Motion to Approve Class Action Settlement in ELIZABETH LARROQUE vs FIRST ADVANTAGE CREDIT CASES| Trellis.Law

On February 02, 2018 a Motion,Ex Parte was filed involving a dispute between Blankenship, Michelle, Chism, Marcus, Larroque, Elizabeth, and First Advantage Credit Cases, for Complex Civil Unlimited in the District Court of San Mateo County.

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1 PETER R. DION-KINDEM (SBN 95267)
THE DION-KINDEM LAW FIRM
2 PETER R. DION-KINDEM, P. C.
3 2945 Townsgate Road, Suite 200
Westlake Village, CA 91361
4 Telephone: (818) 883-4900
Email: peter@dion-kindemlaw.com
5
LONNIE C. BLANCHARD III (SBN 93530)
6 THE BLANCHARD LAW GROUP, APC 9/11/2020
7 5211 East Washington Blvd., # 2262
Commerce, CA 90040
8 Telephone: (213) 599-8255
Fax: (213) 402-3949
9 Email: lonnieblanchard@gmail.com
10
Attorneys for Plaintiff Elizabeth Larroque
11
(Additional Counsel listed on following page)
12
SUPERIOR COURT OF THE STATE OF CALIFORNIA
13
COUNTY OF SAN MATEO
14
15
FIRST ADVANTAGE CREDIT CASES, Case No. JCCP4961
16 CLASS ACTION
Coordination Proceeding (Assigned to the Hon. Marie S. Weiner - Dept.
17 Special Title (CRC Rule. 3.550) 2)
18
Notice of Motion and Unopposed Motion for
19 Preliminary Approval of Class Action
Settlement; Memorandum of Points and
20 Authorities in Support Thereof
21 Date: October 5, 2020
22 Time: 11:00 a.m.
Dept.: 2
23

Unopposed Motion for Preliminary Approval of Class Action Settlement
1
1 Shaun Setareh (SBN 204514)
shaun@setarehlaw.com
2 Thomas Segal (SBN 222791)
3 thomas@setarehlaw.com
Farrah Grant (SBN293898)
4 farrah@setarehlaw.com
SETAREH LAW GROUP
5 315 S. Beverly Drive, Suite 315
Beverly Hills, California 90212
6 Telephone: (310) 888-7771
7 Facsimile: (310) 888-0109

8 Attorneys for Plaintiffs Marcus Chism and Michelle Blankenship

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15

Unopposed Motion for Preliminary Approval of Class Action Settlement
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1
PLEASE TAKE NOTICE that on October 5, 2020 at 11:00 a.m., in Department 2 of the
2
Superior Court of the State of California, County of San Mateo, located at 400 County Center,
3
Redwood City, California 94063, Plaintiffs Elizabeth Larroque, Marcus Chism, and Michelle
4
Blankenship (“Plaintiffs”) will, and hereby do, move this Court for an Order:
5
(1) Granting certification of the Settlement Class for settlement purposes pursuant to
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California Code of Civil Procedure § 382;
7
(2) Preliminarily approving the Settlement Agreement submitted concurrently herewith;
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(3) Appointing Plaintiffs as Class Representatives for the Settlement Class;
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(4) Appointing Lonnie C. Blanchard III of the Blanchard Law Group, APC, Peter R. Dion-
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Kindem of Peter R. Dion-Kindem, P.C., and Shaun Setareh of the Setareh Law Group as
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Class Counsel for the Settlement Class;
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(5) Approving the form and content of the proposed Notice of Settlement, submitted
13
concurrently herewith;
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(6) Approving the notice procedure set forth in the Settlement Agreement and directing that
15
notice be given to class members consistent therewith;
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(7) Approving KCC as the Settlement Administrator; and
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(8) Scheduling a final fairness and approval hearing.
18
This Court should grant this Motion because:
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(1) The Settlement Class meets all the requirements for class certification for settlement
20
purposes under Code of Civil Procedure § 382;
21
(2) The Settlement Agreement is a fair, adequate, and reasonable compromise of the
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disputed Fair Credit Reporting Act (“FCRA”) claim based on Defendant’s allegedly
23
unlawful policies;
24
(3) Plaintiffs and Class Counsel are adequate to represent the Settlement Class;
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(4) The proposed notice procedure complies with California Rules of Court 3.766(d) and (e)
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and adequately apprises Class Members of their rights and fully comports with due
27
process; and
28

