Justia California Court of Appeals Opinion Summaries

The Investigative Consumer Reporting Agencies Act (ICRAA, Civil Code, 1786) mandates certain disclosures for investigative consumer reports, which are often used by landlords to make decisions regarding consumers who apply for housing. ICRAA requires the adoption of “reasonable procedures” for providing consumer information “in a manner which is fair and equitable to the consumer," concerning the confidentiality, accuracy, relevancy, and proper utilization of their information. Any investigative consumer reporting agency or user of information that fails to comply with the requirements is liable to the affected consumer for any actual damages or $10,000, whichever sum is greater. Courts of appeal disagreed about the constitutionality and enforceability of ICRAA.In 2018, the California Supreme Court upheld the constitutional validity of ICRAA. Bernuy had filed one of 27 consolidated actions seeking damages against BPMC for its commission of ICRAA violations in 2017. Bernuy’s action was designated a “bellwether” case for adjudicating certain issues. The court of appeal held that the California Supreme Court’s 2018 decision did not constitute a subsequent change in the law that relieved BPMC of liability for its ICRAA violations. However, certain plaintiffs’ ICRAA claims are time-barred under the applicable two-year statute of limitations. The limitations period was not tolled by the pendency of a putative class action. View "Bernuy v. Bridge Property Management Co." on Justia Law

Securus Technologies, LLC (Securus), is one of six telecommunications companies providing incarcerated persons calling services (IPCS) in California. In this original proceeding, Securus challenges the decision of the California Public Utilities Commission (PUC) adopting interim rate relief for IPCS in the first phase of a two-phase rulemaking proceeding. Among other things, the PUC’s decision: (1) found IPCS providers operate as locational monopolies within the incarceration facilities they serve and exercise market power; (2) adopted an interim cap on intrastate IPCS rates of $0.07 per minute for all debit, prepaid, and collect calls; and (3) prohibited providers from charging various ancillary fees associated with intrastate and jurisdictionally mixed IPCS.   The Second Appellate District affirmed the PUC’s decision. The court concluded Securus has not shown the PUC erred by finding providers operate locational monopolies and exercise market power. The court held that facts do not—as Securus contends—demonstrate Securus “cannot recover its costs (including a reasonable rate of return)” under the interim rate cap and do not amount to a “clear showing” that a rate of $0.07 per minute “is so unreasonably low” that “it will threaten Securus’s financial integrity.” Thus, Securus has failed to satisfy its “burden of proving . . . prejudicial error” on constitutional grounds. View "Securus Technologies v. Public Utilities Com." on Justia Law

These original proceedings involve efforts by the Public Utilities Commission (PUC or the Commission) to discover whether the political activities of Southern California Gas Company (SCG) are funded by SCG’s shareholders, which is permissible, or ratepayers, which is not. The Commission propounded several discovery requests (called “Data Requests”) on SCG, and when SCG failed fully to comply, moved to compel further responses that ultimately resulted in an order to comply or face substantial penalties. SCG seeks a writ of mandate directing the Commission to rescind its order on the ground that the discovery requests infringe on SCG’s First Amendment rights.   The Second Appellate District granted the petition and held that SCG has shown that disclosure of the requested information will impact its First Amendment rights, and the Commission failed to show that its interest in determining whether SCG’s political efforts are impermissibly funded outweighs that impact. The court reasoned that because SCG demonstrated that a threat to its constitutional rights exists, the burden shifted to the Commission to demonstrate that the data requests serve and are narrowly tailored to a compelling governmental interest. However, the PAO’s discovery inquiries into all sources of funding for SCG’s lobbying activities go beyond ratepayer expenditures. Insofar as the requests seek information about shareholder expenditures, they exceed the PAO’s mandate to obtain the lowest possible costs for ratepayers and its authority to compel disclosure of information necessary for that task. The requests, therefore, are not carefully tailored to avoid unnecessary interference with SCG’s protected activities. View "So. Cal. Gas Co. v. P.U.C." on Justia Law

