Limon v. Circle K Stores Inc.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 ERNESTO LIMON, an individual, on No. 1:18-cv-01689-SKO behalf of himself and others similarly 12 situated, ORDER GRANTING DEFENDANT’S MOTION FOR RECONSIDERATION IN 13 Plaintiff, PART AND GRANTING LEAVE TO SUPPLEMENT SUMMARY JUDGMENT 14 v. RECORD 15 CIRCLE K STORES INC., and DOES 1 (Doc. 53) through 50, inclusive, 16 Defendants. 17

18 19 This matter is before the Court on Defendant Circle K Stores, Inc. (“Circle K”)’s motion 20 for reconsideration, filed April 20, 2020. (Doc. 53.) Plaintiff Ernesto Limon filed his opposition 21 to the motion on May 6, 2020 (Doc. 56), and Circle K filed its reply on May 13, 2020 (Doc. 60). 22 The Court reviewed the parties’ papers and all supporting material and found the matter suitable 23 for decision without oral argument pursuant to Local Rule 230(g). The hearing set for May 20, 24 2019, was therefore vacated. (Doc. 62.) 25 Having considered the parties’ briefing, and for the reasons set forth below, the Court shall 26 grant the motion in part and permit the parties leave to supplement the summary judgment record. 27 I. BACKGROUND 28 On June 21, 2018, Plaintiff applied to work for and was thereafter hired by Circle K. (Doc. 1 1 (“Compl.”) ¶¶ 23, 26.) In connection with his employment application, Plaintiff was required to 2 fill out Circle K’s standard disclosure and authorization form (“FCRA Consent Form”) permitting 3 it to obtain a consumer report containing his credit history, criminal records, and other information, 4 in order to verify Plaintiff’s background and experience. (Compl. ¶ 23.) Plaintiff alleges he was 5 confused by the FCRA Consent Form, which contained a release of liability for Circle K’s benefit, 6 and that he did not understand that Circle K would be requesting a consumer report. (Compl. ¶ 24.) 7 He alleges that Circle K nevertheless subsequently obtained such a report. (Compl. ¶ 26.) 8 Seeking to represent a class of similarly situated applicants, Plaintiff brings claims under 9 the Fair Credit Reporting Act (“FCRA”) for failure to provide proper disclosure that a consumer 10 report may be obtained, in violation of 15 U.S.C. § 1681b(b)(2)(A)(i) (Compl. ¶¶ 51–56), and for 11 failure to obtain proper authorization to obtain such a report, in violation of 15 U.S.C. § 12 1681b(b)(2)(A)(ii) (Compl. ¶¶ 57–62). Specifically, Plaintiff alleges that Circle K’s inclusion of a 13 liability release in its standard disclosure and authorization form (“FCRA Consent Form”) violated 14 the statutory requirement that the disclosure document consist “solely” of the disclosure, which 15 thereby rendered his written authorization invalid, Compl. ¶¶ 21–22, 25–24. See 15 U.S.C. §§ 16 1681b(b)(2)(A)(i), (ii). Plaintiff seeks to assert these claims on behalf of a proposed class defined 17 as: 18 all persons in the United States who filled out Defendant’s standard “Fair Credit Reporting Act (FCRA) Consent” form that included an authorization and a liability 19 release clause at any time during the period beginning five (5) years prior to the 20 filing of this Complaint to a date determined by the Court. 21 (Compl. ¶ 35.) Plaintiff further contends that Circle K’s purported violations were willful and 22 that he and the putative class are therefore entitled to statutory and punitive damages under 15 23 U.S.C. § 1681n(a)(1)(A). (Id. ¶¶ 33, 37, 53, 59, 60.) He also requests attorney’s fees and costs 24 under the statute. (Id. ¶¶ 21–22, 56, 62.) 25 On November 20, 2019, Circle K filed a motion for summary judgment, or in the alternative, 26 partial summary judgment, contending that Plaintiff could not establish Article III standing, that 27 Circle K’s alleged statutory violations were not willful as a matter of law, and that Plaintiff could 28 1 not prevail on his second FCRA claim because he provided Circle K a signed written authorization. 