Unopposed Motion for Preliminary Approval of Class Action Settlement
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1
(5) Based on the foregoing, notice should be directed to the Class Members and a final
2
fairness hearing should be scheduled.
3
This Motion is based on this Notice of Motion, the attached Memorandum of Points and
4
Authorities, the Declarations of Peter R. Dion-Kindem, Lonnie C. Blanchard III, Shaun Setareh,
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Elizabeth Larroque, Marcus Chism and Michelle Blankenship, Scott DiCarlo, and Even Hendricks, and
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all exhibits thereto, all papers and pleadings on file with the Court in this action, all matters judicially
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noticeable, and on such oral and documentary evidence as may be presented at the hearing.
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Dated: September 11, 2020 THE DION-KINDEM LAW FIRM
9

11 BY: ____________________________
PETER R. DION-KINDEM, P.C.
12 PETER R. DION-KINDEM
13 Attorney for Plaintiff Elizabeth Larroque

14 THE BLANCHARD LAW GROUP, APC
LONNIE C. BLANCHARD III
15
SETAREH LAW GROUP
16 Shaun Setareh
17 Thomas Segal
Farrah Grant
18 Attorneys for Plaintiffs Marcus Chism
and Michelle Blankenship
19

Unopposed Motion for Preliminary Approval of Class Action Settlement
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1 CONTENTS
2 I. Introduction ........................................................................................................................10

3 II. Overview of the Litigation .................................................................................................11
A. Procedural History .................................................................................................11
4
B. Summary of Claims Subject to the Settlement Agreement ...................................13
5
1. First Advantage’s Alleged Failure to Obtain Legally Required
6 Certifications 13
2. Remedies for Violation of the FCRA 13
7
3. Willfulness 14
8
4. First Advantage’s Potential Defenses to Liability and Certification 15
9 III. Mediation and Settlement ..................................................................................................16
10 IV. Overview of the Settlement ...............................................................................................16

11 A. Settlement Class Definition ...................................................................................16
B. Settlement Relief....................................................................................................17
12
1. Settlement Class Members Will Receive Free and Heavily Discounted
13 Background Check Products. 17
14 2. Settlement Class Members will also receive a $15 discount on First
Advantage’s Instant Check Criminal product. 18
15 3. Settlement Class Members will also receive a $15 discount on First
16 Advantage’s Resume Check product. 19
4. First Advantage has also agreed to injunctive relief ensuring that the
17 alleged wrongful conduct of issuing background checks without first
18 obtaining a required retrospective certification from the requesting
employer has ceased. 20
19 C. Release of Claims ..................................................................................................20
20 D. Notice Procedures ..................................................................................................21
21 V. The Court Should Conditionally Certify the Settlement Class Because it Meets All the
Requirements for Class Certification for Settlement Purposes Only Under Code of Civil
22 Procedure Section 382. ......................................................................................................21

23 A. There Is an Objectively Ascertainable and Sufficiently Numerous Class. ............23
B. There Is a Predominance of Common Questions. .................................................23
24
C. Plaintiffs’ Claims Are Typical. ..............................................................................24
25
D. Plaintiffs and Plaintiffs’ Counsel Can Adequately Represent the Settlement Class.
26 ................................................................................................................................25
VI. The Settlement Is a Fair, Adequate, and Reasonable Compromise of Disputed Claims in
27
View of Defendant’s Potential Liability Exposure and the Risks of Continued Litigation.
28 ............................................................................................................................................25

