United States District Court, S.D. New York
RALPH GAMBLES, individually and as a representative of the classes, Plaintiff,
STERLING INFOSYSTEMS, INC., Defendant.
OPINION & ORDER
A. ENGELMAYER UNITED STATES DISTRICT JUDGE.
Ralph Gambles brings this putative class action under the
Fair Credit Reporting Act, 15 U.S.C. § 1681,
etseq. ("FCRA"). He claims that defendant
Sterling Infosystems, Inc. ("Sterling") violated
his privacy rights under FCRA when, for use by a prospective
employer to whom Gambles had applied for a job as a mortgage
banker, it generated a background report containing false,
misleading, and outdated information about the addresses at
which Gambles had lived. Gambles claims that the report
violated FCRA in that it (1) contained information about
addresses where he had not lived in more seven years; (2)
incorrectly, inconsistently, or duplicatively reported the
dates that Gambles had lived at various addresses; and (3)
used false and derogatory terms to describe certain
addresses. Gambles claims these statements depicted him as
itinerant, unstable, and unattractive. He brings claims under
the FCRA for (1) reporting outdated adverse information in
violation of 15 U.S.C. § 1681c(a), (2) duplicative
reporting, and (3) reporting of inaccurate information, the
latter two in violation of 15 U.S.C. § 1681e(b), which
requires a consumer reporting agency to use reasonable
procedures to assure the maximum possible accuracy of
consumer reports. He seeks statutory and punitive damages as
well as attorneys' fees.
now moves to dismiss for lack of subject matter jurisdiction
under Federal Rule of Civil Procedure 12(b)(1). It argues
that the facts alleged in the Second Amended Complaint
(“SAC”) do not make out a concrete and
particularized injury-in-fact sufficient to give Gambles
standing to sue under Article III of the Constitution.
Sterling principally argues that even if its Report about
Gambles violated the FCRA, there was no injury to Gambles,
because the SAC does not allege that Gambles's
prospective employer relied on these challenged aspects of
the Report when it declined to offer him a job, or that the
report otherwise harmed his job prospects.
following reasons, the Court denies Sterling's motion to
claims in the SAC arise from Sterling's having created a
background report about Gambles and furnished it to
Gambles's potential employer. Gambles alleges that the
report contained outdated, duplicative, misleading, and
adverse information about him.
Gambles's Factual Allegations About Sterling's
Court focuses here on the allegations relevant to whether
Gambles suffered a legally cognizable injury. On
Sterling's motion to dismiss, the Court treats these
allegations as true.
January 2014, Gambles applied to work as a mortgage banker, a
position which paid an annual salary of less than $75, 000.
SAC ¶ 22.
about January 29, 2014, Sterling furnished the Report to
Gambles's prospective employer. Id. ¶ 23.
The Report was created and furnished to the employer solely
in connection with Gambles's job application. It did not
arise from any investigation of suspected misconduct on
Gambles's part, whether in employment or elsewhere.
Id. ¶ 24.
Report purports to set out addresses where Gambles had lived,
each accompanied by a “first seen” and
“last seen” date. Id. ¶¶
25-27. The Report contains 53 total address entries for
Gambles but only 19 unique addresses. Id. ¶ 29.
For various addresses, the duplicative entries contain
overlapping and contradictory “first seen” and
“last seen” dates. Id. ¶¶
27-29. The first “first seen” date in the Report
is June 2000; the last “last seen” date is
December 2013. Id. ¶ 30.
eight addresses, the notation “HIGH RISK
INDICATOR” appears alongside the address, which is then
followed by a short description of the address. Id.
¶¶ 31-32. The descriptions are, variously,
“nursing and personal care facility, ”
“rooming or boarding house, ” and “hotel or
motel.” Id.; Report at 3-6. Three of these
eight notations relate to addresses as to which Gambles's
reported dates of residence predate the report by more than
seven years. SAC ¶ 33.
claims that the Report's account of Gambles's
addresses, in various respects, is inaccurate. See
Id. ¶ 36. The inaccuracies include addresses at
which Gambles, in fact, never resided; incorrect dates for
when Gambles lived at various addresses; and notations
alongside addresses labeled as “HIGH RISK
INDICATOR” addresses that incorrectly describe these
variously as a “hotel or motel, ” a
“rooming or boarding house, ” or a “nursing
and personal care facility, ” when in fact those
addresses were simply residential apartments. Id.
alleges that Sterling knew its customers would rely on the
address information in the reports for employment purposes
and intended that its customers do so. The SAC alleges, in
fact, that Sterling's customers certified that they were
using the addresses in the reports for employment purposes.
