Opinion
C098432
03-26-2024
GEORGINA NAVARRO, Plaintiff and Appellant, v. SCHELL & KAMPETER, INC., Defendant and Respondent.
NOT TO BE PUBLISHED
Super. Ct. No. STK-CV-UCC-2022-0004305
EARL, P. J.Plaintiff Georgina Navarro filed a complaint against defendant Schell & Kampeter, Inc., alleging a single cause of action for violating the federal Fair Credit Reporting Act (FCRA) (15 U.S.C. § 1681 et seq.). The trial court granted defendant's motion for judgment on the pleadings, finding plaintiff did not have standing to bring this action because she did not allege she suffered a concrete injury as a result of the violation. Plaintiff appeals, arguing she is not required to allege an injury under either California law or the FCRA. We disagree and thus affirm.
BACKGROUND
On May 27, 2022, plaintiff filed a class action lawsuit against defendant in state court alleging defendant violated the FCRA when it performed a background check on her and other prospective employees. The FCRA provides an employer may not procure a background check report on an individual unless "a clear and conspicuous disclosure has been made in writing . . . before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes." (15 U.S.C. § 1681b(b)(2)(A)(i).) Plaintiff alleged when she applied for employment with defendant, it provided her with a form entitled "Disclosure Regarding Background Investigation" that violated the FCRA because it contained "extraneous language" and was thus not "clear and conspicuous" and "in a document that consists solely of the disclosure." She also alleged the violation was willful. She further alleged she and other class members "ha[d] been injured [by] . . . having their statutory rights invaded in violation of the FCRA." She alleged no other injury.
This was the extraneous language: "You have the right, upon written request made within a reasonable time, to request whether a consumer report has been run about you and to request a copy of your report. These searches will be conducted by A-Check Global, 1501 Research Park Drive, Riverside, CA 92507, 877-345-2021, www.acheckglobal.com. The scope of this disclosure is all-encompassing, however, allowing the Company to obtain from any outside organization all manner of consumer reports through the course of your employment to the extent permitted by law."
On July 5, 2022, defendant removed the case to federal court on the ground it arose under federal law.
On August 4, 2022, plaintiff filed a motion to remand the case to state court, arguing "[t]here is no federal question jurisdiction over this claim because Plaintiff does not have Article III standing" because she suffered no "injury in fact" as a result of the FCRA violation. She acknowledged she did not allege, and did not intend to allege, that she suffered actual harm as a result of the allegedly noncompliant disclosure. Plaintiff also conceded that she was not alleging that she was confused by the disclosure, or that she would have refused to sign the authorization if the disclosure had complied with the FCRA. Defendant filed a statement of nonopposition to the motion, and the case was remanded to state court on August 17, 2022.
Two months later, on October 25, 2022, the Fifth District Court of Appeal issued its decision in Limon v. Circle K Stores Inc. (2022) 84 Cal.App.5th 671 (Limon). We will discuss Limon in more detail below. For present purposes it is sufficient to note the court held a plaintiff must allege a "concrete injury" in order to have standing to bring a claim in California court based on a violation of the FCRA. (Limon, at p. 703.) Because the plaintiff in Limon failed to allege such an injury, the court held her complaint was properly dismissed on demurrer. (Id. at p. 707.)
On December 12, 2022, defendant filed a motion for judgment on the pleadings, arguing plaintiff lacked standing as defined by Limon. Plaintiff opposed the motion, arguing the trial court was not bound by Limon because "California's Supreme Court and appellate courts have affirmed many times over that California's standing requirement is significantly more lenient than the standing limits set by Article III in federal court. The Fifth District's opinion in Limon is a sharp and consequential departure from this long-established principle."
The trial court granted the motion, finding Limon was "controlling" and it was bound by it. It noted, "Plaintiff is actually arguing Limon was wrongly decided," but "[t]he question of whether Limon was wrongly decided is for the Court of Appeal or the California Supreme Court."
Judgment was entered in favor of defendant, and plaintiff timely appealed.