Unopposed Motion for Preliminary Approval of Class Action Settlement
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1 A. The Settlement Agreement Was Reached Via Arm’s-Length Negotiations of
Experienced Counsel and an Experienced Mediator with Sufficient Information to
2 Intelligently Negotiate a Fair Settlement. ..............................................................26
3 B. First Advantage’s Estimated Liability Exposure. ..................................................27
4 C. Risks in Going Forward with Litigation ................................................................28
D. The Proposed Incentive Awards to Plaintiffs Are Fair, Adequate, and Reasonable.
5
................................................................................................................................28
6 E. The Proposed Award of Attorneys’ Fees and Costs Are Fair, Adequate, and
Reasonable. ............................................................................................................29
7
F. The Proposed Payment to the Settlement Administrator Is Fair, Adequate, and
8 Reasonable. ............................................................................................................30
9 G. The Proposed Settlement Administration Plan Complies with Rule of Court
3.766(e). .................................................................................................................30
10
H. The Proposed Class Notice Complies with Rule 3.766(d) and (e). .......................31
11 VII. Conclusion .........................................................................................................................32
12

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15

Unopposed Motion for Preliminary Approval of Class Action Settlement
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1 Table of Authorities

2 Cases

3 7-Eleven Owners for Fair Franchising v. Southland Corp. (2000) 85 Cal.App.4th 1135 ..................... 26
4 Air Line Stewards, etc., Local 550 v. Am. Airlines, Inc. (7th Cir. 1972) 455 F.2d 101 .......................... 27
5 Alaniz v. California Processors, Inc. (N.D. Cal. 1976) 73 F.R.D. 269 .................................................. 22
6 Ashby v. Farmers Ins. Co. of Oregon (D. Or. 2008) 592 F.Supp.2d 1307 ............................................. 27
7 B.W.I. Custom Kitchen v. Owens-Illinois, Inc. (1987) 191 Cal.App.3d 1341 ........................................ 24
8 Beaver v. Tarsadia Hotels (S.D. Cal., Sept. 28, 2017, No. 11-CV-01842-GPC-KSC) 2017 WL 4310707
............................................................................................................................................................... 30
9
Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715 .................................................................. 28
10
Bowles v. Superior Court of City and County of San Francisco (1955) 44 Cal.2d 574 ......................... 23
11
Bravo v. Gale Triangle, Inc. (C.D. Cal., Feb. 16, 2017, No. CV1603347BROGJSX) 2017 WL 708766
12 ............................................................................................................................................................... 27
13 Cartt v. Superior Court (1975) 50 Cal.App.3d 960 ................................................................................ 31
14 Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43 ................................................................................. 29
15 Clark v. American Residential Services LLC (2009) 175 Cal.App.4th 785............................................ 27
16 Classen v. Weller (1983) 145 Cal.App.3d 27 ......................................................................................... 24
17 Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794 ..................................................................... 22, 26
18 Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069....................................................................... 24
19 Global Minerals & Metals Corp. v. Superior Court (2003) 113 Cal.App.4th 836........................... 22, 25
20 Hanon v. Dataproducts Corp. (9th Cir. 1992) 976 F.2d 497.................................................................. 24
21 Hebbard v. Colgrove (1972) 28 Cal.App.3d 1017 .................................................................................. 23
22 Hicks v. Kaufman and Broad Home Corp. (2001) 89 Cal.App.4th 908 ................................................. 23
23 In re Drexel Burnham Lambert Group, Inc. (2d Cir. 1992) 960 F.2d 285 ............................................. 22
24 Jaimez v. Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286 .............................................................. 22, 23
25 Kullar v. Foot Locker Retail Inc. (2008) 168 Cal.App.4th 116 .............................................................. 27
26 Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480 ..................................................................... 29
27 Lealao v. Beneficial California, Inc. (2000) 82 Cal.App.4th 19 ............................................................ 30
28 Lexmark Intern., Inc. v. Static Control Components, Inc. (2014) 572 U.S. 118..................................... 16

