Olea v. Teichert Pipelines, Inc. ( 2023 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ELIAZAR OLEA, Case No. 21-cv-03016-JST 8 Plaintiff, ORDER REMANDING TO STATE 9 v. COURT; DENYING MOTIONS FOR SUMMARY JUDGMENT AND 10 TEICHERT PIPELINES, INC., PARTIAL SUMMARY JUDGMENT 11 Defendant. Re: ECF Nos. 46, 47, 48, 56 12 13 On May 31, 2023, the Court issued an order to show cause why this case should not be 14 remanded to state court for lack of Article III standing. ECF No. 55. On June 30, Teichert filed a 15 response to the order to show cause. ECF No. 56. The Court will remand the case to state court. 16 I. BACKGROUND 17 Teichert provides construction and repairs for natural gas pipelines throughout California. 18 ECF No. 48-4 ¶ 3. On March 29, 2018, Teichert interviewed Olea for a position as a laborer and 19 offered him the job. ECF No. 48-3 at 31-32, 34; ECF No. 50-1 at 10. The following day, Olea 20 returned to Teichert’s office to review and complete employment forms, including a Consumer 21 Disclosure and Authorization Form. Id. at 11-12, 34, 58, 60. The disclosure form included 22 multiple disclosures mandated by federal and state law. Id. at 60. Olea reviewed the disclosure 23 form, signed the accompanying release consenting to preparation of background reports, and 24 checked a box indicating he wanted a copy of any consumer report ordered on him. Id. at 40, 43. 25 On April 2, Olea began work with Teichert. Id. at 39. 26 On February 23, 2021, Olea filed a complaint in state court, individually and on behalf of a 27 putative class, alleging that Teichert’s disclosure forms are inadequate under the federal Fair 1 (“ICRAA”), California’s Consumer Reporting and Agencies Act (“CCRAA”), and California’s 2 Unfair Competition Law (“UCL”). ECF No. 1-2. Teichert removed the action to federal court. 3 ECF No. 1. 4 In December 2022, each party moved for summary judgment. ECF Nos. 46, 47, 48. In 5 May 2023, the Court ordered Teichert, the removing party, to show cause why this case should not 6 remanded. ECF No. 55. On June 30, Teichert filed a response to the order to show cause. ECF 7 No. 56. 8 II. DISCUSSION 9 A. Standing 10 Olea lacks standing to maintain his FCRA claim. “Plaintiffs must maintain their personal 11 interest in the dispute at all stages of litigation . . . ‘with the manner and degree of evidence 12 required at the successive stages of the litigation.’” TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 13 2208 (2021) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992)). At summary 14 judgment, “the plaintiff can no longer rest on [] ‘mere allegations,’ but must ‘set forth’ by affidavit 15 or other evidence ‘specific facts’” to support standing. Lujan, 504 U.S. at 561. 16 “Only those plaintiffs who have been concretely harmed by a defendant’s statutory 17 violation may sue that private defendant over that violation in federal court.” TransUnion, 141 S. 18 Ct. at 2203. To determine whether a harm is concrete, “[c]ourts should assess whether the alleged 19 injury to the plaintiff has a ‘close relationship’ to a harm ‘traditionally’ recognized as providing a 20 basis for a lawsuit in American courts. Id. at 2204. 21 “A plaintiff who alleges a ‘bare procedural violation’ of the FCRA, ‘divorced from any 22 concrete harm,’ fails to satisfy Article III’s injury-in-fact requirement.” Syed v. M-I, LLC, 853 23 F.3d 492, 499 (9th Cir. 2017) (quoting Spokeo, Inc. v. Robins, 578 U.S. 330, 341 (2016)). Olea 24 alleges that Teichert violated 15 U.S.C.§ 1681b(b)(2)(A), an FCRA provision that requires 25 employers to provide a standalone disclosure form and receive written authorization before 26 procuring a consumer report on a prospective employee. In Syed, the Ninth Circuit explained that 27 Section 1681b(b)(2)(A) “creates a right to information by requiring prospective employers to 1 application process,” “creates a right to privacy by enabling applicants to withhold permission to 2 obtain the report from the prospective employer, and [creates] a concrete injury when applicants 3 are deprived of their ability to meaningfully authorize the credit check.” 853 F.3d at 499. Where 4 a plaintiff “was confused by the inclusion of [other language] with the disclosure,” such that he 5 was “not aware that he was signing a waiver authorizing the credit check when he signed it,” the 6 plaintiff has alleged a sufficiently concrete deprivation of the rights to information and privacy 7 protected by the statute. Id. at 499-500. 