THE U.D. REGISTRY, INC., Plaintiff and Appellant, v. THE STATE OF CALIFORNIA et al., Defendants and Appellants. [No. B179653. Second Dist., Div. Five. Oct. 30, 2006.] THE U.D. REGISTRY, INC., Plaintiff and Respondent, v. THE STATE OF CALIFORNIA et al., Defendants and Appellants. [No. B186012. Second Dist., Div. Five. Oct. 30, 2006.]
No. B179653, No. B186012
Court of Appeal, Second District, Division Five, California
Oct. 30, 2006
144 Cal. App. 4th 405
[CERTIFIED FOR PARTIAL PUBLICATION*]
Jacobson, Russell, Saltz & Fingerman, Michael J. Saltz, Keri Rochelle Montrose and Mark E. Fingerman for Plaintiff and Appellant and for Plaintiff and Respondent.
Bill Lockyer, Attorney General, Albert N. Shelden, Assistant Attorney General, Ronald A. Reiter, Susan Henrichsen and Robyn C. Smith, Deputy Attorneys General, for Defendants and Appellants.
OPINION
TURNER, P. J.—
I. INTRODUCTION
Plaintiff, the U.D. Registry, Inc., and defendants, the State of California and Attorney General Bill Lockyer, appeal from a September 9, 2004 judgment. Defendants separately appeal from an April 13, 2005 postjudgment order awarding plaintiff attorney fees. Plaintiff is a credit reporting agency that provides consumer credit reports to landowners who rent and lease apartments and to property managers. Plaintiff sought declaratory relief and to enjoin enforcement of
II. BACKGROUND
A. Plaintiff‘s Declaratory and Injunctive Relief Action
Plaintiff is a credit reporting agency that issues consumer credit reports within the meaning of
Plaintiff‘s Web site advertised that customers were provided an “Eviction/Tenancy Report” which contains: an “Eviction Case Search“; a “Foreclosure Search” which includes judicial foreclosure of mortgages and liens and trustee and bank foreclosures; a “Bankruptcy Search” which consists of bankruptcy petitions filed in federal court; information as to whether the applicant has been an “Arrieta Claimant” or previously involved with one; a “residence history” which involves a person who has been evicted; tenant history supplied by prior landlords; existing arrest warrants; whether an applicant has a history as a vexatious litigant; a full unabridged report of all reported credit history; compilation of all reported civil judgments; a complete list of all tax liens; reported collection agency activity; and out-of-state credit history. Also, the Web site explains a detailed demographic profile presumably for rental applicants will be prepared which includes: addresses; past addresses; Social Security numbers; verification of Social Security numbers; employers; wage and occupation; age; and birth dates. According to the stipulated facts, in order to change its computer system so as to comply with
Plaintiff commenced this declaratory and injunctive relief action against defendants on December 19, 2002. Plaintiff sought an injunction against enforcement of
After the trial based on the foregoing stipulated facts, the trial court ruled: “1. The operation of
B. The Security Freeze Law, Section 1785.11.2
The bill‘s author, Senator Debra Bowen, argued that identity theft, including the unauthorized use of Social Security numbers, was on the rise. The Assembly Committee on the Judiciary reported: “According to consumer advocates, criminals assume the identity of about 350,000 people a year. The term ‘identity theft’ refers to the practice of scam artists who fraudulently
Consumers Union, which supported the legislation, explained the need for and effect of the security freeze provision as follows: “While California has taken important steps over the past several years to aid victims of identity theft, prevention is the most effective way to stop this problem. [Senate Bill No.] 168 does this by helping to ensure that people obtaining credit are who they say they are. This bill would allow a consumer to put a freeze on any release of . . . credit information unless the consumer affirmatively allows its release. When issuing new credit, a credit grantor checks the credit history of the consumer. If a consumer believes that he or she is the victim of identity theft, the consumer can prevent the release of the credit information. If the information is not released, the identity thief will not be able to establish credit in the consumer‘s name.” (Assem. Com. on Judiciary, Analysis of Sen. Bill No. 168 (2001-2002 Reg. Sess.) as amended July 5, 2001, pp. 7–8.)
