TURO INC.,
A160200
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION TWO
Filed 6/28/22
CERTIFIED FOR PUBLICATION
The trial court granted summary adjudication to the People and the City on Turo‘s first cause of action for declaratory relief that it is not a rental car company under California law, and Turo now challenges that ruling. Because we conclude that Turo is not a rental car company as that term is defined in California statutes, we grant Turo‘s petition for writ of mandate.
FACTUAL AND PROCEDURAL BACKGROUND
The material facts are undisputed. Turo is an Internet-based platform that allows vehicle owners to list, and customers to rent, specific passenger vehicles. Turo processes reservations and payments for the rentals, and retains a percentage of the proceeds of each rental transaction. Turo‘s terms of service contract governs the rentals with respect to cancellations, extensions and late returns, late fees, smoking, pets, fuel, tolls, security deposits, street parking, and nondiscrimination. Turo provides a liability insurance policy through a third-party insurer that covers vehicles during a rental and offers “vehicle protection options” to “cover” the entitlement of owners and liability of renters if a vehicle is damaged during a rental. Turo competes with traditional on-airport and off-airport rental car companies, and has used phrases like “rent” and “rental car” in its advertisements. Turo lists cars for rental to be picked up at SFO, and some of Turo‘s customers pick up cars at SFO, including at curbside. The average cost of a Turo transaction at SFO is similar to that of a traditional car rental at SFO.
The People sued Turo alleging that Turo violated the Unfair Competition Law (
Turo cross-complained against the City, seeking a declaratory judgment that it is not a rental car company under California law.1 Turo alleged that SFO had unlawfully demanded that Turo obtain an off-airport rental car company permit, and pay fees that SFO is authorized to charge only “rental car companies” under
The People and the City (collectively, Real Parties) moved for summary adjudication on Turo‘s cross-claim for declaratory relief. The trial court concluded that Turo is a rental car company within the meaning of
This petition for writ of mandate followed.3
DISCUSSION
I.
The term “rental car company” is not defined in the Government Code, but it is defined in nearly identical language in three separate California statutes to mean a person or entity in the business of renting passenger vehicles to the public. In the chapter of the Civil Code governing “Rental Passenger Vehicle Transactions,” “[r]ental company” is defined as “a person or entity in the business of renting passenger vehicles to the public.” (
Because the trial court‘s summary adjudication order presents a question of statutory interpretation and the application of that statute to undisputed facts, we review the order de novo. (MacIsaac v. Waste Management Collection & Recycling, Inc. (2005) 134 Cal.App.4th 1076, 1081-1082 (MacIsaac).) We must ” ‘determine the Legislature‘s intent so as to effectuate the law‘s purpose.’ ” (Skidgel v. California Unemployment Ins. Appeals Bd. (2021) 12 Cal.5th 1, 14 (Skidgel).) We begin by looking to the words of the statute itself. (Ibid.; MacIsaac, supra, 134 Cal.App.4th at p. 1082 [statutory language is the “most reliable indicator” of legislative intent because it ” ’ “has successfully braved the legislative gauntlet” ’ “].) We construe those words in context, giving them ” ‘a plain and commonsense meaning’ unless the statute specifically defines the words to give them a special meaning.” (MacIsaac, supra, 134 Cal.App.4th at p. 1083.) Courts appropriately refer to dictionary definitions “to ascertain the ordinary, usual meaning of a word.” (Wasatch Property Management v. Degrate (2005) 35 Cal.4th 1111, 1121-1122.) We harmonize clauses and sections of a statutes ” ‘by considering them in the context of the statutory framework as a whole. [Citation.] If the statutory language is unambiguous, then its plain meaning controls.’ ” (Skidgel, supra, 12 Cal.5th at p. 14, quoting People v. Cole (2006) 38 Cal.4th 964, 975.)
II.
There is no dispute that Turo‘s entire business consists of enabling the public to rent motor vehicles. Turo points to various dictionary definitions of the word “rent.” (See Black‘s Law Dictionary (11th ed. 2019) at p. 1551 [defining the verb “rent” as “[t]o pay for the use of another‘s property“]; see also Merriam-Webster Online Dictionary, http://www.merriam-webster.com/dictionary/rent (June 28, 2022) [defining the noun “rent” as “the amount paid by a hirer of personal property to the owner for the use thereof” and the verb “rent” as “to grant the possession and enjoyment of in exchange for rent” and “to take and hold under an agreement to pay rent“].) Turo argues that because it does not own or possess or control the vehicles listed on its website, and has no authority to grant the possession and enjoyment of those vehicles to others, it does not itself rent vehicles to the public. Turo further argues that because it does not rent vehicles to the public, it cannot be in the business of renting vehicles to the public.
That Turo is not a rental car company is supported by several provisions in the chapter of the Civil Code governing Rental Passenger Vehicle Transactions. (See
Other provisions in the Civil Code similarly suggest that Turo is not a “[r]ental company” under
We are not aware of any published case in which a California court has held that an entity is “in the business of renting passenger vehicles to the public” for the purposes of
As a general matter, the phrase “to be in the business of renting” entails engaging in acts of renting. Thus, Village of Bedford Park v. Expedia, Inc. (7th Cir. 2017) 876 F.3d 296 (Bedford Park) holds that online travel agencies like Expedia are not ” ‘engaged in the business of renting’ ” hotel rooms because they do not own or control the hotel rooms and cannot rent them to customers. (Id. at p. 305.) In Bedford Park, as here, a statute applied to entities ” ‘engaged in the business of renting,’ ” and did not define the phrase. (Id. at pp. 301, 305.) The court considered dictionary definitions of “rent,” determined that “renting implies ownership and granting possession of property,” and concluded that since the travel agencies did not own hotels or hotel rooms, they could not independently grant customers access to those rooms.
