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OBABUEKI v. CHOICEPOINT

May 2, 2002

ABEL OBABUEKI, PLAINTIFF,
V.
CHOICEPOINT, INC., AND CHOICEPOINT SERVICES, INC. DEFENDANTS.



The opinion of the court was delivered by: Schwartz, District Judge.

MEMORANDUM ORDER

This action arises out of the withdrawal of an employment offer made by International Business Machines Corporation ("IBM") to Abel Obabueki ("plaintiff"). Plaintiff originally brought this action against IBM, as well as against Choicepoint, Inc. and Choicepoint Services, Inc. (collectively, "Choicepoint"), alleging, inter alia, that Choicepoint had improperly provided erroneous background information about plaintiff in violation of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681, and that the erroneous information caused IBM to withdraw plaintiffs job offer.

By Order dated June 14, 2001, the Court granted summary judgment to IBM on all of plaintiffs claims against the company. The Court also granted summary judgment to plaintiff with respect to his claim against Choicepoint under 15 U.S.C. § 1681b(b)(1)(A), finding that Choicepoint had failed to obtain the required certification from IBM that the information about plaintiff that was provided by Choicepoint would not be used for any illegal purpose. See Obabueki v. International Business Machines, 145 F. Supp.2d 371, 394-96 (S.D.N.Y. 2001).

On January 25, 2002, following a three-day trial, a jury returned a verdict against Choicepoint. The jury found that Choicepoint had violated 15 U.S.C. § 1681e, 1681k by negligently failing to maintain required procedures designed to ensure the completeness and accuracy of its reports. The jury also found that Choicepoint's negligence caused plaintiff to sustain damages in the amount of $450,000.

Currently before the Court are: (i) plaintiffs motion for an order granting attorney's fees and costs of the litigation; and (ii) Choicepoint's motion for judgment as a matter of law pursuant to Rule 50(b) of the Federal Rules of Civil Procedure, or, in the alternative, for a new trial pursuant to Rule 59. For the reasons set forth below, Choicepoint's motion for judgment as a matter of law is granted. Plaintiffs motion for attorney's fees and costs is denied as moot.

I. Factual Background

The following facts were presented at trial. On August 31, 1995, plaintiff pleaded nolo contendere in a municipal court in Santa Clara County, California, to a misdemeanor charge of committing fraud in obtaining public assistance. (Trial Transcript ("Tr.") at 9, 19). On January 27, 1997, plaintiffs conviction was set aside and dismissed by an order pursuant to California Penal Code § 1204.3. (Tr. at 9; Plaintiffs Exhibit ("Pl. Exh.") 3). The dismissal order stated that although plaintiff's conviction was set aside, he was not relieved of any "obligation to disclose the above referenced conviction in response to any direct question contained in any questionnaire or application for public office or for licensure by any State or local agency" (Pl. Exh. 3; see also Tr. at 339).

In September 1999, plaintiff applied for a job as a marketing manager with IBM. (Tr. at 9). He was interviewed by Olwyn Spencer, who at the time was IBM's Program Director for Application Development Market Management. (Id. at 208, 376). In a letter dated September 27, 1999, IBM offered plaintiff the marketing manager position, though the offer was contingent upon the completion of the company's "pre-employment process," which included drug screening and verification of plaintiffs application materials. (Defendants' Exhibit ("Def. Exh.") 10). As part of this pre-employment process, plaintiff filled out a form called a Security Data Sheet ("SDS"). (Tr. at 150-51; Pl. Exh. 10). The first question on the SDS asked plaintiff whether he had "been convicted of or pleaded guilty or `no contest' to a crime or other offense" in the seven years prior to filling out the questionnaire. (Tr. at 151; Pl. Exh. 10). However, the line above Question 1 on the SDS stated that "arrests without convictions, [and] convictions or incarcerations for which a record has been sealed or expunged" need not be included as part of plaintiffs answers to the questions on the SDS. (Pl. Exh. 10). Plaintiff was under the impression that the January 1997 dismissal order expunged his 1995 conviction, and as a result he answered "No" to the first question on the SDS. (Tr. 196-97; Pl. Exh. 10).