STANDARD OF REVIEW
A motion for judgment on the pleadings, like a demurrer, tests the allegations of the complaint to determine whether they state a cause of action. (Angelucci v. Century Supper Club (2007) 41 Cal.4th 160, 166.) "We review an order granting a motion for judgment on the pleadings as a matter of law, applying the same standard that governs review of an order sustaining a demurrer. [Citation.] The grounds for the motion must appear on the face of the complaint or be based on matters that may be judicially noticed. [Citation.] We accept the material allegations of the complaint as true." (Chacon v. Union Pacific Railroad (2020) 56 Cal.App.5th 565, 572.) "[W]e review the validity of the ruling on a motion for judgment on the pleadings and not the reasons given" and will thus affirm the trial court's ruling if it is correct on any ground. (Tukes v. Richard (2022) 81 Cal.App.5th 1, 19; see id. at pp. 18-19.)
DISCUSSION
Plaintiff argues she has standing because (1) the only generally applicable standing requirement in California is the real party in interest requirement found in Code of Civil Procedure section 367 and she is the real party in interest, and (2) the FCRA confers standing on plaintiffs who suffer no injury to recover statutory damages of $100 to $1,000 for willful violations. She also argues Limon is factually distinct and thus not binding. We need not decide whether the real party in interest requirement is the only generally applicable standing requirement in California, because we find a plaintiff must suffer some injury to have standing to sue for a willful violation of the FCRA, and plaintiff fails to allege she suffered any injury. We also find the factual differences between this case and Limon are legally irrelevant.
1. Relevant Law
We begin with a brief discussion of the FCRA and federal standing principles, and a more detailed discussion of Limon.
A. FCRA
"Congress enacted the FCRA in 1970 in response to concerns about corporations' increasingly sophisticated use of consumers' personal information in making credit and other decisions. [Citation.] Specifically, Congress recognized the need to 'ensure fair and accurate credit reporting . . . and protect consumer privacy.' [Citation.] Congress thus required the use of reasonable procedures in procuring and using a 'consumer report.'" (Syed v. M-I, LLC (9th Cir. 2017) 853 F.3d 492, 496 (Syed).) The term" 'consumer'" means "an individual," and the term" 'consumer report'" is broadly defined to include background check reports conducted for employment purposes. (15 U.S.C. § 1681a(c) & (d)(1).)
Congress amended the FCRA in 1996 by adding the disclosure provision that is at issue in this case. It provides, "a person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer unless- [¶] (i) a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes; and [¶] (ii) the consumer has authorized in writing (which authorization may be made on the document referred to in clause (i)) the procurement of the report by that person." (15 U.S.C. § 1681b(b)(2)(A).) We will generally refer to this as the standalone disclosure requirement.
"The FCRA provides a private right of action against those who violate its statutory requirements in procuring and using consumer reports." (Syed, supra, 853 F.3d at p. 497.) If the violation is negligent, the consumer is entitled to "actual damages" and attorney fees and costs. (15 U.S.C. § 1681o(a).) If the violation is willful, the consumer is entitled to "actual damages sustained by the consumer as a result of the [violation] or damages of not less than $100 and not more than $1,000," punitive damages, and attorney fees and costs. (15 U.S.C. § 1681n.)
B. Federal standing principles
"The [U.S.] Constitution confers limited authority on each branch of the Federal Government." (Spokeo, Inc. v. Robins (2016) 578 U.S. 330, 337 (Spokeo).) Article III of the United States Constitution endows federal courts with "[t]he judicial Power of the United States." (U.S. Const., Art. III, § 1.) "Although the Constitution does not fully explain what is meant by '[t]he judicial Power of the United States,' Art. III, § 1, it does specify that this power extends only to 'Cases' and 'Controversies,' Art. III, § 2. And' "[n]o principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies." '" (Spokeo, at p. 337.)
