Judge Kerry Bensinger, Case Number: 23STCV03115, Date: 2023-12-21 Tentative Ruling

RESPONDING PARTY: Plaintiffs Or Vardi, Joseph Schuetz, Chaninthon Thammasan, and Stephanie Steiner

This action[1] is brought by prospective tenants of various rental properties regarding alleged violations of the Investigative Consumer Reporting Agencies Act (ICRAA). On February 14, 2023, Plaintiffs[2], Or Vardi (“Vardi”), Joseph Schuetz (“Schuetz”), Chaninthon Thammasan (“Thammasan”), and Stephanie Steiner (“Steiner”), filed a Complaint, against Defendants, Equity Residential Management, LLC (“ERM”) and TransUnion Rental Screening Solutions, Inc. (sued as Doe 1, hereafter, “TransUnion”), asserting causes of action for (1) Violations of the ICRAA, (2) Invasion of Privacy, and (3) Declaratory Relief.

The Complaint alleges as follows: ERM manages and operates rental properties, including, in relevant part, the Hesby Apartments and Altitude Apartments (the “Subject Properties”). Plaintiffs were prospective tenants of the Subject Properties. Specifically, Vardi, Schuetz, and Thammasan applied for housing at the Hesby Apartments; Steiner applied for housing at the Altitude Apartments. The application required a release of information permitting Defendants to obtain private and personal information from third parties about the Plaintiffs, including information on Plaintiffs’ criminal background and previous evictions. Plaintiffs consented to the release of information. ERM then requested and obtained investigative consumer reports about Plaintiffs without complying with the mandatory requirements disclosures, and authorizations required under the ICRAA. That is, ERM concealed from Plaintiff the nature and type of the investigative consumer reports they would procure about the Plaintiffs, the date the reports would be procured, the entity or entities which would provide the reports, and Plaintiffs’ rights regarding investigative consumer reports, among other things. Defendants were aware of the requirements of the ICRAA prior to committing the above violations.

On August 10, 2023, TransUnion filed this Demurrer to each cause of action in the Complaint and concurrently filed a Motion to Strike portions of the Complaint. Plaintiffs filed Oppositions. TransUnion replied.

“The primary function of a pleading is to give the other party notice so that it may prepare its case [citation], and a defect in a pleading that otherwise properly notifies a party cannot be said to affect substantial rights.” (Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 240.)

“A¿demurrer¿tests the legal sufficiency of the factual allegations in a complaint.” (Ivanoff v. Bank of America, N.A.¿(2017) 9 Cal.App.5th 719, 725.) The Court looks to whether “the complaint alleges facts sufficient to state a cause of action or discloses a complete defense.” (Id.) The Court does not “read passages from a complaint in isolation; in reviewing a ruling on a demurrer, we read the complaint ‘as a whole and its parts in their context.’ [Citation.]” (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 804.) The Court “assume[s] the truth of the properly pleaded factual allegations, facts that reasonably can be inferred from those expressly pleaded and matters of which judicial notice has been taken.” (Harris, supra, 56 Cal.4th p. 240.) “The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.]” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.)

A demurrer may be brought if insufficient facts are stated to support the cause of action asserted. (Code Civ. Proc., § 430.10, subd. (e).) “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

Where the complaint contains substantial factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty will be overruled or plaintiff will be given leave to amend. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.) Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Ibid.)

Defense counsel has satisfied the meet and confer requirement. (Declaration of Ritika Singh, ¶¶ 2-6.)

TransUnion demurs to each cause of action on the basis that the Complaint does not state facts sufficient to constitute any cause of action against TransUnion. The Court addresses each claim in turn.

TransUnion argues the First Cause of Action for Violation of ICRAA fails because Plaintiff cannot demonstrate that TransUnion, as the reporting agency, violated ICRAA.

The purpose of ICRAA is “to ensure that consumer reporting agencies ‘exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy.’” (Connor v. First Student, Inc (2018) 5 Cal.5th 1026, 1032.) “[T]he statute defines an ‘investigative consumer report’ as one ‘in which information on a consumer’s character, general reputation, personal characteristics, or mode of living is obtained through any means.’” (Id., citing Civ. Code, § 1786.2, subd. (c).)¿¿

Pursuant to ICRAA, any person who requests an investigative consumer report on a prospective tenant must comply with the following requirements: (1) “notify the consumer in writing that an investigative consumer report will be made regarding the consumer’s character, general reputation, personal characteristics, and mode of living” within “three days after the date on which the report was first requested” (Civ. Code, § 1786.16(a)(3)); (2) “include the name and address of the investigative consumer reporting agency that will prepare the report and a summary of the provisions of Section 1786.22” (Id.); (3) “certify to the investigative consumer reporting agency” that “the applicable disclosures” were made to the consumer (Civ. Code § 1786.16(a)(4)); (4) “provide the consumer a means by which the consumer may indicate on a written form, by means of a box to check, that the consumer wishes to receive a copy of any report that is prepared” (Civ. Code, § 1786.16, subd. (b)(1)); and (5) “send a copy of the report to the consumer within three business days of the date that the report is provided to the recipient.” (Id.)¿