Unopposed Motion for Preliminary Approval of Class Action Settlement
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1 Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429 ..................................................................................... 21

2 Mallick v. Superior Court (1979) 89 Cal.App.3d 434 ............................................................................ 26

3 McGhee v. Bank of America (1976) 60 Cal.App.3d 442 ........................................................................ 25

4 Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 980 [250 Cal.Rptr.3d 234, 253, 445 P.3d 626, 643]
............................................................................................................................................................... 23
5
Officers for Justice v. Civil Service Com'n of City and County of San Francisco (9th Cir. 1982) 688
6 F.2d 615 ................................................................................................................................................ 28

7 Reyes v. San Diego Cty. Bd. of Supervisors (1979) 196 Cal.App.3d 1263 ............................................. 23

8 Rodriguez v. West Pub. Corp. (C.D. Cal., Sept. 10, 2007, No. CV05-3222 R (MCX)) 2007 WL
2827379................................................................................................................................................. 28
9
Safeco Ins. Co. of America v. Burr (2007) 551 U.S. 47.......................................................................... 15
10
Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319................................................. 21, 23
11
Schwartz v. Harp (C.D. Cal. 1985) 108 F.R.D. 279 ............................................................................... 24
12
Smith v. CRST Van Expedited, Inc. (S.D. Cal., Jan. 14, 2013, No. 10-CV-1116- IEG WMC) 2013 WL
13 163293................................................................................................................................................... 30

14 Stambaugh v. Superior Court (1976) 62 Cal.App.3d 231 ...................................................................... 25
15 Syed v. M-I LLC (E.D. Cal., Oct. 23, 2014, No. CIV. 1:14-742 WBS) 2014 WL 5426862 ................... 14
16 Van Vranken v. Atlantic Richfield Co. (N.D. Cal. 1995) 901 F.Supp. 294 ............................................. 28
17 Vizcaino v. Microsoft Corp. (9th Cir. 2002) 290 F.3d 1043 ................................................................... 29
18 Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224 ............................................. 25, 26, 27, 31
19 Statutes

20 12 C.F.R. § 1022.130 .............................................................................................................................. 17

21 15 U.S.C. § 1681b ................................................................................................................................... 13

22 15 U.S.C. § 1681g ................................................................................................................................... 17

23 15 U.S.C. § 1681n ................................................................................................................................... 13

24 15 U.S.C. § 1681o ................................................................................................................................... 13

25 Civil Code § 178l(f) ................................................................................................................................ 25

26 Rules

27 C.R.C. Rule 3.766 ................................................................................................................................... 31

28 Other Authorities

Unopposed Motion for Preliminary Approval of Class Action Settlement
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1 Fair Credit Reporting Act Disclosures, 84 FR 65280-01 ....................................................................... 17

2 Manual for Complex Litig. (2d ed. 1993) § 30.45 .................................................................................. 22

3 Newberg on Class Actions (3d ed. 1991) § 11.27, pp. 11-40 to 11-56 ................................................... 22

