Masuda v. Lucile Salter Packard Children's Hospital at Stanford

Background

Emily Masuda brought a proposed class action against Lucile Salter Packard Children’s Hospital at Stanford, Stanford Health Care, and Stanford Health Care Advantage. She alleged that, during the employment application process, the defendants used disclosure and authorization forms that violated the Fair Credit Reporting Act (FCRA). According to the complaint, the forms included extra language, did not clearly and accurately summarize rights and the law, and were not standalone documents.

Masuda filed the case in the Superior Court of California for Santa Clara County. The defendants removed it to federal court, asserting federal-question jurisdiction because the claims arose under the FCRA. Masuda moved to remand, arguing that she lacked Article III standing—the constitutional requirement that a plaintiff show a concrete injury that can be addressed by a court.

Standing analysis

The court agreed with Masuda that the complaint did not show a concrete injury. It characterized her allegations as procedural violations involving the form of the disclosures and authorization documents. The court explained that a statutory procedural violation can sometimes establish a concrete injury when it protects a concrete interest, but that the allegations here did not do so.

The court distinguished a Ninth Circuit decision in which the plaintiff alleged facts supporting an inference that he was confused by a disclosure containing a liability waiver and would not have signed it if the disclosure had been clear. Masuda did not allege that she was confused by the forms, later discovered that a consumer report had been obtained when she did not expect it, or suffered another harm caused by the forms. The court also declined to infer concrete harm from the complaint’s references to actual damages.

Additional discovery and remedy

The defendants alternatively asked for limited discovery, including a sworn declaration or deposition, to investigate whether Masuda had suffered an injury supporting federal standing. The court found that request unwarranted. It stated that Masuda could truthfully plead whether she suffered actual harm and that the defendants’ speculation about possible later representations did not justify discovery.

The defendants also argued that the case should be dismissed rather than remanded. The court rejected that argument, explaining that the absence of federal standing does not necessarily prevent a plaintiff from pursuing a federal statutory right in state court. It held that remand was the proper remedy and that the parties could litigate standing under California law in state court.

Disposition

The court granted Masuda’s Motion to Remand and directed the Clerk to remand the case to the Superior Court of California for Santa Clara County. The order did not decide the merits of Masuda’s FCRA claims.