Pioneer Electronics v. Superior Court

• Court: California Supreme Court
• Writing for the Court: Chin
• Citation: Pioneer Electronics v. Superior Court, 150 P.3d 198, 53 Cal.Rptr.3d 513, 40 Cal.4th 360 (Cal. 2007)
• Decision Date: 25 January 2007
• Docket Number: No. S133794.,S133794.
• Parties: PIONEER ELECTRONICS (USA), INC., Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; Patrick Olmstead, Real Party in Interest.

53 Cal.Rptr.3d 513

40 Cal.4th 360

150 P.3d 198

PIONEER ELECTRONICS (USA), INC., Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent Patrick Olmstead, Real Party in Interest.

No. S133794.

Supreme Court of California.

January 25, 2007.

Hughes Hubbard & Reed, William T. Bisset, Charles Avrith, David A. Lombardero and Alicia D. Mew, Los Angeles, for Petitioner.

Sidley Austin, Jeffrey A. Berman, James M. Harris and Steven A. Ellis, Los Angeles, for Employers Group as Amicus Curiae on behalf of Petitioner.

Jocelyn D. Larkin, Brad Seligman, Berkely, and Sarah Varela for Asian Law Caucus, Disability Rights Advocates, Disability Rights and Education Defense Fund, Equal Justice Society, Equal Rights Advocates, The Impact Fund, Legal Aid Society-Employment Law Center, Lawyers' Committee for Civil Rights of the San Francisco Bay Area, Mexican American Legal Defense and Educational Fund, Public Counsel and Western Center on Law and Poverty as Amici Curiae on behalf of Petitioner.

No appearance for Respondent.

Lange & Koncius, Joseph J.M. Lange, Jeffrey A. Koncius, El Segundo; Milberg Weiss Bershad & Schulman, Sanford P. Dumain, Michael R. Reese, Ann M. Lipton, Jeff S. Westerman, Sabrina S. Kim, Los Angeles; Robert I. Lax & Associates and Robert I. Lax for Real Party in Interest.

The Sturdevant Law Firm, James C. Sturdevant, San Francisco, Mark T. Johnson and Sylvia Sokol, San Francisco, for Consumer Attorneys of California as Amicus Curiae on behalf of Real Party in Interest.

David R. Labahn, Sacramento, for California District Attorneys Association as Amicus Curiae on behalf of Real Party in Interest.

CHIN, J.

Purchasers of possibly defective DVD players communicated with the seller, expressing their discontent and relating their identifying information (names, addresses, etc.). We consider here the extent to which California's right to privacy provision (Cal. Const., art. I, § 1) protects these purchasers from having their identifying information disclosed to the plaintiff during civil discovery proceedings in a consumers' rights class action against the seller. The named plaintiff in the action assertedly needs this information from the seller to facilitate communication with potential class members. We focus on the requisite notice and opportunity to assert a privacy right which should accompany a precertification communication to members of the putative class before such disclosure may occur.

The Court of Appeal ruled that trial courts in such cases must assure not only that all prospective or potential class members receive actual notice of their right to grant or withhold consent to the release of their personal identifying information, but also that such consent must be exhibited by each potential class member's own positive act of agreeing to disclosure, rather than by their mere passive failure to object. Because this ruling is overprotective of the purchasers' privacy rights, inconsistent with established privacy principles, and likely to cause adverse consequences in future cases, we will reverse.

I. FACTS

The following uncontradicted facts were taken largely from the Court of Appeal's opinion in this case. Patrick Olmstead purchased a DVD player from Pioneer Electronics (USA), Inc. (Pioneer). Claiming it was defective, he brought suit against Pioneer on his own behalf and on behalf of a putative class of persons who purchased the same model of allegedly defective DVD player. Responding to a discovery request by Olmstead (see Code Civ. Proc., § 2017.010), Pioneer produced redacted documents relating to complaints it received from approximately 700 to 800 consumers regarding the DVD player. Olmstead, seeking further identifying information about these persons, moved to compel Pioneer to provide unredacted copies of any consumer complaints it had received about the allegedly defective DVD players. The motion also asked Pioneer to disclose the names and contact information (addresses and telephone numbers) of each complainant. Pioneer refused to comply, citing the state's privacy provision (Cal. Const., art. I, § 1) and asserting a right of privacy on behalf of these persons.