8 In his complaint, Olea alleges only that Teichert’s violation of the standalone disclosure 9 requirement caused him injury “included, but not limited to, having [his] privacy and statutory 10 rights invaded in violation of the FCRA.” ECF No. 1-2 at 20. But there is no evidence that Olea 11 suffered any concrete injury as a result of Teichert’s alleged violation of the standalone disclosure 12 requirement. Unlike the plaintiff in Syed, Olea was not deprived of his ability to meaningfully 13 authorize the credit check—he does not suggest that he was confused by the disclosure or unaware 14 that he was authorizing a credit check by signing it. Olea does not indicate that he was confused 15 by the documents he reviewed before signing the release: 16 Q: Was there anything on the request, authorization, consent and release for background information form that was confusing to you? 17 A: I don’t recall. Q: Was there anything under the summary of rights under the Fair 18 Credit Reporting Act that was confusing to you? A: Not from what I remember. 19 20 ECF No. 48-3 at 37. Olea also understood that signing the release authorized Teichert to procure a 21 background report: 22 Q: That morning in the conference room, did you fill out the background check forms? 23 A: Yes. Q: So you understood at that time [on March 30, 2018] that Teichert 24 needed you to get a background check? A: Yes. 25 *** Q: And you understood, when you signed this document, that 26 Teichert Pipelines would obtain a report to establish your eligibility for employment? 27 A: Yes. 1 Id. at 35, 42. Olea has not suffered any other type of harm as a result of Teichert’s alleged failure 2 to comply with the standalone disclosure requirement: 3 Q: And the background report didn’t prevent you from getting work at Teichert Pipelines; right? 4 A: That’s correct. Q: Is there some way that you can think of that the background 5 report harmed you? A: Not that I could – no. 6 7 Id. at 50. Olea has not suffered any injury to the rights to privacy and information protected by 8 Section 1681b(b)(2)(A), nor has he suffered any other injury from Teichert’s alleged violation of 9 the standalone disclosure requirement. Olea therefore fails to show he has suffered a concrete 10 injury-in-fact sufficient to confer standing at this stage of the litigation. 11 Because Olea does not have Article III standing to bring his FCRA claim, this Court lacks 12 subject matter jurisdiction over that claim. Thus, the Court cannot exercise supplemental 13 jurisdiction over Olea’s state law claims under the CCRAA, ICRAA, and UCL. “A dismissal on 14 the merits is different from a dismissal on jurisdictional grounds.” Herman Fam. Revocable Tr. v. 15 Teddy Bear, 254 F.3d 802, 806 (9th Cir. 2001). “If the district court dismisses all federal claims 16 on the merits, it has discretion under § 1367(c) to adjudicate the remaining claims; if the court 17 dismisses for lack of subject matter jurisdiction, it has no discretion and must dismiss all claims.” 18 Id.; see Prather v. AT&T, Inc., 847 F.3d 1097, 1108 (9th Cir. 2017) (“Without subject matter 19 jurisdiction over [plaintiff’s] federal claim, the district court properly concluded it had no 20 discretion to exercise supplemental jurisdiction over [plaintiff’s] state law claims.”). 21 B. Remand 22 “If at any time before final judgment it appears that the district court lacks subject matter 23 jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). “Remand is the correct remedy 24 because a failure of federal subject-matter jurisdiction means only that the federal courts have no 25 power to adjudicate the matter. State courts are not bound by the constraints of Article III.” Polo 26 v. Innoventions Int’l, LLC, 833 F.3d 1193, 1196 (9th Cir. 2016). The only basis upon which the 27 Court could enter judgment in Teichert’s favor on the remaining state law claims, rather than 1 constraints of Article III,” Olea may be able to vindicate his claims in state court. Id. at 1996. 2 The Court will therefore remand this action to state court. 3 CONCLUSION 4 This action is hereby remanded to the Superior Court of Alameda County. The Court 5 denies the pending motions for summary judgment as moot. The Clerk shall close the file. 6 IT IS SO ORDERED. 7 Dated: September 25, 2023 8 JON S. TIGAR 9 nited States District Judge 10 11 12 © 15 16 = 17 Z 18 19 20 21 22 23 24 25 26 27 28