004 U.S. Dist. LEXIS 30333, at *28 (C.D. Cal. June 25, 2004) (Same); Barnett v. Experian Info. Solutions, Inc., No. 2:00CV174, 2004 U.S. Dist. LEXIS 28855, at *16-*17 (E.D. Tex. Sept. 30, 2004); Williams v. Telespectrum, Inc., No. 3:05-cv-853, 2007 U.S. Dist. LEXIS 78415 (E.D. Va. June 1, 2007)(Same). Thus, if plaintiff ever hopes to plead a cognizable class, she must, at a minimum, drop her alternative claim for actual damages. Plaintiffs, apparently aware that it is improper to seek a claim for actual damages in a class action lawsuit, now claims that she seeks to certify a liability only class. At this juncture, it is necessary to take a step back and consider exactly how unwieldy plaintiff’s proposition is. Plaintiff is proposing that the court weigh the factual circumstances of each and every member of the putative class to determine whether Trinity has violated the FCRA as to those putative class members. This would be the first round of trials, and it would occur at the certification stage, as discussed above. Then, whatever issues would remain would be tried in the actual class Case 1:17-cv-00053-RGA Document 55 Filed 09/25/17 Page 8 of 12 PageID #: 731 4 action trial. Then, for a third round of trials, the individual plaintiffs have individual trials to determine their individual measure of damages. Given the procedural nightmare plaintiffs have proposed, it cannot seriously be said that this Frankenstein’s monster of litigation is the superior method of adjudicating the claims of plaintiff and the putative class members. Plaintiff is proposing that there be, in all actuality, two rounds of trials before final individualized trials. This is not a superior method of addressing the plaintiffs’ alleged harms, and it is certainly not the most administratively manageable means of doing so. Indeed, the cases cited by plaintiff demonstrate that this approach is not favored. For instance, plaintiff cites Gates v. Rohm & Haahs Co., 655 F.3d 272 (3d. Cir. 2011). While this case does state that issue classes are theoretically possible, it then went on to criticize issue classes and refuse to certify an issue-based class on liability. Indeed, the Gates court criticized plaintiff’s purported “issue only” liability class on the basis that it “was not feasible and would not advance the resolution the resolution of the class members’ claims.” Id. at 272. Further, the court noted, “[C]ertification of a liability-only issue class may unfairly impact defendants and absent class members.” Id. at 274. As in Gates, a liability class is inappropriate here. The determination in Gates is also supported by another case cited by plaintiff. That is Hohider v. United Parcel Service, Inc., 574 F.3d 169 (3d Circ. 2009). In that case, the Third Circuit found that a District Court had abused its discretion in certifying a liability issue class. Id. at 186. Similarly, many of the cases cited by plaintiff are simply inapposite. Two of these cases simply stand for the proposition that the unviability of one theory of recovery does not render the remaining causes of action unviable. See Cannon v. Cherry Hill Toyota, Inc., 184 F.R.D. 540 (D.N.J. 1999) (Maintenance of an individual and class claim does not destroy typicality Case 1:17-cv-00053-RGA Document 55 Filed 09/25/17 Page 9 of 12 PageID #: 732 5 requirement); Stephenson v. Bell Atl. Corp., 177 F.R.D. 279 (D.N.J. 1997) (Finding that antitrust claims could be certified while fraud claims could not.). These cases are not persuasive on the issues presented in the instant Motion. This leaves Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 441 (4 th Cir. 2003). Admittedly, this was a case where a class action claim was bifurcated for liability and individual damages. However, that decision was predicated on the fact that “individualized proof of damages along will not defeat class certification.” Id. at 429. The Gunnels Court went on to note that the type of damages sought in the instant matter may not be appropriate for class certification. Id. at 429-430. (Damage claims relating to time lost, loss of enjoyment of life, etc. might predominate and cause the case to become unmanageable.) Here, it has already been recognized that this is exactly what occurs in relation to damages sought under § 1681o. See Chakejian, 256 F.R.D. at 499. (“If the plaintiff were required to pursue actual damages in this case, individual damages issues would quickly overwhelm the common questions and the suit would become unmanageable and uncertifiable.”) Specifically, the damages plaintiff is seeking include claims for embarrassment, humiliation, loss of sleep, loss of appetite, relational strain, and other abstract damage. See Exhibit 1 to Mot. at ¶ 100. Such damages are wholly inappropriate for a class action lawsuit, and plaintiff’s claim for actual damages must be stricken as a result. III. PLAINTIFF HAS NOT ALLEGED A VIOLATION OF § 1681(b)(f) Plaintiff’s Response to Trinity’s Motion to Dismiss contains a succinct summary of why Count V should be dismissed. As plaintiff states, “Trinity argues that Ms. Doe has no claim for a violation of § 1681 b(f) because, as an employer, it had a permissible purpose to obtain Ms. Doe’s consumer report and she authorized it.” However, plaintiff then goes on to argue that Case 1:17-cv-00053-RGA Document 55 Filed 09/25/17 Page 10 of 12 PageID #: 733 6 “there’s more to the story,” namely that plaintiff “did not authorize the procurement of a report that was specifically not to be used for employment decisions.” This allegation has nothing to do with the imposition of liability under § 1681b(f). That section does not speak, in any way, shape, or form, to the content of the report that is generated. As such, plaintiff simply does not have any relief which can be found under § 1681b(f). To reiterate, the content of § 1681b(f) is as follows: Certain use or obtaining of information prohibited: A person shall not use or obtain a consumer report for any purpose unless— (1) the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished under this section; and (2) the purpose is certified in accordance with section 1681e of this title by a prospective user of the report through a general or specific certification This section only requires that a consumer report be obtained for a purpose authorized by the consumer (plaintiff), and that the purpose be certified to the consumer reporting agency (Pinkerton). Plaintiff has alleged that both of these things occurred. See Exhibit 1 to Mot. at ¶¶ 20, 63. Nothing about 1681b(f) discusses the content of the report. That section simply does not impose liability based upon a report’s failure to live up to the consumer’s authorized purpose. Thus despite plaintiff’s protestations, there is simply no joy to be found for her in § 1681b(f). That section does not require that a consumer report itself state that it is to be used for employment reasons. It similarly does not govern what is to be done when a consumer report disclaims a permissive use. As such, there may be some legal theory which plaintiff may utilize to make a cause of action based on the facts plaintiff alleges, but § 1681b(f) simply does not provide plaintiff the relief which she seeks. Case 1:17-cv-00053-RGA Document 55 Filed 09/25/17 Page 11 of 12 PageID #: 734 7 IV. CONCLUSION For the foregoing reasons, defendant, Trinity Logistics, Inc., respectfully requests that this Honorable Court grant its Motion to Dismiss plaintiff’s Complaint and/or Strike plaintiff’s class claims. Respectfully submitted LITCHFIELD CAVO LLP /s/ Michael C. Heyden, Jr. Michael C. Heyden, Jr. DE Bar No. 5616 1515 Market Street, Ste 1220 Philadelphia, PA 19103 heyden@litchfieldcavo.com Attorneys for defendant, Trinity Logistics, Inc. -and THE LAW OFFICES OF MICHAEL C. HEYDEN. Michael C. Heyden DE Bar No. 2040 1201 N. King Street Wilmington, DE 19801 mcheyden@aol.com (302)654-0789 Attorneys for defendant, Trinity Logistics, Inc. Case 1:17-cv-00053-RGA Document 55 Filed 09/25/17 Page 12 of 12 PageID #: 735