Schenck v. Curtiss-wright Corp. (W.D. Pa. 2019). · Go Syfert
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Schenck
v.
Curtiss-wright Corporation
2:18-cv-00164.
District Court, W.D. Pennsylvania.
Nov 1, 2019.
Unknown

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA JUSTIN SCHENCK, ) Plaintiff, Civil Action No. 18-164 ) Magistrate Judge Maureen P. Kelly ° ; Re: ECF No. 80 CURTISS-WRIGHT CORPORATION, )

Defendant.

OPINION AND ORDER This is a proposed class action brought pursuant to the Fair Credit Reporting Act, 15 U.S.C. § 1681 (““FCRA”). Plaintiff Justin Schenck (“Schenck”) alleges that Defendant Curtiss-Wright Corporation (“Curtiss-Wright”) violated the FCRA by failing to provide candidates for employment with copies of their background reports and a written summary of FCRA rights. Presently before the Court is Representative Plaintiff's Motion for Class Certification. ECF No. 80. For the reasons set forth below, the motion will be denied.! I. FACTUAL AND PROCEDURAL BACKGROUND

A. Procedural History Schenck originally filed a Class Action Complaint against Curtiss-Wright in the Allegheny County Court of Common Pleas, Pennsylvania (“State Court”), on December 29, 2017. ECF No. 1-2. Curtiss-Wright removed the action to this Court on February 5, 2018. ECF No. 1. Schenck subsequently filed a First Amended Complaint, ECF No. 38, asserting seven claims against Curtiss-Wright.

| In accordance with the provisions of 28 U.S.C. § 636(c)(1), the parties voluntarily consented to having a United States Magistrate Judge conduct proceedings in this case, including the entry of a final judgment. ECF Nos. 13, 14.

In Counts One through Three of the First Amended Complaint, Schenck asserts claims pursuant to 15 U.S.C. §§ 1681b(b)(2) and 1681(d) of the FCRA. In Counts Four and Five, he asserts claims under 15 U.S.C. §§ 1681b(b)(3). In Counts Six and Seven, he asserts claims under the Pennsylvania Criminal History Records Information Act. Based on the parties’ Joint Stipulation to Sever and Remand Counts One to Three filed on December 6, 2018, ECF No. 74, the Court severed and remanded Counts One to Three to State Court on December 7, 2018, ECF No. 75. The Court retained jurisdiction over Counts Four through Seven. In the instant Motion for Class Certification, however, Schenck only seeks class certification of Counts Four and Five pursuant to Section 1681b(b)(3). See ECF No. 81 at 2 n. 1. With respect to these two claims, Schenck proposes certification of the following class: All natural persons residing in the United States (including territories and other political subdivisions): (1) who applied for employment with [Curtiss-Wright] or any of its subsidiaries; (2) about whom [Curtiss-Wright] obtained a consumer report for employment purposes from Sterling InfoSystems, Inc. from September 2015 to May 2018; (3) where the consumer report contained a score of “Complete Report- Consider” at the top; and (4) [Curtiss-Wright] did not send a notice as provided in 15 U.S.C. § 1681b(b)(3). ECF No. 80 § 4. The parties conducted discovery relevant to class certification. After discovery closed, on April 18, 2019, Schenck filed the instant Motion for Class Certification and Brief Support. ECF No. 80, 81. Curtiss-Wright filed a Brief in Opposition on May 28, 2019, ECF No. 86, and Schenck filed a Reply Brief on June 11, 2019, ECF No. 89. A hearing for argument relative to the Motion for Class Certification was held on July 30, 2019. ECF Nos. 92, 93. Accordingly, the Motion for Class Certification is now ripe for disposition.

. B. Factual Background never happened, then at best, the time for providing notice has not yet lapsed, and no violation of the statute has occurred as to the 1,105 hired applicants. Thus, Schenck only identifies a potential statutory violation as to the 7 rejected applicants. To the extent Schenck relies on the decision of the United States Court of Appeals for the Third Circuit in Long v. Southeastern Pennsylvania Transportation Authority, 903 F.3d 312 (3d Cir. 2018), this ruling does not alter the outcome in the instant case. In Long, the plaintiffs were not hired because of criminal history disclosed in their background reports, and the defendant

