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Cunha v. IntelliCheck, LLC

United States District Court, N.D. California

May 26, 2017

JAMES CUNHA, Plaintiff,
INTELLICHECK, LLC, et al., Defendants.



         Defendants Chico Produce, Inc. d/b/a/ Pro Pacific Fresh, Inc. (“ProPacific”) and IntelliCheck, LLC (“IntelliCheck”) move to dismiss or strike portions of Plaintiff James Cunha's first amended complaint (“FAC”). ECF Nos. 24, 40. The Court will grant the motions in part and deny them in part.

         I. BACKGROUND

         This putative class action arises out of an employment background check that IntelliCheck performed on Cunha when he applied to be a produce delivery driver for ProPacific on April 30, 2016. FAC, ECF No. 21 ¶ 8. On his first day of employment, Cunha was required to sign a number of forms, including a “Disclosure and Authorization for Consumer Reports” form (“Disclosure Form”). Id. ¶¶ 8, 10. After Cunha signed the Disclosure Form, IntelliCheck prepared a consumer report on Cunha that included information about misdemeanor convictions that occurred more than seven years prior to the date of the consumer report and information about arrests that did not result in a conviction. Id. ¶ 15. As a result of the information contained in the consumer report, ProPacific terminated Cunha on May 20, 2016. Id. ¶ 15.

         Cunha alleges that ProPacific and IntelliCheck violated the Fair Credit Reporting Act (“FCRA”) and California's Investigative Consumer Reporting Agencies Act (“ICRAA”) by: (1) failing to make the requisite disclosures prior to obtaining a consumer report on Cunha; (2) preparing a consumer report that contained information older than seven years and terminating Cunha on that basis; and (3) failing to provide a copy of the consumer report before terminating Cunha based on information contained therein. Id. ¶¶ 21-23, 51, 92. With respect to disclosures, Cunha alleges that ProPacific's documents failed to disclose that Cunha had the right to obtain a copy of the report, that Cunha had the right to view the consumer report, and a statement summarizing the provisions of California Civil Code § 1786.22. Id. ¶¶ 10, 26. Cunha further alleges that ProPacific willfully violated the FCRA and the ICRAA by inserting a liability waiver in its Disclosure Form. Id. ¶ 13. Additionally, Cunha alleges that the Disclosure Form violated the FCRA and the ICRAA because it contained “extraneous information” (e.g. an authorization to obtain a physical examination and drug and alcohol testing) not solely related to the disclosure. Id. ¶¶ 14, 59.

         The FAC asserts the following seven causes of action:

(1) FCRA claim under §§ 1681c(a)(2) and 1681c(a)(5) against IntelliCheck;
(2) FCRA claim under §§ 1681b(b)(2)(A) and 1681d against ProPacific;
(3) FCRA claim under §§ 1681b(b)(3)(A) and 1681m against ProPacific;
(4) FCRA claim under § 1681b(b)(2)(A)(ii) against ProPacific;
(5) ICRAA claim under § 1786.18 against IntelliCheck;
(6) ICRAA claim under § 1786, et seq. against ProPacific; and
(7) California Unfair Competition Law (“UCL”) claim under California Business & Professions Code § 17200, et seq. against both Defendants.

Id. ¶¶ 46-114. Based on these alleged violations, Cunha and putative class members seek statutory damages under the FCRA, actual damages under the ICRAA, and injunctive relief and restitutionary disgorgement under the UCL. Id. ¶ 24.

         On March 16, 2017, ProPacific moved to dismiss or strike Cunha's second, fourth, sixth, and seventh causes of action. ECF No. 24. On April 14, 2017, IntelliCheck moved to dismiss Cunha's first, fifth, and seventh causes of action. ECF No. 40. For the foregoing reasons, the Court grants in part and denies in part the motions.


         Before turning to the merits of the motions to dismiss, the Court resolves the parties' requests for judicial notice.

         “As a general rule, we may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” United States v. Corinthian Colleges, 655 F.3d 984, 998-99 (9th Cir. 2011) (internal quotation marks and citations omitted). However, “[t]he court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b). The Court “may take judicial notice on its own; or [] must take judicial notice if a party requests it and the court is supplied with the necessary information.” Fed.R.Evid. 201(c).

         Cunha requests that the Court take judicial notice of the following documents: (1) First Amended Complaint and Demand for Jury Trial in Sarmad Syed, et al. v. M-I LLC, et al, Case No. 14-CV-00742-WBS-BAM, ECF No. 36 (E.D. Cal.); and (2) Order filed in Gabriel Felix Moran v. The Screening Pros, LLC, Case No. 12-57246 (9th Cir.). ECF No. 34-1. Defendants do not oppose this request.

         IntelliCheck requests that the Court take judicial notice of the following documents: (1) Order filed in Marchioli v., Inc., Case No. 16-CV-02305-JGB-DTB (C.D. Cal., Jan. 25, 2017); and (2) Order filed in John Doe v. Sterling Infosystems, Inc., Case No. 15-CV-04770-RGK-AJW (C.D. Cal., Dec. 21, 2015). ECF Nos. 41, 51. Cunha does not oppose this request.

         The Court grants both requests for judicial notice because the documents are public court filings. See Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n. 6 (9th Cir. 2006) (“We may take judicial notice of court filings and other matters of public record”).

         The Court also takes judicial notice of Cunha's consumer report from May 2016 under the incorporation by reference doctrine. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (“A court may take into account documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached the [plaintiff's] pleading.”) (internal quotation marks omitted) (quoting In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir.1999)). Cunha references his May 2016 consumer report throughout his complaint, and IntelliCheck and Cunha both attached this document to their briefing. See ECF No. 40-1, Ex. A; ECF No. 48-2, Ex. 1.


         A. Legal Standards

         A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief” which gives “the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Fed.R.Civ.P. 8(a)(2); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks omitted). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 663.

         Under Rule 12(f) of the Federal Rules of Civil Procedure, the Court “may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” The function of a motion to strike pursuant to Rule 12(f) is “to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial.” Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010) (citation omitted).

         B. Claim One

         Cunha does not oppose IntelliCheck's motion to dismiss his claim under Section 1681c of the FCRA. ECF No. 40 at 11-13; ECF No. 48 at 9. Therefore, the Court grants the motion to dismiss this claim with prejudice.

         C. Claim Two

         ProPacific moves to dismiss or strike portions of Cunha's second cause of action on the ground that he has failed to state a claim under Sections 1681d and 1681g(c) of the FCRA because he has not alleged sufficient facts to demonstrate that the information contained in his consumer report was obtained through personal interviews. ECF No. 24 at 8-9.[1] The Court agrees.

         Cunha alleges that ProPacific violated Section 1681d(a) “by failing to provide a disclosure concerning the nature and scope of the investigation for the consumer report and by failing to provide a summary of the consumer's rights under 15 U.S.C. § 1681g(c).” ECF No. 21, ¶ 62. However, Section 1681d's disclosure requirements only apply to “investigative consumer reports, ” which the statute defines as “a consumer report or portion thereof in which information on a consumer's character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on or with others with whom he is acquainted or who may have knowledge concerning any such items of information.” See 15 U.S.C. ยงยง 1681d, 1681a(e) (emphasis ...

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