Choicepoint, a consumer reporting agency, was retained by IBM to perform a background check on plaintiff. (Tr. at 10.). On September 28, 1999, an individual working for Inquest, one of Choicepoint's independent contractors, went to the Santa Clara County courthouse in California to check if plaintiff had any criminal convictions. (Id.) On October 5, 1999, IBM received a report from Choicepoint that contained information about plaintiffs 1995 conviction but did not mention the 1997 dismissal order. (Id.; Pl. Exh. 16).*fn1 Later that day plaintiff received a call from Kathy Brown, an IBM account manager. (Tr. at 209). Brown told plaintiff that the background check had revealed the 1995 conviction, and she asked plaintiff for an explanation. (Id. at 209-10). Plaintiff told Brown about the 1997 order and faxed a copy of that order to Brown at her request. (Id. at 210). Brown showed the 1997 order, along with the Choicepoint report, to Dick Carson and Eric Ketzel, both of whom worked in the human resources department of IBM. (Id. at 336, 338, 349). Carson and Ketzel both concluded, after looking at both the Choicepoint report and the 1997 dismissal order, that plaintiff had lied in his response to the first question on the SDS. (Id.) Ketzel discussed this conclusion with Olwyn Spencer, the department manager who had interviewed Obabueki. (Id. at 382, 387). Spencer, who was ultimately responsible for deciding whether plaintiff should be hired, agreed with Ketzel, and as a result she decided to withdraw the offer of employment that had previously been made to plaintiff. (Id. at 379). Kathy Brown called plaintiff on October 14, 1999, to tell him that IBM planned to withdraw the offer. (Id. at 214). Five days later plaintiff received a letter from the company confirming that the job offer had been withdrawn. (Id. at 158-59, 217).

After plaintiff had been informed that his job offer would be withdrawn, he contacted Choicepoint to find out whether the 1997 dismissal order had been included in the report that Choicepoint provided to IBM. (Id. at 158, 214-16). Plaintiff informed a Choicepoint employee via telephone that his 1995 conviction had been dismissed, and he faxed a copy of the 1997 order to Choicepoint. (Id.). Choicepoint told plaintiff that it would investigate his case and also informed plaintiff that although the FCRA provided that the company had 30 days to address plaintiffs contention that a mistake had been made, Choicepoint would try to respond to plaintiffs inquiry in less time. (Id. at 216). Choicepoint then asked Inquest, its contractor in California, to obtain a copy of plaintiffs entire case file from the Santa Clara County courthouse. (Id. at 90). After viewing the entire file, Choicepoint sent a revised report to IBM on October 21, 1999. (Id. at 92; Pl. Exh. 17). This revised report stated that plaintiffs criminal record was "clear," and made no mention of either the 1995 conviction or the 1997 dismissal order. (Pl. Exh. 17). Plaintiff received a copy of the revised report on October 24, 1999, and faxed a copy of that report to IBM that same day. (Tr. at 163). Plaintiff spoke with Shelbi McCoy, an employee in IBM's human resources department, about the second report, and was told by McCoy that the company would "redo the investigation and get back" to plaintiff. (Id.) Plaintiff also contacted several other IBM employees in late October and early November of 1999 to find out if the company had reconsidered hiring him based on the revised Choicepoint report. (Tr. at 222-24). However, despite the existence of the revised report, IBM did not re-offer plaintiff the marketing manager position.

II. Legal Standard

Courts may grant judgment as a matter of law against a party when there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on a particular issue, and such judgment may be granted even after a jury has returned a verdict. See Fed.R.Civ.P. 50(a),(b). In ruling on a motion for judgment as a matter of law, trial courts are required to consider the evidence in the light most favorable to the nonmovant and to give that party the benefit of all reasonable inferences that the jury might have drawn in his favor from the evidence. See Tolbert v. Queens College, 242 F.3d 58, 70 (2d Cir. 2001). The Court cannot assess the weight of conflicting evidence, pass on the credibility of the witnesses, or substitute its judgment for that of the jury. Smith v. Lightning Bolt Productions, Inc., 861 F.2d 363, 367 (2d Cir. 1988) (internal quotation marks omitted); see also Kim v. Hurston, 182 F.3d 113, 117 (2d Cir. 1999); Piesco v. Koch, 12 F.3d 332, 343 (2d Cir. 1993). In making its evaluation, the Court should "review all of the evidence in the record," Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000), but it must disregard all evidence favorable to the moving party that the jury is not required to believe. That is, the Court should give credence to the evidence favoring the nonmovant as well as that evidence supporting the moving party that is uncontradicted and unimpeached, at least to the extent that that evidence comes from disinterested witnesses. Id. (internal quotation marks omitted).

III. Discussion

Choicepoint argues that it is entitled to judgment as a matter of law because none of the evidence produced at trial indicated that IBM withdrew plaintiffs job offer because of the incompleteness of the initial Choicpoint report. Rather, Choicepoint argues, the evidence clearly showed that after reviewing both the initial Choicepoint report and the 1997 dismissal order that plaintiff faxed to IBM on October 5, 1999, IBM concluded that plaintiff had lied on the SDS, and then decided to withdraw the job offer based on that conclusion. Choicepoint maintains that the plaintiff's provision of the 1997 order to IBM cured the inaccuracy of the initial report and thus broke the chain of causation between Choicepoint's negligent failure to comply with the FCRA and plaintiffs injury (i.e., his loss of the IBM job offer). Choicepoint also ...


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