Rattler v. MH Sub I, LLC

Background

Kim Rattler filed a proposed class action against MH Sub I, LLC and Demandforce, Inc. She alleged that the defendants obtain consumer reports for employment background checks without providing disclosures that comply with the Fair Credit Reporting Act (FCRA) or obtaining proper authorization.

Rattler alleged that the disclosure and authorization form she received contained unnecessary language and information concerning applicants in other states. She contended that the form was not “clear and conspicuous” because, among other things, it was not in all capital letters or boldface, included information about multiple states, and used dense, small type. She also alleged that the defendants’ conduct was willful.

The proposed class included the defendants’ current, former, and prospective employment applicants in the United States who underwent background checks beginning five years before the action was filed and continuing until final judgment. The defendants removed the action from California state court to federal court and filed the motion addressed in this order.

Defendants’ Motion

The defendants asked the court to strike class allegations covering claims arising more than two years before the complaint. The FCRA provides a limitations period ending on the earlier of two years after the plaintiff discovered the violation or five years after the violation occurred. Courts may treat constructive discovery—when a person should have discovered the violation—as discovery for this purpose.

The defendants argued that deciding which proposed class members’ claims were timely would require individual determinations about when each person discovered the alleged violation. They also asked the court to strike the class allegations under Rule 12(b)(6), which addresses whether a complaint states a legally sufficient claim, and Rule 23(d)(1)(D), which concerns class-action pleadings.

Court’s Analysis

The court explained that motions to strike are generally disfavored and that courts especially disfavor striking class allegations before class certification. The court noted that the cases cited by defendants addressed the statute-of-limitations issue at the class-certification stage, rather than by striking the allegations at the beginning of the case.

The court also relied on authority stating that the existence of individual statute-of-limitations questions does not automatically mean that common questions fail to predominate. It concluded that the limitations issue was better addressed after discovery, when the court considered class certification. The court stated that its ruling did not prevent defendants from opposing certification or seeking to limit the class at the appropriate time.

Disposition

Judge Edward M. Chen denied defendants’ motion to strike portions of the class allegations under Rule 12(f). The court also denied defendants’ alternative requests to strike the class allegations under Rule 12(b)(6) and Rule 23(d)(1)(D). The denial of the Rule 12(f) request was without prejudice to defendants’ later opposition to class certification or request to limit the class. The order disposed of Docket No. 7.