Judge: Daniel S. Murphy, Case: 23STCV00072, Date: 2024-01-31 Tentative Ruling

Case Number: 23STCV00072    Hearing Date: January 31, 2024    Dept: 32

BACKGROUND

            On January 3, 2023, Plaintiffs Robin Smith, Taryn Laronge, and Sandra Simonian filed this action against Defendants Equity Residential Management, LLC and Does 1 through 10. TransUnion Rental Screening Solutions, Inc. (TURSS) was subsequently identified as Doe 1. The complaint asserts causes of action for: (1) violation of ICRAA; (2) invasion of privacy; and (3) declaratory relief. Plaintiffs allege that their privacy has been violated through investigative consumer reports obtained by Defendants in association with Plaintiffs’ rental applications.

            On April 24, 2023, this case was deemed related with numerous other cases against Equity, with the lead case being heard in Department 38. All hearings were therefore taken off calendar in this Court.

            On August 24, 2023, Defendant TURSS filed the instant demurrer and motion to strike. Plaintiffs filed their opposition on January 18, 2024. Defendant filed its reply on January 24, 2024.

            On December 11, 2023, this case was severed and reassigned back to this Court pursuant to an order by Department 38 that the case was unrelated. The hearing on the demurrer and motion to strike was continued to January 31, 2024.

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.) When considering demurrers, 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.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (Code Civ. Proc., § 430.30, subd. (a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Ibid.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn, supra, 147 Cal.App.4th at 747.)

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part of that pleading. (Code Civ. Proc., § 435, subd. (b).) The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike (1) any irrelevant, false, or improper matter inserted in any pleading and (2) all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id., § 437.)

MEET AND CONFER

Before filing a demurrer or a motion to strike, the demurring or moving party is required to meet and confer with the party who filed the pleading demurred to or the pleading that is subject to the motion to strike for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., §§ 430.41, 435.5.) The Court notes that Defendant has complied with the meet and confer requirement. (See Singh Decl.)

DISCUSSION

I. Demurrer

            a. ICRAA

            The Investigative Consumer Reporting Agencies Act (ICRAA) regulates the procurement of reports containing information on a consumer’s character, general reputation, personal characteristics, or mode of living. ICRAA imposes certain requirements on those that request such information and the agencies that gather it for them. Here, the complaint alleges that Defendants failed to notify Plaintiffs of an investigative report being performed on them and failed to disclose certain other information required by ICRAA.

            Defendant TURSS argues that it is not a landlord and does not “procure or cause to be prepared an investigative consumer report,” or “request[] an investigative consumer report.” (See Civ. Code, § 1786.16(a), (b).) Therefore, Defendant argues, the ICRAA requirements implicated in the complaint do not apply to it. Defendant also argues that there are no allegations specifically pertaining to it because it was simply added as a Doe onto Plaintiff’s complaint against Equity Residential.

However, Defendant admits that it is “an agency that supplies consumer reports to those that request them.” (Dem. 6:1-3.) These agencies are covered by ICRAA, not just landlords. Additionally, Defendant attempts to establish facts through a declaration. (See Armbruster Decl.) On a demurrer, the allegations in the complaint are taken as true, and the Court may not consider extrinsic evidence. The complaint alleges that all Defendants are “persons” subject to ICRAA. (Compl. ¶ 35, citing Civ. Code, § 1786.2(a), (d).) The complaint notes that ICRAA “regulates landlords and agencies that gather information on consumers to provide to landlords.” (Compl. ¶ 37.) The complaint lists the various ways that “Defendants” violated ICRAA. (Compl. ¶¶ 38-41.) TURSS is one of the Defendants. Therefore, it is sufficiently clear what TURSS is being accused of. Plaintiff is free to allege that all of the defendants committed the same wrongs, regardless of how improbable that may be. Ultimately, it cannot be resolved on a demurrer whether any Defendant is actually covered by ICRAA or actually violated ICRAA. At this stage, the claim is adequately pled.    

            b. Invasion of Privacy

            “An actionable claim [for invasion of privacy] requires three essential elements: (1) the claimant must possess a legally protected privacy interest; (2) the claimant's expectation of privacy must be objectively reasonable; and (3) the invasion of privacy complained of must be serious in both its nature and scope.” (County of Los Angeles v. Los Angeles County Employee Relations Com. (2013) 56 Cal.4th 905, 926, internal citations omitted.) Plaintiffs’ second cause of action alleges intrusion of privacy based on Defendant’s alleged violation of ICRAA. (Compl. ¶¶ 47-48.)

