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Terrell v. Costco Wholesale Corp.

United States District Court, W.D. Washington, Seattle

March 10, 2017

JULIUS TERRELL, Plaintiff,
v.
COSTCO WHOLESALE CORP., Defendant.

          ORDER DENYING DEFENDANT'S MOTION TO DISMISS

          JAMES L. ROBART United States District Judge

         I. INTRODUCTION

         This matter comes before the court on Defendant Costco Wholesale Corp.'s (“Costco”) motion to dismiss Plaintiff Julius Terrell's complaint for lack of standing. (Mot. (Dkt. # 19).) Mr. Terrell opposes the motion (see Resp. (Dkt. # 28)), and Costco has filed a reply (Reply (Dkt. # 30)). Having considered these submissions, the appropriate portions of the record, and the relevant law, and considering itself fully advised, [1] the court DENIES Costco's motion for the reasons described herein.

         II. BACKGROUND

         In November 2014, Mr. Terrell applied for a job with Costco, a national retail chain headquartered in Washington State. (Compl. (Dkt. # 1) ¶¶ 21-22.) As part of the online application process, Costco required Mr. Terrell to undergo a background check, which third-party vendor First Advantage LNS Screening Solutions, Inc. (“First Advantage”) performed. (Id. ¶ 24.) Because Costco sought information about Mr. Terrell's credit capacity, character, general reputation, and personal characteristics, the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., required Costco to provide Mr. Terrell with a “clear and conspicuous” document that consisted solely of the disclosure that a consumer report may be obtained for employment purposes. (Id. ¶¶ 12, 22, 24, 28.)

         Instead of a standalone disclosure, however, Costco provided Mr. Terrell with a document titled, “Pre-Application FCRA Disclosure and Authorization.” (Id. ¶¶ 27-28; id., Ex. A.) As the title suggests, that document included both a disclosure and an authorization permitting Costco to gather information about Mr. Terrell from a wide array of sources, including:

[A]ny law enforcement agency, administrator, state or federal agency, institution, school or university (public or private), information service bureau, employer, or insurance company.

(Id., Ex. A.) Additionally, the Disclosure and Authorization discouraged Mr. Terrell from contacting First Advantage or Kronos, the human resources company hosting Costco's online application:

Please do not contact First Advantage Corporation for the status of your employment application. First Advantage Corporation does not have access to this information and will not be able to respond to your request. Please do not contact Kronos for results of the background check. Kronos does not have access to the report and will not be able to respond to your request.

(Id. ¶ 35; id., Ex. A.) Mr. Terrell was required to authorize the background check to complete his application. (Id., Ex. A.)

         On August 10, 2016, Mr. Terrell filed a putative class action against Costco in King County Superior Court, Washington. (See Not. of Removal (Dkt. # 1) ¶¶ 5-6; Am. Not. of Removal (Dkt. # 8) ¶¶ 5-6.) On September 6, 2016, Costco removed the action to federal court, invoking the court's federal question and diversity jurisdiction. (See id.); 28 U.S.C. §§ 1331-32, 1441, 1446.

         Mr. Terrell complains that under Section 1681b(b)(2) of the FCRA, Costco's Disclosure and Authorization: (1) constitutes “an impermissible attempt to secure permission from the applicant to access a variety of records that would otherwise be protected from disclosure” (Compl. ¶¶ 32-33); (2) discouraged Mr. Terrell from contacting First Advantage when he was entitled to receive information about his background check upon request (id. ¶ 35); (3) falsely states that First Advantage does not have access to information about Mr. Terrell's employment application (id.); and (4) is not “clear and conspicuous” and contains more information than is permitted for an FCRA disclosure (id. ¶ 38). Based on these allegations, Mr. Terrell seeks statutory and punitive damages on behalf of himself and a class of those similarly situated. (Id. ¶ 59.)

         Costco moves to dismiss Mr. Terrell's complaint. (See Mot.) It contends that Mr. Terrell has failed to sufficiently allege a concrete injury and thus lacks standing to sue in federal court. (Id.) The court now turns to the question of whether Mr. Terrell has sufficiently alleged Article III standing.

         III. ...


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