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_ employer failed to provide copies of those reports under Section 1681b(b)(3)(A). Long, 903 F.3d at 316-17. There was, therefore, no dispute that “adverse action” occurred in that case, or that defendant had violated the FCRA. The Third Circuit addressed, instead, whether plaintiffs had standing to sue despite the fact that there was no inaccurate information in the reports that plaintiffs could have disputed, if given the opportunity. Id. at 318. Repmlers of whether the reports were inaccurate, the court concluded, plaintiffs had standing to sue for a violation of the FCRA. In so holding, the Third Circuit noted: “taking adverse action without providing the required consumer report is the very harm that Congress sought to prevent” through enacting the FCRA. Id. at 324 (quoting Susinno v. Work Out World Inc., 862 F.3d 346, 352 (3d Cir. 2017) (internal quotations omitted) (emphasis added). In this proposed class action, however, Schenck does not assert any violation of the statute with respect to the individuals hired by Curtiss-Wright, for the reasons discussed above. Whether, as Long considers, standing exists for a purported “bare procedural violation” of the FCRA is therefore not relevant to this analysis. See id. at 317. In a footnote, in his Memorandum in Support of Motion for Class Certification, Schenck further eiceriiet Congress did not intend for adverse action to be a precondition to recovery because it envisioned that two separate notices (both a pre-adverse action notice and an adverse action notice) be provided, as necessary. ECF No. 81 at 23, n. 7. While the statute contemplates _ the potential for more than one communication, Schenck fails to produce authority to support the proposition that a statutory violation occurs if, in fact, no adverse action is taken. For these reasons, the Court agrees with Curtiss-Wright that the proper class size consists of the approximately 7 individuals not hired by Curtiss-Wright, as opposed to the 1,112 members proposed by Schenck who received a “consider” notation but were hired.” With respect to a class of 7, it is clear that Schenck cannot satisfy numerosity. Indeed, at the hearing of this matter, Schenck’s counsel acknowledged that there is no authority in the Third Circuit for certifying a class of less than 10 members, admitting that the “tipping point” is typically around 20. ECF No. 93 at 25:11-20; see also Stewart, 275 F.3d at 226-227. Accordingly, Schenck fails to meet his burden of persuasion as to the first requirement for class certification pursuant to Rule 23(a)(1). As such, the Court finds that Schenck has not established numerosity. .

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The Court finds that this second requisite is satisfied. As Schenck correctly points out, the proposed class members’ claims all arise out of a standardized policy for handling consumer reports during the employment process at Curtiss-Wright, creating at least one issue of law or fact common to the class. To the extent Curtiss-Wright argues that commonality does not exist because there is no “intent” to take adverse action as to the hired applicants, this issue is moot in light of the Court’s finding that the 1,105 hired individuals are not properly included in the class. Thus, are common questions of law and fact sufficient to establish commonality.

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re Prudential, 148 F.3d at 307-08)). Rule 23(b)(3) lists four factors to consider: (1) the class members’ interests in individually controlling the prosecution or defense of separate actions; (2) any similar pending litigation; (3) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (4) the likely difficulties in managing a class action. “Superiority must be looked at from multiple points of view: the judicial system, the potential class members, the present plaintiff, the attorneys for the litigants, the public at large, the defendant, the issues.” Chakejian v. Equifax Info. Serv. LLC, 256 F.R.D. 492, 501 (E.D. Pa. 2009). In support of his Motion for Class Certification, Schenck argues that there is no desire for individual members to litigate these claims in individual cases, given the limited potential recovery. He further argues that there is no competing class litigation against Curtiss-Wright on the claims presented, that this is a desirable forum because Curtiss-Wright does business in this forum, and there is a related class action pending in the Allegheny County, Pennsylvania Court of - ‘Common Pleas. Finally, he notes that this case does not present significant manageability problems. ECF No. 81 at 31-32. In opposing the instant Motion, Curtiss-Wright asserts that Schenck cannot satisfy the superiority requirements set forth in Rule 23(b)(3). ECF No. 86 at 10. Based on consideration of the above-noted factors, the Court agrees that some of the relevant considerations may weigh in Schenck’s favor. However, the Court finds that the class action is not a superior mechanism for the same reasons as set forth in its discussion of Rule 23(a)(1). Given the very limited number of claims and small number of class members, a class action mechanism is not necessary or appropriate to manage the remaining volume of claims of the 7 applicants. Accordingly, the superiority requirement is not satisfied.

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‘IV. CONCLUSION For the foregoing reasons, the Court finds that Schenck has not met his burden of establishing each of the requisite Rule 23 elements by a preponderance of the evidence. Therefore, class certification is not proper. Plaintiff's Motion for Class Certification is denied. ORDER Accordingly, this | A day of November, 2019, IT IS HEREBY ORDERED that Representative Plaintiff's Motion for Class Certification, ECF No. 80, is DENIED.

