California Supreme Court: Transaction is not required to sue online providers
harvardlawreview.org
harvardlawreview.org
That's so obviously wrong and exactly what civil rights legislation was created to address, that I feel like the lower courts made a big mistake and this should have never reached the SC. There's nothing surprising in the CA SC ruling.. I'm surprised Harvard Law Review decided to write an article on it.
Analogies and metaphors break though.. when stacked too high or precariously. Here we stack the segregation analogy and the metaphor of "corporation are people, with rights." So, discriminating against a class of corporations is a violation of civil rights. In this case, the civil rights of bankruptcy attorneys & collection agencies... who probably do unsavoury things with square's service.
This seems obviously true if eg the class in question is the corporation owner's race or sex.
GP was disputing your characterization of the example as absurd, nothing more.
No, nothing offered upthread suggested that. First of all because it didn't refer to merely having a shareholder of a particular ethnicity, but more critically because it didn't suggest it was illegal to refuse to do business with a company that happened to have a major shareholder or board member of a particular race or ethnicity but that it was illegal for a business to refuse to do business because of the race/ethnicity of some party holding a specified role ownership/management role within the target firm.
History has plenty of examples where it works, however in many other cases the policy just limits those trying it. Most people don't care enough about your prejudice when they can get a better deal and suddenly the out group becomes normal business partners.
our opinion does not preclude Square from disputing White’s factual allegations. ... Nor do we express any view on whether a defendant violates the Act by discriminating on the basis of occupation or on White’s adequacy as a representative for a class of bankruptcy attorneys excluded from Square’s services. The question of an individual plaintiff’s standing under the Unruh Civil Rights Act is distinct from the question of that plaintiff’s ability to serve as a representative for a class of allegedly aggrieved individuals.[0]
White only won standing to bring his case. He's still prohibited from using Square; and he needs to win his case against Square before that'll change.
0. https://law.justia.com/cases/california/supreme-court/2019/s...
It get's around the arbitration clause by overturning Surrey, so plaintiffs who are not a party to the arbitration clause can be found that may (through class representation) act for those who are subject to the arbitration clause.
In New York City, there is a law against advertising for jobs with gender-specific terms. So the terms "busboy", "waitress", etc... are not permitted - you must use both gendered terms or a gender neutral term.
Some enterprising people decided to file complaints each week against restaurants and bars for their gender-based job postings online. The restaurants and bars would get fined, and the complaintee would be given a portion of the fine.
Some folks are earning a steady income filing these complaints - never having any intention of even applying for any of those jobs.
This practice continues even today - courtesy of the New York City Human Rights Commission. Ironically, the City advertises the number of "actions" against bars and restaurants as a metric that it is doing good in the community.
> The court then noted that even if allowing plaintiffs to sue prior to signing up could lead to abusive litigation, that issue should be left to the legislature.
This was my concern, as well. I hope that the opening this allows for later lawsuits will be handled by the larger corporations who have deep pockets and can afford to fight these battles. My fear is that this would create a bunch of drive-by-lawsuits aimed at small businesses in the hopes that they will just settle (much the same as patent trolls).
I would love to hear from any lawyers on the board who have thoughts on this case.
This seems to have tremendous implications for any digital business. I'm reading into this a bit, but it seems that part of Square's case rested on the fact that White didn't actually want to do business with him. He may have just heard about the Shierkatz case from his friends' firm and then saw an opening for a class action.
If that's the case, just the passing intention to do business - real or not - becomes grounds? Yikes. I feel like I agree with the decision to have business be open to all consumers, but I didn't see much in the way of proof-of-intent on the plaintiff's behalf.
> White was personal friends with a partner of Shierkatz RLLP, and he discovered the prohibition on debt collection in Square’s agreement after reading the court’s Shierkatz file.
Standing should never be the hurdle these kinds of claims fail on.
This is exactly the problem that the Supreme Court has been trying to prevent by generally allowing arbitration clauses to be binding. The cost, delay and uncertainty of going to court creates its own punitive effect and thereby creates an imbalance.
https://news.bloomberglaw.com/daily-labor-report/uber-sees-w...
The 60k arbitration claims could of cost $75m in fees alone, not to mention it can be 9k/day to pay the arbitrators themselves. So they settled for $146m.
There are a few other cases of this, and I am sure there will be more collective action through mass arbitration. I imagine eventually it will come to being abused as well.
The moment large groups of individuals start making use of the forced arbitration every company has tried to get the courts to let them get out of arbitration that they inflicted on others.
It is well established that forced arbitration has nothing to do about efficiency for company vs individual and is specifically because it is a system designed to protect companies from culpability.
My point was that a business with at least 60000 customers is not a very small business. It's a sizable business that should have the resources to defend itself in the 60000 arbitration cases that it chose to force upon its customers.
Are you saying that you expect them to have the resources, or are you saying that the businesses should be budgeting to support responding to large scale arbitration?
Just because a business is large doesn't mean they are high margin or have infinite money.