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15

Unopposed Motion for Preliminary Approval of Class Action Settlement
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1 I. INTRODUCTION
2 The proposed Settlement before the Court provides a fitting and fair resolution to a highly
3 complex class action lawsuit in which Plaintiffs claim that First Advantage failed to obtain proper
4 certifications from employers in violation of Section 1681b(b)(1) of the federal Fair Credit Reporting
5 Act (“FCRA”). Plaintiffs contend that during the class period, First Advantage used client certifications
6 as part of its background check process, but these certifications were unlawful, either because they
7 were blanket certifications contained in First Advantage’s form contracts with its employer clients or
8 because the certifications stated that the employer would comply with its obligations to disclose to
9 consumers that a report may be obtained for employment purposes and to obtain their written
10 authorization to procure the report as opposed to a statement that the client had already complied with
11 such disclosure and authorization obligations. Plaintiffs do not seek to recover actual damages as a
12 result of First Advantage’s alleged violations, but instead seek only statutory damages. However, in
13 order to recover statutory damages, Settlement Class Members must show that First Advantage not
14 only violated the FCRA, but that its violations were willful. Given the enhanced proof necessary to
15 demonstrate willfulness (and the possibility of no recovery whatsoever if said proof were deemed
16 lacking), this Settlement, which will benefit approximately 1.65 million Settlement Class Members,
17 was achieved in the face of considerable risk.
18 Another important consideration is the great uncertainty of First Advantage’s ability to pay a
19 judgment if Plaintiffs were to prevail. If the class did prevail, the minimum statutory award would be
20 $100 per violation and the maximum award would be $1,000 per violation. Thus, First Advantage
21 would be facing a massive judgment between $165 million and $1.65 billion. Despite these obvious
22 financial constraints, the parties have structured the Settlement to provide Settlement Class Members
23 with valuable relief tailored to the alleged conduct underlying Plaintiffs’ claims. To wit, Settlement
24 Class Members will receive several of First Advantage’s background check products at no cost to
25 them, or at a fraction of the regular cost. Moreover, First Advantage has agreed to injunctive relief
26 precluding the recurrence of the alleged FCRA violations giving rise to Plaintiffs’ claims.
27

Unopposed Motion for Preliminary Approval of Class Action Settlement
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1
Plaintiffs are prepared to litigate their case through certification and trial but recognize that
2
there are significant risks in going forward with litigation. As a result, in the opinions of Plaintiffs and
3
Plaintiffs’ counsel, the Settlement represents a fair, adequate, and reasonable compromise in view of
4
those risks. Accordingly, as explained in greater detail below, the Court should grant preliminary
5
approval so that notice can be sent to the Settlement Class Members regarding the Settlement.
6
II. OVERVIEW OF THE LITIGATION
7 A. Procedural History
8
On August 17, 2015, Plaintiff Elizabeth Larroque filed a Complaint in this Court, alleging a
9
single cause of action for violation of the FCRA. Plaintiff Larroque alleged, on behalf of herself and a
10
putative class, that First Advantage furnished consumer reports to potential employers without first
11
obtaining certifications from the potential employers required by the FRCA. (Larroque Compl. ¶¶ 10-
12
11.) Plaintiff Larroque, however, did not allege that she or putative class members suffered harm or
13
actual damages as a result of First Advantage’s alleged conduct. 1 She instead alleged entitlement to
14
statutory damages. (Id. ¶ 13 & Prayer for Relief.)
15
On October 8, 2015, First Advantage answered the Complaint and removed the case to the U.S.
16
District Court for the Northern District of California. On June 21, 2016, the District Court issued an
17
order to show cause regarding subject matter jurisdiction. (Larroque v. First Advantage LNS Screening
18
Sols. (N.D. Cal.), No. 3:15-cv-04684-JSC, ECF No. 32.) On September 2, 2016, the District Court
19
remanded the case to this Court, holding that Plaintiff Larroque “alleged nothing more than a bare
20
procedural violation of the FCRA” and could not satisfy Article III’s injury-in-fact requirement. (Id.,
21
ECF No. 18 at 8.)
22
On December 12, 2016, First Advantage filed a motion for judgment on the pleadings, arguing
23
that Plaintiff Larroque lacked statutory standing to bring a claim under the FCRA. On January 12,
24
2017, the Honorable Richard DuBois issued an Order denying the motion.
25

26
1
Plaintiff Larroque obtained the position for which she applied. She does not allege that First
27 Advantage’s purported violation of the FCRA impacted her employment prospects, nor her subsequent
employment, in any way.
28

