The California Appeals Court overturned a Los Angeles Superior Court decision holding that California’s Investigative Consumer Reporting Agencies Act (ICRAA) was unconstitutionally vague because of its overlap with California’s Consumer Credit Reporting Agencies Act (CCRAA).  Connor v. First Student, Inc., 2015 Cal. App. LEXIS 699 (Cal. App. 2d Dist. Aug. 14, 2015). 

In the underlying lawsuit, a class of bus drivers alleged that the defendant employer violated California’s ICRAA when it ran background checks without written consent.  Relying on  Ortiz v. Lyon Management Group, Inc., 157 Cal. App. 4th 604, 69 Cal. Rptr. 3d 66 (2007), the Los Angeles Superior Court ruled that the ICRAA was unconstitutionally vague because of its overlap with the CCRAA.   

On appeal, the plaintiffs argued that the overlap between the two statutes did not make the ICRAA unconstitutionally vague and that the Los Angeles Superior Court failed to consider case law governing the interpretation of overlapping statutes.  

The California Appeals Court agreed with the plaintiffs, reasoning that “[T]here is nothing in either law that precludes application of both acts to information that relates to both character and creditworthiness.”   

The Court explained that under California law, “[a]n agency that furnishes a report containing both creditworthiness information and character information, and the person who procures or causes that report to be made, can comply with each act without violating the other.  And despite the overlap between the CCRAA and the ICRAA there remain certain consumer reports that are governed exclusively by the ICRAA (those with character information obtained from personal information), because each act expressly excludes those specific reports governed by the other act.”  

The statutes share similarities — both the ICRAA and CCRAA impose obligations on the agencies regarding disclosure to consumers when the agencies furnish reports, and limit when and to whom those reports may be furnished.  However, the specific obligations and limitations, and the remedies for violations of each act are different.  For example, the ICRAA imposes greater obligations and stricter limitations, and allows greater remedies.   

In reversing the Los Angeles Superior Court, the California Appeals Court also overturned the Ortiz case, which held that the ICRAA was unconstitutionally vague as applied to tenant screening reports containing unlawful detainer information because unlawful detainer information relates to both creditworthiness and character.  According to the Ortiz Court, the ICRAA and the CCRAA presented a “statutory scheme that required information in consumer reports to be categorized as either character information (governed by the ICRAA) or creditworthiness information (governed by the CCRAA); when the information can be categorized as both, the statutory scheme cannot be constitutionally enforced because it does not give adequate notice of which act governs that information.”   

By reversing the Los Angeles Superior Court, the California Appeals Court effectively revived the ICRAA.