A long line of federal authority holds, "For there to be a case or controversy under Article III, the plaintiff must have a' "personal stake"' in the case-in other words, standing." (TransUnion LLC v. Ramirez (2021) 594 U.S. ____, ____ [141 S.Ct. 2190, 2203], italics added.) To establish standing the plaintiff must show he or she "(i) suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the injury is likely to be redressed by judicial relief." (Ibid.) Because the standing requirement derives from article III, it is" 'settled'" that Congress cannot" 'statutorily grant[] the right to sue to a plaintiff who would not otherwise have standing.'" (Spokeo, supra, 578 U.S. at p. 339.) Thus, a plaintiff does not "automatically satisf[y] the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right. Article III standing requires a concrete injury even in the context of a statutory violation." (Id. at p. 341.)
In Spokeo, supra, 578 U.S. 330, the United States Supreme Court held a "bare procedural violation" of the FCRA that was "divorced from any concrete harm" does not satisfy "the injury-in-fact requirement of Article III" and thus is not sufficient to confer standing. (Spokeo, at p. 341.) It gave two examples of procedural violations that would be insufficient to confer standing: (1) a consumer reporting agency fails to provide a required notice to the user of a consumer report but the information in the report is "entirely accurate"; and (2) the report contains inaccurate information that poses no "material risk of harm," like "an incorrect zip code. It is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm." (Id. at p. 342.)
The FCRA violation at issue in Spokeo was the failure to" 'follow reasonable procedures to assure maximum possible accuracy of' consumer reports." (Spokeo, supra, 578 U.S. at p. 335, quoting 15 U.S.C. § 1681e(b).) Since Spokeo was decided, numerous federal courts have considered the issue of standing in cases brought by plaintiffs who claimed a prospective employer violated the FCRA's standalone disclosure requirement. In Syed, for example, the Ninth Circuit held the plaintiff "allege[d] more than a 'bare procedural violation'" of the FCRA and thus "established Article III standing" because the allegations were sufficient to "infer" the plaintiff "was confused by . . . the disclosure and would not have signed it had it" complied with the law. (Syed, supra, 853 F.3d at p. 499.) In Winters v. Douglas Emmett, Inc. (C.D.Cal. 2021) 547 F.Supp.3d 901, in contrast, the district court held the plaintiff lacked standing because he did not allege a concrete injury and he admitted "he was not confused by the extraneous information and would not have declined to sign the authorizations had they contained sufficiently clear disclosures as required by the FCRA." (Id. at pp. 907-908.) Other district courts have reached similar results. (See Soman v. Alameda Health Sys. (N.D.Cal., Jan. 20, 2023, No. 17-cv-06076-JD) 2023 U.S.Dist. Lexis 10653, *13 ["district courts have continued to find that alleged violations of FCRA disclosure provisions are insufficient to confer standing when, as here, they are 'unaccompanied by allegations that a plaintiff was confused or would have acted differently as a result of those violations' "]; Nunley v. Cardinal Logistics Mgmt. Corp. (C.D.Cal., Oct. 5, 2022, No. ED CV 22-01255-FWS-SP) 2022 U.S.Dist. Lexis 182820, *10 [same].)
Thus, in the Ninth Circuit at least, in order to have standing to bring a claim in federal court based on a violation of the FCRA's standalone disclosure requirement, the plaintiff must allege he or she was confused by the extraneous language in the disclosure form or would not have signed the form if it had complied with the law, or some other concrete injury.
C. Limon v. Circle K Stores, Inc.
Limon, on which the trial court relied, is strikingly similar to this case. The plaintiff in Limon applied for a job with the defendant and signed a disclosure form authorizing it to obtain a background report. (Limon, supra, 84 Cal.App.5th at p. 681.) Like plaintiff in this case, the plaintiff in Limon alleged the disclosure form contained" 'extraneous provisions'" in violation of the FCRA's standalone disclosure requirement. (Limon, at p. 682.) The plaintiff filed a class action lawsuit on behalf of himself and all other applicants who had signed the same disclosure form. (Ibid.) He alleged the defendant's violation of FCRA's standalone disclosure requirement was willful, and he sought statutory damages of $100 to $1,000 for each violation, punitive damages, and attorney fees. (Limon, at pp. 683-684.)