BY THE COURT: Yf hi be PEL we </ AS AAA MAUREEN P. KEZLY UNITED STATES MAGISTRATYJUDGE ce: All counsel of record via CM/ECF

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1 Numerosity This factor requires that the class is so numerous that joinder of all members is impracticable. Fed. R. Civ. P. 23(a)(1); In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d 283, 309 (3d Cir. 1998). The United States Court of Appeals for the Third Circuit has held that “generally if the named plaintiff demonstrates that the potential number of plaintiffs exceeds 40, the first prong of Rule 23(a) has been met.” Stewart v. Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001). In the instant Motion, Schenck argues that numerosity is satisfied, because his proposed class incudes approximately 1,112 members, each individual claim is small, and the members are . geographically dispersed. This class, as defined by Schenck, includes all Curtiss-Wright applicants for whom a background check was conducted and marked by Sterling as “consider.” Curtiss-Wright responds that Schenck’s proposed class size is inaccurate, because it improperly includes non-aggrieved individuals. At best, it argues, the class is comprised of just 7 individuals who were not hired by Curtiss- Wright—an insufficient number to establish numerosity. Following review, the Court agrees that Schenck’s proposed class includes non-aggrieved individuals and concludes that Schenck has not satisfied the numerosity requirement. In support ‘of the proposed class of 1,112 members who received a “consider” notation, Schenck argues that Sterling’s “consider” notation.represents an intent to take adverse action, thereby triggering the pre-adverse action notice provision of Section 1681b(b)(3)(A). Curtiss-Wright disputes that any such intent existed at this time, arguing that the “consider” flag merely suggests further action (e.g., resolving a discrepancy in dates of prior employment) was required for Curtiss-Wright to assess and finalize the report. Given that the “consider” notation was generated by Sterling, and _ not by the individuals tasked with hiring decisions at Curtiss-Wright, that only a very small percentage (1%) of the applicants who received the “consider” notation were not hired, that the “consider” notation could arise with discrepancies as minor as a typographical error, and that the testimony suggests further review occurred following this notation, Schenck’s position is not supported by the evidence presented. But even assuming, arguendo, that intent to take adverse action existed at some point as to some or all of the 1,105 hired applicants, Schenck’s proposed class still includes a significant number of non-aggrieved individuals. As noted above, Section 1681b(b)(3)(A) only requires the pre-adverse action notice to be provided “before taking any adverse action,” and thus, and “an ‘adverse action’ must be taken in order for a violation of the statute to occur.” Manuel, 123 F. Supp. 3d at 820-821 (emphasis added); see also Reardon, 2013 WL 6231606, at *12 (concluding that applicants who did not experience any adverse action were not entitled to pre-adverse action notice, granting summary judgment as to those applicants). An “adverse action” does not occur until a decision is carried out, and “an actor has until that time to take the necessary steps to comply with the FCRA’s requirements.” Dahy, 2018 WL 6930261, at *3 (emphasis added). Here, Schenck does not identify any purported “adverse action” taken as to the 1,105 proposed class members that were hired by Curtiss-Wright. Schenck makes clear he is not arguing that the “consider” notation is, itself, is an “adverse action,” but simply that it is the trigger for requiring notice and an opportunity to respond under Section 1681b(b)(3)(A). ECF No. 81 at 15." Because notice is only required at some point “before” adverse action occurs, if an adverse action \ 4 Courts have held that the formation of intent to take adverse action is distinguished from the adverse action itself. Dahy, 2018 WL 6930261, at *3 (“The formation of such intent, therefore, cannot be the adverse action’) (internal quotations omitted); Branch v. Gov. Employees Ins. Co., 286 F. Supp. 3d 771, 783 (E.D. Va. 2017) (“This Court and others have consistently recognized that an employer’s formation of intent to take adverse action and the adverse action itself are distinct.”).
2 Commonality Rule 23(a)(2) requires Schenck to show that there are questions of law or fact common to the class. While Schenck must establish the existence of at least one issue of law or fact common. to the class, he is not required to show that “there is an identity of claims or facts among class members.” In re Prudential, 148 F.3d at 310; Johnston v. HBO Film Mgmt., 265 F.3d 178, 184 (3d Cir. 2001). 5 At the hearing of this matter, Schenck’s counsel argued that it is feasible that, after hiring, Curtiss-Wright could - initiate adverse action based on information contained in the background report in the employee’s file, and that counsel is aware of one individual who was later discharged as a result of misstatements in his or her application. ECF No. 93 at 38:14-39:5, While it is conceivable that certain hired applicants could assert a violation of the FCRA based on subsequent adverse action, this has not been briefed for the Court’s consideration.
