Case Name: Nick Miletak v. HireRight, LLC

Case No.: 19CV340891

Defendant’s Demurrer to Plaintiff Nick Miletak’s Complaint

Factual and Procedural Background

Defendant HireRight, LLC (“HireRight”) is in the business of providing consumer background reports for employment purposes. (Complaint, ¶12.) To carry out its business activities and objectives, defendant HireRight enters into contracts with various vendors and companies who sell a whole host of consumer information that defendant HireRight, in turn, resells to employers who are seeking to hire or make other employment decisions. (Complaint, ¶13.) Defendant HireRight assembles data (including credit history, criminal records, driver history, residential/address history) and delivers it to an employer electronically. (Complaint, ¶14.)

Around August 2018, plaintiff Nick Miletak (“Miletak”) applied for employment with Cardinal Health and signed a consent disclosure authorizing Cardinal Health to obtain a consumer background report prepared by defendant HireRight. (Complaint, ¶18.) On October 8, 2018, defendant HireRight prepared a background report with plaintiff Miletak as the subject and provided the report to Cardinal Health and to plaintiff Miletak via an email link. (Complaint, ¶20.) When accessing the link, plaintiff Miletak had the option to download the prepared report in PDF format. (Complaint, ¶21.) When downloading or printing the background report, the background report encounters scaling shrinkage in converting from HTML file to PDF or printable format. (Complaint, ¶22.) The scaling shrinkage results in the required first page disclosure notice to appear in 11.76-point bold face font. (Id.) The actual font used on defendant HireRight’s HTML page complies with Civil Code section 1786.29 but downloading or printing results in a deficient font. (Id.) Defendant HireRight also failed to send the report within three business days prescribed by Civil Code section 1786.16. (Complaint, ¶23.)

On January 14, 2019, plaintiff Miletak filed a complaint against defendant HireRight, LLC asserting causes of action for:

(1) Violation of Civil Code §1786.29
(2) Violation of Civil Code §1786.16

On March 21, 2019, defendant HireRight filed the motion now before the court, a demurrer to plaintiff Miletak’s complaint.

I. Defendant HireRight’s demurrer to the second cause of action in plaintiff Miletak’s complaint is SUSTAINED.

“[Where] recovery is based on a statutory cause of action, the plaintiff must set forth facts in his [or her] complaint sufficiently detailed and specific to support an inference that each of the statutory elements of liability is satisfied. General allegations are regarded as inadequate. [Citations.]” (Mittenhuber v. City of Redondo Beach (1983) 142 Cal.App.3d 1, 5.)

Civil Code section 1786.50, subdivision (a) states:

An investigative consumer reporting agency or user of information that fails to comply with any requirement under this title with respect to an investigative consumer report is liable to the consumer who is the subject of the report in an amount equal to the sum of all the following:
(1) Any actual damages sustained by the consumer as a result of the failure or, except in the case of class actions, ten thousand dollars ($10,000), whichever sum is greater.
(2) In the case of any successful action to enforce any liability under this chapter, the costs of the action together with reasonable attorney’s fees as determined by the court.

In this action, plaintiff Miletak contends defendant HireRight is an investigative consumer reporting agency who failed to comply with two requirements. In the second cause of action, plaintiff Miletak alleges defendant HireRight violated Civil Code section 1786.16, subdivision (b)(1) which states, in relevant part:

Any person described in subdivision (d) of Section 1786.12 who requests an investigative consumer report, in accordance with subdivision (a) regarding that consumer, shall do the following:
(1) Provide the consumer a means by which the consumer may indicate on a written form, by means of a box to check, that the consumer wishes to receive a copy of any report that is prepared. If the consumer wishes to receive a copy of the report, the recipient of the report shall send a copy of the report to the consumer within three business days of the date that the report is provided to the recipient, who may contract with any other entity to send a copy to the consumer. The notice to request the report may be contained on either the disclosure form, as required by subdivision (a), or a separate consent form. The copy of the report shall contain the name, address, and telephone number of the person who issued the report and how to contact them.