The plaintiff initially filed his action in federal court, and the defendant moved for summary judgment on the ground he lacked article III standing. Consistent with the federal law discussed above, the district court held that, in order to have standing, the plaintiff had to show he was confused by the extraneous language on the disclosure and would not have signed it had it complied with the law. The court found the plaintiff failed to make such a showing and gave him an opportunity to supplement the record with evidence sufficient to support article III standing. The plaintiff stated he could not supplement the record, and the court granted the motion for summary judgment and dismissed the case without prejudice for lack of jurisdiction. (Limon, supra, 84 Cal.App.5th at p. 684.)
The plaintiff then filed his complaint in state court, and the defendant demurred on the grounds the plaintiff lacked capacity to sue and was not the real party in interest because he suffered no injury. The trial court granted the demurrer without leave to amend, the plaintiff appealed, and the appellate court affirmed. (Limon, supra, 84 Cal.App.5th at pp. 680, 685.)
The Limon court began by briefly summarizing the FCRA and federal standing principles. It then framed the questions on appeal as follows: "[W]hether a plaintiff must suffer an injury in order to have standing to sue under the FCRA in California courts, and, if so, whether Limon has adequately alleged a sufficient injury to confer standing upon him." (Limon, supra, 84 Cal.App.5th at p. 690.) It answered the first question yes and the second question no.
The court began by discussing standing in California. It noted Code of Civil Procedure section 367-which provides "[e]very of action must be prosecuted in the name of the real party in interest"-"undoubtedly relates to standing," but it held section 367 does not "delineate the entire scope of California's standing doctrine" and "is not the only requirement for standing in California." (Limon, supra, 84 Cal.App.5th at pp. 691, 692; see id. at pp. 690-692.)
It then discussed several cased cited by the plaintiff to support his argument that "California does not require a 'concrete injury' to exercise jurisdiction over his claims." (Limon, supra, 84 Cal.App.5th at p. 692.) It found those cases stand for the proposition "that the [California] Legislature may authorize public interest lawsuits by a plaintiff even if that plaintiff has not been injured by the claimed violation. [Citations.] These cases do not, however, stand for the proposition that a concrete or particularized injury is never required in order for a plaintiff to have standing to sue in California." (Id. at pp. 693-694.)
The court then discussed the "beneficial interest" requirement in Code of Civil Procedure section 1086, which provides a writ of mandate "must be issued upon the verified petition of the party beneficially interested." A long line of cases holds, "To have standing to seek a writ of mandate, a party must be 'beneficially interested' (Code Civ. Proc., § 1086), i.e., have 'some special interest to be served or some particular right to be preserved or protected over and above the interest held in common with the public at large.' [Citation.] This standard . . . is equivalent to the federal 'injury in fact' test." (Associated Builders & Contractors, Inc. v. San Francisco Airports Com. (1999) 21 Cal.4th 352, 361-362; see also People ex rel. Dept. of Conservation v. El Dorado County (2005) 36 Cal.4th 971, 986 [same]; People for Ethical Operation of Prosecutors etc. v. Spitzer (2020) 53 Cal.App.5th 391, 407-408 [same].) The plaintiff in Limon argued "the beneficial interest requirement is limited to mandamus actions under Code of Civil Procedure section 1086." (Limon, supra, 84 Cal.App.5th at p. 696, italics added.) The court disagreed, noting, "There are a number of California cases that indicate the 'beneficial interest' requirement applies generally to questions of standing." (Id. at p. 699.) The court concluded "as a general matter, to have standing to pursue a claim for damages in the courts of California, a plaintiff must be beneficially interested in the claims he is pursuing." (Id. at p. 700.)
