Judge: Daniel S. Murphy, Case: 23STCV31160, Date: 2024-03-08 Tentative Ruling

Case Number: 23STCV31160    Hearing Date: March 8, 2024    Dept: 32

BACKGROUND

            On December 20, 2023, Plaintiff Monica Sanchez filed this action against National Instruments Corporation, alleging violation of the California Invasion of Privacy Act (CIPA). Plaintiff alleges that Defendant secretly deploys spyware to access the devices of visitors to its website. Plaintiff alleges that she visited Defendant’s website in 2023, whereupon Defendant accessed Plaintiff’s device and installed “pen register” and “trap and trace” tracking software.

            The complaint asserts a single cause of action under CIPA, or Penal Code sections 630 et seq. Plaintiff alleges economic injury and intangible injury to her dignity. Plaintiff alleges that she is entitled to statutory damages of $5,000 under Penal Code section 637.2(a)(1). Additionally, Plaintiff prays for punitive damages, attorneys’ fees, and all other relief as may be deemed appropriate.

            On February 8, 2024, Defendant filed the instant motion to reclassify the case from unlimited to limited jurisdiction. Plaintiff filed her opposition on February 26, 2024. Defendant filed its reply on March 1, 2024.  

LEGAL STANDARD

“A trial court has authority to conduct a pretrial hearing [a Walker hearing] to obtain information about whether the amount of the judgment will require reclassification.” (Stern v. Superior Court (2003) 105 Cal.App.4th 223, 229.) “Under the Walker standard, a matter may be

reclassified as a limited civil action ‘when (i) the absence of jurisdiction is apparent before trial from the complaint, petition, or related documents, or (ii) during the course of pretrial litigation, it becomes clear that the matter will ‘necessarily’ result in a verdict below the superior court's jurisdictional amount....’” (Ytuarte v. Superior Court (2005) 129 Cal.App.4th 266, 276.)

            A “defendant or cross-defendant may file a motion for reclassification within the time allowed for that party to respond to the initial pleading.” (Code Civ. Proc., § 403.040(a).) “The court shall grant the motion and enter an order for reclassification, regardless of any fault or lack of fault, if the case has been classified in an incorrect jurisdictional classification.” (Ibid.)

DISCUSSION

I. The Applicable Jurisdictional Minimum

            As an initial matter, the jurisdictional minimum applicable here is $25,000. At the time the complaint was filed, the prior versions of Code of Civil Procedure sections 85 and 86 were in effect, and the jurisdictional minimum was $25,000. The amended Sections 85 and 86, which increased the minimum to $35,000, did not go into effect until January 1, 2024. In California, “statutes ordinarily are interpreted as operating prospectively in the absence of a clear indication of a contrary legislative intent.” (Quarry v. Doe I (2012) 53 Cal.4th 945, 955.) “[A] statute may be applied retroactively only if it contains express language of retroactivity or if other sources provide a clear and unavoidable implication that the Legislature intended retroactive application.” (Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 844.)

Sections 85 and 86 do not contain any express language of retroactivity, nor is there a clear and unmistakable indication that the provisions were meant to apply retroactively. Defendant’s interpretation is unsupported by legal authority. Therefore, the amended versions of Sections 85 and 86 do not apply to this case, and the relevant jurisdictional minimum is $25,000.    

II. Whether Plaintiff’s Claim Possibly Exceeds the Jurisdictional Minimum

            Defendant argues that because Plaintiff is a “tester” who visits different websites in search of violations and only visited Defendant’s website once, her damages are de minimis and only slightly exceed the statutory penalty of $5,000.

            However, the unlikelihood of Plaintiff recovering more than $25,000 is not sufficient to reclassify the case. Rather, it must “appear[] to a legal certainty that plaintiff cannot recover the amount.” (Ytuarte, supra, 129 Cal.App.4th at p. 277.) “This standard of ‘legal certainty’ is not met when it appears a verdict within the unlimited court's jurisdiction is ‘possible.’” (Ibid.) CIPA allows recovery of $5,000 per violation or three times the amount of actual damages, whichever is greater. (Pen. Code, § 637.2(a).) Defendant has presented no evidence or legal authority to preclude the possibility, as a matter of law, that Plaintiff suffered sufficient damages which would exceed $25,000 when trebled. Plaintiff never admitted in the complaint that she suffered de minimis damages. To the contrary, Plaintiff alleges that she suffered economic and intangible injuries, and that the amount in controversy is up to $75,000. (Compl. ¶¶ 21, 24.) Therefore, it is “possible” for Plaintiff to recover more than $25,000. To the extent that the complaint fails to allege sufficient facts, it is subject to demurrer, not reclassification.

            Defendant argues that the $5,000-per-violation penalty and treble damages from Penal Code section 637.2(a) do not apply because the narrower $2,500 fine from Section 638.51 applies instead. Section 637.2(a) applies to violations of CIPA as a whole, whereas Section 638.51 applies specifically to pen register and trap/trace. Plaintiff alleges that Defendant violated Section 638.51 by installing a pen register and trap/trace software on her device. (Compl. ¶¶ 22-23.) Defendant relies on De Anza Santa Cruz Mobile Estates Homeowners Assn. v. De Anza Santa Cruz Mobile Estates (2001) 94 Cal.App.4th 890, 911, which held that “a general statute must bow to a more specific statute addressing the same subject.”

However, De Anza addressed whether the statutory remedy provided in Civil Code section 798.86, part of the Mobilehome Residency Law (MRL), precluded recovery of punitive damages under Civil Code section 3294. (De Anza, supra, 94 Cal.App.4th at p. 911.) The court held that “a plaintiff who proceeds solely on a cause of action for violation of the provisions of the Mobilehome Residency Law is limited to the statutory penalty provided in Civil Code section 798.86.” (Id. at pp. 915-16.) This is because “a plaintiff cannot recover both punitive damages and statutory penalties, as this would constitute a prohibited double penalty for the same act.” (Id. at p. 912.)

By contrast, Penal Code sections 637.2 and 638.51 do not implicate the potential for double recovery. While Section 638.51 applies specifically to pen register and trap/trace, the penalty discussed therein is a fine and/or imprisonment, not an award of damages going to the victim. Section 638.51 imposes a criminal penalty, which is unrelated to a victim’s recovery of civil damages. Private recovery is instead governed by Section 637.2, which authorizes a civil action against a person who has violated any provision of CIPA. Therefore, Sections 637.2 and 638.51 do not conflict. Section 638.51 is not “a more specific statute addressing the same subject.” (See De Anza, supra, 94 Cal.App.4th at p. 911.) Rather, Section 638.51 addresses a different subject—criminal penalties—and leaves civil damages to Section 637.2.

III. Injunctive Relief

Additionally, a limited civil case is one in which “[t]he relief sought is a type that may be granted in a limited civil case.” (Code Civ. Proc., § 85(b).) Injunctive relief cannot be sought in a limited civil case. (Ytuarte, supra, 129 Cal.App.4th at p. 275.) Although Plaintiff currently alleges that she is not seeking injunctive relief (Compl. ¶ 21), the complaint can be amended. If Plaintiff asserts injunctive relief, the case would be correctly classified as unlimited for that independent reason.  

CONCLUSION

            Defendant’s motion to reclassify is DENIED.