Senate Bill No. 168 (2001-2002 Reg. Sess.) was also intended in part to shift some of the identity theft burden from consumers to credit reporting agencies and other entities. The California Public Interest Research Group argued in support of the bill: “Right now the burden is completely on consumers to both protect their personal information and clean up their damaged credit reports once they have become victims of identity theft. Unfortunately, a consumer has little control over who has access to his Social Security number and credit report, so his actions will not necessarily prevent identity theft from occurring. It is the responsibility of the business or other entity [that] profits from the distribution of a consumer‘s personal information to keep that information from falling into the wrong hands. [Senate Bill No.] 168 will help place the responsibility where it belongs.” (Assem. Com. on Judiciary, Analysis of Sen. Bill No. 168 (2001-2002 Reg. Sess.) as amended July 5, 2001, pp. 8-9.) The Senate Judiciary Committee Report discussed, “Who should bear the cost of privacy protection? [[] The existence and widespread use of credit reports, as well as government reliance on [Social Security numbers] for many purposes, are facts of modern life that consumers cannot prevent. If these unavoidable facts of life pose threats to individual privacy and financial security, the question becomes how best to protect individual privacy, and who should pay for such protection. [[] This bill‘s security alert and freeze provisions, and the provisions restricting [Social Security number] use, appear to keep the costs of privacy protection off of consumers, who have little choice in the matter, and to assign them to the entities who either benefit from their access to private information (credit
It is also evident a consumer‘s right to control the use of his or her personal and financial information was a legislative concern. The Assembly Committee on Banking and Finance noted that credit reporting agencies gather and transmit personal information about consumers which can “result in disastrous consequences for the individual” when an identity thief strikes—“outside of the purview of the affected person.” (Assem. Com on Banking and Finance, Analysis of Sen. Bill No. 168 (2001-2002 Reg. Sess.) as amended June 14, 2001, p. 3.) The Assembly Committee on the Judiciary identified as a key issue whether consumers should be permitted to assert control over the use of their personal and financial information. (Assem. Com. on Judiciary, Analysis of Sen. Bill No. 168 (2001-2002 Reg. Sess.) as amended July 5, 2001, p. 1.) The Assembly Committee on the Judiciary‘s synopsis of the bill explained the parameters of the permitted control: “The bill also permits a consumer to place a security freeze on his or her credit report which would prohibit the credit reporting agency from releasing the consumer‘s credit report or any information from it without the express authorization of the consumer. A consumer, using a personal identification number assigned to him or her by the credit reporting agency, would be able to lift the freeze and allow his or her credit report to be accessed for a specific purpose, party or period of time, provided that specified information is presented to the credit bureau.” (Id. at p. 1.) Proponents of the legislation expressed a desire to place control of credit reports in the hands of the consumer: “Supporters of the bill argue that . . . the bill‘s security alert and security freeze provisions are necessary to give the consumer, rather than the credit grantor or credit bureau, control over the use of his or her credit history.” (Id. at p. 2.) Consumers Union, a supporter, asserted in part, “[Senate Bill No.] 168 gives the consumer, rather than the credit grantor or
III. DISCUSSION
A. The Constitutionality of the Security Freeze Law Under the First Amendment as Applied to Plaintiff
1. Basic Principles
Plaintiff argues its dissemination of public record facts and other credit-related information is speech that is protected by the federal and state Constitutions, and
The burden is on the state to demonstrate the constitutionality of
Before proceeding to an analysis of the First Amendment issues, it is appropriate to review the two types of applicable constitutional challenges—facial and as-applied attacks on a statute. Our Supreme Court delineated the scope of an as-applied challenge thusly: “An as applied challenge may seek (1) relief from a specific application of a facially valid statute or ordinance to an individual or class of individuals who are under allegedly impermissible present restraint or disability as a result of the manner or circumstances in which the statute or ordinance has been applied, or (2) an injunction against future application of the statute or ordinance in the allegedly impermissible manner it is shown to have been applied in the past. It contemplates analysis of the facts of a particular case or cases to determine the circumstances in which the statute or ordinance has been applied and to consider whether in those particular circumstances the application deprived the individual to whom it was applied of a protected right. [Citations.]” (Tobe v. City of Santa Ana (1995) 9 Cal.4th 1069, 1084; see California Assn. of Private Special Education Schools v. California Department of Education (2006) 141 Cal.App.4th 360, 376.) As-applied challenges are evaluated on a case-by-case basis. (Tobe v. City of Santa Ana, supra, 9 Cal.4th at p. 1084; Hale v. Morgan (1978) 22 Cal.3d 388, 404.) Finally, an as-applied challenge requires evidence that the statute is or has been applied in an unconstitutional manner in the past. (Bowen v. Kendrick (1988) 487 U.S. 589, 621; Tobe v. City of Santa Ana, supra, 9 Cal.4th at p. 1084.) As part of the agreed facts, the parties do not dispute that section 1785.11.2 requires plaintiff to freeze the release of information derived from public documents.