After surveying the law of standing in California, the court turned to the FCRA, in particular, title 15 United States Code section 1681n(a), which provides, "Any person who willfully fails to comply with any requirement imposed [by the FCRA] with respect to any consumer is liable to that consumer" for" 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." (15 U.S.C. § 1681n(a)(1)(A), italics added.) The plaintiff argued the italicized language demonstrated Congress intended to confer standing on plaintiffs who suffered no actual injury to recover statutory damages of $100 to $1,000 for willful violation of the FCRA. The court rejected the plaintiff's argument. It noted the FCRA authorizes the Federal Trade Commission to recover" 'a civil penalty'" of up to $2,500 for knowing violations of the FCRA. (Limon, supra, 84 Cal.App.5th at p. 701, citing 15 U.S.C. § 1681s(a)(2)(A).) It then noted the words "damages" and "penalty" are not synonymous, and it cited the rule that where the Legislature uses different words in different part of the same statute," '" 'it must be presumed that the Legislature intended a different meaning.'" '" (Limon, at p. 701.) It found the commonly understood meaning of the word "damages" "connotes compensation for an injury" and thus presupposes" 'there must be an injury to compensate,'" while the commonly understood meaning of the "penalty" "connotes punishment for wrongdoing." (Id. at p. 702.) Because title 15 United States Code section 1681n(a)(1)(A) used the term "damages" rather than "penalty," the court held it was "intended to compensate a plaintiff for injury," and not to penalize a company for bare procedural violation of the FCRA that caused no injury. (Limon, at p. 703.) It thus concluded, "To have standing to pursue his claims, Limon must allege a concrete injury." (Ibid.)
Finally, the court held the plaintiff did not allege a concrete injury because he admitted he was willing to submit to a background check; he knew he was authorizing a background check; he would have authorized a background check even if he had received a compliant disclosure form; and he admitted in federal court he could not supplement the record with evidence sufficient to establish article III standing. (Limon, supra, 84 Cal.App.5th at pp. 704, 706.) The court thus concluded "Limon did not allege a sufficient injury to his legally protected interests under the FCRA to confer standing upon him," and it affirmed the judgment of dismissal. (Id. at p. 707.).
2. Analysis
Although plaintiff stops short of arguing Limon was wrongly decided and we should decline to follow it, that is the thrust of most of her arguments. As defendant notes, "We, of course, are not bound by the decision of a sister Court of Appeal. [Citation.] But '[w]e respect stare decisis, however, which serves the important goals of stability in the law and predictability of decision. Thus, we ordinarily follow the decisions of other districts without good reason to disagree.'" (The MEGA Life & Health Ins. Co. v. Superior Court (2009) 172 Cal.App.4th 1522, 1529.) Limon is a thorough decision. It considered and rejected most of the arguments plaintiff makes here, and she fails to give us a good reason to disagree with it. Indeed, plaintiff barely mentions Limon in her opening brief, much less tries to convince us it was wrongly decided.
Plaintiff notes a long line of California cases holds," 'Unlike the federal constitution, our state Constitution has no case or controversy requirement imposing an independent jurisdictional limitation on our standing doctrine,'" which is true. (San Diegans for Open Government v. Public Facilities Financing Authority of City of San Diego (2019) 8 Cal.5th 733, 738; see also Weatherford v. City of San Rafael (2017) 2 Cal.5th 1241, 1247-1248; Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 936, fn. 11; Grosset v. Wenaas (2008) 42 Cal.4th 1100, 1117, fn. 13; Jasmine Networks, Inc. v. Superior Court (2009) 180 Cal.App.4th 980, 990.) Indeed, the Limon court recognized that California courts are not bound by standing requirements imposed on federal courts by article III of the United States Constitution. (Limon, supra, 84 Cal.App.5th at p. 690.) It ultimately concluded, however, that this does not mean California imposes no standing requirements on plaintiffs seeking access to its courts, and we generally agree with this conclusion. (See ibid.)
