Judge: Anne Richardson, Case: 23STCV17235, Date: 2023-10-12 Tentative Ruling

DEPARTMENT 40 - JUDGE ANNE RICHARDSON - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no email is necessary and all parties should appear at the hearing in person or by Court Call. 

Case Number: 23STCV17235    Hearing Date: April 19, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

I. Background

A. Pleadings

Plaintiffs—i.e., Jason Gunnels, Denae Jacobson, Gabriela Jacobo, Andrea Jacobo, Antoine Jones, Michael Manuel, Eric Powers, Daissy Sanchez, Raphael Schmidt, Rejoice Schmidt, Catherine Belmes, Anastasiya Saikina, Tatiana Fitch, Kapil Talwalkar, Lily Weaver, Catherine Y’tell, Deborah Alvarez, Armon Behbahany, Raymod Bridges, Sanice Bridges, Lisa Clayton, Aikaterini Marinou, Anyela Najarro, Ricardo Newsom, Jessica Romero, Odilia Sifontes, and Tiffanne Strong—sue Defendants Equity Residential Management, L.L.C. (ERM), TransUnion Rental Screening Solutions, Inc. (TransUnion), and Does 1 through 10 pursuant to an October 27, 2023, First Amended Complaint (FAC) alleging claims of (1) Violations of the Investigative Consumer Reporting Agencies Act (ICRAA), Cal. Civ. Code § 1786, et seq., (2) Invasion of Privacy, and (3) Declaratory Relief.

The claims arise from allegations that, among other things, in the past two years, and within the applicable statute of limitations, Plaintiffs applied for housing in apartment complexes owned by most if not all Defendants and that those owner Defendants used a portion of Plaintiffs’ application fees to obtain investigative consumer reports on Plaintiffs from Defendants TransUnion without disclosing the same to Plaintiffs, conduct which is alleged to violate disclosure requirements in the ICRAA.

On August 4, 2023, this action was determined to be non-complex by Department 11 at the Spring Street Courthouse.

On August 11, 2023, Department 1 reassigned this action to Department 40 at the Stanley Mosk Courthouse.

On October 18, 2023, this Court sustained the demurrer of Equity Residential Management to the original complaint in this matter, with leave to amend. The First Amended Complaint was filed on October 27, 2023.

B. Motion Before the Court

On December 13, 2023, TransUnion filed a demurrer to the FAC’s invasion of privacy claim. The demurrer does not challenge the statutory ICRAA claim or the claim for declaratory relief.

On April 8, 2024, Plaintiff Gunnels filed an opposition to TransUnion’s demurrer.

On April 11, 2024, TransUnion filed a reply to Plaintiff’s opposition.

TransUnion’s demurrer is now before the Court.

II. Demurrer: SUSTAINED, with leave to amend.

A. Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747; see Code Civ. Proc., § 430.10, subd. (e).)

To sufficiently allege a cause of action, a complaint must allege all the ultimate facts—that is, the facts needed to establish each element of the cause of action pleaded. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 212, superseded by statute as stated in Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.) “[E]ach evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)

In testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-67.) Courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228, disapproved on other grounds, Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1162.) A demurrer, however, “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)

B. Analysis

1. Relevant Law

To allege an invasion of privacy in violation of the state constitutional right, a plaintiff “must establish each of the following: (1) a legally protected privacy interest; (2) a reasonable expectation of privacy in the circumstances; and (3) conduct by defendant constituting a serious invasion of privacy.” (Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 39-40 (Hill).) Defendants may prevail by negating any element or “by pleading and proving, as an affirmative defense, that the invasion of privacy is justified because it substantively furthers one or more countervailing interests. Plaintiff, in turn, may rebut a defendant’s assertion of countervailing interests by showing there are feasible and effective alternatives to defendant’s conduct which have a lesser impact on privacy interests.” (Id. at p. 40.) “Actionable invasions of privacy must be sufficiently serious in their nature, scope, and actual or potential impact to constitute an egregious breach of the social norms underlying the privacy right.” (Id. at p. 37.)

“[E]xcept in cases involving physical intrusion, the tort [of invasion of privacy] must be accompanied by publicity in the sense of communication to the public in general or to a large number of persons as distinguished from one individual or a few. [Citation.] ‘The gravamen of the tort is unwarranted publication of intimate details of plaintiff's private life. [Citations.] The interest to be protected is individual freedom from the wrongful publicizing of private affairs and activities which are outside the realm of legitimate public concern. [Citations.]’ [Citation.]” (Kinsey v. Macur (1980) 107 Cal.App.3d 265, 270 (Kinsey).)

2. Allegations

The FAC’s second cause of action alleges an invasion of privacy by Defendants through Defendants obtaining and furnishing investigative consumer reports about Plaintiffs without complying with mandatory requirements of the ICRAA relating to such reports. (FAC, ¶¶ 75-72; see FAC, ¶¶ 32-52 [common factual allegations to all counts].)

3. Parties’ Arguments

In its demurrer, TransUnion argues that the invasion of privacy claim is defective on three grounds. First, the claim does not allege a physical intrusion, for which reason the FAC must allege that the disclosure was as to private facts, not public ones, and was made to the public at large or to a large number of persons, distinguished from one individual or a few. Second, TransUnion argues that Plaintiffs did not have a reasonable expectation of privacy in their consumer reports, as released by TransUnion to ERM, where the FAC itself alleges that Plaintiffs recognized and agreed that a part of their individual rental housing applications with ERM could involve background checks from a consumer reporting agency. Third, TransUnion argues that the FAC fails to allege an invasion of privacy that is highly offensive to a reasonable person given that the FAC alleges Plaintiffs’ understanding that background checks were part of the rental application process.

