Turo Inc. v. Superior Court of City and County of San Francisco

80 Cal.App.5th 517

295 Cal.Rptr.3d 793

TURO INC., Petitioner,

v.The SUPERIOR COURT OF the CITY AND COUNTY OF SAN FRANCISCO, Respondent;

The People ex rel. Dennis J. Herrera, as City Attorney, etc., et al., Real Parties in Interest.

A160200

Court of Appeal, First District, Division 2, California.

Filed June 28, 2022

Cooley LLP, Michael G. Rhodes, Matthew D. Brown, Benjamin H. Kleine, Bethany C. Lobo, Ashley K. Corkery, Julie M. Veroff, San Francisco, Elizabeth B. Prelogar, for Petitioner

No appearance by Respondent

Dennis J. Herrera, City Attorney, Yvonne R. Meré, Chief Attorney, Owen J. Clements, Kristine A. Poplawski, Marc Price Wolf, Deputy City Attorneys, for Real Parties in Interest

Miller, J. Turo Inc. operates an online platform that allows car owners to rent their cars to other Turo users. Unlike companies such as Enterprise or Hertz, Turo does not own, lease, or rent a fleet of cars for customers to rent. The People, acting by and through the City Attorney of San Francisco, sued Turo alleging that Turo engaged in unlawful and unfair business practices by operating a rental car business at San Francisco International Airport (SFO) without a valid permit. Turo cross-complained against the City and County of San Francisco (the City), which owns and operates SFO, seeking a declaratory judgment that it is not a rental car company under California law. The issue before us here is whether Turo is "in the business of renting vehicles to the public." If it is, then the parties agree that Turo is a "rental car company" for the purposes of Government Code section 50474.1, and accordingly SFO is authorized to require Turo to collect a fee from its customers on behalf of the airport.

The trial court granted summary adjudication to the People and the City on Turo's first cause of action for declaratory relief that it is not a rental car company under California law, and Turo now challenges that ruling. Because we conclude that Turo is not a rental car company as that term is defined in California statutes, we grant Turo's petition for writ of mandate.

FACTUAL AND PROCEDURAL BACKGROUND

The material facts are undisputed. Turo is an Internet-based platform that allows vehicle owners to list, and customers to rent, specific passenger vehicles. Turo processes reservations and payments for the rentals, and retains a percentage of the proceeds of each rental transaction. Turo's terms of service contract governs the rentals with respect to cancellations, extensions and late returns, late fees, smoking, pets, fuel, tolls, security deposits, street parking, and nondiscrimination. Turo provides a liability insurance policy through a third-party insurer that covers vehicles during a rental and offers "vehicle protection options" to "cover" the entitlement of owners and liability of renters if a vehicle is damaged during a rental. Turo competes with traditional on-airport and off-airport rental car companies, and has used phrases like "rent" and "rental car" in its advertisements. Turo lists cars for rental to be picked up at SFO, and some of Turo's customers pick up cars at SFO, including at curbside. The average cost of a Turo transaction at SFO is similar to that of a traditional car rental at SFO.

The People sued Turo alleging that Turo violated the Unfair Competition Law ( Bus. & Prof. Code, § 17200 et seq. ) by operating a rental car business at SFO without the required permit, engaging in prohibited curbside transactions at SFO, and using airport roadways and offering services on airport property without permission. The People further alleged that Turo's actions constituted unfair business practices, inasmuch as failure to comply with SFO's permit and fee requirements resulted in Turo's ability to advertise and charge lower prices than competitor rental car companies.

Turo cross-complained against the City, seeking a declaratory judgment that it is not a rental car company under California law.¹ Turo alleged that SFO had unlawfully demanded that Turo obtain an off-airport rental car company permit, and pay fees that SFO is authorized to charge only "rental car companies" under Government Code section 50474.1, subdivision (a).²

The People and the City (collectively, Real Parties) moved for summary adjudication on Turo's cross-claim for declaratory relief. The trial court concluded that Turo is a rental car company within the meaning of Government Code section 50474.1, subdivision (a), and granted the Real Parties’ motion.

This petition for writ of mandate followed.³

DISCUSSION

I.

The term "rental car company" is not defined in the Government Code, but it is defined in nearly identical language in three separate California statutes to mean a person or entity in the business of renting passenger vehicles to the public. In the chapter of the Civil Code governing "Rental Passenger Vehicle Transactions," "[r]ental company" is defined as "a person or entity in the business of renting passenger vehicles to the public." ( Civ. Code, § 1939.01, subd. (a).) In the Consumer Automotive Recall Safety Act ( Veh. Code, § 11750 et seq. ), "rental car company" is defined as "a person or entity in the business of renting passenger vehicles to the public in California." (Veh. Code, § 11752, subd. (f).) And in the portion of the Insurance Code regulating the sale of insurance by "Car Rental Agents," a "[r]ental car company" is "any person in the business of renting vehicles to the public." ( Ins. Code, § 1758.89, subd. (d).) From this we conclude, and the parties agree, that for purposes of section 50474.1 of the Government Code, Turo is a "rental car company" if it is in the business of renting vehicles to the public.

