District Court (Cal.) Says Rosenthal Act Provides Predicate Act and Standing under UCL, Even without Plaintiff Having Paid Money

In Fernandez v. Progressive Mgmt. Sys., No. 3:21-cv-00841-BEN-WVG, 2022 U.S. Dist. LEXIS 120329 (S.D. Cal. July 7, 2022), Judge Benitez allowed a UCL claim to proceed predicated on a Rosenthal Act violation where the customer did not allege to have paid money to the defendant.

Defendant, however, is incorrect that Plaintiff must have paid EACMC monies to establish UCL standing. See Kwikset, 51 Cal. 4th at 323 (the lost money or property standard only requires a showing of some form of economic injury); Rex v. Chase Home Fin. LLC, 905 F. Supp. 2d 1111, 1145 (C.D. Cal. 2012) (UCL standing does not require a tangible monetary expenditure); Brown v. Google LLC, No. 20-cv-03664-LHK, 2021 U.S. Dist. LEXIS 244695, 2021 WL 6064009, at *15 (N.D. Cal. Dec. 22, 2021) (rejecting the argument that because the plaintiff did not pay any monies, they failed to plead UCL standing). Here, the Court finds Plaintiff’s economic injury is based on the alleged damage to his credit, and not prior payment of medical bills. The FAC alleges the damage to Plaintiff’s credit and his ability to obtain credit occurred because Progressive reported the alleged improper EACMC bills as “unpaid and overdue” to credit bureaus. FAC at 6, ¶¶ 26-27; 17, ¶ 92. Plaintiff’s alleged credit damage constitutes an economic injury for purposes of UCL standing. Rubio v. Capital One Bank, 613 F.3d 1195, 1204 (9th Cir. 2010) (citations omitted) (explaining that a loss of credit constitutes a monetary loss and is an actual economic injury for purposes of UCL standing); Rex, 905 F. Supp. 2d at 1147 (basing UCL standing on allegations of the defendants providing credit reports with inaccurate and erroneous information); Aho v. AmeriCredit Fin. Servs., Inc., No. 10-cv-01373-DMS-BLM, 2011 U.S. Dist. LEXIS 61069, 2011 WL 2292810, at *2 (S.D. Cal. June 8, 2011) (finding UCL standing where the plaintiff’s credit report was “negatively affected by [the] [d]efendant’s reporting of the deficiency to credit reporting agencies”); Izsak v. Wells Fargo Bank, N.A., No. C 13-05362 SI, 2014 U.S. Dist. LEXIS 52057, 2014 WL 1478711, at *5 (N.D. Cal. Apr. 14, 2014) (citing Rubio, 613 F.3d at 1204) (explaining that “[d]amage to credit is sufficient to be a loss of money or property” in determining UCL standing); White v. Trans Union, LLC, 462 F. Supp. 2d 1079, 1084 (C.D. Cal. 2006) (“The perpetration of Credit Reports containing inaccurate erroneous information regarding ‘due and owing’ debts is a sufficient injury to grant Plaintiffs [UCL] standing.”); King v. Bank of Am., N.A., No. C-12-04168 JCS, 2012 U.S. Dist. LEXIS 141963, 2012 WL 4685993, at *8 (N.D. Cal. Oct. 1, 2012) (“Allegations of a diminished credit score have been found to satisfy the UCL’s standing requirement.”); Alborzian v. JPMorgan Chase Bank, N.A., 235 Cal. App. 4th 29, 38-39, 185 Cal. Rptr. 3d 84 (2015) (finding standing under the UCL where the plaintiffs alleged a diminished credit score after the defendant provided false and negative information to credit agencies); Price v. Synapse Grp., Inc., No. 16-cv-01524-BAS-BLM, 2017 U.S. Dist. LEXIS 115363, 2017 WL 3131700, at *4 (S.D. Cal. July 24, 2017) (finding a charge on a credit card to be an economic injury, when the charge was not actually paid, explaining “in a modern economy in which credit card transactions are a ubiquitous feature, deprivation of a consumer’s credit line is surely among the most common” ways to show economic injury).