In opposition, Plaintiffs argue that they have a privacy interest in their consumer reports, that the reasonable expectation of privacy in those reports was violated when Defendants failed to comply with ICRAA disclosure requirements, and—without citing to relevant authority at section II.C.—that litigation will reveal the seriousness of the invasion of privacy, where demurrer proceedings are entirely unsuited for the mixed legal and factual questions required for this determination. Plaintiffs also add brief arguments supporting leave to amend, as applicable.

In reply, TransUnion notes that the opposing papers fail to rebut arguments relating to whether the FAC alleges a public disclosure of private facts, either to the public at large or to a large number of persons, distinguished from one individual or a few. TransUnion then argues that Plaintiffs’ consent to background checks, as alleged in the FAC, shows the non-viability of Plaintiffs’ claim for invasion of privacy. TransUnion adds that Plaintiffs’ FAC does not allege an intrusion that is highly offensive to a reasonable person where Plaintiffs allege to have consented to consumer reports being created, and where the opposition’s sole cited authority did not hold that ICRAA violations are in and of themselves egregious violations of societal norms. Last, TransUnion attacks authority cited generally at page two in Plaintiffs’ opposition for the position that a complaint is invulnerable to a demurrer if it states a cause of action on any theory.

4. Court’s Determination

The Court finds in favor of TransUnion.

First, the Court determines that the FAC fails to allege an invasion of privacy that is so serious in nature as to be highly offensive to a reasonable person. (Hill, supra, 7 Cal.4th at pp. 39-40.)

Here, the FAC itself alleges that Plaintiffs were aware that their rental applications involved background checks that could involve consumer reports. (FAC, ¶ 34.) After Plaintiffs completed their applications, such a background check was allegedly completed by TransUnion and disclosed to ERM. (FAC, ¶¶ 34, 40.) The Plaintiffs thus consented to the disclosure of their information from a consumer reporting agency to ERM. The only other wrong seemingly alleged by Plaintiffs against TransUnion beyond the disclosures to ERM appears to be failure to comply with Civil Code section 1786.20 regarding certain information that must be posted on TransUnion’s website, an allegation incorporated into the invasion of privacy count that does not relate to disclosure of Plaintiffs’ private information. (FAC, ¶¶ 67-71 [ICRAA violation], ¶ 75 [incorporation].) Under these circumstances, the FAC fails to allege an invasion of privacy that is highly offensive to a reasonable person going through a rental application process with advance knowledge that submitting the application involves consent to the landlord obtaining consumer reports regarding the applicants.

Plaintiffs’ argument that litigation—presumably the discovery process—will show the seriousness of the invasion of privacy is 1) undermined by the allegations in the FAC, as discussed in the preceding paragraph, and 2) an argument unsupported by any cited authority. Moreover, this case has been pending since July, 2023 with no stay on discovery. However, this is an argument in favor of granting leave to amend.

Second, the Court determines that the FAC does not sufficiently allege disclosure of Plaintiffs’ consumer reports to the public at large or to a large number of persons rather than to an individual or a few individuals. (Kinsey, supra, 107 Cal.App.3d at p. 270.)

The FAC alleges disclosure of each individual Plaintiff’s consumer report from TransUnion to ERM. (See FAC, ¶¶ 33, 40, 47, 51-52 [facts common to all counts alleging disclosures by TransUnion to ERM alone], 71 [TransUnion’s violation of ICRAA provisions by failure to provide required privacy notices on website, indicating TransUnion disclosed Plaintiffs’ consumer reports to “Defendants” generally and no one else] 75 [incorporation], 77 [reasonable expectation of privacy in TransUnion complying with consumer report laws], 79 [invasion of privacy arose from Defendants’ previously alleged background conduct], 80 [disclosures by TransUnion to ERM alone].)

Read liberally, the FAC alleges what appears to be a single disclosure of each Plaintiff’s consumer report from TransUnion to ERM, failing to allege whether TransUnion furnished the report to individuals or entity beyond ERM or its employees. As an illustration of the Court’s point, the Court refers to the FAC’s 40th paragraph, which alleges that “Plaintiffs are informed and believe that [ERM] procured at least one investigative consumer report about Plaintiffs from TransUnion Rental Screening.” Those allegations fail to amount to public disclosure or disclosure to a large number of persons. And as noted in TransUnion’s reply at page four, the opposition fails to address the public disclosure issue. Last, though not raised by the parties, the Court notes that insofar as a large number of reports were disclosed by TransUnion to ERM because there are multiple Plaintiffs involved in this action, the Court only consider disclosures as to each individual Plaintiff for the purposes of this analysis. The second cause of action is thus insufficiently alleged.

In summary, the fact that there is a basis on a given set of facts for a statutory claim under the ICRAA does not automatically mean that there is a basis for a common law invasion of privacy claim, as the elements of that cause of action have been defined by our courts. As noted by the Supreme Court in Connor v. First Student, Inc. (2018) 5 Cal.5th 1026, 1032, ICRAA was “enacted to ensure that consumer reporting agencies ‘exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy.’ . . . The statute was, in part, designed to protect consumers from identity theft by giving them ‘copies of any investigative consumer reports made on them.’”  However, as concluded above, more must be alleged in order to withstand demurrer as to the common law invasion of privacy claim.

For these reasons, the Court SUSTAINS TransUnion’s demurrer.

However, in light of the Plaintiff’s request, the Court will grant leave to amend. 

III. Conclusion

Defendant TransUnion’s Demurrer to the Second Cause of Action in Plaintiff’s First Amended Complaint is SUSTAINED, with leave to amend.