Unopposed Motion for Preliminary Approval of Class Action Settlement
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1
On February 17, 2017, First Advantage filed a petition for writ of mandamus. The First
2
Appellate District of the Court of Appeal denied the petition on March 23, 2017. On April 3, 2017,
3
First Advantage filed a Petition for Review with the California Supreme Court. On May 10, 2017, the
4
California Supreme Court denied the Petition for Review.
5
On March 21, 2017, the Honorable Susan Etezadi entered an Order deeming the Larroque case
6
complex and assigning it to the Honorable Marie Weiner in Department 2.
7
On September 14, 2017, after deposing Plaintiff Larroque, First Advantage again removed this
8
case. On November 9, 2017, the District Court remanded the case to this Court, again finding that
9
Plaintiff Larroque’s allegations did not support Article III standing. (Larroque v. First Advantage LNS
10
Screening Sols. (N.D. Cal.), No. 3:17-cv-05313-JSC, ECF No. 24 at 3.)
11
On August 2, 2017, Plaintiff Marcus Chism filed a Complaint in the Superior Court for the
12
State of California, County of San Francisco, alleging a cause of action for violation of the FCRA.
13
Plaintiff Chism alleged, on behalf of himself and a putative class, that First Advantage failed to require
14
potential employers to certify compliance with certain provisions of the FCRA before furnishing
15
consumer reports. (Chism Compl. ¶¶ 20-23.) His Complaint alleged entitlement to statutory damages. 2
16
(See Chism Compl., Prayer for Relief.) On October 19, 2017, First Advantage filed a motion to quash
17
for lack of personal jurisdiction, which Plaintiff Chism opposed on November 6, 2017.
18
On December 22, 2017, Chism filed a Petition for Coordination to have Chism and Larroque
19
coordinated. On March 5, 2018, this Court granted the Petition for Coordination.
20
On May 30, 2018, after resolution of the Petition for Coordination, this Court entered an Order
21
denying First Advantage’s motion to quash for lack of personal jurisdiction in Chism. 3 On June 14,
22
2018, First Advantage filed a petition for writ of mandamus. The First Appellate District of the Court
23
of Appeal denied the petition on June 28, 2018. On July 9, 2018, First Advantage filed a Petition for
24
Review with the California Supreme Court. On July 25, 2018, the California Supreme Court denied the
25
2
26 Plaintiff Chism obtained the job for which he applied. (Chism First Amended Compl. ¶ 6.)
3
Plaintiff Chism filed a First Amended Complaint on June 8, 2018, which added Plaintiff Michelle
27 Blankenship as a named Plaintiff. Like Plaintiffs Chism and Larroque, Plaintiff Blankenship received
the job for which she applied and did not allege any concrete harm resulting from First Advantage’s
28 alleged violation of the FRCA. (Chism First Amended Compl. ¶¶ 7, 30-31.)

Unopposed Motion for Preliminary Approval of Class Action Settlement
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1
Petition for Review. On October 23, 2018, First Advantage filed a Petition for a Writ of Certiorari with
2
the United States Supreme Court. On December 3, 2018, the United States Supreme Court ordered
3
Plaintiff Chism to file a Response to the Petition. Plaintiff Chism filed a Response on February 1, 2019.
4
On March 18, 2019, the Supreme Court denied the Petition.
5
B. Summary of Claims Subject to the Settlement Agreement
6 1. First Advantage’s Alleged Failure to Obtain Legally Required Certifications
7
The FCRA prohibits a consumer reporting agency from furnishing a consumer report for
8
employment purposes unless the employer certifies that it has provided the employee or job applicant a
9
disclosure that it will do so in a document consisting “solely of the disclosure” and obtained the
10
consumer’s written authorization to procure the report. (15 U.S.C. § 1681b(b)(2)(A)(i)-(ii).)
11
Pursuant to the FCRA, a “consumer reporting agency” cannot furnish a consumer report to the
12
employer unless the employer first certifies that it has complied with its disclosure and authorization
13
requirements. 15 U.S.C. § 1681b(b)(1)(A)(i) states:
14 (1) CERTIFICATION FROM USER. A consumer reporting agency may furnish a
15 consumer report for employment purposes only if (A) the person who obtains such report
from the agency certifies to the agency that (i) the person has complied with paragraph
16 (2) with respect to the consumer report . . . . (emphasis added).