At a March 2004 hearing, the trial court acknowledged that disclosure of the information sought was indeed affected by the privacy provision, stating that "the names are probably protected unless there's a Colonial Life letter that goes out." (The court was referring to this court's decision in Colonial Life & Accident Ins. Co. v. Superior Court (1982) 31 Cal.3d 785, 787-790, 183 Cal.Rptr. 810, 647 P.2d 86, upholding a trial court order allowing disclosure by an insurer of the names and addresses of certain previously insured claimants to plaintiff in a bad faith settlement action, if those earlier claimants specifically authorized disclosure by signing and dating an enclosed form so stating.) The court in the present case ordered Pioneer "to write a `Colonial' [Life] letter and then reveal the names of those consumers who do not object."

The court's decision was refined in an order drafted later that month. In it, the court stated that it "is in receipt of two versions of a `Colonial Life' letter to customers" and that "[t]he major difference is whether or not an affirmative response should be required. In order for the letter to have any meaning, it should require an affirmative response, as did the letter in the Colonial Life case." The court then authorized the following text:

"Dear Consumer: [1] In August, 2001, litigation was filed in California in which the plaintiff alleges that Pioneer DVD Players are not compatible with the DVD Video Standard and as such, are incapable of playing all DVD discs. As part of the litigation, Pioneer was required to provide the plaintiffs counsel with a copy of the record that it made of information or complaints you provided some time ago when you contacted Pioneer's customer service department about your Pioneer DVD Player. Before doing so, however, Pioneer removed all identifying information regarding your name, address and telephone number. The court has now directed that Pioneer send you this notice so that you can decide whether to authorize Pioneer to disclose your personal information to the plaintiffs counsel so they may contact you.

"If you agree to the disclosure of this information to the plaintiffs counsel, please check the box on the enclosed form and return it to the address shown on the form. Not responding to this letter will be treated as declining contact from Plaintiff's counsel." (Italics added.) In other words, the trial court's initial order, as refined above, contemplated that disclosure of the identifying information would be improper in the absence of an affirmative response by the Pioneer customer affected. Plaintiff Olmstead, believing this order too restrictive, moved for reconsideration and clarification. In April 2004, the court vacated its March order and adopted plaintiffs new proposed language for the letter to Koneer's customers.

This new letter stated that, "If you do not agree to the disclosure of this information to the plaintiffs counsel, please check the box on the enclosed form and return it to the address shown on the form. Not responding to this letter will be treated as agreeing to contact by Plaintiff's counsel." (Italics added.) The effect of these changes was to state that customer identifying information would be released unless the addressed consumer objected. As the trial court stated, "[i]t seems to me that this information, just the names, addresses and contact information is not particularly sensitive. It's not medical information. It's not personal finances. It's merely the name, and if the people don't want to be contacted, they can say so."

The trial court stayed its April order pending writ review by the Court of Appeal, which granted Pioneer's petition for writ of mandate, and issued the writ vacating the trial court's order. We will reverse.

II. DISCUSSION

Does a complaining purchaser possess a right to privacy protecting him or her from unsolicited contact by a class action plaintiff seeking relief from the vendor to whom the purchaser's complaint was sent? As noted, in the order now under review, the trial court ordered defendant Pioneer to inform the approximately 700 to 800 complaining Pioneer customers, by letter, about the lawsuit, plaintiff Olmstead's request for identifying information in order to contact them, and their right to object to release of that information. The letter also would have informed them that their failure to respond would be treated as consent to release of the information.

Pioneer argues, and the Court of Appeal held, that the court should have gone further and ordered that Pioneer make no such disclosure of the identifying information to plaintiff without the affirmative consent of Pioneer's former customers. As noted, the Court of Appeal concluded that protecting disclosure of an individual's name and other identifying information is a matter embraced within the state Constitution's privacy provision (Cal. Const., art. I, § 1), that adequate steps to assure actual notice is a prerequisite to an assumed waiver of a customer's right of privacy, and that the measures ordered in this case were inadequate. As will appear, we believe that under the circumstances in this case, the trial court's order was sufficient and involved no serious breach of privacy.

Initially, we note that we are dealing with a proposed precertification notice to prospective class members. Although the Consumers Legal Remedies Act (Civ.Code, § 1750 et seq.) expressly authorizes postcertification notices in class actions (see id, § 1781, subds. (d) & (e)), no comparable provision exists for precertification notices. In Atari, Inc. v. Superior Court (1985) 166 Cal.App.3d 867, 212 Cal.Rptr. 773, the court found "no persuasive objection to use of this kind of precertification communication by...