Citing Code of Civil Procedure section 367, plaintiff next argues "California's standing doctrine only requires that the plaintiff be a 'real party in interest.'" Code of Civil Procedure section 367 provides, "Every action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute." Many cases have described the real party in interest requirement of section 367 as a "standing" requirement. (See Weatherford v. City of San Rafael, supra, 2 Cal.5th at p. 1249 [referring to "general standing requirements under section 367"]; City of Santa Monica v. Stewart (2005) 126 Cal.App.4th 43, 59 [" 'Standing' derives from the principle that '[e]very action must be prosecuted in the name of the real party in interest . . . .' (Code Civ. Proc, § 367)"]; Redevelopment Agency of San Diego v. San Diego Gas & Electric Co. (2003) 111 Cal.App.4th 912, 920 ["A party who is not the real party in interest lacks standing to sue"].) The real party in interest is" 'the person possessing the right sued upon by reason of the substantive law,'" or" 'the party who has title to the cause of action, i.e., the one who has the right to maintain the cause of action,'" or" 'the owner of the cause of action.'" (Windham at Carmel Mountain Ranch Assn. v. Superior Court (2003) 109 Cal.App.4th 1162, 1172, 1173.) The purpose of the real party in interest requirement "is to protect a defendant from harassment by other claimants on the same demand." (Redevelopment Agency of San Diego, at p. 921.) So defined, plaintiff is arguably the real party in interest within the meaning of Code of Civil Procedure section 367 because if anyone has the right to sue defendant for violating the FCRA's standalone disclosure requirements, it is the individual to whom the noncompliant disclosure was given.
Plaintiff contends Code of Civil Procedure section 367 is California's "only" generally applicable standing requirement, and because she is the real party in interest, she ipso facto has standing. The Limon court rejected a similar argument and concluded section 367 "is not the only requirement for standing in California." (Limon, supra, 84 Cal.App.5th at p. 692, italics added.) Plaintiff gives us no reason to disagree with this conclusion.
Plaintiff notes there are a number of California statutes that impose their own standing requirements. For example, Business and Professions Code section 17204 provides that an action brought under the unfair competition law (Bus. & Prof. Code, § 17200 et seq.) "shall be prosecuted exclusively . . . by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition." (Bus. & Prof. Code, § 17204.) Code of Civil Procedure section 1086 is another example. As discussed above, it generally requires a plaintiff seeking a writ of mandate to show they are "beneficially interested" in the outcome. (Code Civ. Proc., § 1086.) Plaintiff argues the fact that these two statutes require a plaintiff to show either an "injury in fact" or a "beneficial interest" in order to have standing to sue in two particular types of cases (i.e., unfair competition law cases and writ of mandate cases, respectively) demonstrates there is no general rule in California that all plaintiffs must have either an injury in fact or a beneficial interest in order to have standing. In other words, if there is already an "injury in fact" or "beneficial interest" requirement in order to establish standing, there would be no reason for Business and Professions Code section 17204 or Code of Civil Procedure section 1086 to impose those requirements. This is a colorable argument, because "[w]e do not presume that the Legislature performs idle acts, nor do we construe statutory provisions so as to render them superfluous." (Shoemaker v. Myers (1990) 52 Cal.3d 1, 22.) As we next explain, however, we ultimately find that whether a plaintiff has standing to sue for a violation of the FCRA depends on the language and intent of that particular statute, and plaintiff gives us no reason to disagree with the Limon court's holding that the FCRA requires a plaintiff to show some concrete injury in order to have standing to sue for willful violations.
As plaintiff accurately recognizes, "The prerequisites for standing to assert statutorily based causes of action are determined from the statutory language, as well as the underlying legislative intent and the purpose of the statute." (Boorstein v. CBS Interactive, Inc. (2013) 222 Cal.App.4th 456, 466; see also White v. Square, Inc. (2019) 7 Cal.5th 1019, 1024 ["Standing rules for statutes must be viewed in light of the intent of the Legislature and the purpose of the enactment"].) The FCRA "creates a private right of action for willful or negligent noncompliance with its requirements." (Gorman v. Wolpoff & Abramson, LLP (9th Cir. 2009) 584 F.3d 1147, 1154; see also Syed, supra, 853 F.3d at p. 497 ["FCRA provides a private right of action"].) Plaintiff is thus asserting a statutorily based cause of action, and whether she has standing to do so depends on the language and intent of the FCRA.