By contrast, a facial challenge is conducted as follows: “A facial challenge to the constitutional validity of a statute or ordinance considers only the text of the measure itself, not its application to the particular circumstances of an individual. [Citation.] ‘To support a determination of facial unconstitutionality, voiding the statute as a whole, petitioners cannot prevail by suggesting that in some future hypothetical situation constitutional problems may possibly arise as to the particular application of the statute . . . . Rather, petitioners must demonstrate that the act‘s provisions inevitably pose a present total and fatal conflict with applicable constitutional prohibitions.’ ” (Arcadia Unified School Dist. v. State Dept. of Education (1992) 2 Cal.4th 251, 267, quoting Pacific Legal Foundation v. Brown (1981) 29 Cal.3d 168, 180-181.)” (Tobe v. City of Santa Ana, supra, 9 Cal.4th at p. 1084, original italics.)
2. The applicable level of constitutional scrutiny: commercial versus noncommercial speech
The first question we must consider is what type of speech is at issue. Plaintiff asserts the expression at issue is noncommercial speech and relies on U.D. Registry, Inc. v. State of California (1995) 34 Cal.App.4th 107, 111, a decision of our colleagues in Division Four of this appellate district. In U.D. Registry, our Division Four colleagues evaluated the constitutionality of fоrmer section 1785.13, subdivision (a)(3) which stated: “(a) Except as authorized under subdivision (b) no consumer credit reporting agency shall make any consumer credit report containing any of the following items of information: [[] [[] (3) Unlawful detainer actions, unless the lessor was the prevailing party. For purposes of this paragraph, the lessor shall be deemed to be the prevailing party only if (A) final judgment was awarded to the lessor (i) upon entry of the tenant‘s default, (ii) upon the granting of the lessor‘s motion for summary judgment, or (iii) following trial, or (B) the action was resolved by a written settlement agreement between the parties which states that the unlawful detainer action may be reported. In any other instance in which the action is resolved by settlement agreement, the lessor shall not be deemed to be the prevailing party for purposes of this
Defendants argue though that the foregoing bright-line rule—that commercial speech is only that which proposes a transaction—in U.D. Registry, Inc. v. State of California, supra, 34 Cal.App.4th at page 111, has been superseded by subsequent authority. We agree with defendants the “speech proposing a commercial transaction” test is no longer the sole test for determining the purposes. The controlling discussion in this regard is the analysis of our Supreme Court in Kasky v. Nike, Inc., supra, 27 Cal.4th at page 957, an opinion issued after U.D. Registry, Inc. In Kasky, our Supreme Court explained the United States Supreme Court has held that the propose-a-commercial-transaction test for commercial speech is not the sole standard of First Amendment review. In Kasky, the California Supreme Court explained that in Board of Trustees, State Univ. of N.Y. v. Fox, supra, 492 U.S. at pages 473-474, the United States Supreme Court held that “‘speech proposing a commercial transaction‘” was the test for identifying commercial speech. But as оur Supreme Court explained in Kasky, “[I]n other decisions the [United States Supreme C]ourt has indicated that the category of commercial speech is not limited to this core segment. For example, the [United States Supreme C]ourt has accepted as commercial speech a statement of alcohol content on the label of a beer bottle (Rubin v. Coors Brewing Co. [(1995)] 514 U.S. [476,] 481-482), as well as statements on an attorney‘s letterhead and business cards identifying the attorney as a CPA (certified public accountant) and CFP (certified financial planner) (Ibanez v. Florida Dept. of Business and Professional Regulation, Bd. of Accountancy [(1994)] 512 U.S. [136,] 142).” (Kasky v. Nike, Inc., supra, 27 Cal.4th at p. 956; see Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1381