17 Plaintiffs allege that First Advantage violated this requirement by using blanket prospective
18 certifications or contemporaneous, individualized certifications that included prospective language. In
19 other words, Plaintiffs allege that First Advantage did not obtain a consumer-by-consumer certification
20 prior to issuing the background check that the employer had complied with the disclosure and
21 authorization requirements. Instead, in Plaintiffs’ view, First Advantage’s certifications stated only that
22 the employer would comply in the future.
23 2. Remedies for Violation of the FCRA
24 If a consumer reporting agency willfully violates any of these requirements, it is liable for
25 statutory damages of at least $100 and up to $1,000 per violation. (15 U.S.C. § 1681n(a).) If a
26 consumer reporting agency negligently violates the FCRA, it is liable for actual damages. (15 U.S.C. §
27 1681o.) As stated above, however, Plaintiffs are not asserting claims for actual damages.
28

Unopposed Motion for Preliminary Approval of Class Action Settlement
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1 3. Willfulness
2 Because Plaintiffs are not seeking actual damages, but only statutory damages, Plaintiffs and
3 Settlement Class Members must not only prove that First Advantage violated the law, but also that its
4 violations were willful in order to prevail at trial.
5 Among other ways, Plaintiffs would attempt to show First Advantage’s conduct cannot be
6 reconciled with the FCRA’s clear language. In Syed v. M-I LLC (E.D. Cal., Oct. 23, 2014, No. CIV.
7 1:14-742 WBS) 2014 WL 5426862, at *4–5, rev'd and remanded (9th Cir. 2017) 846 F.3d
8 1034, opinion amended and superseded on denial of reh'g (9th Cir. 2017) 853 F.3d 492, and rev'd (9th
9 Cir. 2017) 853 F.3d 492, the District Court held that an allegation that a consumer reporting agency
10 relied on “prospective” certification language from its customer supported a claim that it willfully
11 violated its obligations under the FCRA:
12 Unlike the interpretation analyzed in Safeco, however, the court sees no apparent
foundation in the text of § 1681b(b)(1) for PreCheck’s belief that it could rely on
13
M–I’s prospective certification of compliance with paragraph (2). See Safeco 551
14 U.S. at 69–70 (“While we disagree with Safeco’s analysis, we recognize that its
reading has a foundation in the statutory text and a sufficiently convincing
15 justification to have persuaded the District Court to adopt it and rule in Safeco’s
favor.” (internal citations omitted)). Prospective certification actually runs counter
16 to § 1681b(b)(1)’s use of the phrase “has complied,” which clearly appears to refer
retrospectively to an action already taken. 15 U.S.C. § 1681b(b)(1) (“the person has
17
complied with paragraph (2)” (emphasis added)). It makes no sense for M–I to
18 certify that it “has complied” with the FCRA before having done so; M–I must wait
until it actually “has complied” to certify its actions. Even if the statute’s language
19 is not entirely “pellucid,” it is clear enough to foreclose the use of a prospective
certification as to compliance with paragraph (2).
20
This understanding is reinforced by the statute’s next clause, which requires
21 certification that “the person will comply with paragraph (3) ...if paragraph (3)
becomes applicable”-a sharp contrast of language suggesting that Congress
22 contemplated prospective certification as to paragraph (3), but not paragraph (2).
15 U.S.C. § 1681b(b)(1)(A)(i). Accordingly, whether or not PreCheck received a
23
prospective certification from M–I in 2002, the plain language of § 1681b(b)(1)
24 supports plaintiff’s allegation that PreCheck intentionally or recklessly violated the
FCRA by failing to secure a certification that M–I “has complied” with paragraph
25 (2).
26 PreCheck’s actions might be objectively reasonable if it could point to some court
decision or “authoritative guidance” from the FTC that it relied upon when deciding
27 to use a prospective, blanket certification. That is, PreCheck must show that it had
some “sufficiently convincing justification” for thinking that a prospective
28