TransUnion’s argument rests on the dual premise that (1) TransUnion is a reporting agency, not the landlord or property management requesting a prospective tenant’s investigative consumer reports, and (2) the Complaint sets forth allegations that ERM requested the reports. Thus, TransUnion argues it did not and could not have violated ICRAA. This argument fails because the first premise—that TransUnion is a reporting agency—is not alleged in the Complaint. It is extrinsic, and therefore not a proper ground to sustain the demurrer. “A¿demurrer¿tests the legal sufficiency of the factual allegations in a complaint.” (Ivanoff, supra, 9 Cal.App.5th at p. 725, emphasis added.)

For similar reason, but stated differently, the Court finds the First Cause of Action is uncertain. Here, the Complaint specifically alleges that ERM, “under the direction and control of Property Owner manages and operates the Hesby Apartments ... and the Altitude Apartments” (Complaint, ¶14), and that ERM “required Plaintiffs to complete an “Application” and to consent to a release of information” including a screen for criminal background and previous evictions (Complaint, ¶ 22). There are no allegations describing TransUnion’s role in the alleged noncompliance with the ICRAA.

Plaintiffs’ opposition also confirms the uncertainty of the allegations as to TransUnion. Plaintiffs appear to concede that TransUnion is a reporting agency by pointing to the allegation at paragraph 41 of the Complaint that ICRAA regulates landlords and agencies that gather information on consumers. (See Opposition, p. 3:11-12.) The ICRAA may very well apply to agencies, however there is no allegation identifying TransUnion as such an agency. Nor is there an allegation identifying TransUnion as a landlord. The distinction is important because the main thrust of the Plaintiff’s allegation is that the landlord is the person/entity requesting the investigative consumer report and there is no allegation TransUnion is the landlord. (See Complaint, ¶ 44.) The First Cause of Action is uncertain.

“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 Commission (2013) 56 Cal.4th 905, 926.) The ICRAA does not prevent any consumer from maintaining an action for invasion of privacy, among other claims. (Civ. Code, § 1786.52.)

Here, the invasion of privacy claim rests upon the sole allegation that “the Defendants ... invaded the Plaintiffs’ rights of privacy by obtaining investigative consumer reports about the Plaintiffs without complying with mandatory requirements under the ICAA for getting investigative reports about the Plaintiffs.” (Complaint, ¶ 52.) This allegation fails to satisfy the second or third element. The Complaint merely alleges a reasonable expectation of compliance with the ICRAA. There is no allegation regarding Plaintiffs’ reasonable expectation of privacy or the nature and scope of the invasion. The Second Cause of Action is deficient.

“To qualify for declaratory relief, a party would have to demonstrate its action presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations.” (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909, quotation marks and brackets omitted.)

A cause of action for declaratory relief should not be used as a duplicate cause of action for the determination of identical issues raised in another cause of action. (General of America Insurance Co. v. Lilly (1968) 258 Cal.App.2d 465, 470.) Further, “there is no basis for declaratory relief where only past wrongs are involved.”¿ (Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 366, quotation marks omitted.)¿

Plaintiffs’ declaratory relief claim is based on the contention that an actual controversy exists between the parties regarding the legality and effect of Defendants’ application. Because Defendants demand that all leases be renewed or re-certified, and because the same forms are always used, which authorizes Defendants to obtain investigative consumer reports about the Plaintiffs, a judicial determination is necessary to prevent the Defendants’ continued violations of the ICRAA. (Complaint, ¶¶ 53-54.) The declaratory relief claim, however, is not ripe because Plaintiffs allege only a past wrong. Plaintiffs do not allege they reapplied or will reapply. Without such an allegation there is no actual controversy, only a hypothetical one.

Moreover, for the reasons stated above, the Complaint fails to identify whether TransUnion is a landlord or a reporting agency. Given this uncertainty, the Third Cause of Action is deficient.

Defendant TransUnion Rental Screening Solutions, Inc.’s Demurrer to the Complaint is Sustained. Leave to amend is Granted.

Plaintiffs are ordered to serve and file their First Amended Complaint within 30 days of this order.

Defendant is ordered to serve and file their responsive pleading within 30 days of service of Plaintiffs’ amended pleading.

Kerry Bensinger

Judge of the Superior Court

[1] This case was previously deemed related to lead case Thomas v. Equity Residential (22STCV23730). On June 23, 2023, this case was stayed while the lead case proceeded. On October 11, 2023, the court in lead case 22STCV23730 deemed this case unrelated. This action was then severed and returned to this Court. Accordingly, the Court lifts the stay and proceeds.

[2] This action was also filed by Plaintiffs Bashar Alabi, Margaret Dawson, Jamie Meraz, and Renae Young. These plaintiffs requested dismissal of the Complaint on August 7, 2023. Dismissal was entered the following day.