Later in Kasky, our Supreme Court identified various tests applied in the advertising context by the United States Supreme Court. Yet, as our Supreme Court explained in Kasky, those standards are not the exclusive test for identifying commercial speech: “Thus, although the court in Bolger[ v. Youngs Drug Products Corp. (1983)] 463 U.S. 60, identified three factors—advertising format, product references, and commercial motivation—that in combination supported a characterization of commercial speech in that case, the court not only rejected the notion that any of these factors is sufficient by itself, but it alsо declined to hold that all of these factors in combination, or any one of them individually, is necessary to support a commercial speech characterization.” (Kasky v. Nike, Inc., supra, 27 Cal.4th at p. 957, original italics.)
Finally, in Kasky, our Supreme Court cited United States Supreme Court decisional language which acknowledged ambiguities exist “‘at the margins’ ” of what may be categorized as commercial speech. (Kasky v. Nike, Inc., supra, 27 Cal.4th at p. 958, citing Edenfield v. Fane (1993) 507 U.S. 761, 765; see also Cincinnati v. Discovery Network, Inc. (1993) 507 U.S. 410, 419-420; Zauderer v. Office of Disciplinary Counsel of Supreme Court (1985) 471 U.S. 626, 637.) Therefore, we agree with defendants the analysis in U.D. Registry, Inc. v. State of California, supra, 34 Cal.App.4th at page 111 that “[t]he test” for defining commercial speech is whether the expression proposes a commercial transaction is no longer the sole standard of First Amendment review. As our Supreme Court has noted, there is no single bright-line test for defining commercial speech. (Intel Corp. v. Hamidi, supra, 30 Cal.4th at p. 1381; Kasky v. Nike, Inc., supra, 27 Cal.4th at p. 956.)
Commercial speech is entitled to less First Amendment protection than other forms of expression. (Bolger, supra, 463 U.S. at pp. 64–65; Kasky v. Nike, Inc., supra, 27 Cal.4th at p. 952.) As to noncommercial speech, content-based regulation is valid only when it is narrowly tailored, i.e., the least restrictive means is used to promote a compelling government interest. (United States v. Playboy Entertainment Group, Inc., supra, 529 U.S. at p. 813; Kasky v. Nike, Inc., supra, 27 Cal.4th at p. 952Bigelow v. Virginia, supra, 421 U.S. at p. 819 [fighting words]; Flatley v. Mauro (2006) 39 Cal.4th 299, 328 [extortion].) Commercial speech though is subject to an intermediate standard of review first set forth in Central Hudson, supra, 447 U.S. at page 566: “At the outset, we must determine whether the expression is protected by the First Amendment.
3. The Central Hudson Test Applicable to Commercial Speech
The United States Supreme Court set forth the four-part intermediate scrutiny analysis applicable to content-based regulation of commercial speech in Central Hudson, supra, 447 U.S. at page 566 (the Central Hudson test): “At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.” (Accord, Lorillard Tobacco Co. v. Reilly (2001) 533 U.S. 525, 554-555 [refusing to reject Central Hudson analysis].)
