Judge Thomas D. Long, Case Number: 20STCV42994, Date: 2023-10-24 Tentative Ruling

On April 28, 2021, Plaintiff Stacy Kate Yeh filed this action against Defendant Barrington Pacific LLC for violation of the Investigative Consumer Reporting Agencies Act (“ICRAA”).

This action was later related and consolidated with Case Nos. 20STCV43014, 20STCV43044, 20STCV45444, 20STCV45446, 20STCV45447, 20STCV45449, 20STCV45453, 20STCV45456, 20STCV45457, 20STCV45497, 20STCV45499, 20STCV45500, 20STCV45506, 20STCV45507, 20STCV45511, 20STCV45513, 20STCV45514, 20STCV45542, 20STCV45554, 20STCV45561, 20STCV45574, 20STCV45578, 20STCV45582, 20STCV45888, 20STCV45973, 21SMCV00602, 21STCV00454, 21STCV00459, 21STCV00466, 21STCV00468, 21STCV00491, 21STCV00508, 21STCV00664, 21STCV00668, 21STCV00687, 21STCV00690, 21STCV00693, 21STCV00699, 21STCV00701, 21STCV00834, 21STCV00862, 21STCV00867, 21STCV01854, 21STCV01858, 21STCV01866, 21STCV01869, 21STCV01991, 21STCV02036, 21STCV02038, 21STCV05076, 21STCV05077, 21STCV05089, 21STCV05098, 21STCV05108, 21STCV05148, 21STCV06228, 21STCV06250, 21STCV12211, 21STCV12220, 21STCV12263, 21STCV12361, 21STCV12414, 21STCV12421, 21STCV12474, 21STCV12695, 21STCV12725, 21STCV12727, 21STCV12730, 21STCV12733, 21STCV12735, 21STCV12737, 21STCV12739, 21STCV12741, 21STCV12743, 21STCV12744, 21STCV12745, 21STCV12747, 21STCV12748, 21STCV12750, 21STCV12757, 21STCV12759, 21STCV12778, 21STCV12780, 21STCV12781, 21STCV12782, 21STCV12785, 21STCV12787, 21STCV12790, 21STCV12791, 21STCV12794, 21STCV12797, 21STCV12800, 21STCV12807, 21STCV12808, 21STCV12811, 21STCV12821, 21STCV12821, 21STCV12825, 21STCV12826, 21STCV12848, 21STCV14606, 21STCV14626, 21STCV14628, 21STCV14656, 21STCV14658, 21STCV16621, 21STCV16666, 21STCV29543, 21STCV29632, 21STCV29638, and 21STCV42817.

Some of the consolidated Plaintiffs also allege violation of the Unfair Competition Law (“UCL”) based on the violations of ICRAA.

On August 9, 2023, Defendants filed a motion for summary judgment of all consolidated cases.

Defendant’s request for judicial notice of filings in this consolidated case is denied as unnecessary. These documents are already part of the case’s record.

Plaintiff’s request for judicial notice of the published case of Bernuy v. Bridge Property Management Company (2023) 89 Cal.App.5th 1174, 1186-1187 is denied as unnecessary.

In reply, Defendant asks the Court to take judicial notice of the August 18, 2023 order in Flores v. Accurate Background LLC, 2023 Cal. Super. LEXIS 66520. This order is unpublished and nonprecedential. (See Santa Ana Hospital Medical Center v. Belshe (1997) 56 Cal.App.4th 819, 831 [“a written trial court ruling has no precedential value”].) The request is denied.

Plaintiff’s Objections to the Declarations of Justin Penn and Michael Means are overruled.

The Defendants in each of these now-consolidated actions—Barrington Pacific LLC, Shores Barrington LLC, and DE Glendon LLC—share a management company and use substantially the same applications and procedures for rentals. (Means Decl. ¶¶ 4-5.)

On November 2, 2019, Plaintiff Stacy Kate Yeh and her roommate submitted an Application for Occupancy to the Barrington Pacific Apartments. (Additional Material Facts “AMF” 1.) The same day, Barrington Pacific used the Application and Authorization to obtain reports about Yeh from CoreLogic Rental Property Solutions LLC and CrimSafe, as well as a Lease Recommendation Report and RegistryCheck Report. (AMF 23-27.) Barrington Pacific never provided Yeh with a box to check if she wanted to receive a copy of any report that was obtained about her, and it did not provide Yeh with a copy of the reports. (AMF 28-29.)

Each Plaintiff had their rental applications approved and were or currently are tenants of Defendants. (Undisputed Material Facts “UMF” 1.) Defendants used substantively identical rental applications for residential rental of their properties for all Plaintiffs, and they all use the same procedures, generally speaking, in evaluating rental applications including procedures for background checks. (UMF 14-15.)

