United States District Court, E.D. California
David Garza, Naser Alzer, Kimberly Kennedy, Amandeep Singh
and Samah Haider (collectively “plaintiffs”), on
behalf of themselves and others similarly situated, bring
this class action suit against defendants Confi-Chek, Inc.,
Peoplefinders.com, Enformion, Inc. and Advanced Background
Checks (collectively “defendants”) for violations
of § 1681(e)(b) of the federal Fair Credit Reporting Act
(“FCRA”) and chapter 109 of the Texas Business
and Commerce Code. First Am. Compl. (“FAC”), ECF
No. 26, ¶¶ 1, 59. Confi-Chek, Inc. is the parent or
holding company to subsidiary defendants Peoplefinders.com,
Enformion, Inc. and Advanced Background Checks. Id.
¶ 17. On February 25, 2019, defendants moved to transfer
this action to the Southern District of Texas. Mot., ECF No.
49. Plaintiffs oppose the motion, Opp'n, ECF No. 52, and
defendants replied, Reply, ECF No. 54. On May 31, 2019, the
court heard oral argument on the motion. After consideration,
as explained below, the court GRANTS the motion and orders
this matter transferred to the Southern District of Texas for
FACTUAL AND PROCEDURAL BACKGROUND
are consumer reporting agencies engaged in the business of
“dispersing information concerning consumers for the
purpose of furnishing ‘consumer reports' . . . to
third parties.” FAC ¶¶ 17-19. Defendants'
principal place of business is in Sacramento, California.
Id. Defendants operate several background
investigation websites that provide personal, and often
highly sensitive, information about consumers within their
database, including arrest and conviction records, if any.
Id. ¶ 24. For a fee, users can obtain a
background report on “virtually any person in the
United States.” Id. ¶ 25.
plaintiffs, who are citizens of Texas, allege defendants
“maintain inadequate polic[ies] or procedures to insure
they accurately assemble and provide consumer reports in
compliance with the FCRA, especially in the matter of
eliminating expunged, expuncted, or sealed criminal records
from their websites and reports.” Id.
¶¶ 12-16, 26. Plaintiffs contend defendants are
attempting to avoid liability for erroneous or inaccurate
information contained in these reports by claiming they are
not actually consumer reporting agencies, do not sell
consumer reports and are not subject to FCRA regulations.
Id. ¶ 28. Regardless of the proper label
applied to defendants, plaintiffs contend defendants are
providing the same sensitive personal, legal and financial
information, compiled using the same data sources, as the
major consumer reporting agencies; this information is
inevitably used for the same purpose as most users of major
reporting agencies, namely consideration of employment,
housing, credit worthiness, etc. Id. ¶¶
29-30. As such, plaintiffs allege defendants are, in all
respects, consumer reporting agencies as defined by §
1681a(f) of the FCRA. Id. ¶ 32.
defendants are subject to FCRA regulations, as plaintiffs
claim, defendants must “follow reasonable procedures to
assure maximum possible accuracy of the information
concerning the individual about whom the report relates, per
15 U.S.C. § 1681e(b).” Id. ¶ 33.
Plaintiffs argue that defendants “regularly and
illegally publish and report criminal records that have been
expunged, expuncted or sealed by court order, ” thus
violating FCRA standards. Id. ¶ 34. For
example, the claims of three of the named class
representatives stem from a Texas-based expungement service
that discovered the class members' expunged or expuncted
criminal records improperly published on defendants'
database. Id. ¶ 35. Among the many harmful
effects of defendants' unlawful practices, the most
prominent is the consumer's inability to secure
employment because of the erroneous criminal records in their
reports. Id. ¶ 36.
also allege these same practices violate chapter 109 of the
Texas Business and Commerce Code, which governs business
entities engaged in the publication of criminal record
information. Id. ¶¶ 40-42. Because
defendants allegedly received notice that certain criminal
records have been expunged, yet failed to update the
expunction in their own databases, plaintiffs claim
defendants contravene Texas law. Id.
initiated this action on July 16, 2018. ECF No. 1. On
November 5, 2018, plaintiffs amended their complaint and now
bring three causes of action on behalf of the putative class:
(1) violation of FCRA § 1681e(b), (2) violation of Texas
Business and Commerce Code sections 109.001-.007, and (3)
injunctive relief under Texas law. FAC ¶¶ 66-76.
