Walmart's Motion to Decertify Class Granted in Background Check Case

On Oct. 18, a class of approximately 6.5 million Walmart applicants was decertified by a California federal judge based on the determination that the named plaintiffs had failed to allege an injury sufficient to meet the Spokeo standing bar.

In January, 2019, U.S. District Judge David O. Carter certified a class comprised of millions of Walmart job applicants who collectively alleged that the company had committed Fair Credit Reporting Act and California's Investigative Consumer Reporting Agency Act violations. The basis of the allegation was that Walmart had not provided applicants with sufficient background check disclosure forms between June 2012 and March 2019.

Early on in the litigation process, the judge determined that the plaintiffs had sufficiently met the Article III standing bar in Spokeo v. Robins as established by the U.S. Supreme Court. As the case progressed, it would become the plaintiffs' burden to assert concrete injury and not simply a statutory violation. As the dispute proceeded to summary judgment phase, the plaintiffs were charged with supplying more "specific facts" to establish standing as opposed to the base allegations that had previously been sustaining the class's status and case. The class decertification occurred as a result of the judge determining that the named plaintiffs failed to provide more concrete proof as was required. According to the judge's written order, the "named plaintiffs have failed to identify an injury stemming from this statutory violation that can suffice to support Article III standing."

Judge Carter referenced the Spokeo dispute in reaching his determination, which similarly involved alleged FCRA violations. The judge noted that the Supreme Court refrained from establishing standing based solely on procedural violation, requiring that concrete injury must be proven as well. In both cases, the plaintiffs alleged only bare procedural violations.

Walmart argued for summary judgement in its favor by the district court; however, Judge Carter ruled that whether the plaintiffs could establish standing or certify as a class under the California law standards still remained to be addressed, ultimately concluding that, "the court will accordingly allow the state court, in the exercise of its proper parallel jurisdiction, to determine whether plaintiffs have standing under California law." As such, the Walmart dispute returns to Orange County Superior Court, where the case was originally filed in June 2017.

Posted: October 25, 2019

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