Real Parties argue that we should follow the reasoning of the federal district court in Crawford v. Uber Technologies, Inc. (N.D.Cal. 2018) 2018 WL 1116725 (Crawford). There, in seeking judgment on the pleadings, Uber argued that it was “not an entity ‘primarily engaged in the business of transporting people’ ” for the purposes of the federal Americans with Disabilities Act. (Id. at *3.) Uber‘s argument rested on the undisputed fact that drivers, not Uber, convey passengers in vehicles that Uber does not own. (Ibid.) In denying Uber‘s motion, the district court observed that nothing in the relevant statute requires that an entity own or lease its own vehicles in order to qualify as a private entity providing taxi service. (Id. at *4.) Real Parties argue that, just as nothing in the statute at issue in Crawford required that an entity own its own vehicles, nothing in the statutory definitions of “rental company” or “rental car company” require that a rental car company have a possessory interest in the vehicles its rents or have the right to control the vehicles. Real Parties argue that to interpret the statutes as including a requirement that a rental company be in the business of renting vehicles that it owns or controls is to effectively add words to the statutes, which we must not do. (See City of Sacramento v. Public Employees’ Retirement System (1994) 22 Cal.App.4th 786, 794 [” ‘[w]ords may not be inserted in a statute under the guise of interpretation’ “].) This argument is not persuasive, because the word “rent,” which does appear in the statute, implies ownership or control of the item rented. Our interpretation of “a person or entity in the business of renting passenger vehicles to the public” as applying only to the business of renting vehicles the person or entity owns or controls therefore does not require the addition of
Real Parties also point out that the court in Crawford, unpersuaded by Uber‘s attempt to rely on Bedford Park, concluded that Uber‘s analogy to Expedia was “strained“: “Expedia facilitates a transaction that is not dependent on the service it offers. Hotels have rented rooms to guests long before the creation of expedia.com and can do so without the website‘s assistance. By contrast, without Uber and its competitors, non-professional drivers would find it difficult—if not impossible—to locate a rider and transport her to the destination of her choice for monetary compensation. To say that Uber merely facilitates connections between ‘both sides of the two-sided ridesharing market’ obscures the fact that Uber arguably created a market for this type of transportation.” (Crawford, supra, 2018 WL 1116725 at *4.) We agree that Turo‘s business model is unlike Expedia‘s, and may well be more like Uber‘s, but that is not determinative. It seems as though neither company is a perfect analogy to Turo, which appears to have some traits in common with both: for example, the court in Crawford observed that Expedia does not control how the hotels listed on its website price their rooms, just as Turo apparently does not control the prices at which car owners list their vehicles for rental. (Ibid.) In any event, the primary issue in Crawford concerned the control that Uber exercised over its drivers, an issue that the district court concluded could not be determined on the pleadings. (Id. at *4.) The court observed that there were “significant factual questions as to Uber‘s degree of control over its drivers for employment law purposes,” as well as questions about whether Uber controlled how its drivers dealt with riders. (Ibid.) The question we face is different and more focused: is Turo a rental car company for the purpose of
Our conclusion that a rental car company owns or otherwise controls the vehicles that it rents is further supported by the definition of “[p]ersonal vehicle sharing programs,” or PVSPs, in the Insurance Code. The Insurance Code defines ” ‘[p]ersonal vehicle sharing’ ” as the “use of private passenger motor vehicles by persons other than the vehicle‘s owner, in connection with a personal vehicle sharing program” (
Further, the Insurance Code‘s definition of PVSP is incorporated in the Vehicle Code‘s Consumer Automotive Recall Safety Act, which imposes different requirements on a PVSP than on a “rental car company,” defined as a “person or entity in the business of renting passenger vehicles to the public in California” (
In sum, although the Government Code does not expressly define the term “rental car company,” we conclude that Turo is not a “rental company” or “rental car company” as that term is defined in the statutes discussed above,
DISPOSITION
The petition for writ of mandate is granted. Let a peremptory writ of mandate issue, directing respondent court to vacate the portion of its order of April 23, 2020, granting Real Parties’ motion for summary adjudication of Turo‘s first cause of action for declaratory judgment in its corrected first amended cross complaint, and to enter a new order denying said motion. Costs are awarded to petitioner.
Miller, J.
WE CONCUR:
Richman, Acting P.J.
Mayfield, J.*
A160200, Turo, Inc. v. Superior Court
* Judge of the Mendocino Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Court: San Francisco County Superior Court
Trial Judge: Hon. Ethan P. Schulman
Cooley LLP, Michael G. Rhodes, Matthew D. Brown, Benjamin H. Kleine, Bethany C. Lobo, Ashley K. Corkery, Julie M. Veroff, Elizabeth B. Prelogar, for Petitioner
No appearance by Respondent
Dennis J. Herrera, City Attorney, Yvonne R. Meré, Chief Attorney, Owen J. Clements, Kristine A. Poplawski, Marc Price Wolf, Deputy City Attorneys, for Real Parties in Interest
A160200, Turo, Inc. v. Superior Court