UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
CORY GROSHEK, and all others
similarly situated,
Plaintiff,
-vs-

Case No. 15-C-157

TIME WARNER CABLE, Inc.
Defendant.
DECISION AND ORDER
This is a putative class action under the Fair Credit Reporting Act,
15 U.S.C. § 1681, et seq. (“FCRA”). Cory Groshek alleges that Time Warner
Cable, Inc. willfully violated the FCRA by procuring a consumer report for
employment purposes without first providing a clear and conspicuous
written disclosure in a document consisting solely of the disclosure.
Groshek moved for class certification at the same time that he filed his
complaint in accordance with the procedure set forth in Damasco v.
Clearwire Corp., 662 F.3d 891, 896 (7th Cir. 2011) (“[t]he pendency of that
motion protects a putative class from attempts to buy off the named
plaintiffs”).
Time Warner moves to dismiss for failure to state a claim. For the
reasons that follow, Time Warner’s motion to dismiss is denied, and the
Case 2:15-cv-00157-RTR Filed 07/31/15 Page 1 of 10 Document 28

 motion for class certification will remain pending as a placeholder motion
pursuant to the Damasco procedure. 662 F.3d at 896-97.
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)
tests the legal sufficiency of the complaint, not the merits of the lawsuit.
Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 675 (7th Cir. 2001). To
survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to “‘state a claim to relief that is plausible on its
face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 540, 570 (2007)). A claim is plausible if the plaintiff
“pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Id. The
Court accepts the allegations in the complaint as true and draws all
reasonable inferences in favor of the plaintiff. Mallett v. Wis. Div. of
Vocational Rehab., 130 F.3d 1245, 1248 (7th Cir. 1997).
Groshek applied for employment at Time Warner Cable in
September of 2014. Groshek received an offer of employment conditioned
upon his completion of thirty-plus pages of online documents, including
multiple background screening disclosures and authorizations. Time
Warner required Groshek to consent to three separate background
disclosure/authorization forms, all of which included the following liability
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 release:
“I hereby release from liability all persons and organizations
furnishing references or other information.”
Groshek

contends

that

the

foregoing

release

violates

15

U.S.C.

§ 1681b(b)(2)(A), which provides that no person may procure a consumer
report for employment purposes unless –
(i) a clear and conspicuous disclosure has been made in
writing to the consumer at any time before the report is
procured or caused to be procured, in a document that consists
solely of the disclosure, that a consumer report may be
obtained for employment purposes (emphasis added); and
(ii) the consumer has authorized in writing (which
authorization may be made on the document referred to in
clause (i)) the procurement of the report by that person.
Time Warner argues that Groshek fails to state a claim because the
release is a third-party release, not a release for Time Warner Cable. This
is beside the point because, as the statute clearly states, the document with
the disclosure must contain only the disclosure. It is undisputed that the
disclosures at issue here are on documents that also contain the abovequoted release language.
Time Warner argues further that the release language is
permissible because it actually draws attention to and enhances the
disclosure. In support, Time Warner cites § 1681b(b)(2)(A)(ii), infra, which
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 expressly permits the inclusion of a consumer authorization on the
disclosure form, but this is the only item that can accompany the
disclosure. Some courts have fudged on the clear statutory language,
focusing on the so-called “effectiveness” of the disclosure, but the Court
agrees with those courts that adhere to the language of the statute. See,
e.g., Singleton v. Domino’s Pizza, No. 11-1823, 2012 WL 245965, at *9 (D.
Md. Jan. 25, 2012) (“both the statutory text and FTC advisory opinions
indicate that an employer violates the FCRA by including a liability release
in a disclosure documents”); Reardon v. ClosetMaid Corp., No. 2:08-cv01730, 2013 WL 6231606, at *9 (W.D. Penn. Dec. 2, 2013) (“the Court
agrees with the analysis in Singleton, given the rather direct statutory
language at issue. … [T]he release verbiage is still not an ‘authorization,’
which is the only other provision the FCRA allows in a valid disclosure
form”).
Time Warner also asserts that Groshek cannot show that the
violation was willful. Under the FCRA, a willful violation must be
intentional or reckless, and “a company subject to FCRA does not act in
reckless disregard of it unless the action is not only a violation under a
reasonable reading of the statute’s terms, but shows that the company ran
a risk of violating the law substantially greater than the risk associated
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 with a reading that was merely careless.” Safeco Ins. Co. of Am. v. Burr,
551 U.S. 47, 69 (2007). Once again, the Court agrees with the plaintiff and
those courts which maintain that the language of the statute is simple and
straightforward. Time Warner acted recklessly by including extraneous
information in the disclosure. See, e.g., Miller v. Quest Diagnostics, No.
2:14-cv-04278-SRB, 2015 WL 545506, at *2 (W.D. Mo. Jan. 28, 2015)
(“Assertions that [defendant] was aware of the FCRA, but failed to comply
with its requirements, are sufficient to support an allegation of willfulness
and to avoid dismissal”).
Finally, Time Warner argues that Groshek’s pre-suit settlement
demand demonstrates that he is an inadequate class representative:
TWC can either pay me a high six figure settlement to make
this issue disappear now, or it can pay seven or eight figures
to settle it later (and I know, for a fact, that TWC will settle at
some point, as all companies doe in cases such as this). The
choice is TWC’s – either pay me, or pay a minimum of
$1000.00 to everyone affected by its FCRA violations over the
last five years, plus punitive damages and reasonable
attorney’s fees.
Thus according to Time Warner, Groshek is inadequate because he
attempted to sell out the putative class for his own financial gain. While
this may have been his intent, an individual settlement with Groshek
would not have compromised the claims of any putative class members.