Our conclusions concerning the Central Hudson test are as follows. First, we must determine whether the speech concerns lawful activity and is not misleading. (Central Hudson, supra, 447 U.S. at p. 566; ARP Pharmacy Services, Inc. v. Gallagher Bassett Services, Inc., supra, 138 Cal.App.4th at
Second, we must consider whether the asserted government interest is substantial. (Central Hudson, supra, 447 U.S. at p. 566; ARP Pharmacy Services, Inc. v. Gallagher Bassett Services, Inc., supra, 138 Cal.App.4th at p. 1316.) Here, the Legislature‘s stated goals were to: protect consumers from identity theft; give the public a tool to prevent identity theft; and in general prevent further identity theft. In support of their assertion this interest is substantial, defendants point to statistics cited in the legislative committee reports evidencing the rise in identity theft. Law enforcement and other agencies reported increases in the numbers of identity theft inquiries, complaints, and investigations. Plaintiff does not dispute that protecting consumers from identity theft is a substantial government interest. Indeed, in the trial court and here, the parties conceded protecting consumers from identity theft is a compelling state interest. This court previously has observed, “Nor can it be seriously doubted that our state has a compelling interest in protecting its citizens against fraud and identity theft. [Citation.]” (Valov v. Department of Motor Vehicles, supra, 132 Cal.App.4th at p. 1128.) Similarly, the United States Supreme Court has recognized a substantial state interest in preventing fraud and protecting privacy. (Edenfield v. Fane, supra, 507 U.S. at pp. 768-769; Schaumburg v. Citizens for Better Environ. (1980) 444 U.S. 620, 636.) We conclude the government interest is substantial and compelling.
Third, we turn to the question whether section 1785.11.2 directly and materially advances the government‘s asserted interest in protecting consumers from identity theft. (Greater New Orleans Broadcasting Assn., Inc. v. United States, supra, 527 U.S. at p. 188; Central Hudson, supra, 447 U.S. at p. 566Central Hudson test thusly: “The third part of the Central Hudson test asks whether the speech restriction directly and materially advances the asserted governmental interest. ‘This burden is not satisfied by mere speculation or conjecture; rather, a governmental body seeking to sustain a restriction on commercial speech must demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree.’ Edenfield[ v. Fane, supra, 507 U.S. at pp.] 770-771. Consequently, ‘the regulation may not be sustained if it provides only ineffective or remote support for the government‘s purpose.’ Central Hudson, 447 U.S., at 564. We have observed that ‘this requirement is critical; otherwise, “a State could with ease restrict commercial speech in the service of other objectives that could not themselves justify a burden on commercial expression.“’ Rubin[ v. Coors Brewing Co. (1995)] 514 U.S. [476,] 487, quoting Edenfield, 507 U.S., at 771.” (Greater New Orleans Broadcasting Assn., Inc. v. United States, supra, 527 U.S. at p. 188.) The legislative committee reports include statements to the effect that an identity thief may be less likely to obtain credit in the victim‘s name when the creditor cannot access a credit report; therefore, a consumer may be able to thwart identity theft by freezing dissemination of his or her credit report. Defendants did not present any specific evidence to that effect in the trial court. More precisely, there is no evidence a single credit report prepared by plaintiff has led to a single case of identity theft. Nevertheless, we will assume, for purposes of discussion, that section 1785.11.2 directly advances the government‘s interest in protecting consumers from identity theft by allowing them to stop the distribution of their credit reports.
Fourth, the restriction must not be excessive. (Central Hudson, supra, 447 U.S. at pp. 564, 566; Kasky v. Nike, Inc., supra, 27 Cal.4th at p. 952.) The United States Supreme Court has held, “[I]f the governmental interest could be served as well by a more limited restriction on commercial speech, the excessive restrictions cannot survive.” (Central Hudson, supra, 447 U.S. at p. 564; see Board of Trustees, State Univ. of N.Y. v. Fox, supra, 492 U.S. at p. 480.)
