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Vera v. Mondelez Global LLC

United States District Court, N.D. Illinois, Eastern Division

March 17, 2017

Johnny Vera, individually and as a representative of the class, Plaintiff,
v.
Mondelez Global LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          Honorable Thomas M. Durkin United States District Judge

         Judge Thomas M. Durkin Memorandum Opinion and Order Johnny Vera alleges that his former employer, Mondelez Global LLC, used an improper disclosure format to inform him that they planned to run a background check on his personal history before hiring him, in violation of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681b(b)(2)(A)(i). See R. 1-1. Mondelez has moved to dismiss for lack of subject-matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). R. 8. For the following reasons, that motion is granted.

         Legal Standard

         For purposes of a motion to dismiss under Rule 12(b)(1) the court accepts all well-pleaded factual allegations as true and construes all reasonable inferences in the plaintiffs favor. See Scanlan v. Eisenberg, 669 F.3d 838, 841 (7th Cir. 2012). "Where jurisdiction is in question, the party asserting a right to a federal forum has the burden of proof, regardless of who raise[d] the jurisdictional challenge . . . ." Craig v. Ontario Corp., 543 F.3d 872, 876 (7th Cir. 2008).

         Background

         Vera applied online for a job with Mondelez. R. 1-1 ¶ 20. As part of the application process, the website displayed "a statement related to the general topic of background checks" (the "Statement"). Id. ¶21. Vera was required to scroll down the webpage in order to read the Statement in its entirety. Id. The Statement provided that Vera gave Mondelez "the right to request . . . any and all information about [Vera's] background." Id. ¶ 32. In addition to information about requesting a background check, the Statement included "privacy and liability waivers, " such as an authorization for "all companies, credit agencies, educational institutions, persons, government agencies, criminal and civil courts, and former employers to release information they have about me and release them for any liability for doing so." Id. ¶ 33. Vera also alleges that the Statement misstated his rights under the FCRA, id. ¶¶ 42-44, and included various other information about his and Mondelez's obligations should he be hired. Id. ¶¶ 47-50. Mondelez then proceded to obtain a background check of Vera. Id. ¶ 28.

         Vera alleges that Mondelez's Statement violated FCRA's "stand-alone disclosure requirement." The statute provides the following in relevant part:

a person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless ... a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer may be obtained for employment purposes ....

15 U.S.C. § 1681b(b)(2)(A)(i) (emphasis added). Vera alleges that the Statement Mondelez gave him as part of his employment application violates this provision of the FCRA because it contained more information than just the disclosure that Mondelez intended to "procure a consumer report" about him. R. 1-1 ¶¶ 31, 60, 68.

         Analysis

         Mondelez argues that the Court does not have subject matter jurisdiction over Vera's claim because Vera has failed to allege an injury-in-fact. Mondelez argues that even if Vera has alleged that Mondelez failed to comply with the "standalone disclosure requirement" in § 1681b, Vera has failed to allege that he was harmed by that failure.

         In Spokeo, Inc. v. Robins the Supreme Court addressed the circumstances under which violation of statutory rights-like the "stand-alone disclosure requirement" of § 1681b-are sufficient to establish harm that forms that basis of a "case or controversy" under Article III of the Constitution. 136 S.Ct. 1540 (2016). The Supreme Court acknowledged that "Congress has the power to define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before." Id. at 1549. Nevertheless, "Congress'[s] role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right." Id. For instance, "a bare procedural violation, divorced from any concrete harm, [cannot] satisfy the injury-in-fact requirement." Id.

         Like Vera's claim, Spokeo concerned a provision of the FCRA. The FCRA provision at issue in Spokeo imposed obligations on reporting agencies to follow certain procedures when collecting and reporting background and credit information about individuals. The Supreme Court acknowledged that by imposing these requirements on reporting agencies, "Congress plainly sought to curb the dissemination of false information by adopting procedures designed to decrease that risk." Id. at 1550. Despite that intent, however, "[a] violation of the FCRA's procedural requirements may result in no harm. For example, even if a consumer reporting agency fails to provide the required notice to a user of the agency's consumer information [in violation of § 1681e(d)], that information regardless may be entirely accurate." Id.

         By contrast, "the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact, " such that a plaintiff "need not allege any additional harm beyond the one Congress has identified." Id. at 1549 (emphasis added). As an example of such an actionable procedural right, the Court cited the deprivations of information allegedly in violation of rights granted by federal statutes at issue in Federal Election Comm'n v. Akins,524 U.S. 11 (1998), and Public Citizen v. Department of Justice,491 U.S. 440 (1989). Id. at 1549-50; see also Id. at 1553 (Thomas, ...


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