2 (Doc. 27.) The Court denied Circle K’s motion for summary judgment on January 10, 2020. (Doc. 3 36.) It is this order that Circle K asks the Court to reconsider. 4 II. STANDARD FOR A MOTION FOR RECONSIDERATION 5 Circle K moves for reconsideration under Federal Rule of Civil Procedure 60(b)(6) and the 6 Court’s inherent power to reconsider and modify its interlocutory orders. (See Doc. 53-1 at 4.) The 7 Court observes as a preliminary matter that Rule 60(b)(6) relates to the modification of a final 8 judgment, order, or proceeding. See Fed. R. Civ. P. 60(b)(6); Balla v. Idaho State Bd. of 9 Corrections, 869 F.2d 461, 466 (9th Cir. 1989). An order denying summary judgment, of which 10 Circle K seeks reconsideration here, is not a final order and therefore is not subject to Rule 60(b)(6). 11 See Senza–Gel Corp. v. Seiffhart, 803 F.2d 661, 669 (Fed. Cir. 1986) (“A denial of summary 12 judgment is not only not a ‘final judgment,’ and not appealable, it is not a judgment at all.”) (citation 13 omitted); IV Sols., Inc. v. Connecticut Gen. Life Ins. Co., No. CV 13-9026-GW(AJWx), 2016 WL 14 7888011, at *2 (C.D. Cal. Dec. 5, 2016) (order denying summary judgment is “interlocutory, 15 meaning that it is not subject to Rules 59 or 60, though still within the Court’s inherent authority to 16 consider . . . .”). Therefore, to the extent that Circle K seeks reconsideration of the Court’s January 17 10, 2020 order, its motion must rest on the Court’s inherent power to reconsider, rescind, or modify 18 its interlocutory orders. See City of Los Angeles v. Santa Monica Baykeeper, 254 F.3d 882, 885 19 (9th Cir. 2001) (“A district court’s power to rescind, reconsider, or modify an interlocutory order 20 is derived from the common law, not from the Federal Rules of Civil Procedure.”); Balla, 869 F.2d 21 at 465 (“Courts have inherent power to modify their interlocutory orders before entering a final 22 judgment”); Andrews Farms v. Calcot, Ltd., 693 F. Supp. 2d 1154, 1165 (E.D. Cal. 2010) (“The 23 denial of a summary judgment motion . . . is an interlocutory, unappealable order that can be 24 reviewed by the district court at any time before final judgment is entered.”). 25 A district court may reconsider and reverse a previous interlocutory decision for any reason 26 it deems sufficient, even in the absence of new evidence or an intervening change in or clarification 27 of controlling law. Abada v. Charles Schwab & Co., Inc., 127 F. Supp. 2d 1101, 1102 (S.D. Cal. 28 2000). Nevertheless, a court should generally leave a previous decision undisturbed absent a 1 showing of clear error or manifest injustice. Id. Reconsideration is not a mechanism for parties to 2 make new arguments that could reasonably have been raised in their original briefs. See Kona 3 Enters. v. Estate of Bishop, 229 F.3d 887, 890 (9th Cir. 2000). Nor is it a mechanism for the parties 4 “to ask the court to rethink what the court has already thought through—rightly or wrongly.” 5 United States v. Rezzonico, 32 F.Supp.2d 1112, 1116 (D. Ariz. 1998). (citing Motorola, Inc. v. J.B. 6 Rodgers Mech. Contractors, 215 F.R.D. 581, 582 (D. Ariz. 2003)). Reconsideration is an 7 “extraordinary remedy, to be used sparingly in the interests of finality and conservation of judicial 8 resources.” Kona Enters., 229 F.3d at 890. “To succeed, a party must set forth facts or law of a 9 strongly convincing nature to induce the court to reverse its prior decision.” United States v. 10 Westlands Water Dist., 134 F. Supp. 2d 1111, 1131 (E.D. Cal. 2001). See also E.D. Cal. Local 11 Rule 230(j). 