As noted above, Civil Code section 1786.50 imposes liability upon “An investigative consumer reporting agency or user of information that fails to comply with any requirement under this title with respect to an investigative consumer report.” In turn, the obligation imposed by Civil Code section 1786.16 is imposed upon “Any person described in subdivision (d) of Section 1786.12 who requests an investigative consumer report.” Civil Code section 1786.12, subdivision (d) states, in relevant part, “An investigative consumer reporting agency shall only furnish an investigative consumer report … [t]o a person that it has reason to believe: (1) Intends to use the information for employment purposes….” Here, that person is alleged to be Cardinal Health. (See Complaint, ¶¶18 – 19.)

Defendant HireRight argues initially on demurrer that the obligation imposed by section 1786.16 lies with Cardinal Health so defendant HireRight cannot be liable. In opposition, plaintiff Miletak points to that portion of section 1786.16, subdivision (b)(1) which states, “If the consumer wishes to receive a copy of the report, the recipient of the report shall send a copy of the report to the consumer within three business days of the date that the report is provided to the recipient, who may contract with any other entity to send a copy to the consumer.” Plaintiff Miletak concedes Cardinal Health is the recipient of the report, but directs the court’s attention to his allegation that, “Cardinal Health also contracted with [defendant HireRight] to deliver the prepared report to the Plaintiff pursuant to the requirements of § 1786.16.” (Complaint, ¶19.) Plaintiff Miletak apparently contends, based on this allegation, that defendant HireRight assumed Cardinal Health’s legal obligations under section 1786.16.

The court does not agree with plaintiff Miletak’s position. While section 1786.16 gives Cardinal Health, the recipient of the report, the right to contract with another entity to send a copy of the report to the consumer, the plain language of the statute imposes liability only upon the recipient of the report/ person who requested the investigative consumer report. In plaintiff Miletak’s complaint, the recipient of the report/ person who requested the investigative consumer report is Cardinal Health.

Accordingly, defendant HireRight’s demurrer to the second cause of action in plaintiff Miletak’s complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] is SUSTAINED WITHOUT LEAVE TO AMEND.

II. Defendant HireRight’s demurrer to the first cause of action in plaintiff Miletak’s complaint is SUSTAINED.

Plaintiff Miletak’s first cause of action alleges a violation of Civil Code section 1786.29, subdivision (a) which states:

An investigative consumer reporting agency shall provide the following notices on the first page of an investigative consumer report:
(a) A notice in at least 12-point boldface type setting forth that the report does not guarantee the accuracy or truthfulness of the information as to the subject of the investigation, but only that it is accurately copied from public records, and information generated as a result of identity theft, including evidence of criminal activity, may be inaccurately associated with the consumer who is the subject of the report.

The purported non-compliance is the failure to provide notice in a 12-point font size. Defendant HireRight directs the court’s attention to plaintiff Miletak’s own allegation at paragraph 22 which states, “When downloading or printing the background report prepared by the Defendant the background report encounters scaling shrinkage in converting from HTML file to PDF or printable format. The resulting shrinkage in the conversion results in the required first page disclosure notice to appear in 11.76-point bold face font. … The Plaintiff asserts that the actual font used on the Defendants HTML page of the completed report is compliant but because of conversion during downloading or printing results in a deficient font being provided.” (Emphasis added.)

In essence, plaintiff alleges the HTML version of the investigative consumer report complies, but a printed or downloaded version does not. The statute requires an investigate consumer reporting agency to provide notice on the first page of an investigative consumer report in at least 12-point boldface type. Plaintiff has alleged defendant HireRight’s report complies when viewed in HTML. Since the statute does not require an investigative consumer reporting agency to provide the investigative consumer report in multiple formats, plaintiff’s allegation of compliance defeats this cause of action.