Plaintiffs-buyers Melissa and Geoffrey Williams sued defendant FCA US LLC (manufacturer) for violation of the Song-Beverly Consumer Warranty Act (popularly known as the lemon law), seeking restitution for a defective truck that was manufactured and warranted by manufacturer. Buyers sought restitution from manufacturer after trading in the defective truck for another vehicle at an unrelated dealership. The parties disputed whether manufacturer was entitled to a credit for the trade-in value of the truck in calculating “the actual price paid or payable by the buyer” under the restitution provision. Instead of resolving the question of statutory interpretation presented, the trial court transmitted the question to the jury and told the parties the jury would decide, based on the parties’ closing arguments, what should be included in “the actual price paid.” The jury found manufacturer breached its express written warranty to buyers when it (or its authorized repair facility) failed to repair the defects in buyers’ truck “to match the written warranty after a reasonable number of opportunities to do so.” The jury further found manufacturer willfully failed to promptly replace or repurchase the defective truck and awarded buyers damages and a civil penalty. The trial court subsequently denied buyers’ motion for a new trial, in which buyers argued the damages were inadequate as a matter of law because the jury’s calculation of “the actual price paid or payable” impermissibly deducted the $29,500 credit buyers previously received when they traded in the defective truck for a new vehicle. Buyers appealed, raising the issue of whether the jury impermissibly deducted the trade-in credit when it calculated “the actual price paid or payable by the buyer,” as provided in the restitution provision. The Court of Appeal reversed, finding the jury inappropriately and prejudicially deducted the $29,500 trade-in value of the defective vehicle from the buyers’ statutory restitution award, and thus the damages awarded were inadequate as a matter of law. View "Williams v. FCA US LLC" on Justia Law

Fleming filed a class action complaint, alleging Oliphant violated the California Rosenthal Fair Debt Collection Practices Act. Oliphant filed a petition to dismiss Fleming’s class action claims and compel binding arbitration of his individual claims under the Federal Arbitration Act (9 U.S.C. 2). According to Oliphant’s records custodian, Fleming electronically applied for a credit card in December 2013. The electronic application included no reference to an arbitration agreement. Fleming received the card, used his card for purchases, made payments on his account, and received account statements, which did not include any reference to arbitration. There is no evidence of any signed agreement. Oliphant provided no evidence that it even sent such an agreement to Fleming. Oliphant proffered three Cardmember Agreements—or exemplars—that were in effect when Fleming opened his account, when he made his last payment to the account in March 2018, and when the account was charged off in May 2018, which included arbitration agreements. Fleming denied receiving any of the exemplars.The court of appeal affirmed the denial of the petition to compel arbitration. Oliphant did not meet its burden in proving the existence of a valid arbitration agreement with Fleming. Nothing in the record suggests that Fleming might have consented to an arbitration provision. View "Fleming v. Oliphant Financial, LLC" on Justia Law

Chen sued BMW for breach of warranty and for violating the Song-Beverly Consumer Warranty Act (Civ. Code 1790) and the Consumers Legal Remedies Act (section 1750). After the suit was pending for about a year, the defendants communicated an offer under Code of Civil Procedure Section 998, to have a $160,000 judgment entered against them; the defendants would pay Chen’s reasonable attorney’s fees and costs, as determined by the court. Chen would return the vehicle. Chen rejected the offer as “fatally vague and uncertain. The litigation continued for another two years. The parties settled on the day of the trial. The terms of the settlement were essentially identical to the section 998 offer.Chen moved as a prevailing party for attorney fees and costs of $436,071.82. The trial court awarded only $53,509.51, including only fees and costs accrued through July 2017, 45 days after the section 998 offer was made. The court of appeal affirmed. BMW’s offer complied with the statutory requirements and Chen did not achieve a result more favorable than its terms. The statute, therefore, disallowed recovery of attorney fees and costs accrued after the offer was made. View "Chen v. BMW of North America" on Justia Law

The Public Utilities Commission (the Commission or PUC) oversees the California High-Cost Fund A program (CHCF-A), which provides subsidies to small, rural, independent telephone companies that provide local telephone service in rural and remote areas of California. The subsidies defray the high cost of providing service in such areas. Ten small rural telephone companies that participate in CHCF-A subsidies filed this writ proceeding to nullify the Commission’s broadband imputation order. They contend broadband imputation (1) is not authorized by section 275.6, (2) exceeds the authority granted to the Commission by other statutes and the California Constitution, (3) is preempted by federal law, and (4) is an unconstitutional taking of private property.   The Fifth Appellate District denied the telephone companies’ petition for a writ. The court reasoned that to implement broadband imputation in a general rate case, the Commission will be required to conduct several reasonableness inquiries before reaching a decision about a telephone company’s rates. At this point, the “total effect” of broadband imputation on the telephone companies’ rates cannot be determined because the Commission has not made the foregoing reasonableness determinations and established a telephone company’s rate design and CHCF-A subsidy. Consequently, the court wrote it cannot determine that the rates will be so unreasonably low as to be confiscatory in violation of the telephone companies’ constitutional rights. View "Calaveras Telephone Co. v. Public Utilities Commission" on Justia Law