Plaintiff argues the FCRA's provision governing civil liability for willful violations confers standing on consumers who suffer no injury. That provision states, "Any person who willfully fails to comply with any requirement imposed under [the FCRA] with respect to any consumer is liable to that consumer in an amount equal to . . . [¶] . . . [1] any actual damages sustained by the consumer as a result of the failure or [2] damages of not less than $100 and not more than $1,000." (15 U.S.C. § 1681n(a)(1)(A), italics added.) Plaintiff argues the plain language of this provision shows Congress intended two things: (1) to create civil liability and authorize a lawsuit whenever a person willfully fails to comply with a requirement imposed by the FCRA; and (2) to authorize consumers who suffered no actual injury to bring such lawsuits by permitting them to recover statutory damages of $100 to $1,000 instead of actual damages. To support her argument, plaintiff cites Arcilla v. Adidas Promotional Retail Operations, Inc. (C.D.Cal. 2007) 488 F.Supp.2d 965, 974, which held "the only conceivable interpretation [of this language] is that a consumer whose FCRA rights have been violated may elect either actual or statutory damages, with no requirement of having to present evidence of actual harm."
The Limon court considered and rejected the same argument. As discussed above, it noted the provision uses the term "damages" (i.e., "actual damages" or "damages of not less than $100 and not more than $1,000"). Because the FCRA did not define the term damages, the court gave it its ordinary and common meaning by looking at various dictionary definitions, which included" 'compensation for loss or injury,'" " 'money that is paid to someone by a person or organization who was responsible for causing some injury or loss,'" or" 'compensation in money imposed by law for loss or injury.'" (Limon, supra, 84 Cal.App.5th at p. 701, italics added.) The court also cited case law that holds," 'Damages are intended to be compensatory, to make one whole. ([See Civ. Code, § 3281].) Accordingly, there must be an injury to compensate.'" (Id. at p. 702, italics added.) Finally, the court noted the apparent purpose of the FCRA's statutory damages provision was to compensate plaintiffs who have suffered a concrete injury," 'but may find it difficult to prove actual damages.'" (Limon, at p. 702.) The court thus held the term "damages" presupposes an injury or loss to compensate, and it concluded that, by using that term, Congress intended to limit standing to individuals who have suffered an actual injury or loss as a result of a violation of the FCRA. (Limon, at p. 703.)
Plaintiff disagrees. She cites Los Angeles County Metropolitan Transportation Authority v. Superior Court (2004) 123 Cal.App.4th 261 for the proposition that the purpose of "statutory damages" is" 'to ensure that the plaintiff will receive at least a minimum amount of compensation, even though there are little or no actual damages sustained.'" What the Los Angeles County court actually said was: "[T]he civil penalty mandated by [Civil Code] section 52, subdivision (b)(2), appears designed to ensure that the plaintiff will receive at least a minimum amount of compensation, even though there are little or no actual damages sustained." (Id. at p. 276, italics added.) Civil Code section 52 is part of the Unruh Civil Rights Act (Civ. Code, § 51 et seq.), which prohibits various discriminatory acts and practices, and subdivision (b)(2) provides, "Whoever denies the right provided by [certain provisions of the Act] . . . is liable for each and every offense for the actual damages suffered by any person denied that right and, in addition . . . [¶] . . . [¶] . . . [a] civil penalty of twenty-five thousand dollars ($25,000) to be awarded to the person denied the right." (Civ. Code, § 52, subd. (b)(2).) The issue in Los Angeles County was whether that civil penalty was the equivalent of" 'damages imposed primarily for the sake of example and by way of punishing the defendant,'" and the court ultimately held it was not. (Los Angeles County, at p. 264; see id. at p. 276.)
Los Angeles County was not a standing case, and it does not help plaintiff in any event because it underscores another point made by the Limon court-namely, that damages and civil penalties are different. While damages are intended to compensate for injury, civil penalties"' "are intended to punish the wrongdoer and to deter future misconduct." [Citation.] An act may be wrongful and subject to civil penalties even if it does not result in injury.'" (Limon, supra, 84 Cal.App.5th at p. 702, italics added.) The FCRA authorizes the Federal Trade Commission "to enforce compliance with the requirements imposed by this title," and provides, "in the event of a knowing violation . . . the Federal Trade Commission may commence a civil action to recover a civil penalty in a district court of the United States against any person who violates this title. In such action, such person shall be liable for a civil penalty of not more than $2,500 per violation." (15 U.S.C. § 1681s(a)(1) & (2), italics added.) The Limon court concluded that because Congress used different terms (i.e., "damages" and "civil penalty") in different parts of the FCRA, it presumably intended a different meaning. (Limon, at p. 701.) Thus, civil penalties, which "do not require the existence of an injury," can only be sought by the Federal Trade Commission, while damages, which "require an injury to compensate," can only be sought by a plaintiff who is injured. (Id. at p. 700.) Plaintiff has presented us with no persuasive reason to disagree with this conclusion.