As discussed above, section 1785.11.2 does not survive the intermediate scrutiny applicable to commercial speech as applied to plaintiff. Therefore, section 1785.11.2 does not, if the expression at issue is noncommercial speech, survive the strict scrutiny standard applicable to noncommercial speech. Hence, even if plaintiff‘s consumer credit reports are noncommercial speech because they do not propose a commercial transaction (City of Cincinnati v. Discovery Network, Inc., supra, 507 U.S. at pp. 422-423; Board of Trustees of State University of N.Y. v. Fox, supra, 492 U.S. at pp. 473-474; Bolger, supra, 463 U.S. at p. 66)—as our Division Four colleagues held in U.D. Registry, Inc. v. State of California, supra, 34 Cal.App.4th at page 111—section 1785.11.2 unconstitutionally violates plaintiff‘s First Amendment rights. As discussed above, section 1785.11.2 is more extensive than is necessary to serve the state‘s asserted interest. It follows, as pertinent to a strict scrutiny analysis, that section 1785.11.2 is not narrowly tailored to promote that interest; it is not the least restrictive means to that end. (United States v. Playboy Entertainment Group, Inc., supra, 529 U.S. at p. 813; Kasky v. Nike, Inc., supra, 27 Cal.4th at p. 952.) Under any relevant First Amendment analysis, section 1785.11.2 is unconstitutional as applied to plaintiff.
B. Reformation
As noted above, the trial court enjoined the operation and enforcement of section 1785.11.2 to the extent it prevents dissemination and reporting of “any information contained in and/or obtained from matters of public record” as to plaintiff but otherwise allowed the statute tо stand. Plaintiff argues that section 1785.11.2 cannot be judicially reformed. The California Supreme Court has set forth the applicable rule as follows: “This court has refused to undertake wholesale judicial amendment of legislation. [Citations.] However, ‘a reviewing court may, in appropriate circumstances, and consistently with the separation of powers doctrine, reform a statute to conform it to constitutional requirements in lieu of simply declaring it
In Metromedia, Inc. v. City of San Diego (1981) 453 U.S. 490, 521, the United States Supreme Court reversed the decision of the California Supreme Court in Metromedia, Inc. v. San Diego (1980) 26 Cal.3d 848, 885–886, concerning the validity under the First Amendment on restrictions on off-site advertising signs. The United States Supreme Court remanded the case to our Supreme Court in order to determine whether the ordinance could be reformed. (Metromedia, Inc. v. San Diego, supra, 453 U.S. at p. 521 & fn. 26.) Upon remand, in Metromedia, Inc. v. City of San Diego (1982) 32 Cal.3d 180, 190-191, our Supreme Court declined to reform an ordinance restricting off-site advertising signs. Our Supreme Court held that the ordinance could not be reformed because: it was doubtful whether the purpose of the original ordinance could be served by a reformed version; as reformed, the language of the ordinance was inconsistent with that of the original enactment; there was insufficient evidence there would be a material reduction in the number of billboards; as reformed, the city would be left with an ordinance less effective in achieving the goal of reducing the number of billboards; and there would be constitutional problems discerning what was commercial as distinguished from noncommercial speech. (Metromedia, Inc. v. City of San Diego, supra, 32 Cal.3d at pp. 190–191.)