Defendants have moved to transfer this action to the Southern
District of Texas because, among other things, the named
plaintiffs are Texas citizens and interpretation of Texas law
is central to the resolution of this matter. Mot. at 1.
Plaintiffs oppose transfer, Opp'n, and defendants have
replied, Reply. The court resolves the motion below.
the convenience of parties and witnesses, . . . a district
court may transfer any civil action to any other district or
division where it might have been brought . . . .” 28
U.S.C. § 1404(a). “Section 1404(a) is intended to
place discretion in the district court to adjudicate motions
for transfer according to an ‘individualized,
case-by-case consideration of convenience and
fairness.'” Stewart Org., Inc. v. Ricoh
Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v.
Barrack, 376 U.S. 612, 622 (1964)). “In ruling on
a motion to transfer pursuant to § 1404(a), the Court
must evaluate three elements: (1) convenience of the parties;
(2) convenience of the witnesses; and (3) interests of
justice.” Safarian v. Maserati North America,
Inc., 559 F.Supp.2d 1068, 1071 (C.D. Cal. 2008)
(citation omitted). “Once the court determines that
venue is proper, the movant must present strong grounds for
transferring the action . . . .” Id. (citing
Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d
834, 843 (9th Cir. 1986)). A motion to transfer venue under
section 1404(a) “does not concern the issue
‘whether and where' an action may be properly
litigated. It relates solely to the question where, among two
or more proper forums, the matter should be litigated to best
serve the interests of judicial economy and convenience to
the parties.” Injen Tech. Co. v. Advanced Engine
Mgmt., 270 F.Supp.2d 1189, 1193 (S.D. Cal. 2003)
(citation and emphasis omitted).
determining whether transfer is proper, the court must
“balance the preference accorded plaintiff's choice
of forum with the burden of litigating in an inconvenient
forum.” Decker Coal, 805 F.2d at 843
(citations omitted). According to the Ninth Circuit, relevant
factors determining whether transfer is appropriate include:
(1) the location where relevant agreements were negotiated
and executed, (2) the state that is most familiar with the
governing law, (3) the plaintiff's choice of forum, (4)
the respective parties' contacts with the forum, (5) the
contacts relating to the plaintiff's cause of action in
the chosen forum, (6) the differences in the costs of
litigation in the two forums, (7) the availability of
compulsory process to compel attendance of unwilling
non-party witnesses, and (8) the ease of access to sources of
Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99
(9th Cir. 2000) (citing Stewart Org., 487 U.S. at
addition to the above considerations, if venue is to be
transferred, “the transferee court must have subject
matter jurisdiction and . . . defendants must be subject to
personal jurisdiction in the district, and be amenable to
service of process there.” Rubio v. Monsanto
Co., 181 F.Supp.3d 746, 760 (C.D. Cal. 2016) (citing
A.J. Industries, Inc. v. U.S. District Court for Central
Dist. of Cal., 503 F.2d 384, 386-88 (9th Cir. 1974)).
These requirements are not subject to waiver by the parties;
the court must perform an independent examination to
determine if transfer is appropriate under section 1404(a).
See Id. (“[N]one of the requirements for
transfer can be waived by the parties, and the Court cannot
transfer the case if § 1404(a) is not satisfied.”
(citing Hoffman v. Blaski, 363 U.S. 335, 342-44
(1960)); see also 15 Charles A. Wright & Arthur
R. Miller, Federal Practice and Procedure §
3845 (4th ed. 2019) (“Transfer under Section 1404(a) is
proper only to a judicial district or division where the
plaintiff had a right-independent of the consent or wishes of
the defendant-to bring the action.”).
Subject Matter Jurisdiction
parties do not address subject matter jurisdiction in their
briefing; nonetheless, the court must ensure the Southern
District of Texas would have subject matter jurisdiction over
this litigation if transferred. Rubio, 181 F.Supp.3d
at 760. For the same reasons subject matter jurisdiction
adheres in this court, namely that plaintiffs' claims
invoke 15 U.S.C. § 1681p (FCRA jurisdiction) as well as
28 U.S.C. §§ 1331 (federal question jurisdiction),
1332(a) (diversity jurisdiction), 1332(d)(2) (class action
diversity jurisdiction) and 1367 (supplemental jurisdiction),
the Southern District of Texas would have jurisdiction over
this matter. See FAC ¶¶ 5-9.