            As discussed above, Defendant’s factual argument regarding whether it is an entity subject to ICRAA goes beyond the scope of a demurrer. Defendant also argues that Plaintiffs do not allege a reasonable expectation of privacy or a serious intrusion. Defendant points out that the complaint admits consumer reports are common in relation to rental applications, and Plaintiffs consented to the release of their information. (See Compl. ¶¶ 19-20.)   

            Plaintiff does not identify any facts that indicate a reasonable expectation of privacy or a serious intrusion. Plaintiff cites no authority suggesting that a violation of ICRAA necessarily results in an invasion of privacy. Plaintiff points out that ICRAA does not affect a plaintiff’s right to sue for invasion of privacy. (See Civ. Code, § 1786.52.) However, a plaintiff suing for invasion of privacy must still satisfy the elements for that claim. Therefore, the second cause of action, as currently pled, fails to state an invasion of privacy.

            c. Declaratory Relief

“Any person interested under a written instrument . . . or under a contract . . . may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties . . . arising under the instrument or contract.” (Code Civ. Proc., § 1060.) “Where the allegations of the complaint reveal the controversy to be conjectural, anticipated to occur in the future, or an attempt to obtain an advisory opinion from the court, the fundamental basis of declaratory relief is lacking.” (Brownfield v. Daniel Freeman Marina Hospital (1989) 208 Cal.App.3d 405, 410.)

The complaint alleges that there is a present dispute regarding the legality of Defendants’ rental application, and because Defendants use the same forms each time leases are renewed, a judicial determination is needed to prevent further violations of ICRAA. (Compl. ¶ 50.) This is a hypothetical future dispute, not a present controversy. Plaintiffs do not allege that they have applied or will apply for a lease renewal. Defendant’s potential continued violations against unspecified persons constitute events that are “anticipated to occur in the future” and do not implicate any rights or obligations between Plaintiffs and Defendant. Between Plaintiffs and Defendant, the only existing dispute is whether Defendant violated ICRAA with past consumer reports. (See Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 366 [“there is no basis for declaratory relief where only past wrongs are involved”].)

II. Motion to Strike

            a. Injunctive Relief

            Plaintiffs request injunctive relief as part of their first cause of action for violation of ICRAA. (Compl. ¶ 46.) ICRAA provides for damages, attorneys’ fees, and punitive damages, but not injunctive relief. (See Civ. Code, § 1786.50.) Additionally, “injunctive relief lies only to prevent threatened injury and has no application to wrongs that have been completed.” (Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005) 129 Cal.App.4th 1228, 1266.) As discussed above, the complaint does not allege any threatened future harm upon Plaintiff. The controversy only concerns previous consumer reports representing a prior wrong. Therefore, injunctive relief is stricken.

            b. Prayer for Relief

            Defendant moves to strike certain prayers for relief on the grounds that the underlying causes of action have not been adequately alleged. As discussed above, Plaintiffs have properly pled a violation of ICRAA, which provides for damages and attorneys’ fees, but not injunctive relief. Therefore, only Prayer 9 for injunctive relief is stricken.

            c. Punitive Damages

            ICRAA provides for an award of punitive damages “[i]f the court determines that the violation was grossly negligent or willful.” (Civ. Code, § 1786.50(b).) Intent is generally an allegation of ultimate fact. (See Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6 [allegations that defendants acted “wrongfully and intentionally” and “in retaliation” were sufficient to support a prayer for punitive damages].) Nonetheless, the complaint here goes further and alleges that Defendant was advised by counsel of the requirements under ICRAA but knowingly performed non-compliant background checks on Plaintiffs because it “did not want the tenants or prospective tenants to know about or have access to any confidential consumer reports about them.” (Compl. ¶ 33.) For pleading purposes, this sufficiently establishes a grossly negligent or willful violation of ICRAA. Further facts evidencing intent can be ascertained in discovery.   

CONCLUSION

            Defendant’s demurrer is SUSTAINED as to the second and third causes of action with leave to amend. The demurrer is OVERRULED as to the first cause of action. Defendant’s motion to strike is GRANTED as to injunctive relief with leave to amend, and DENIED in all other respects.