12 III. ANALYSIS 13 Circle K contends that Ruiz v. Shamrock Foods Co., — F. App’x —, 2020 WL 1320953 14 (9th Cir. Mar. 20, 2020) (unpublished), a Ninth Circuit case decided three months after the Court 15 denied the motion for summary judgment, clarified that, in order to demonstrate that they suffered 16 a concrete injury sufficient to confer Article III standing as defined in Syed v. M-I-, LLC, 853 F.3d 17 492 (9th Cir. 2017), a plaintiff bringing an FCRA stand-alone disclosure claim must produce 18 admissible evidence establishing (1) that they were confused by the inclusion of the liability waiver 19 on Circle K’s FCRA Consent Form and (2) they “would not have signed it had it contained a 20 sufficiently clear disclosure.” (Doc. 53-1 at 2.) Plaintiff counters (Doc. 57 at 7–8) that because 21 Ruiz is unpublished and therefore not precedential, it cannot constitute a change in controlling law. 22 See generally Ninth Circuit Rule 36–3(a) (“Unpublished dispositions and orders of this Court are 23 not precedent . . . .”). Nevertheless, because the decision has “persuasive value and indicate[s] how 24 the Ninth Circuit applies binding authority,” the Court will consider it. Irving v. Lennar Corp., No. 25 2:12–CV–0290 KJM EFB, 2014 WL 1573552, at *3 (E.D. Cal. Apr. 17, 2014) (quoting Nogales v. 26 Beard, Civil No. 11cv2146–BTM (BLM), 2013 WL 6419259, at *9 n.2 (S.D. Cal. Dec. 9, 2013)). 27 Indeed, the Court, in a prior order in this case, noted the possibility that the Ninth Circuit’s ruling 28 1 in Ruiz would affect the determination of Circle K’s motion for summary judgment. (See Doc. 32 2 at 6.) As such, considering Ruiz’s application of the Ninth Circuit’s decision in Syed makes sense 3 at this stage in light of the similarities between the two cases. See Irving, 2014 WL 1573552, at 4 *3. 5 In denying Circle K’s motion for summary judgment, the Court found Plaintiff met the 6 standard for Article III standing articulated in Syed: he had provided evidence in the form of his 7 declaration and deposition testimony that he was confused by the liability release in Circle K’s 8 FCRA Consent form, did not understand that by signing the FCRA Consent he was authorizing 9 Circle K to obtain his background check, and nevertheless had a background check report procured. 10 (Doc. 36 at 10–12.) The Court rejected Circle K’s contention that, in order to demonstrate standing 11 under Syed, Plaintiff must also establish, in addition to his confusion, that he would not have signed 12 the FCRA Consent form had it omitted the liability waiver, finding it “contrary to case law” of 13 several district courts in this Circuit. (Id. at 12 (citing cases).) 14 In Ruiz, the Ninth Circuit clarified that, contrary to the cases on which this Court relied, 15 demonstrating a concrete injury for Article III standing purposes as defined in its Syed decision 16 requires not just evidence of confusion about an FCRA authorization form, but also evidence that 17 a plaintiff “would not have signed [the form] had it contained a sufficiently clear disclosure.” Ruiz, 18 2020 WL 1320953, at *1 (quoting Syed, 853 F.3d at 499). In moving for reconsideration, Circle K 19 contends that Plaintiff failed to submit evidence at the summary judgment stage to satisfy his 20 burden of showing he would not have signed Circle K’s FRCA Consent form, had it been clear that 21 by signing it, he was authorizing Circle K to obtain his background check. (Doc. 53-1 at 8.) 22 Plaintiff does not contest this point. 23 After a review of the summary judgment record, and lacking any dispute by Plaintiff, the 24 Court agrees with Circle K. There is no evidence in the record demonstrating that Plaintiff would 25 not have signed Circle K’s FRCA Consent form had it been “sufficiently clear,” i.e., had it not 26 contained the liability waiver. Indeed, Plaintiff testified at his deposition that he indicated in Circle 27 K’s employment application (signed prior to, but on the same day as, the FRCA Consent form) he 28 “[w]ould . . . be willing to submit to a background check.” (Doc. 33-1, Statement of Undisputed 1 Material Facts (“SUMF”) at 4; Doc. 27-4, Deposition of Ernesto Limon (“Limon Dep.”) 86:12–25 2 and Ex. 4.) Plaintiff further testified that he understood the application informed Circle K of his 3 willingness to submit to a background check. (SUMF at 5; Limon Dep. 87:1–7.) 