Tuesday, August 13, 2019
Unruh Act Bars Discriminatory Denial Of Services by Website—High Court
Decision Comes in Response to Certified Question From Ninth Circuit
By a MetNews Staff Writer
A man who entered a website with the intent of purchasing services but found they are denied to individuals such as himself, on a discriminatory basis, has standing to maintain an action under the Unruh Civil Rights Act, the California Supreme Court declared yesterday.
The opinion for a unanimous court, by Justice Goodwin Liu, came in response to a query to it from the Ninth U.S. Circuit Court of Appeals, which asked:
“Does a plaintiff suffer discriminatory conduct, and thus have statutory standing to bring a claim under the Unruh Act, when the plaintiff visits a business’s website with the intent of using its services, encounters terms and conditions that deny the plaintiff full and equal access to its services, and then departs without entering into an agreement with the service provider? Alternatively, does the plaintiff have to engage in some further interaction with the business and its website before the plaintiff will be deemed to have been denied full and equal treatment by the business?”
The response yesterday will result in the reinstatement of a putative class action brought by bankruptcy attorney Robert E. White against Square, Inc. which operates a website. According to the complaint, filed in U.S. District Court for the Northern District of California, Square enables individuals or businesses to “accept electronic payments without themselves directly opening up a merchant account with any Visa or MasterCard member bank.”
Square takes a percentage of each electronic payment and assesses a transaction fee. But White could not sign up for the service based on what he termed, in his complaint, a “Bad List.”
The user agreement provides:
“By creating a Square Account, you…confirm that you will not accept payments in connection with the following businesses or business activities:”
Category No. 28 is “bankruptcy attorneys or collection agencies engaged in the collection of debt.”
He could not be a user without committing fraud, White argued.
(Other categories include “any illegal activity or goods,” “betting, including lottery tickets, casino gaming chips, off-track betting, and wagers at races,” “adult entertainment oriented products or services,” “drug paraphernalia,” “occult materials,” and “escort services.”)
The complaint alleges:
“Credit Card Company’s maintenance of Bad List is and was a violation of Unruh Law entitling Bankruptcy Law Firm to not less than $4,000 in minimum statutory damages per offense under Unruh Law and the Class to its own minimum statutory damages of $4,000 per Class member per offense under Unruh Law.”
District Court Judge Jon S. Tigar dismissed White’s complaint on the ground that the plaintiff lacked standing under the Unruh Act because he had not tendered the purchase price for Square’s services.
Answering the Ninth Circuit’s question, Liu said:
“When a plaintiff has visited a business’s website with intent to use its services and alleges that the business’s terms and conditions exclude him or her from full and equal access to its services, the plaintiff need not enter into an agreement with the business to establish standing under the Unruh Civil Rights Act. In general, a person suffers discrimination under the Act when the person presents himself or herself to a business with an intent to use its services but encounters an exclusionary policy or practice that prevents him or her from using those services. We conclude that this rule applies to online businesses and that visiting a website with intent to use its services is, for purposes of standing, equivalent to presenting oneself for services at a brick-and-mortar store. Although mere awareness of a business’s discriminatory policy or practice is not enough for standing under the Act, entering into an agreement with the business is not required.”
He went on to say:
“…White did not need to contact Square to ask for an exception to the stated restriction or to verify that the restriction applied to him….Such a requirement would limit a business’s liability only to individuals who inquire and would potentially enable a business to make exceptions to its stated policies in order to avoid suit, even as its stated policies deter the lion’s share of customers belonging to a protected group.”
The case is White v. Square, Inc., S249248.
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