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Ratliff v. Celadon Trucking Services, Inc.

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

April 23, 2018

Jerome Ratliff Jr., individually and on behalf of all other similarly situated, Plaintiff,
Celadon Trucking Services, Inc., and Celadon Group, Inc., Defendants.



         Plaintiff Jerome Ratliff alleges that defendants Celadon Trucking Services, Inc. and Celadon Group, Inc. intentionally and willfully violated the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. Defendants move to dismiss the complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(2). That motion is granted.

         I. Legal Standards

         A motion to dismiss under Rule 12(b)(1) challenges the court's subject-matter jurisdiction, while a motion to dismiss under Rule 12(b)(2) tests whether the court has personal jurisdiction over a defendant. Fed.R.Civ.P. 12(b)(1)-(2). For both motions, the party asserting jurisdiction bears the burden of establishing that jurisdiction is satisfied. Glaser v. Wound Care Consultants, Inc., 570 F.3d 907, 913 (7th Cir. 2009); Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010).

         Where, as here, a court resolves a Rule 12(b)(2) motion based on the submission of written materials and without holding an evidentiary hearing, the plaintiff need only make out a prima facie case of personal jurisdiction. uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 423 (7th Cir. 2010); GCIU-Emp'r Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1023 (7th Cir. 2009). Even though courts resolve all factual disputes in the plaintiff's favor, courts accept as true all unrefuted facts in the defendants' declarations or affidavits. GCIU-Emp'r Ret. Fund, 565 F.3d at 1020 n.1. Accordingly, when defendants challenge a fact alleged in the plaintiff's complaint with a sworn statement, the plaintiff has an obligation to go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction. Id.

         II. Background

         Ratliff applied for a job as a truck driver with Celadon by submitting an application in response to a solicitation on Celadon's website.[1] [1] ¶ 22; [19-1] ¶ 3. Celadon obtains a background report from HireRight, LLC for all of its applicants. [1] ¶ 2. The background report includes information such as the applicant's prior employers, trucking accidents, incident history, and the like. Id. ¶¶ 2, 19. After Ratliff electronically signed disclosure and release consent forms, [19-1] ¶ 7, a recruiter at Celadon processed Ratliff's application and initiated a request to obtain his background report from HireRight, [18-2] ¶ 16. Celadon received the report the same day that Ratliff submitted his application. [1] ¶ 23. Based on information from the background report, Celadon decided not to hire him. Id. ¶¶ 24-25. But, Celadon did not notify him within three days of their decision to not hire him, nor did Celadon comply with any of the other related Fair Credit Reporting Act requirements. Id. ¶ 26.

         Celadon leased a drop yard in Illinois, which had space for approximately ten trailers; but Celadon did not have any offices or operations in Illinois, nor did it make employment or personnel decisions in Illinois. [18-2] ¶¶ 8-10. In 2016 and 2017, (1) less than 7% of all routes driven by Celadon drivers began or ended in Illinois, id. ¶ 11; (2) less than 5% of all miles driven by Celadon drivers were driven in Illinois, id. ¶ 12; (3) and less than 10% of Celadon's revenue was generated by customers headquartered in Illinois, id. ¶ 13. Ratliff viewed Celadon's solicitation from Illinois, he submitted his application from Illinois, and his application included his Illinois address. [19-1] ¶¶ 3-5. There was no suggestion that Ratliff's Illinois residency was material to Celadon's hiring decision. See Id. ¶ 6. The Celadon recruiter who processed Ratliff's application was based in Pennsylvania; and Celadon made the decision not to hire Ratliff from Pennsylvania. [18-2] ¶¶ 14-17.

         III. Analysis

         Ratliff asserts that defendants willfully violated the FCRA by failing to provide the requisite notifications under 15 U.S.C. § 1681b(b)(3)(B). This failure, Ratliff contends, caused an informational injury, and it violated his right to privacy.[2] Defendants move to dismiss this action for lack of standing and for lack of personal jurisdiction.

         To establish standing under Article III of the United States Constitution, a plaintiff must show an “injury in fact” that is “fairly traceable” to the defendant's conduct and that is “likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016), as revised (May 24, 2016). Ratliff bears the burden of establishing each element of standing. Silha v. ACT, Inc., 807 F.3d 169, 173 (7th Cir. 2015). Here, defendants only challenge the injury-in-fact requirement. Ratliff must show that his injury is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Spokeo, 136 S.Ct. at 1548. Merely alleging a statutory violation does not automatically satisfy the concrete injury requirement. Id. at 1549. In some circumstances, where there is a risk of real harm, a violation of a statutory procedural right will be enough to confer standing; but, a plaintiff cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” Id.

         Section 1681b(b)(3)(B) provides that when a consumer applies for employment, which prompts a person to procure a consumer report on the consumer, and in turn, to take an adverse action on the employment action because of the consumer report, then the person must provide the consumer, within three days of the action, with the following information: (1) a statement that the adverse action was taken because of the consumer report; (2) the name and contact information of the consumer reporting agency that generated the report; (3) a disclaimer that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the consumer with an explanation for the adverse action; and (4) the opportunity for the consumer to request a free copy of the report for the purpose of disputing the accuracy or completeness of the information in the report. 15 U.S.C. § 1681b(b)(3)(B).

         Yet, as the Supreme Court explained in Spokeo, there are many instances where a violation of one of those four procedures would not result in harm. Spokeo, 136 S.Ct. at 1550. As an example, the failure to provide the required notice to the consumer might not cause harm if the consumer information is entirely accurate. Id. “In addition, not all inaccuracies cause harm or present any material risk of harm.” Id. This hypothetical helps resolve this case, where Ratliff does not allege that the report defendants used contained harmful inaccuracies that he was unable to correct.

         Drawing on Federal Election Commission v. Akins, 524 U.S. 11 (1998) and Public Citizen v. U.S. Department of Justice, 491 U.S. 440 (1989), Ratliff argues that he need not show further harm beyond defendants failure to provide those required disclosures because that failure caused his informational injury. Although the Supreme Court cited Akins and Public Citizen as examples of where a violation of a procedural right was sufficient to constitute an injury in fact, see Spokeo, 136 S.Ct. at 1549-50, both cases are distinguishable from this one because the plaintiffs in those cases alleged injuries that involved more than the mere denial of access to information in violation of a statutory procedure. In Akins, denying voters access to information about the American Israel Public Affairs Committee's membership, contributions, and expenditures constituted an injury in fact because it limited voters' ability to evaluate candidates for public office, which conflicted with the aims of the Federal Election Campaign Act, 52 U.S.C. ยง 30101(4). Similarly, the denial of access to records concerning ...

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