4 The Court will therefore grant Circle K’s motion for reconsideration insofar as it requests 5 that the Court “reexamine the MSJ denial” in light of Ruiz’s clarification of the Article III standing 6 requirements defined in Syed.1 The results of that reexamination, however, will be deferred until 7 after the parties have been permitted to supplement the summary judgment record to address 8 whether Plaintiff can met his burden of showing he would not have signed Circle K’s FCRA 9 Consent form had it not contained the liability waiver.2 See Ruiz, 2020 WL 1320953, at *1. The 10 Court declines to find that Plaintiff has waived his opportunity to present evidence in an attempt to 11 meet this burden, particularly given that fact discovery is still ongoing. (See Doc. 52 (continuing 12 discovery deadline to July 8, 2020).) Granting the parties leave to supplement the summary 13 judgment record in light of Ruiz is in the interest of the “conservation of judicial resources,” Kona 14 Enters., 229 F.3d at 890, and will further prevent “manifest injustice,” Abada, 127 F. Supp. 2d at 15 1102. Cf. Hoffman v. Tonnemacher, 593 F.3d 908, 911 (9th Cir. 2010) (“The denial of summary 16 judgment does not preclude a contrary later grant of summary judgment. Consequently, allowing 17 a party to file a second motion for summary judgment is logical, and it fosters the ‘just, speedy, and 18 inexpensive’ resolution of suits.”) (quoting Fed. R. Civ. P. 1). 19 IV. ORDER 20 For the foregoing reasons, the Court ORDERS as follows: 21 1. Circle K’s motion for reconsideration (Doc. 53) is GRANTED in part, insofar as it requests 22 that the Court reexamine its January 10, 2020 order (Doc. 36) denying Circle K’s motion 23 for summary judgment on the issue of Article III standing in light of the Ninth Circuit’s 24 1 As Circle K merely repeats the arguments made in its summary judgment motion, the Court declines to reconsider 25 its finding that there is sufficient evidence to show Plaintiff was confused by the liability waiver in Circle K’s FCRA Consent form. See Taylor v Knapp, 871 F.2d 803, 805 (9th Cir. 1989) (Granting a motion for reconsideration is not 26 appropriate when the movant previously raised all of the arguments that are in the motion for reconsideration.). 2 In permitting the parties to supplement the record, the Court at the same time expresses its skepticism that Plaintiff 27 will be able at this stage to adduce competent summary judgment evidence that would not contradict his earlier deposition testimony. See, e.g., Van Asdale v. Int’l Game Tech., 577 F.3d 989, 998 (9th Cir. 2009) (setting forth the 28 “sham affidavit” rule). 1 decision in Ruiz v. Shamrock Foods Co., — F. App’x —, 2020 WL 1320953 (9th Cir. Mar. 2 20, 2020) (unpublished); 3 2. The parties are GRANTED LEAVE to supplement the summary judgment record. Within 4 fourteen (14) days of the filing of this order, Plaintiff may file a brief, not to exceed five (5) 5 pages (exclusive of exhibits), together with competent summary judgment evidence, 6 directed to the issue of whether he can meet his burden of showing, that he would not have 7 signed Circle K’s FCRA Consent form had it not contained the liability waiver. Within 8 seven (7) days of Plaintiff’s filing, Circle K may file a brief in response, not to exceed five 9 (5) pages (exclusive of exhibits). No other briefing shall be permitted; and 10 3. A ruling on the remainder of Circle K’s motion for reconsideration, insofar as it requests 11 that the Court modify its January 10, 2020 order, is DEFERRED until the close of the 12 supplemental briefing period, at which point the Court may either set a hearing or indicate 13 the matter remains under submission pursuant to Local Rule 230(g). 14 IT IS SO ORDERED. 15

Sheila K. Oberto 16 Dated: May 28, 2020 /s/ . UNITED STATES MAGISTRATE JUDGE 17

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