Kristi Del Toro v. Centene Corporation

Background

Kristi Del Toro filed an individual and putative class action against Centene Corporation, Envolve Pharmacy Solutions, Inc., and US Script, LLC. She asserted one claim under the Fair Credit Reporting Act (FCRA), alleging that the defendants failed to provide a clear, conspicuous, standalone disclosure before obtaining a consumer report for employment purposes. She also asserted seven California wage-and-hour claims involving matters such as regular and overtime pay, meal periods, wage statements, and payment of wages after termination.

Centene and Envolve moved to dismiss all eight claims, asked the court to strike the fifth claim, and alternatively asked the court to transfer the case to the Eastern District of California.

FCRA Claim

The court held that Del Toro lacked Article III standing, meaning she had not alleged the concrete injury required to invoke federal-court jurisdiction. The court explained that alleging only a technical violation of the FCRA was insufficient. Del Toro alleged that the disclosure was embedded in other information rather than provided in a standalone document, but she did not allege that she read the forms, was confused by the disclosure, was affected in any way, or would have refused authorization if the disclosure had been presented differently.

The court therefore granted the motion to dismiss the FCRA claim. Because the deficiency might be cured, the court granted leave to amend that claim to allege facts establishing concrete injury and standing.

State-Law Claims

Del Toro conceded that she could not pursue the fifth claim, which concerned failure to timely pay wages upon termination, because she had not been terminated. The court dismissed that claim with prejudice.

The court dismissed the remaining California claims for lack of subject-matter jurisdiction. It found that the state wage-and-hour claims did not share a sufficient factual connection with the FCRA claim: the FCRA claim concerned employment-application forms and background checks, while the state claims concerned compensation and working conditions after hiring. The court also stated that, even if supplemental jurisdiction were available, it would decline to exercise it because the state-law claims substantially predominated over the federal claim.

The court granted leave to amend the remaining state-law claims if Del Toro could allege another basis for federal jurisdiction.

Other Requests and Disposition

The court granted in part and denied as moot in part the motion to dismiss. It denied as moot the defendants’ alternative requests to strike the fifth claim and transfer the case. The court dismissed all claims except the fifth claim with leave to amend, and dismissed the fifth claim with prejudice. Any amended complaint had to be filed within 30 days, and it could not add new causes of action or parties without a stipulation or court permission.

Judge Lucy H. Koh signed the order on April 2, 2020.