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Title v. Hireright

May 20, 2011

TITLE:
VERSO PAPER LLC
v.
HIRERIGHT, INC.



The opinion of the court was delivered by: The Honorable David O. Carter, Judge

CIVIL MINUTES - GENERAL

Julie Barrera Not Present Courtroom Clerk Court Reporter

ATTORNEYS PRESENT FOR PLAINTIFFS: ATTORNEYS PRESENT FOR DEFENDANTS: NONE PRESENT NONE PRESENT

PROCEEDING (IN CHAMBERS): ORDER DENYING DEFENDANT HIRERIGHT INC.'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT

Before the Court is a Motion to Dismiss (Docket 11) filed by Defendant HireRight, Inc. ("Defendant" or "HireRight") in the above-captioned case. The Court finds this matter appropriate for decision without oral arguments. Fed.R.Civ. P. 78; Local Rule 7-15. After reviewing the moving, opposing, and replying papers, the Court hereby DENIES the Motion.

I. Background

Plaintiff Verso ("Plaintiff") is a Memphis, Tennessee-based subsidiary of Verso Paper Corp., a leading North American producer and supplier of "coated" papers to catalog and magazine publishers. Defendant HireRight is a California-based employment screening company. On September 8, 2006, Plaintiff entered into an agreement with Defendant HireRight to assist Plaintiff in the hiring of "qualified, honest employees." Complaint, ¶ 2. Pursuant to this agreement, Defendant prepared a background report to identify any prospective employees' "County, Criminal, Felony, and Misdemeanor" convictions. Id.

Plaintiff alleges that this report was inaccurate in the case of one of its prospective accounting employees, Thom Williams ("Williams"). Id. at 3. Plaintiff avers that it provided HireRight with the properly spelled named, social security number, and address for Williams. Id. at ¶8. HireRight's background report declared that Williams was free of criminal convictions in Shelby County, Tennessee, DeSoto County, Mississippi, and Lee, County, Mississippi, when, in fact, Williams had entered into a guilty plea for the felony charge of embezzlement in the Circuit Court of Lee County, Mississippi on November 18, 2001. Id. In the plea, Williams had admitted to stealing $215,663.49 from his former employer. Id.

Relying on Defendant's report, Plaintiff allegedly hired Williams without the knowledge of Williams's felony conviction. Id. at 4. Following his employment, Williams embezzled $10,247,386 from Plaintiff "by using fictitious vendor payment accounts . . . and wire transfers." Id. On July 6, 2010, Williams pled guilty to the charge of wire fraud for embezzling $10,247,386 from Plaintiff. Id.

Plaintiff filed this Complaint on December 27 2010, asserting causes of action for breach of contract; negligence and gross negligence; and negligent misrepresentation. Plaintiff requests recovery of damages and "interest on all monies awarded." Id. at 7.

II. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed when a plaintiff's allegations fail to state a claim upon which relief can be granted. Dismissal for failure to state a claim does not require the appearance, beyond a doubt, that the plaintiff can prove "no set of facts" in support of its claim that would entitle it to relief. Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1968 (2007) (abrogating Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99 (1957)). In order for a complaint to survive a 12(b)(6) motion, it must state a claim for relief that is plausible on its face. Ashcroft v. , 129 S.Ct. 1937, 1950 (2009). A claim for relief is facially plausible when the plaintiff pleads enough facts, taken as true, to allow a court to draw a reasonable inference that the defendant is liable for the alleged conduct. Id. at 1949. If the facts only allow a court to draw a reasonable inference that the defendant is possibly liable, then the complaint must be dismissed. Id. Mere legal conclusions are not to be accepted as true and do not establish a plausible claim for relief. Id. at 1950.Determining whether a complaint states a plausible claim for relief will be a context-specific task requiring the court to draw on its judicial experience and common sense. Id.

In evaluating a 12(b)(6) motion, review is "limited to the contents of the complaint." Clegg v. Cult Awareness Network, 18 F.3d 752, 754 (9th Cir. 1994). However, exhibits attached to the complaint, as well as matters of public record, may be considered in determining whether dismissal is proper without converting the motion to one for summary judgment. See Parks School of Business, Inc. , 51 F.3d 1480, 1484 (9th Cir. 1995); Mack v. South Bay Beer Distributors, Inc., 798 F.2d 1279, 1282 (9th Cir. 1986). Further, a court may consider documents "on which the complaint 'necessarily relies' if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6)

Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006). "The Court may treat such a document as 'part of the complaint, and thus may assume that its contents are true for purposes of ...


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