United States District Court, W.D. Missouri, Central Division
RIA SCHUMACHER, Individually and on Behalf of All Others Plaintiffs,
SC DATA CENTER, INC. d/b/a COLONY BRANDS, INC., Defendant.
NANETTE K. LAUGHREY United States District Judge.
S.C. Data Center, Inc. moves for an order certifying an
interlocutory appeal from the Court's November 29, 2016
Order, [Doc. 61');">61], in which the Court enforced the
parties' settlement agreement and denied S.C. Data's
Rule 12(b)(1) motion to dismiss. [Doc. 62]. For the following
reasons, SC Data's motion is denied.
behalf of a class, Plaintiff Ria Schumacher brings three
claims under the Fair Credit Reporting Act arising out of her
employment application with Defendant S.C. Data Center, Inc.
Schumacher filed this action on February 3, 2016, in the
Circuit Court of Cole County, Missouri. S.C. Data removed the
matter to this Court on March 4, 2016. On May 12, 2016, the
parties attended mediation with Richard Sher, an experienced
mediator in Saint Louis, Missouri. During this mediation, the
parties reached a class settlement, conditioned on the
Court's requisite Rule 23 approval.
16, 2016, the Supreme Court decided Spokeo v.
Robins, 136 S.Ct. 1540 (2016), which addressed Article
III standing within the context of FCRA claims. Then, on July
15, 2016, SC Data filed its motion to dismiss, citing
Spokeo for the proposition that Schumacher's
FCRA claims lacked sufficient concreteness to provide
standing. At oral argument on S.C. Data's motion to
dismiss, Schumacher asked the Court to enforce the
parties' previous May 12, 2016 settlement agreement. On
August 17, 2016, the Court invited supplemental briefing on
its subject matter jurisdiction to enforce the settlement,
which the parties filed. [Docs. 51 and 52].
Court granted Schumacher's request for an order enforcing
the parties' settlement agreement and denied S.C.
Data's motion to dismiss for lack of subject matter
jurisdiction following Spokeo. [Doc. 61');">61]. The Court
[B]ecause the parties entered into a settlement agreement
that Schumacher wishes to enforce, the issue is not whether
the Court has subject matter jurisdiction over her FCRA
claims. Instead, the issue is whether the Court has subject
matter jurisdiction to enforce the parties' settlement
[Doc. 61');">61, p. 3]. The Court held that “in light of [its]
obligations under Rule 23 as well as the strong public policy
and judicial preference for settlements, this Court finds no
reason permitting, let alone compelling, a district court to
disregard a valid, binding contract to settle the
litigation.” [Doc. 61');">61, p. 8].
moves the Court to certify its Order for interlocutory appeal
so that S.C. Data may have the “the Eighth Circuit
Court of Appeals decide the legal question of standing to
bring the complaint, which must be addressed at the forefront
and which in turn may invalidate the parties' conditional
settlement.” [Doc. 68, p. 6].
1292(b) establishes three criteria for certification of an
order for interlocutory appeal: “[T]he district court
must be of the opinion that (1) the order involves a
controlling question of law; (2) there is substantial ground
for difference of opinion; and (3) certification will
materially advance the ultimate termination of the
litigation.” Union Cnty, Iowa v. Piper Jaffray
Co., 525 F.3d 643, 646 (8th Cir. 2008). “[It] has
. . . long been the policy of the courts to discourage
piecemeal appeals because most often such appeals result in
additional burdens on both the court and the
litigants.” White v. Nix, 43 F.3d 374, 376
(8th Cir. 1994) (internal quotations and citation
omitted). Due to this additional burden, motions for
certification should be “granted sparingly and with
discrimination.” Id. (internal quotations and
citation omitted). The movant must meet a heavy burden of
establishing that the case is “an exceptional one in
which immediate appeal is warranted.” Id.
Thus, the “district judge is given authority by the
statute to defeat any opportunity for appeal by
certification, in deference to familiarity with the case and
the needs of case management.” Charles Allen Wright and
Arthur R. Miller, 16 Fed. Prac. & Proc. Juris. §
3929 (3rd ed.).
has not met its heavy burden of demonstrating that the
proposed issue is an exceptional one warranting interlocutory
appeal because it fails to show that there is “a
substantial ground for difference of
opinion.” In support of this requirement, SC Data
cites to cases around the country in which courts have
inconsistently determined that FCRA claims like
Schumacher's either are or are not sufficiently concrete
to confer Article III standing following Spokeo.