3 Typicality Typicality requires that “the claims or defense of the representative parties are typical of the claims or defenses of the class.” Fed R. Civ. P. 23(a)(3). This inquiry focuses on whether the interests of the named plaintiffs align with the interests of the absent class members. Stewart, 275 F.3d at 227. It is designed to ensure that “class representatives are sufficiently similar to the rest of the class—in terms of their legal claims, factual circumstances, and stake in the litigation—so that certifying those individuals to represent the class will be fair to the rest of the class. In re Schering Plough Corp. ERISA Litig., 589 F.3d 585, 597 (3d Cir. 2009). _ The Court also finds that this third requirement is met. Schenck’s claims are highly similar to the 6 other rejected applicants, in that they all allegedly went through Curtiss-Wright’s standardized hiring process, did not receive a pre-adverse action notice as required by Section 1681b(b)(3)(A), and were ultimately not hired by Curtiss-Wright based in whole or in part on their background reports. To the extent Curtiss-Wright.argues that Schenck’s claims are not typical because he admits his background report was accurate, the Court notes that there is no evidence provided to establish whether this is, in fact, atypical of the remaining class members. In any event, however, Long holds that “the statute confers a broader right than simply to be free from adverse action based on inaccurate information.” Long, 903 F.3d at 319. Therefore, typicality is satisfied.
4 Adequacy of Representation Pursuant to Rule 23(a)(4), Schenck must establish that he “will fairly and adequately protect the interests of the class.” This inquiry requires the Court to consider (1) the qualifications of the proposed class attorney to represent the class; and (2) whether the named parties’ interests conflict with those of the class. Schering Plough, 589 F.3d at 597-98. There is no dispute here that Schenck’s counsel is sufficiently qualified to represent the - . Class, and the Court concludes this element is met. The parties dispute only whether Schenck is an adequate representative for the proposed class. Schenck argues that he has a lay person’s knowledge of this case and has demonstrated a genuine interest in the case by giving a deposition, attending the mediation and attending the oral argument of the instant motion. While Schenck’s adequacy as a representative is moot in light of Schenck’s failure to satisfy the numerosity requirement under Rule 23(a)(1), the Court finds that Schenck has demonstrated sufficient knowledge and alignment of interest with respect to the 7 potential class members, such that this requirement would be satisfied. . B. Rule 23(b) Factors In addition to the Rule 23(a) factors, Schenck must establish that at least one of the factors under Rule 23(b) is satisfied. Schenck argues that the proposed class satisfies Rule 23(b)(3), which requires that (1) questions of law or fact predominate over individual issues; and (2) that the class action mechanism will' be superior to other available means of adjudicating the controversy. Of these two requirements, the Court concludes that Schenck does not satisfy the superiority requirement, rendering class certification improper. ‘ 14 1. Predominance This inquiry “tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation.” Walney v. SWEPI LP, No. 13-102, 2015 WL 5333541, at *9 (W.D. Pa. Sept. 14, 2015) (internal quotations omitted). The court “must examine each element of a legal claim through the prism of Rule 23(b),” and “because the nature of the evidence that will suffice to resolve a question determines whether the issue is common or individual, a district court must formulate some prediction as to how specific issues will play in order to determine whether common or individual issues predominate in a given case.” Id. (internal quotations omitted). Here, with respect to the class of 7 rej ected applicants, the use of a standardized application and review process at Curtiss-Wright suggests that many of the relevant issues will be subject to common proof. Whether, for example, Curtiss-Wright ever issued background reports and summaries of FCRA rights as a matter of policy, can be proved with respect to all class members. Although Curtiss-Wright argues that there are several highly individualized inquiries present, ECF No. 86 at 10, including a fact-specific inquiry into whether “intent” existed as to any particular _ candidate, these issues are largely mooted by the Court’s conclusion that the class does not properly include the hired individuals. .Thus, the predominance requirement as to the 7 rejected applicants is met. 2. Superiority > “The superiority requirement of Rule 23(b)(3) asks whether ‘a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.’”” Barenbaum v. Hayt, Hayt & Landau, LLC, No. 18-4120, 2019 WL 4305761, at *15 (E.D. Pa. Sept. 10, 2019) (quoting Fed. R. Civ. P. 23(b)(3)). “Courts are able to ‘balance, in terms of fairness and efficiency, the merits of a class action against those of alternative methods of adjudication.’” Id. (quoting In