If McDonald's had to pay $9000/day in arbitration for every one of their billions of customers, they would spend more than their market cap in a few minutes.
The whole point is that these companies have to pay for arbitration for each customer, rather than e.g. a single class action law suit. So unless you make over $9000 per day off your customers, you're going to lose big time.
Here's the Unrah Act:
All persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.
Seems to me that the only business that would be concerned is a business that is engaged in activity that they shouldn't be doing anyway. And if that's the case, they should be sued.
e.g.,:
Beyonce -https://fortune.com/2019/09/21/beyonce-lawsuit-website-ada-c...
Maybe a solution would be to change these laws so that the outcome of the lawsuit is a mandated change to ADA standards, but no damages, and parties have to pay their own attorney's fees. That would achieve what you say you're looking for, good faith ADA compliance, without incentivizing strongarm attorneys looking for a quick buck
We pretty much have this for violations of civil law. The judge says "just make your crap in compliance and we won't fine you" and continues the case to a later date and if it's in compliance by that later date they don't fine you.
Of course that doesn't solve the trolls that send a scary looking letter even when no violation exists and hope that the victim settles but it's better than the trolls being able to win in court.
That is, whoever loses the case has to pay both their own and the other sides legal costs.
This radically changes incentives, and much of the abuses in the US system just don't occur.
If the issue isn't clear it's more of a gamble. And maybe those issues should often be left out of court.
There's also virtuous cycle here: sites that are more accessible to screen readers would generally have better semantic markup, and be better for machine parsing, too.
That being said...
The problem in this case is the rammifications are not always more accessibility, in fact they are often less accessibility and even less availability. It's not dissimilar to copyright trolls and striking youtube videos that happened to have happy birthday playing in the background. The frivolous label gets applied and undermines greater accessibility.
An example of where this can go bad:
1) Materials that are not accessible are taken down under threat of lawsuit, now its not available to anyone. Could they have been made accessible? Sure! did anyone ask...or did they start with a lawsuit? - https://www.theledger.com/news/20190420/ada-compliance-polk-...
2) when assholes are assholes and use the ADA, everyone else now has to counter arguments saying they are trying to personally profit - https://attorneyatlawmagazine.com/ada-trolls-and-unintended-...
3) New laws making it harder in Florida to win ADA lawsuits - https://www.wptv.com/longform/florida-lawmaker-files-bill-to...
1. https://news.berkeley.edu/wp-content/uploads/2016/09/2016-08...
The ADA in that case turned an unmitigated public good from "Sure, why not publish them online?" into "We can't publish this content without paying a lot of money we don't have, so we just won't publish it.".
In this case, the ADA has left society worse off.
https://www.3playmedia.com/2019/02/04/closed-captioning-in-h...
Best case was $2.94 per minute, worst is $5.87
Arguably they can afford the 3.5 - 7 million dollars but if they aren't reusing the material for current students they may reasonably desire to spend the money elsewhere.
I would argue that you shouldn't acquire an obligation by providing something for free without benefit to themselves.
> Writing for a unanimous court, Justice Liu emphasized that “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,” […]
And merely awareness is not enough.
Given this, there is no reason to price the risk (a customer paying their lawyer with debt that will be discharged) into their pricing: it is already prohibited by statute.
However, as a matter of Bankruptcy law, purchases made with a credit card with no intent to pay back are not dischargeable by bankruptcy courts. Sometimes any purchases made just prior to bankruptcy, and especially any abnormally large purchases are not considered dischargeable, and in some cases are presumptive fraud. I think this is where the prohibition against credit card use for bankruptcy lawyers comes from. [0]
This legal decision is a very good thing. The terms of service clauses only exist to limit the rights of the user for the sake of lowering litigation risks against the site in question. These agreements need to be destroyed. If any site wishes to limit user rights or limit risks of litigation they should directly alter their products to apply such limits directly.
So long as online business makes a good faith effort to limit functional access to their products/services that would otherwise violate the agreeable terms they are already legally covered from litigation risks without need for a terms of service agreement, such as anti-hacking laws. The point of these agreements is to allow such websites necessary protection from litigation intentionally withholding any equivalent functional limitations upon their users. The reason for that is they want user contributions with the fewest barriers upon those users and the maximal harvesting of the resulting user engagement.
> And merely awareness is not enough.
How do you legally prove intention? The practical distinction that applied to this particular legal case is that the plaintiff merely read the site's terms of service agreement insinuating that had they not been serious about opening an account they would not have taken such an effort. They did not take any further action to engage that business, however, such as ever navigating to the site's account creation page.
I hope this is a step towards voiding terms of services protections from online businesses.
http://cdn.ca9.uscourts.gov/datastore/opinions/2018/06/07/16...
> California Courts of Appeal have interpreted this reference to mean that the Unruh Act prohibits arbitrary occupational discrimination. Sisemore v. Master Fin., Inc.,151 Cal. App. 4th 1386,1405–06 (2007); Long v. Valentino, 216 Cal. App. 3d 1287,1297 (1989).
