White v. Square, Inc.

7 Cal.5th 1019

446 P.3d 276

250 Cal.Rptr.3d 770

Robert E. WHITE, Plaintiff and Appellant,

v.SQUARE, INC., Defendant and Respondent.

S249248

Supreme Court of California.

August 12, 2019

Moskovitz Appellate Team, Myron Moskovitz, Christopher Hu, San Francisco; McGrane, William McGrane, San Francisco; Reallaw and Michael J. Hassen for Plaintiff and Appellant.

John C. Colwell, San Diego, for National Association of Consumer Bankruptcy Attorneys as Amicus Curiae on behalf of Plaintiff and Appellant.

Melissa Riess, Richmond; Linda Kilb ; Lindsay Nako and Daniel Nesbit for Disability Rights Advocates, Disability Rights Education & Defense Fund, Impact Fund, Civil Rights Education and Enforcement Center, Disability Rights California, Disability Rights Legal Center, Law Foundation of Silicon Valley, Legal Aid at Work, Legal Services for Prisoners with Children, National Federation of the Blind, National Federation of the Blind of California and Public Justice as Amici Curiae on behalf of Plaintiff and Appellant.

Munger, Tolles & Olson, Fred A. Rowley, Jr., Jeffrey Y. Wu, Los Angeles, Jonathan H. Blavin, J. Max Rosen, San Francisco; Wilson Sonsini Goodrich & Rosati, Colleen Bal, Palo Alto, and Joshua A. Baskin for Defendant and Respondent.

Quinn Emanuel Urquhart & Sullivan, Kathleen M. Sullivan, Diane M. Doolittle, and Brett J. Arnold, Redwood Shores, for Internet Association as Amicus Curiae on behalf of Defendant and Respondent.

Opinion of the Court by Liu, J.

Here we consider a question regarding California’s Unruh Civil Rights Act ( Civ. Code, § 51 et seq. ) (the Act) posed by the United States Court of Appeals for the Ninth Circuit: Does a plaintiff have standing to bring a claim under the Unruh Civil Rights Act when the plaintiff visits a business’s website with the intent of using its services, encounters terms and conditions that allegedly deny the plaintiff full and equal access to its services, and then leaves the website without entering into an agreement with the service provider? (See White v. Square, Inc. (9th Cir. 2018) 891 F.3d 1174, 1175 ; Cal. Rules of Court, rule 8.548, (a) & (f)(5).)

The answer is yes. 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. We express no view on White’s occupational discrimination claims.

I.

Bankruptcy attorney Robert White sued Square, Inc. (Square) in October 2015, alleging that Square’s seller agreement discriminated against bankruptcy attorneys in violation of the Unruh Civil Rights Act. Square offers an internet service that allows individuals and merchants to " ‘accept electronic payments without themselves directly opening up a merchant account with any Visa or MasterCard member bank.’ " ( White v. Square , Inc. , supra , 891 F.3d at p. 1175.) Square does not charge its users any fee to register for its services; instead, after a user has registered, Square collects a percentage of every transaction as well as a flat fee for each transaction. Square’s terms of service state that when a user creates an account, the user must " ‘confirm that you will not accept payments in connection with the following businesses or business activities: ... (28) bankruptcy attorneys or collection agencies engaged in the collection of debt.’ " ( Ibid . )

White’s second amended complaint alleges that he "formed the strong, definite and specific intent" to sign up for and use Square’s services. White familiarized himself with Square’s seller agreement by reviewing a separate lawsuit filed against Square by a bankruptcy law firm called shierkatz RLLP. He then visited Square’s website on multiple occasions and carefully reviewed its terms of service. He proceeded to the page of Square’s website that allows a user to register for its services, but he declined to click the button labeled "Continue." Because White intended to use Square’s services for his bankruptcy practice, he believed he could not sign the agreement without committing fraud. In support of this belief, White cites a letter from Square’s counsel to shierkatz RLLP in which Square stated that " ‘signing up for Square’s service with the intent to violate the applicable terms of service would be fraudulent.’ " ( White , supra , 891 F.3d at p. 1176, fn. 3.)