Because the trial court's summary adjudication order presents a question of statutory interpretation and the application of that statute to undisputed facts, we review the order de novo. ( MacIsaac v. Waste Management Collection & Recycling, Inc. (2005) 134 Cal.App.4th 1076, 1081-1082, 36 Cal.Rptr.3d 650 ( MacIsaac ).) We must " ‘determine the Legislature's intent so as to effectuate the law's purpose.’ " ( Skidgel v. California Unemployment Ins. Appeals Bd. (2021) 12 Cal.5th 1, 14, 282 Cal.Rptr.3d 639, 493 P.3d 196 ( Skidgel ).) We begin by looking to the words of the statute itself. ( Ibid. ; MacIsaac , supra , 134 Cal.App.4th at p. 1082, 36 Cal.Rptr.3d 650 [statutory language is the "most reliable indicator" of legislative intent because it " ‘ "has successfully braved the legislative gauntlet" ’ "].) We construe those words in context, giving them " ‘a plain and commonsense meaning’ unless the statute specifically defines the words to give them a special meaning." ( MacIsaac , supra , 134 Cal.App.4th at p. 1083, 36 Cal.Rptr.3d 650.) Courts appropriately refer to dictionary definitions "to ascertain the ordinary, usual meaning of a word." ( Wasatch Property Management v. Degrate (2005) 35 Cal.4th 1111, 1121-1122, 29 Cal.Rptr.3d 262, 112 P.3d 647,) We harmonize clauses and sections of a statutes " ‘by considering them in the context of the statutory framework as a whole. [Citation.] If the statutory language is unambiguous, then its plain meaning controls.’ " ( Skidgel , supra , 12 Cal.5th at p. 14, 282 Cal.Rptr.3d 639, 493 P.3d 196, quoting People v. Cole (2006) 38 Cal.4th 964, 975, 44 Cal.Rptr.3d 261, 135 P.3d 669.)

II.

There is no dispute that Turo's entire business consists of enabling the public to rent motor vehicles. Turo points to various dictionary definitions of the word "rent." (See Black's Law Dictionary (11th ed. 2019) at p. 1551 [defining the verb "rent" as "[t]o pay for the use of another's property"]; see also Merriam-Webster Online Dictionary, http://www.merriam-webster.com/dictionary/rent (June 28, 2022) [defining the noun "rent" as "the amount paid by a hirer of personal property to the owner for the use thereof" and the verb "rent" as "to grant the possession and enjoyment of in exchange for rent" and "to take and hold under an agreement to pay rent"].) Turo argues that because it does not own or possess or control the vehicles listed on its website, and has no authority to grant the possession and enjoyment of those vehicles to others, it does not itself rent vehicles to the public. Turo further argues that because it does not rent vehicles to the public, it cannot be in the business of renting vehicles to the public.

We conclude that Turo's reading of the statutes is correct.

That Turo is not a rental car company is supported by several provisions in the chapter of the Civil Code governing Rental Passenger Vehicle Transactions. (See Civ. Code, § 1939.01, subd. (a) [" ‘[r]ental company’ means a person or entity in the business of renting passenger vehicles to the public"].) In that chapter of the Civil Code, a "[r]enter" is defined as a person "obligated under a contract for the lease or hire of a passenger vehicle from a rental company for a period of less than 30 days." (Id. , subd. (b), italics added.) By describing a renter as leasing or hiring a vehicle from a rental company , the definition presumes that a rental company contracts with renters for the lease or hire of vehicles that the rental company owns or controls. Here, however, Turo does not own or control the vehicles.

Other provisions in the Civil Code similarly suggest that Turo is not a "[r]ental company" under Civil Code section 1939.01. For example, later in this chapter, the Civil Code sets limits on the amount of a renter's liability to a rental company for damage to a rented vehicle, including "[t]he estimated cost of parts which the rental company would have to pay to replace damaged vehicle parts"; "[t]he estimated cost of labor to replace damaged vehicle parts"; and "[a]ctual charges for towing, storage, and impound fees paid by the rental company." ( Civ. Code, § 1939.05, subd. (a).) These limits presume that the rental company owns or controls the rented vehicle, which is not the case for Turo. The Civil Code defines "[d]amage waiver" as ...