Each Plaintiff for all related and consolidated cases signed a rental application that authorized verification of the items included in the rental application. (UMF 2.) The rental application also included a disclosure that explained Defendants would obtain Plaintiffs’ credit report, as well as a consent signed by Plaintiffs allowing Defendants to obtain their reports. (UMF 4.) Plaintiffs do not allege that any information about them in Defendants’ possession is inaccurate. (UMF 5.)

For each claim in the complaint, the defendant moving for adjudication must satisfy the initial burden of proof by showing that one or more elements of a cause of action cannot be established or that there is a complete defense to a cause of action. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520 (Scalf).) Then the burden shifts to the plaintiff to show that a triable issue of material fact exists as to that cause of action or a defense. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf, supra, 128 Cal.App.4th at p. 1520.) To establish a triable issue of material fact, the party opposing the motion must produce “substantial responsive evidence.” (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 162-163.)

Under ICRAA, any person requesting an investigative consumer report in connection with the hiring of a dwelling unit must make certain disclosures and include a written form with a box to check indicating that the consumer wishes to receive a copy of any report that is prepared. (Civ. Code, § 1786.16, subds. (a)(3), (b).) “An investigative consumer reporting agency or user of information that fails to comply with any requirement under this title with respect to an investigative consumer report is liable to the consumer who is the subject of the report in an amount equal to the sum of all the following: [¶] (1) Any actual damages sustained by the consumer as a result of the failure or, except in the case of class actions, ten thousand dollars ($10,000), whichever sum is greater. . . .” (Civ. Code, § 1786.50, subd. (a).)

All Plaintiffs allege that Defendants did not comply with all of ICRAA’s requirements. (See, e.g., Yeh Complaint ¶ 20.)

Defendants argue that Plaintiffs lack standing. “In assessing standing, California courts are not bound by the ‘case or controversy’ requirement of article III of the United States Constitution, but instead are guided by ‘prudential’ considerations. [Citation.] ‘One who invokes the judicial process does not have “standing” if he, or those whom he properly represents, does not have a real interest in the ultimate adjudication because the actor has neither suffered nor is about to suffer any injury of sufficient magnitude reasonably to assure that all of the relevant facts and issues will be adequately presented.’ [Citations.]” (Bilafer v. Bilafer (2008) 161 Cal.App.4th 363, 370.)

Defendants primarily rely on Limon v. Circle K Stores Inc. (2022) 84 Cal.App.5th 671 (Limon) as an analogous case analyzing standing under the Fair Credit Reporting Act (“FCRA”). In Limon, the plaintiff alleged that his employer violated FCRA’s disclosure and authorization requirements (Id. at pp. 682-683.) Under FCRA, “‘Any person who willfully fails to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer in an amount equal to the sum of—[¶] (1)(A) any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000 . . . .’” (Id. at pp. 683-684, quoting 15 U.S.C. § 1681n.) This provision for liability is nearly identical to the one contained in ICRAA. (See Civ. Code, § 1786.50, subd. (a).)

Both the Plaintiffs here and the plaintiff in Limon characterized the relief sought as statutory penalties available regardless of injury. (Opposition at pp. 8, 11-12; Limon, supra, 84 Cal.App.5th at pp. 700-701.) Considering the close parallels between the language in ICRAA and FCRA, the Court agrees with the Limon court’s legal and linguistic analysis of the terms “damages” and “penalties.” (See Limon, supra, 84 Cal.App.5th at pp. 700-703.) ICRAA provides for the recovery of “actual damages” or $10,000, whichever is greater. (Civ. Code, § 1786.50, subd. (a).) The specific use of the term “actual damages,” rather than “penalties,” shows that the statute is intended to compensate for injury, not to punish for violations. (See Limon, supra, 84 Cal.App.5th p. 703.) The availability of a specific amount of statutory damages is an acknowledgement that some plaintiffs who suffered concrete harm may have difficulty proving their actual damages. (See id. at p. 702.)

Because the statute provides for damages, not penalties, Plaintiffs must demonstrate that they suffered an actual and concrete injury. It is clear that they cannot do so.

The Limon plaintiff did not allege that the consumer report obtained by his employer contained injurious, false, or inaccurate information, and there was no adverse employment decision based on sale or inaccurate reporting. (Limon, supra, 84 Cal.App.5th at p. 705.) There was no injury to the plaintiff’s protected interest in ensuring fair and accurate credit or background reporting because there were no allegations of any exposure to a material risk of future harm. (Ibid.)