I always get frustrated when companies arbitrarily decide they don't want certain industries (alcohol or firearms or porn).
But forcing all companies to take every comer on the same terms seems a bit extreme. I freelance in IT. I would want more money or would downright refuse certain jobs on moral grounds (I wouldn't work with the Saudi government at any price). Am I being unreasonable in that?
You should have every right to deny service to them and the law supports you on that.
> Indeed, the basic rights guaranteed by section 51 would be drastically undermined if, as the landlord contends, a business enterprise could exclude from its premises or services entire classes of the public simply because the owner of the enterprise had some reason to believe that the class, taken as a whole, might present greater problems than other groups. Under such an approach, for example, members of entire occupations or avocations, e.g., sailors or motorcyclists, might find themselves excluded as a class from some places of public accommodation simply because the proprietors could show that, as a statistical matter, members of their occupation or avocation were more likely than others to be involved in a disturbance. (See, e.g., Atwater v. Sawyer (1884) 76 Me. 539 [49 Am.Rep. 634] (innkeeper's exclusion of all members of the militia, because of disorderly conduct of other militiamen, held impermissible).) Similarly, members of a particular nationality or ethnic group might be excluded from an apartment complex simply because the landlord had found from his experience that members of that nationality or ethnic group were more likely to play [30 Cal. 3d 740] loud music or to damage the landlord's property than tenants of other backgrounds.
> As these examples demonstrate, the exclusion of individuals from places of public accommodation or other business enterprises covered by the Unruh Act on the basis of class or group affiliation basically conflicts with the individual nature of the right afforded by the act of access to such enterprises.
(emphasis added)
https://law.justia.com/cases/california/supreme-court/3d/30/...
The CA SC didn't address that..
our opinion does not preclude Square from disputing White’s factual allegations. ... Nor do we express any view on whether a defendant violates the Act by discriminating on the basis of occupation or on White’s adequacy as a representative for a class of bankruptcy attorneys excluded from Square’s services. The question of an individual plaintiff’s standing under the Unruh Civil Rights Act is distinct from the question of that plaintiff’s ability to serve as a representative for a class of allegedly aggrieved individuals.[0]
White only won standing to bring his case. He's still prohibited from using Square; and he needs to win his case against Square before that'll change.
0. https://law.justia.com/cases/california/supreme-court/2019/s...
Per the article: Finally, the court declined to address whether occupational discrimination is covered by the Unruh Act
They charge a variable rate based on the nature of the business and the risk it involves. Porn sites get charged 10-20% in credit card fees because of the high number of chargebacks.
IceCreme? We can't refuse you, but it's $4500 for you!
Where do you draw the line? Litigation is expensive!
I'm speculating that fraud would be lower than average for such transactions, because there's such a strong paper trail from the instacheck system and all.
Sounds like offering VOIP related stuff would also be a no no with them, so I guess if you made a chat app with features similar to Skype, couldn't use stripe either.
It sounds like some of these rules might be passed down by one of the major credit card processors, but I know there's other providers out there who allow this stuff but maybe higher fees or more vetting for a merchant account.
https://stripe.com/restricted-businesses
As for the virtual world idea, I have debated about using blockchain since I know some other virtual worlds experimented with doing blockchain based payments, so could probably mix decentralized and centralized but I think not having a stable value kinda sucks, then non technical users setting up a wallet and other considerations, especially if multiple devices is kinda a UX nightmare. Well I guess you could make a wallet on your phone or desktop app, and try to enter the seed words in your VR headset too but probably be strange to most people. Micro transactions where speed matters is also a hurtle...
Does this actually strengthen rights for minorities or does it dilute those right by including bill collectors under the law?
Edit: as pointed out below, I am extrapolating from a ruling on standing an implication that has not explicitly been decided one way or another. I have done this so strongly that what I posted in the second sentence above is essentially false. I'll leave it as full disclosure of my error.
> Finally, the court declined to address whether occupational discrimination is covered by the Unruh Act or if White was an adequate representative to support the class action
Emphasis mine.
our opinion does not preclude Square from disputing White’s factual allegations. ... Nor do we express any view on whether a defendant violates the Act by discriminating on the basis of occupation or on White’s adequacy as a representative for a class of bankruptcy attorneys excluded from Square’s services. The question of an individual plaintiff’s standing under the Unruh Civil Rights Act is distinct from the question of that plaintiff’s ability to serve as a representative for a class of allegedly aggrieved individuals.[0]
0. https://law.justia.com/cases/california/supreme-court/2019/s...
I can use this ruling, doesn't matter how skittish their compliance officer is nor the lack of clarity from their federal regulators. Should be a good time and accelerant!
Progress!
This is very interesting to me. This case seems to (or at least might, once it’s fully litigated) further open the door to class action led by a plaintiff who is not bound under an arbitration agreement, but with the class still representing members who are bound under arbitration agreements.
I also want to laud the beautiful design of the webpage.