In addition, the court is persuaded by defendant HireRight’s argument that this claim is “de minimis.” Defendant HireRight’s citation to Harris v. Time, Inc. (1987) 191 Cal.App.3d 449 (Harris) and the discussion therein is particularly apt.

As a final argument, Time claims the judgment of dismissal was correct based on the legal maxim “de minimis non curat lex,” or “the law disregards trifles.” (Civ. Code, § 3533.) In this age of the consumer class action this maxim usually has little value. However, the present action is “de minimis” in the extreme. This lawsuit is an absurd waste of the resources of this court, the superior court, the public interest law firm handling the case and the citizens of California whose taxes fund our judicial system. It is not a use for which our legal system is designed.

As a practical matter, plaintiffs’ real complaint is that they were tricked into opening a piece of junk mail, not that they were misled into buying anything or expending more than the effort necessary to open an envelope. If Joshua’s mother lost the initial skirmish in the battle of direct mail advertising by opening the envelope, she could have won the war by simply throwing the thing away. If she were angry she might even have returned Time’s business reply envelope empty, requiring Time to pay the return postage. If she felt particularly hostile, she might have inserted a nasty note or other evidence of her displeasure in the reply envelope. A $15 million lawsuit, filed in a superior court underfunded and already overburdened with serious felony prosecutions and complex civil litigation involving catastrophic injury from asbestos, prescription drugs and intrauterine devices, is a vast overreaction. The law may permit junk mail to be delivered for a lower cost than the individual citizen must pay. It does not require that the public subsidize junk litigation.

For many, an unpleasant aspect of contemporary American life is returning to the sanctity of one’s home each day and emptying the mailbox, only to be inundated with advertisements and solicitations. Some days, among all of the junk mail, one is fortunate to be able to locate a bill, let alone a letter from a friend or loved one. Insult is added to injury when one realizes that individual citizens must pay first class postage rates to send their mail, while junk mail, for reasons apparent only to Congress and the United States Postal Service, is sent at less one-half of that rate. The irritation level soars to new heights when, succumbing to the cleverness or ruse of the sender of junk mail and believing one is being offered something for nothing, one actually opens an envelope and examines its contents, both of which would otherwise been deposited unopened in their rightful place, the garbage can. Snake oil salesmen have been replaced by bulk rate advertisers whose wares must be causing our postal carriers’ backs to be nearing the breaking point under the weight of such mail.

As much as one might decry this intrusion into our lives and our homes and sympathize with Joshua’s plight, eliminating it lies with Congress, not the courts. The courts cannot solve every complaint or right every technical wrong, particularly one which causes no actual damage beyond the loss of the few seconds it takes to open an envelope and examine its contents. Our courts are too heavily overburdened to be used as a vehicle to punish by one whose only real damage is feeling foolish for having opened what obviously was junk mail.

We therefore affirm, despite the partial technical validity of the action, because the judgment is correct based on the “de minimis” theory.

(Harris, supra, 191 Cal.App.3d at pp. 458–460.)

By his own admission in opposition, plaintiff Miletak is not claiming any actual damages instead seeking an amount allowed by statute. [On that basis, plaintiff Miletak’s reliance on Ballin v. Los Angeles County Fair (1941) 43 Cal.App.2d Supp. 884 is distinguishable as the plaintiff there alleged actual damages of at least ten cents.] Plaintiff makes no allegation that due to the smaller font, either he or his prospective employer, Cardinal Health, could not read the notice and detrimentally relied on the accuracy or truthfulness of information contained in the investigative consumer report. Plaintiff alludes to the right of privacy but does not explain how his right of privacy has been violated as a result of the notice in an investigative consumer report being 11.76-point font, particularly where plaintiff Miletak admits he viewed the notice in a compliant 12-point font.

Accordingly, defendant HireRight’s demurrer to the first cause of action in plaintiff Miletak’s complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] is SUSTAINED WITHOUT LEAVE TO AMEND.