New laws provide greater protections for consumers and renters in California By Ian Barlow
Important new laws have gone into effect that provide significant protections for California consumers and renters. These laws impact many of our current and potential clients and provide additional tools for protecting and enforcing the rights of California consumers and renters, including in the context of governmental, individual, and class actions.
This article highlights three new laws in particular: California’s “Junk Fee” Ban; the Right to Repair Act; and California’s Cap on Rental Security Deposits.
SB 478: California’s Ban on ‘Junk Fees’
Hidden charges and fees unfortunately pervade consumer transactions. They affect purchases for event tickets, rentals, hotel stays, food delivery, and other e-commerce. They are deceptive and frustrating. California has recently taken steps to address this practice. SB 478 has been called California’s “Junk Fee Law,” the “Honest Pricing Law,” the “Drip Pricing Law,” and “Hidden Fees Statute.” All of these names are appropriate; SB 478 essentially requires transparent pricing: the price a consumer sees should be the price they pay.
SB 478 became operative law as of July 1, 2024, adding a provision to the California Consumer Legal Remedies Act (“CLRA”) that makes it illegal to advertise, display, or offer “a price for a good or service that does not include all mandatory fees or charges.” Cal. Civ. Code § 1770(a)(29). Accordingly, all fees, with a few exceptions, must be disclosed to consumers at the outset of the transaction and represented in the advertised purchase price.
As with all CLRA claims, violations of section 1770(a)(29) can be brought as an individual or class action and make the following relief available: actual damages (no less than a total of $1,000 if a class action); injunctive relief; restitution; punitive damages; and attorney fees. Cal. Civ. Code § 1780(a) and (e). Additional monetary remedies are available for consumers who Section 1770(a)(29) is also subject to CLRA pre-suit notice requirements for any action involving a request for damages. Id. § 1782.
However, the new law includes several exceptions. For example:
- Taxes and fees imposed by a government entity do not have to be included in the advertised price;
- While handling fees must be included, businesses can exclude reasonable shipping and delivery charges;
- Certain financial entities already required to comply with particular federal, state or regulatory disclosure requirements are exempt;
- Certain broadband internet services complying with FCC consumer labeling requirements are not included;
- Grocery store- or distributor-owned delivery services that deliver food items from the grocery store or distributor to a consumer are exempt; and
- Restaurants, bars, and grocery stores are not required to include mandatory fees and charges for food and beverage items in prices advertised to consumers. However, they must be clearly and conspicuously disclosed.
Cal. Civ. Code § 1770(a)(29)(A)(i)-(ii), (B)-(D). The law also does not apply to purchases of goods and services made for commercial purposes. Id. § 1761(a)-(b).
The California Attorney General’s Office has created a helpful webpage that includes FAQs on SB 478. See https://oag. ca.gov/hiddenfees; see also https://oag.ca.gov/system/files/attachments/press-docs/SB%20478%20FAQ%20%28B%29.pdf.
SB 244 California’s Right to Repair Act
The Right to Repair or Fair Repair movement has steadily gained traction across the United States. Advocates argue that manufacturers should make diagnostic tools, repair manuals, and replacement parts available to consumers consistent with consumers’ product ownership rights, to make product ownership and repair more cost effective, as well as reduce e-waste Continued on page 16 are a “senior citizen or a disabled person.” Id. § 1780(b)(1)-(2). Fall 2024 — The Litigator 15Continued from page 15 and promote sustainability. Organizations such as The Repair Association (repair.org) and US PIRG (pirg.org) have helped push the envelope and influence state legislation to advance consumer and environmental protections, create job opportunities, and enhance product quality and longevity.
California was one of four states to pass Right to Repair legislation in 2023 alone. Other states include New York, Colorado, and Minnesota. See National Conference of State Legislatures, ncsl.org, Right to Repair 2023 Legislation, at https://www.ncsl.org/technology-andcommunication/right-to-repair-2023legislation. Governor Newsom signed California’s Right to Repair Act in October 2023, and it went into effect on July 1, 2024.