Id. ¶ 69.
alleges that Sterling failed to use reasonable procedures in
creating the Report. Sterling generates background reports by
using algorithms that collect information from various
electronic databases. Id. ¶¶ 46-47. The
SAC alleges that, given Sterling's ability to generate
these reports, it could have created an algorithm that would
exclude addresses at which he lived more than seven years
ago, id. ¶¶ 46-51, or resolve duplicative,
incoherent, or overlapping “first seen” and
“last seen” dates, id. ¶¶
56-60, 65. The SAC further alleges that Sterling did not
manually review background reports before issuing them.
Id. ¶¶ 52, 65. The SAC acknowledges that
the Report includes a disclaimer that the information in it,
“for legal and practical reasons, ” should be
used only to verify information provided by the job
application of the Report's subject, and “should
not be used alone or in conjunction with any other
information to make an employment decision.”
Id. ¶ 67; Report at 7.
alleges that the Report's errors harmed Gambles by making
him less appealing to prospective employers, casting him as
itinerant and unstable, and that it infringed his privacy
interests. Id. ¶¶ 37-41. The Report, the
SAC alleges, also caused Gambles emotional harm. Id.
¶ 43. The SAC further alleges that, because Sterling is
a large employment screening company, there is a risk that it
will report information in the Report to another potential
employer. Id. ¶ 42. The SAC does not, however,
allege that the employer to whom the Report was furnished
based its decision not to hire Gambles on its account of his
brings three FCRA claims, each on behalf of a putative class
defined by the type of information that Sterling allegedly
improperly disseminated in its reports. The first, on behalf
of a “Outdated Adverse Information Class, ”
brings a claim under 15 U.S.C. § 1681c(a) on behalf of
persons whose background report contained addresses for time
periods that predated the report by more than seven years,
one of which has a “high risk indicator.” The
second, on behalf of a “Duplicative Information Class,
” brings a claim under 15 U.S.C. § 1681e(b) on
behalf of persons whose background report contained multiple
references to the same address. The third, on behalf of a
“Inaccurate Address Information Sub-Class, ”
brings a claim under 15 U.S.C. § 1681e(b) on behalf of
persons in the Duplicative Information Class as to whom there
are inconsistent “first seen” and “last
seen” dates for a particular address. See Id.
December 14, 2015, Gambles filed a Complaint. Dkt. 1. On
March 28, 2016, Sterling filed a motion to dismiss. Dkt. 21.
On April 8, 2016, Gambles filed a First Amended Complaint
(“FAC”). Dkt. 28. On April 15, 2016, the Court
stayed proceedings pending the decision in Spokeo v.
Robins, 136 S.Ct. 1540 (2016), Dkt. 34, which was
decided on May 16, 2016. On May 31, 2016, Sterling moved to
dismiss the FAC. Dkt. 39. On June 22, 2016, Gambles filed the
SAC, Dkt. 47, having been granted leave to do so on June 20,
2016, Dkt. 44. On July 25, 2016, Sterling filed the instant
motion to dismiss, Dkt. 51, and included a memorandum of law
in support, Dkt. 52 (“Sterling Mem.”). On August
8, 2016, Gambles filed an opposition to Sterling's
motion. Dkt. 53 (“Gambles Opp.”). On August 15,
2016, Sterling filed a reply in support of its motion. Dkt.
56 (“Sterling Rep.”).
September 15, 2016, the Court held argument on Sterling's
motion to dismiss, and commissioned supplemental briefing.
See Dkt. 62 (“Tr.”). On September 29,
2016, Gambles and Sterling filed supplemental briefs, Dkts.
60, 61 (“Sterling Supp.”), respectively. During
the briefing process, the parties have filed letters drawing
the Court's attention to supplemental case authority.
See Dkts. 55, 59, 68-71.
moves to dismiss for lack of subject matter jurisdiction
under Federal Rule of Civil Procedure 12(b)(1), arguing that
Gambles does not have standing to bring his lawsuit ...