Plaintiff cites a Senate report on the 1996 amendments to the FCRA that added the standalone disclosure requirement. According to the report, Congress was worried about "privacy concerns raised by unfettered access to consumer reports." (Sen.Rep. No. 104-185, 1st Sess., p. 18 (1995).) The report states, "the FCRA permits employers to obtain consumer reports pertaining to current and prospective employees. The Committee is concerned, however, that this provision may create an improper invasion of privacy. Section 403 of this bill [which added the standalone disclosure requirement] requires that employers provide prior written disclosure to current and prospective employees that their consumer reports may be procured in connection with their employment. Further, employers must obtain a specific or general written authorization prior to procuring such a report." (Sen.Rep. No. 104-185, 1st Sess., p. 35 (1995).) The new requirement protects privacy rights by (1) requiring employers to clearly disclose they intend to procure a report that could contain private information about an individual, and (2) allowing the individual to withhold authorization to procure a report and thus prevent the disclosure of private information. (Syed, supra, 853 F.3d at p. 497.) Plaintiff argues this shows "a compliant disclosure form is critical to ensuring that employees' privacy rights are protected." This may be true, but it does not demonstrate Limon got it wrong when it held "the statutory damages provision [of the FCRA] is intended to compensate a plaintiff for injury" and not "to penalize a company for a violation of the FCRA" that causes no injury. (Limon, supra, 84 Cal.App.5th at p. 703.) Moreover, plaintiff fails to explain how defendant's failure to comply with the standalone disclosure requirement invaded (or even implicated) her privacy rights because she admitted in federal court that she was not confused by the disclosure, she realized she was authorizing a background check, and she would have authorized a background check even if the disclosure did not contain extraneous information. Simply put, plaintiff alleges no injury or harm to her privacy interests.
Plaintiff's final argument is that Limon is "factually distinct" and thus "not binding" because the extraneous language in the disclosure form in this case is different than the extraneous language in Limon. Although the language is different, we find this is a difference without a legal distinction. Instead, the critical fact in both cases is that the extraneous language caused no injury. Similar to the plaintiff in Limon, plaintiff admitted in federal court that she did not allege-and did not intend to allege-that she suffered "a concrete and particularized injury" as a result of defendant's failure to comply with the standalone disclosure requirement, or "that she suffered any actual harm, such as not realizing that she authorized a background check or being confused by the background check disclosure. Nor does Plaintiff allege that she would have refused to sign the background check disclosure if it did not contain the extraneous information." To drive the point home she then reiterated, "There is no allegation that Plaintiff was confused by the background check disclosure or that she would have refused to sign the disclosure if it was sufficiently clear. . . . Plaintiff has not made any such allegations and does not intend to." Plaintiff provides no reason we should not hold her to the admissions she made in federal court, and these admissions effectively demonstrate she has not alleged, and does not intend to allege, that she suffered any injury. Thus, although the extraneous language in this case may be different than the extraneous language in Limon, the relevant fact in both cases is that violation of the standalone disclosure requirement caused no injury.
This is the extraneous language in Limon:" 'I release any such person or entity from liability for furnishing such information. [¶] Copy: If you are applying for a job or live in California, Minnesota, or Oklahoma you may request a copy of the report by checking this box.'" (Limon, supra, 84 Cal.App.5th at p. 683, italics omitted.)
DISPOSITION
The judgment is affirmed. Defendant shall recover its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1), (2).)
We concur: HULL, J., WISEMAN, J. [*]
[*] Retired Associate Justice of the Court of Appeal, Fifth Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.