The new law broadly covers electronic devices—such as cell phones and laptop computers—and appliances and requires manufacturers to make repair guides, parts and diagnostic tools available to product owners, service and repair facilities, and service dealers “on fair and reasonable terms.” Cal. Pub. Res. Code § 42488.2. The statute is expressly intended to “provide a fair marketplace for the repair of electronic and appliance products and to prohibit intentional barriers and limitations to third-party repair.” Id. § 42488.1.
For products priced between $50 and $99.99, manufacturers must make documentation, parts, and tools available for at least three years after the last date the product was manufactured, regardless of warranty periods.
For products priced $100 or more, manufacturers must make such documentation, parts, and tools available for at least seven years after the product was last manufactured, regardless of warranty periods. It also encompasses electronic, and appliance products sold outside of direct retail, including to schools, businesses, and local governments. Cal. Pub. Res. Code § 42488.2(j)(3)(A).
California’s law is in many ways broader than the Right to Repair laws enacted in other states. For instance, California’s Right to Repair Act covers products manufactured and first sold in California on July 1, 2021. Id. By contrast, New York’s Right to Repair law applies to products first sold or used in New York on or after July 1, 2023. N.Y. Gen. Bus. Law § 399-nn(2).
However, California’s Right to Repair Act also includes several exceptions. For instance, the law does not apply to alarm systems or video game consoles. Cal. Pub. Res. Code § 424882.2(j)(3)(B)(ii)(iii). It also carves out equipment categories, including agricultural, construction, industrial, and forestry equipment. Id. § 424882.2(j)(3)(B)(i). Furthermore, the law states that companies are not required to divulge trade secrets or source code or license intellectual property, “except as necessary to comply with this section.” Id. § 424882.2(c).
A private right of action provision was included in a similar bill but it was unsuccessful. This a\Act only provides for public enforcement by city, county, city and county, or state entities. It allows for penalties to be imposed on companies that knew or should have known that it violated the Act in the amount of $1,000 per day for the first violation, $2,000 per day for the second violation, and $5,000 per day for the third and subsequent violations. Cal. Pub. Res. Code § 424882.3.
AB 12 Rental Security Deposit Caps
California also recently enacted a law intended to address housing accessibility and affordability in the state. To be sure, roughly 45% of households in California are made up of renters, compared to 35% nationwide. See Public Policy Institute of California, ppic.org, California’s Renters, at https://www.ppic.org/blog/californias-renters/. As of 2022, close to 17 million Californians were tenants. Tenantstogether.org, Snapshot of Tenants in California 2022, at https://www.tenantstogether.org/sites/tenantstogether.org/files/ TT%20Tenant%20snapshot%202022.pdf. Median rent across all bedroom and unit types in California is roughly $2,850 (Zillow.com, California Rental Market, at https://www.zillow.com/ rental-manager/market-trends/ca/) and approximately $1995 in Sacramento (https://www.zillow.com/rental-manager/market-trends/sacramento-ca/).
As of July 1, 2024, AB 12 limits the amount certain rental housing providers can charge for a security deposit to one month’s rent. Cal. Civ. Code § 1950.5(c)(1). The new law does not apply to security deposits collected or demanded before July 1, 2024. Id. § (c)(5).
It also does not apply to smaller rental property owners who own two or fewer rental properties and no more than four total dwelling units. For those landlords, they are limited to charging no more than two months’ rent for security deposits. Id. § 1950.5(c)(4)(A)(ii). However, if the prospective renter is a servicemember, even smaller landlords are required to limit security deposits to no more than one month’s rent. Id. § 1950.5(c)(4)(B).
A landlord’s bad faith claim or retention of security deposits or any portion of security deposits in violation of Civil Code section 1950.5 may subject the landlord to “statutory damages of up to twice the amount of the security, in addition to actual damages” and the landlord “shall have the burden of proof” for establishing any authority “to demand additional security deposits.” Cal. Civ. Code § 1950.5(l).
For a short video overview of the above laws, please visit: https://www.youtube.com/watch?v=cB8kGg3AgNg