Unopposed Motion for Preliminary Approval of Class Action Settlement
14
1 certification fulfilled its obligation under the FCRA. Safeco 551 U.S. at 69–70. But
PreCheck has not provided, and the court cannot find, any court decision addressing
2 the use of prospective certifications under § 1681b (b)(1).
3
Plaintiffs also argue that, as a company specializing in providing background checks, First
4
Advantage should be expected to be fully conversant with all of its legal requirements under the FCRA.
5
4. First Advantage’s Potential Defenses to Liability and Certification
6
Notwithstanding Plaintiffs’ arguments, Plaintiffs recognize that proceeding with litigation
7
would carry significant risks in light of First Advantage’s potential defenses. For instance, First
8
Advantage has relied in part upon the decision of the United States Supreme Court in Safeco Ins. Co. of
9
America v. Burr (2007) 551 U.S. 47 [127 S.Ct. 2201, 167 L.Ed.2d 1045] and has contended that its
10
conduct was not willful under the test for willfulness as set forth in that case. Plaintiffs expect that First
11
Advantage will take the position that Safeco stands for the proposition that conduct is not willful
12
because there is no appellate authority or Federal Trade Commission or Consumer Financial Protection
13
Bureau guidance stating that such conduct was objectively unreasonable. Plaintiffs also anticipate that
14
First Advantage will contend it did not act recklessly because, whatever the language in the
15
certifications at issue, Plaintiffs received disclosures from their potential employers and authorized
16
them to obtain consumer reports from First Advantage prior to ordering and obtaining background
17
reports on them from First Advantage. In addition, First Advantage will likely argue that it vetted
18
employers before taking them on as clients, provided FCRA-related training, and required prospective
19
and contemporaneous certifications from clients. First Advantage will further point to the fact that the
20
U.S. Government also uses “a one-time, blanket certification” that the user “will” comply with Section
21
1681b(b)(2) to demonstrate that First Advantage’s interpretation of this statutory provision is
22
reasonable. First Advantage also will contend that its clients all understood that they were certifying
23
that they had complied with their disclosure and authorization obligations before ordering background
24
reports from First Advantage. In sum, First Advantage will assert that it did not recklessly disregard an
25
unjustifiably high risk of probable harm to Plaintiffs or any other consumers because such potential
26
harm never existed.
27

Unopposed Motion for Preliminary Approval of Class Action Settlement
15
1
Plaintiffs further anticipate that First Advantage would argue, in a post-trial appeal, that

Case Info

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Marie S. Weiner Track Judge’s New Case

Case No.

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Document Filed Date

September 11, 2020

Case Filing Date

February 02, 2018

County

Parties

BLANKENSHIP, MICHELLE Plaintiff
CHISM, MARCUS Plaintiff
DION-KINDEM, PETER R Attorney for the Plaintiff
FIRST ADVANTAGE CREDIT CASES Defendant
LARROQUE, ELIZABETH Plaintiff
NEWLAND, G DANIEL Attorney for the Defendant
SETAREH, CHAIM S. Attorney for the Plaintiff
Eric Lloyd Attorney
Lonnie Blanchard Attorneys for Plaintiffs
George Newland Attorney
Howard Leviant Attorneys for Plaintiffs
William Pao Attorneys for Plaintiffs
Thomas Segal Attorneys for Plaintiffs
Jeff Holmes Attorney
Peter Dixon Attorney
Luanne Sacks Attorneys for Defendants
Robert Thompson Attorneys for Defendants
Michele Floyd Attorneys for Defendants
Jacqueline Young Attorneys for Defendants
Brian Kenyon Attorneys for Plaintiffs
Farrah Grant Attorneys for Plaintiffs

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Motion,Ex Parte: ELIZABETH LARROQUE vs FIRST ADVANTAGE CREDIT CASES

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