Similarly, in the case of In re Marriage of Burkle, supra, 135 Cal.App.4th at pages 1068-1069, Division Eight of this appellate district held
In a like vein, section 1785.11.2 cannot be judicially reformed so as to permit the statute to apply to plaintiff. The text of section 1785.11.2 and the legislative committee reports that preceded its adoption are such that we cannot “say with confidence” that the trial court‘s proposed rewriting of the statute, or any other redrafting, would “closely effectuat[e] policy judgments clearly articulated by” the Legislature. (Kopp v. Fair Pol. Practices Com., supra, 11 Cal.4th at p. 615.) The trial court‘s construction that prevents a consumer from freezing information “contained in and/or obtained from public records” permits the disclosure to plaintiff‘s customers of the very information the Legislature sought to keep confidential—names, Social Security numbers, addresses, tax information, rental records, and judgments. The Legislature intended to allow consumers to prevent disclosure of any information in a credit reporting agency report; not merely that “contained in and/or obtained from public records” as the trial court‘s reformation order permits. There is no evidence the Legislature intended to enact a statute that permitted a consumer to freeze disclosure of everything except information “contained in and/or obtained from public records.” No committee reports suggest if a consumer can freeze only information not “contained in and/or obtained from public records,” there will be the comparable protections against identity theft section 1785.11.2 was designed to provide. Moreover, the Legislature intended to require a credit reporting agency, upon receiving the consumer‘s written request, to freeze the release of all of her or his information. (
C. Facial Challenge
The trial court enjoined the enforcement of section 1785.11.2 as to credit reports containing information derived from public records. There has been no evidentiary showing as to: the manner in which credit reporting agencies other than plaintiff secure their information or their sources; the
The parties agree there is a compelling state interest in the prevention of identity theft which means that concern can serve as a basis for a consumer restricting disclosure of private information like a Social Security number. Further, section 1785.11.2 can validly apply if there are fraudulent misrepresentations in a credit report as there is no First Amendment right to use commercial speech to make fraudulent or misleading statements. (Zauderer v. Office of Disciplinary Counsel of Supreme Court, supra, 471 U.S. at p. 638 [“The States and the Federal Government are free to prevent the dissemination of commercial speech that is false, deceptive, or misleading“]; Kasky v. Nike, Inc., supra, 27 Cal.4th at p. 953 [“’ [T]here is no constitutional value in false statements of fact’ “].) If a credit report contains only false information, then section 1785.11.2 could constitutionally be used to prevent its release. There are logically conceivable circumstances where a consumer can forestall the release of credit information the Constitution does not protect. Hence, in terms of a facial challenge, defendants have demonstrated that there is not a “total and fatal” conflict between section 1785.11.2 and the First Amendment. (Tobe v. City of Santa Ana, supra, 9 Cal.4th at p. 1084; see Arcadia Unified School Dist. v. State Dept. of Education, supra, 2 Cal.4th at p. 267.) There is no merit to plaintiff‘s facial invalidity contentions. Therefore, the trial court could not restrain enforcement of section 1785.11.2 against other credit reporting agencies.
One brief word is in order concerning U.D. Registry, Inc. v. State of California, supra, 34 Cal.App.4th at pages 111-116. U.D. Registry, Inc. was limited to the issue of restrictions on credit agencies truthfully reporting the results of unlawful detainer proceedings pursuant to
For the first time in the rehearing petition, plaintiff argues the requirement recognized in Tobe v. City of Santa Ana, supra, 9 Cal.4th at page 1084 that a party mounting a facial attack on a statute demonstrate the challenged provision presents a “present tоtal and fatal conflict” with the applicable constitutional prohibition does not apply to an overbreadth question in the free expression context. Plaintiff‘s analysis is incorrect. (Secretary of State of Md. v. J. H. Munson Co. (1984) 467 U.S. 947, 967-968 [“Where, as here, a statute imposes a direct restriction on protected First Amendment activity, and where the defect in the statute is that the means chosen to accomplish the State‘s objectives are too imprecise, so that in all its applications the statute creates an unnecessary risk of chilling free speech, the statute is properly subject to facial attack.” (Fn. omitted.)]; People v. Stanistreet (2002) 29 Cal.4th 497, 511, fn. 5.) Moreover, as noted, insufficient evidence was presented to support the trial court‘s facial overbreadth conclusions. The evidence before the trial court related to plaintiff‘s credit reports. There was no evidence as to industry wide practices or other credit reporting agency‘s reports. Plaintiff presented no evidence as to whether section 1785.11.2 impinges upon the free expression rights of a substantial portion of those credit reporting agencies to whom it applies. (See American Academy of Pediatrics v. Lungren (1997) 16 Cal.4th 307, 348.)
*See footnote, ante, page 405.
IV. OTHER ISSUES*
The September 9, 2004 judgment in case No. B179653 is reversed. The April 13, 2005 postjudgment order awarding attorney fees in case No. B186012 is affirmed. Upon issuаnce of the remittitur, the trial court is to issue a new injunction consistent with the views expressed in this appeal. Plaintiff, U.D. Registry, Inc., is to recover its costs incurred on appeal from defendants, State of California and Bill Lockyer. Any issue of attorney fees on appeal is to be pursued pursuant to rule 870.2(c) of the California Rules of Court.