Aguilar incurred debt from a consumer credit account with OneMain Financial, which assigned the account to OneMain Trust. The debt was later sold to CACH, which sued to collect the charged-off debt. CACH dismissed that action without prejudice, following Aguilar’s attempt to file a cross-complaint alleging violations of the Rosenthal Fair Debt Collection Practices Act (Civ. Code, 1788), premised on incorporated provisions of the federal Fair Debt Collection Practices Act (FDCPA) and an alleged violation of the California Fair Debt Buying Practices Act, based on CACH’s apparent misidentification of the charge-off creditor as OneMain Financial rather than OneMain Trust.Aguilar sued CACH and its counsel, alleging false or misleading representations in the collection action, in violation of the Rosenthal Act. The defendants filed a successful anti-SLAPP (strategic lawsuit against public participation) motion under Code of Civil Procedure section 425.16. The trial court struck the Rosenthal Act claim. The court of appeal affirmed. The trial court correctly considered whether Aguilar made a prima facie showing of a material misrepresentation under the Rosenthal Act, insofar as the alleged violation is premised on a purported failure to comply with FDCPA requirement, and found the complaint lacked minimal merit. Materiality is a proper consideration under the Rosenthal Act where the alleged state law violation is premised on enumerated provisions of the federal statute, which federal courts uniformly interpret as incorporating a materiality requirement. View "Aguilar v. Mandarich Law Group, LLP" on Justia Law

Michael Smalley sued Subaru of America, Inc. (Subaru) under California’s lemon law. Pursuant to Code of Civil Procedure section 998, Subaru made a settlement offer to Smalley, which Smalley did not accept. The matter went to trial, and Smalley prevailed, but recovered less than the section 998 offer. In accordance with the fee shifting rules of section 998, the trial court awarded Smalley his pre-offer costs, but awarded Subaru its post-offer costs. Smalley appealed. The Court of Appeal concluded the section 998 offer was valid, reasonable, and made in good faith. Therefore, it affirmed the trial court’s costs awards. Because of the pendency of the appeal on the costs awards, the trial court deferred a ruling on Smalley’s motion for attorney fees. Smalley also appealed the order delaying ruling on the attorney fees motion. The Court of Appeal concluded that order is not appealable, and no grounds existed to construe it as an extraordinary writ. That appeal was dismissed. View "Smalley v. Subaru of America, Inc." on Justia Law

Amazon fulfills orders for products sold by third-party merchants through a program it calls “Fulfillment by Amazon” (FBA). According to the First Amended Complaint (FAC), the state agency responsible for collecting sales and use tax is the California Department of Tax and Fee Administration (DTFA) has historically not collected from Amazon sales and use taxes for products sold through the FBA program.   Plaintiff filed a taxpayer action under section 526a seeking a declaration that the DTFA “has a mandatory duty to assess and collect” sales and use tax specifically from Amazon for products sold through the FBA program. The DTFA and its Director and the Amazon entities that Plaintiff named in his FAC as Real Parties in Interest all demurred to the FAC. The trial court sustained Respondents’ demurrers without leave to amend.   The Second Appellate District affirmed the trial court’s order sustaining Respondents’ demurrers. The court explained that no statute or regulation conclusively establishes that the DTFA must pursue Amazon for sales and use taxes related to FBA transactions. The language of Revenue and Taxation Code section 6015, subdivision (a) makes it clear that there may be multiple “persons” who the DTFA may regard as “retailers” for the purposes of a single transaction. The statutory framework of the Sales and Use Tax Law and the statutes vesting the DTFA with authority to administer that statutory framework led the court to conclude that whether a taxpayer is a retailer for purposes of the Sales and Use Tax Law is a discretionary determination and not a ministerial task. View "Grosz v. Cal. Dept. of Tax & Fee Administration" on Justia Law