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 Groshek’s settlement demand was submitted on his own behalf, but he is
now represented by competent class counsel. Time Warner also argues that
Groshek is inadequate because he could be charged with extortion. John
Chisholm’s caseload was recently lightened,1 but the Court doubts that the
Milwaukee County District Attorney would devote time and resources to
prosecuting Groshek on the tenuous theory that a pre-suit settlement
demand qualifies as extortion. In any event, Time Warner can renew these
arguments when Groshek’s motion is ripe for decision. Damasco, 662 F.3d
at 896 (“If the parties have yet to fully develop the facts needed for
certification, then they can also ask the district court to delay its ruling to
provide time for additional discovery or investigation”).
Finally, the Court notes that there are other ways for class action
plaintiffs to protect themselves from the “buy-off” problem. “Before
engaging in any settlement discussions, for example, counsel for potential
class plaintiffs could require an agreement from defense counsel to defer
the making of any actual offer of settlement until the conclusion of
negotiations about the parameters of the offer to be extended or without
the plaintiff’s prior consent.” Smith v. Specified Credit Assoc., Inc., No. 14

Eric Boehm, Wisconsin Supreme Court shuts down John Doe investigation,
Wisconsin Watchdog (July 16, 2015), http://watchdog.org/229533/supreme-court-johndoe/.
1

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 C 06496, 2015 WL 468871, at *2 (N.D. Ill. Jan. 30, 2015). The Court would
like the parties to discuss this possibility so it can dispose of the Demasco
motion before the end of September. Id. at *2, n.2 (“Similar agreements are
often entered into by class litigants in cases pending in this district so that
prophylactic Demasco class certification motions, which might otherwise
remain pending for long periods before briefing and resolution, can be
disposed of before they become reportable on semi-annual Civil Justice
Reform Act reports”).
NOW, THEREFORE, BASED ON THE FOREGOING, IT IS
HEREBY ORDERED THAT:
1.

Time Warner’s motion for leave to file a sur-reply brief [ECF

No. 21] is GRANTED;
2.

Time Warner’s motion to dismiss [ECF No. 13] is DENIED;

3.

Pursuant to Federal Rule of Civil Procedure 16(b), a

telephonic scheduling conference is scheduled for September 16, 2015 at
9:30 a.m. (Central Time). Please be available at that time. The Court will
initiate the call.
4.

The purpose of the conference call is to establish a scheduling

order which will limit the time: (a) to join other parties and to amend the
pleadings; (b) to file motions; (c) to complete discovery;
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 5.

The scheduling order may also: (a) modify the timing for

disclosure under Rules 26(a) and 26(e)(1) and of the extent of discovery to
be permitted; (b) provide for the disclosure or discovery of electronically
stored information; (c) include any agreements the parties reach for
asserting claims of privilege or protection as trial preparation material
after information is produced; (d) the date or dates for conferences before
trial, a final pretrial conference, and trial; and (e) any other matters
appropriate in the circumstances of the case;
6.

The time limitations set forth in the scheduling order may

only be modified for good cause and with the Court’s consent. Fed. R. Civ.
P. 16(b)(4);
7.

The parties should be prepared to discuss the matters listed in

Civil Local Rule 16(a)(1). Please refer to Attachment A. Special attention
should also be given to Rule 26(f)(1), which requires the parties to conduct
a settlement/discovery conference at least twenty-one (21) days prior to the
initial scheduling conference described above. The Rule 26(f) conference
may be conducted by telephone. Rules 26(f)(2) and (3) mandate that the
parties, within fourteen (14) days of their conference: (a) file a written
report outlining the proposed discovery plan they have developed at their
Rule 26(f) conference; and (b) make the required initial disclosures under
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 Rule 26(a) regarding witnesses and documents. In addition to the matters
specified in Rules 26(f)(2) and (3), the Court requests that the proposed
discovery plan submitted by the parties include one or two sentences
stating the nature of the case;
8.

The written report must include the telephone numbers where

the parties can be reached for this call;
9.

The parties should also, as directed, discuss alternatives to the

pendency of the Demasco placeholder motion. The written report should
outline the parties’ respective positions on this issue;
10.

In addition, Judge Randa is participating in the Seventh

Circuit Electronic Discovery Pilot Program and has adopted the Principles
Relating to the Discovery of Electronically Stored Information. Counsel
should be fully prepared to discuss methods and techniques to accomplish
cooperative fact-finding in their case at the initial status conference.
Before the initial status conference, counsel must also meet and discuss the
Principles Relating to the Discovery of Electronically Stored Information.
At the initial status conference, counsel must be prepared to discuss what
agreements they have reached regarding discovery of Electronically Stored
Information (“ESI”) and what area of disagreement they have with regard
to discovery of ESI. After discussing the matter with counsel, the Court
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 will determine whether to enter the Standing Order Relating to the
Discovery of Electronically Stored Information in their particular case.
(Please refer to Attachments B & C).
Dated at Milwaukee, Wisconsin, this 31st day of July, 2015.
BY THE COURT:
__________________________
HON. RUDOLPH T. RANDA
U.S. District Judge

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