Kriegler, J., concurred.
ARMSTRONG, J., Dissenting. — I respectfully dissent.
According to the complaint in this action, U.D. Registry, Inc. (UDR) is a credit reporting agency serving the rental housing industry: “In order to assist landlords, property managers and others in determining the eligibility of a consumer for hiring of a dwelling, UDR maintains a database on unlawful detainers and other public records on tens of millions of prospective tenants throughout the state of California and other states.”
UDR brought this lawsuit against the State of California to enjoin the enforcement of
In U.D. Registry, Inc. v. State of California (1995) 34 Cal.App.4th 107 (UDR I), our colleagues in Division Four of this District Court of Appeal unequivocally answered this question, ruling that
Like the statute at issue in UDR I, the Freeze Statute, prohibits the “truthful reporting of ‘information contained in court files that are fully available to the public and which can be freely reported and copied by any other person, entity or member of the media.’ ” (UDR I, supra, 34 Cal.App.4th at p. 110.) Consequently, it is, as the trial court found, facially unconstitutional.
Contrary to the majority, I agree with the trial court that the Freeze Statute may be reformed to preserve it against invalidation. Under California law, “[i]nvalid provisions of a statute should be severed whenever possible to preserve the validity of the remainder of the statute. [Citations.]” (Briseno v. City of Santa Ana (1992) 6 Cal.App.4th 1378, 1384.) As our Supreme Court has explained: “. . . a court may reform—i.e., ‘rewrite‘—a statute in order to preserve it against invalidation undеr the Constitution, when we can say with confidence that (i) it is possible to reform the statute in a manner that closely effectuates policy judgments clearly articulated by the enacting body, and (ii) the enacting body would have preferred the reformed construction to invalidation of the statute.” (Kopp v. Fair Pol. Practices Com. (1995) 11 Cal.4th 607, 660–661.)
The purpose of the Freeze Statute is to prevent identity thieves from obtaining new credit by preventing a prospective credit issuer from reviewing the victim‘s credit history, and thus using the victim‘s good credit history to extend new credit to a thief. I believe that this purpose would be closely effectuated by the trial court‘s reformation, which in effect excised the ineffective method of preventing identity theft (prohibiting the dissemination of public credit information, such as unlawful detainer actions and bankruptcy filing, which would disincline a creditor to extend new credit, and is thus useless to a thief) while leaving intact the effective method (prohibiting dissemination of private credit information). Moreover, “[t]here is no persuasive reason to suppose” that the inclusion of public credit information “was so critical to the enactment of [the statute] that the measure would not have been enacted in its absence.” (Calfarm Ins. Co. v. Deukmejian (1989) 48 Cal.3d 805, 822.) Like the trial court, I feel confident that the Legislature would have preferred the reformed construction of the Freeze Statute to its invalidation.
Finally, this case was brought and tried as a facial challenge to the Freeze Statute. Indeed, UDR does not have standing to bring an as-applied challenge, since it has never been subject to an enforcement action based on the statute. (Tobe v. City of Santa Ana (1995) 9 Cal.4th 1069, 1084
In sum, the trial court enjoined the enforcement of the Freeze Statute to the extent that it “seeks to prevent the dissemination and reporting by consumer credit reporting agencies of any information contained in and/or obtained from matters of public record, and to the extent that the Freeze Statute seeks to preclude plaintiff from disseminating and reporting information contained in the public record. . . .” The effect of the majority opinion is to limit the reach of the injunction to a single consumer credit repоrting agency, UDR. Because I believe that the Freeze Statute as written is unconstitutional to the extent that it precludes the dissemination by any consumer credit reporting agency of information contained in and/or obtained from the public record, I respectfully dissent.
A petition for a rehearing was denied November 29, 2006, and the opinion was modified to read as printed above. The petition of appellant The U.D. Registry, Inc., for review by the Supreme Court was denied February 7, 2007, S148641. Kennard, J., was of the opinion that the petition should be granted.