Privacy of Consumer Complaints Must Be Affirmatively Waived by Consumer According to California Appellate Court

In an important privacy decision, a California appellate court held that in responding to a discovery request, a company may withhold the names of its consumers who have complained about the company's products unless the consumer affirmatively consents to release of his or her name. Pioneer Electronics v. Superior Court (Olmstead), Calif. 2nd Appellate Distr., 3/30/05, No. B174826. The Pioneer court based its decision on the right to privacy in the California Constitution.

Pioneer had appealed a trial court ruling allowing the plaintiffs to learn the names of the consumers unless they responded to a letter objecting to disclosure of their identities. The appellate court reversed the trial court's order, holding that consent could not be presumed from a consumer's failure to respond:

Waiver of the fundamental right of privacy (Cal. Const., art. I, § 1) cannot depend on what would amount, in effect, to a conclusive presumption that a letter from Pioneer, essentially a stranger, was received, opened and read, rather than disregarded as junk mail. (Cf. Evid. Code, §§ 630, 641 [presumption letter properly addressed and mailed is received in ordinary course of mail affects burden of providing evidence, not burden of proof].)

The April 2004 order is deficient because it infers waiver of the consumers’ right of privacy without providing reasonable assurance that the consumers actually intended to waive that right, without any positive act by the consumer. Requiring an express consent from the consumer, rather than inferring waiver from passive conduct alone is appropriate in this case. This is so not only because of the importance of the rights but also because anything less would place a burden on consumers that they never agreed to bear. This deficiency was not, but could have been, remedied through other measures which would reasonably ensure the consumers receive actual notice and consent to disclosure of personal identifying information.

The decision will be disappointing to class action plaintiffs because it could significantly limit their access to a company's communications with unhappy consumers. Under the Pioneer decision, those consumers must now affirmatively choose to have their contact information released to the plaintiff's attorneys.