Limson v. Bridge Property Management Company

Background

Maryrose Limson and other plaintiffs, including their minor children, alleged that Bridge Property Management Company obtained investigative consumer reports while processing housing applications and annual resident recertifications at the Ivy II at College Park, a low-income apartment complex in Chino, California. They asserted claims under the Fair Credit Reporting Act (FCRA), the California Investigative Consumer Reporting Agencies Act (ICRAA), and California’s Unfair Competition Law (UCL). The plaintiffs alleged that the application materials did not properly disclose their rights, did not provide required information about the reports, and did not include a checkbox allowing them to request copies of reports.

FCRA claim

The FCRA defines an “investigative consumer report” as a consumer report containing information about a person’s character, general reputation, personal characteristics, or mode of living obtained through personal interviews with people acquainted with that person. Bridge argued that the complaint merely labeled the reports “investigative consumer reports” without alleging facts showing that personal interviews occurred.

The court agreed that the complaint did not adequately plead this required element. It therefore dismissed the FCRA claim under Rule 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. The court granted leave to amend by November 15, 2019, so the plaintiffs could allege facts showing that the reports met the FCRA definition.

The court separately rejected Bridge’s argument that the plaintiffs lacked Article III standing. The court reasoned that the alleged failure to tell consumers that they could obtain copies of their reports, and how to obtain them, implicated a substantive informational right created by the FCRA. According to the court, that alleged informational injury was sufficient to establish standing under the Supreme Court’s decision in Spokeo v. Robins, assuming the plaintiffs could amend the FCRA claim to state a viable claim. The court did not find a privacy injury based on the plaintiffs’ allegations because they alleged that they had consented to release their information and did not allege that they misunderstood the authorization.

ICRAA and federal jurisdiction

The court considered whether the state-law claims could remain in federal court under the Class Action Fairness Act (CAFA), which provides federal jurisdiction over certain class actions when, among other requirements, more than $5 million is in controversy. The complaint identified a $25 application fee as the only specific type of damages. Even assuming that fee could count as actual damages, the court concluded that multiplying it by the more than 1,000 alleged class members would produce no more than $25,000. The plaintiffs also conceded that ICRAA statutory damages were unavailable in class actions.

The court therefore found that the plaintiffs had not shown CAFA’s amount-in-controversy requirement. The opinion discussed what would happen if the FCRA claim could not be cured, but it did not state that the ICRAA claim was dismissed on the merits or decide whether that claim was adequately pleaded.

UCL claim

The UCL requires a plaintiff to show an economic injury involving lost money or property and a causal connection between that injury and the alleged unfair business practice. The plaintiffs relied on the $25 application fee. The court found that the complaint did not allege facts showing that Bridge’s disclosure violations caused the fee; the allegations indicated that the fee would have been charged whether or not the disclosures complied with the law.

The court therefore dismissed the UCL claims for lack of the required economic injury and allowed the plaintiffs to amend. The court did not decide whether the alleged ICRAA violations could provide the unlawful conduct underlying the UCL claim.

Other rulings and disposition

Bridge’s request for attorneys’ fees and costs under the FCRA was denied because the court did not find that the complaint had been filed in bad faith or for purposes of harassment. Bridge’s motion to strike allegations seeking declaratory relief concerning the plaintiffs’ leasehold interests and references to “illegal contracts” was also denied. The court declined to strike those allegations based on arguments concerning the possible merits of a quiet-title claim or the requested remedies.

The order states that the motion to dismiss was granted in part and denied in part, the FCRA and UCL claims were dismissed with leave to amend, the motion to strike was denied, and targeted discovery would be permitted concerning whether Bridge obtained reports meeting the FCRA definition of “investigative reports.”