Similarly here, Plaintiffs’ rental applications were approved and they became tenants of the Defendants. (UMF 2.) Plaintiffs do not allege that any information about them in Defendants’ possession is inaccurate. (UMF 11.) Thus, they have not suffered an injury from false information or exposure to a risk of future harm.

The Limon court also rejected the plaintiff’s claim of “informational injury” because there was no connected concrete injury. (Limon, supra, 84 Cal.App.5th at p. 706.) “‘Informational injury that causes no adverse effects’—e.g., where required information is provided but is provided in the wrong format as in the present case—has been held insufficient to satisfy Article III standing.” (Ibid.) The deprivation of information is also not a cognizable injury. (Ibid.)

That is the same situation here: Plaintiffs allege that they were not informed that investigative consumer reports would be prepared regarding their character, general reputation, personal characteristics, and mode of living. (Yeh Complaint ¶ 20.) They also allege that they never received a summary of the provisions of Civil Code section 1786.22. (Ibid.) But despite this deprivation of information, Plaintiffs suffered no concrete injury. Their applications were not denied, and the reports contained accurate information.

Plaintiffs argue that reliance on Limon is misguided because ICRAA imposes affirmative obligations that are not imposed by FCRA, and the differences in their objections make a difference. (Opposition at pp. 8-10.) Plaintiffs contend that the stated purposes of FCRA are to ensure “fair and accurate credit reporting” and “to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy,” but ICRAA has the additional purpose of preventing identity theft because “consumers are best protected if they are automatically given copies of any investigative consumer reports made on them.” (Id. at p. 9 [quoting 15 U.S.C. §¿1681 and Civ. Code, § 1786].) Plaintiffs’ ICRAA quotation is part of the legislative findings. In the same section, the statute states, “It is the purpose of this title to require that investigative consumer reporting agencies adopt reasonable procedures for . . . information relating to the hiring of dwelling units in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of the information in accordance with the requirements of this title.” (Civ. Code, § 1786, subd. (f).) This purpose of ensuring fairness and accuracy is substantially similar to the purpose of FCRA.

Plaintiffs also contend that the Court of Appeal recently held that actual damages do not need to be shown, and the issue of standing is an issue to be addressed by the legislature. (Opposition at pp. 7-8, 12.) Plaintiffs quote Bernuy v. Bridge Property Management Co. (2023) 89 Cal.App.5th 1174, 1187 (Bernuy): “[T]o the extent BPMC believes that a $10,000 statutory penalty is unfair when no actual damage is shown or is too much when a non-profit entity fails to comply with ICRAA requirements, those are policy matters for the Legislature to decide.” (Opposition at pp. 7-8.)

Bernuy involved the retroactive effect of a California Supreme Court decision that upheld the constitutional validity of ICRAA. (See, e.g., Bernuy, supra, 89 Cal.App.5th at pp. 1179, 1181-1183.) The defendant argued that when there were no actual damages, fairness and public policy weighed against the general rule that judicial decisions apply retroactively. (Id. at pp. 1186-1187.) The Court of Appeal mentioned the $10,000 statutory damages in the context of the defendant’s argument that it was “unfair when no actual damage is shown.” (Id. at p. 1187.) The “policy matters for the Legislature to decide” referred to the fairness of the statutory damages, and the Court characterized the defendant’s fairness argument as a “substantive disagreement with the damages provision of ICRAA.” (Ibid.) Bernuy did not involve damages and injury in the context of standing, and “cases are not authority for propositions not considered.” (B.B. v. County of Los Angeles (2020) 10 Cal.5th 1, 11, quotation marks omitted.) Plaintiffs’ reliance on this dicta cannot overcome the standing requirement of actual injury.

The UCL includes any unlawful, unfair, or fraudulent business act or practice and unfair, deceptive, untrue, or misleading advertising. (Bus. & Prof. Code, § 17200.) The UCL embraces “anything that can properly be called a business practice and that at the same time is forbidden by law.” (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.) “By proscribing any unlawful business practice, section 17200 borrows violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable.” (Ibid.)

This cause of action is based on Defendants’ alleged violations of ICRAA. (E.g., Yeh Complaint ¶¶ 15-22.) For all the reasons discussed above, Plaintiffs lack standing to bring claims under ICRAA, so there is no basis for UCL claims.

The motion for summary judgment is GRANTED. Defendants are ordered to submit a proposed judgment within five days.

The Hearing on Motion to Compel Further Discovery Responses to Discovery Requests of Plaintiffs in Related Actions is denied as moot.

A Non-Appearance Case Review Re: Submission of Proposed Judgment is scheduled for December 15, 2023 at 9:00 a.m.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

Hon. Thomas D. Long

Judge of the Superior Court