However, as this Court made clear in its Order, the question
facing this Court was whether it had subject matter
jurisdiction to enforce a valid, binding contract between
S.C. Data and Schumacher to settle the litigation, not
whether Schumacher had standing to bring her underlying
claims following Spokeo.
fails to cite to any case showing disagreement with the
Court's opinion that settlements are enforceable,
regardless of subsequent changes in the law. In addition, the
fact that the Eighth Circuit has not ruled on this specific
issue is insufficient to establish a substantial ground for
difference of opinion. See, e.g., White v.
Nix, 43 F.3d 374, 378 (8th Cir. 1994)
(“[S]ubstantial ground for difference of opinion does
not exist merely because there is a dearth of cases.”).
As discussed in this Court's Order, at least one federal
court of appeals has thoroughly considered this issue and
found that a later change in the law eliminating the
plaintiffs' cause of action did not render the
parties' settlement agreement moot or unenforceable.
Ehrheart v. Verizon Wireless, 609 F.3d 590
(3rd Cir. 2010). S.C. Data's citations to
cases addressing the separate issue of whether
post-Spokeo, Schumacher has standing to bring her
underlying claims, are a reiteration of S.C. Data's
arguments in its motion to dismiss and do not require a
contrary result. Accordingly, SC Data's cited authorities
do not undermine the soundness of Ehrheart's
analysis or this Court's agreement with
Ehrheart. Nor do S.C. Data's authorities
contradict the three principles relied upon by the Third
Circuit in Ehrheart and this Court in its Order: (1)
“the restricted, tightly focused role of district
courts prescribed by Rule 23, requiring them to act as
fiduciaries for the absent class members, but that does not
vest them with broad powers to intrude upon the parties'
bargain”; (2) “the strong public policy favoring
settlement of disputes” that is “particularly
muscular in class action suits”; and (3)
“jurisprudence holding that changes in the law after a
settlement is reached do not provide ground for
rescission.” [Doc. 61');">61, p. 4 (quoting Ehrheart,
609 F.3d at 593 (internal quotations omitted)].
this Court is unaware of any courts that have found
Spokeo to be grounds for refusing to enforce or
denying approval of an FCRA class settlement. Rather,
following the Spokeo decision, several federal
courts have preliminarily or finally approved class
settlement agreements that, like in this case, were entered
into by parties prior to Spokeo and involved
underlying claims that may have been impacted by
Spokeo.See, e.g., Hillson v. Kelly
Services, Inc., 2017 WL 279814, at *3-6 (E.D. Mich. Jan.
23, 2017) (preliminarily approving parties' FCRA class
settlement after evaluating standing after Spokeo
and concluding, “[T]he Court declines to weigh in on
this split in authority” but ultimately finding
“that Plaintiffs have suffered a ‘concrete'
injury”); Zink v. First Niagara Bank, N.A.,
2016 WL 7473278, at *3 (W.D.N.Y. Dec. 29, 2016) (determining
proposed settlement amount for class's RPAPL and RPL
statutory claims was “reasonable, particularly in view
of the uncertainty regarding the existence of subject matter
jurisdiction in light of Spokeo” and finally
approving parties' class settlement); Heaton v.
Social Finance, Inc., No. 14-cv-05191- TEH (N.D. Cal.
Aug. 9, 2016) (finally approving parties' FCRA class
settlement without mention of standing or Spokeo but
where parties noted in their briefing in support of the
settlement that, “the settlement in this case was
negotiated with consideration to the risks posed by . . .
Spokeo, [which] . . . may have presented
substantial, if not insurmountable, hurdles to continued
litigation in this forum”); Chapman v. Dowman,
Heintz, Boscia, & Vician, P.C., 2016 WL 3247872, at
*1 n.1 (N.D. Ind. June 13, 2016) (finally approving FDCPA
class settlement and noting, “The Court acknowledges
that the Supreme Court's recent opinion in Spokeo . .
. may call into question the plaintiff's standing .
. . In supplemental briefing, both ...