The district court dismissed White’s second amended complaint with prejudice on the ground that he lacked standing under the Unruh Civil Rights Act to sue Square. The district court concluded that White had not attempted to use Square’s services and only had "mere awareness" of its discriminatory terms of service. White appealed to the United States Court of Appeals for the Ninth Circuit, which then issued the certification order at issue here. In the order, the Ninth Circuit concluded that White’s allegations "satisfy Article III’s requirements for a concrete and particularized injury" and that he has met federal constitutional standing requirements. ( White , supra , 891 F.3d at p. 1177.)

II.

Standing rules for statutes must be viewed in light of the intent of the Legislature and the purpose of the enactment. ( Midpeninsula Citizens for Fair Housing v. Westwood Investors (1990) 221 Cal.App.3d 1377, 1385, 271 Cal.Rptr. 99 ; Librers v. Black (2005) 129 Cal.App.4th 114, 124, 28 Cal.Rptr.3d 188.) The Unruh Civil Rights Act provides: "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, sexual orientation, citizenship, primary language, or immigration status are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever." ( Civ. Code, § 51, subd. (b) ; all undesignated statutory references are to this code.) Section 52, subdivision (a) provides:

"Whoever denies, aids or incites a denial, or makes any discrimination or distinction contrary to Section 51 ... is liable for each and every offense for the actual damages, and any amount that may be determined by a jury, or a court sitting without a jury, up to a maximum of three times the amount of actual damage but in no case less than four thousand dollars ($4,000), and any attorney’s fees that may be determined by the court in addition thereto, suffered by any person denied the rights provided in Section 51 ...." And section 52, subdivision (c)(3) authorizes "any person aggrieved by" conduct of resistance to the full enjoyment of any of the rights described in this section to request "preventive relief, including an application for a permanent or temporary injunction, restraining order, or other order ... as the complainant deems necessary to ensure the full enjoyment of the rights described in this section."

The purpose of the Act is to create and preserve "a nondiscriminatory environment in California business establishments by ‘banishing’ or ‘eradicating’ arbitrary, invidious discrimination by such establishments." ( Angelucci v. Century Supper Club (2007) 41 Cal.4th 160, 167, 59 Cal.Rptr.3d 142, 158 P.3d 718 ( Angelucci ), citing Isbister v. Boys’ Club of Santa Cruz, Inc. (1985) 40 Cal.3d 72, 75–76, 219 Cal.Rptr. 150, 707 P.2d 212.) "The Act stands as a bulwark protecting each person’s inherent right to ‘full and equal’ access to ‘all business establishments.’ ( § 51, subd. (b) ; see Isbister , supra , 40 Cal.3d at p. 75 [219 Cal.Rptr. 150, 707 P.2d 212].)" ( Angelucci , at p. 167, 59 Cal.Rptr.3d 142, 158 P.3d 718.) In enforcing the Act, courts must consider its broad remedial purpose and overarching goal of deterring discriminatory practices by businesses. ( Ibid . ; see Isbister , at p. 75, 219 Cal.Rptr. 150, 707 P.2d 212.) We have consistently held that "the Act must be construed liberally in order to carry out its purpose." ( Angelucci , at p. 167, 59 Cal.Rptr.3d 142, 158 P.3d 718 ; see Koire v. Metro Car Wash (1985) 40 Cal.3d 24, 28, 219 Cal.Rptr. 133, 707 P.2d 195 ( Koire ).)

In light of its broad preventive and remedial purposes, courts have recognized that "[s]tanding under the Unruh Civil Rights Act is broad." ( Osborne v. Yasmeh (2016) 1 Cal.App.5th 1118, 1127, 205 Cal.Rptr.3d 656 ( Osborne ).) At the same time, we have acknowledged that " ‘a plaintiff cannot sue for discrimination in the abstract, but must actually suffer the discriminatory conduct.’ " ( Angelucci , supra , 41 Cal.4th at p. 175, 59 Cal.Rptr.3d 142, 158 P.3d 718.) "In essence, an individual plaintiff has standing under the Act if he or she has been the victim of the defendant’s discriminatory act." ( Ibid. ["plaintiff must be able to allege injury — that is, some ‘invasion of the plaintiff’s legally protected interests’ "].)

III.

Our cases addressing related issues under the Unruh Civil Rights Act have involved brick-and-mortar establishments, not online businesses, and those cases make clear that a plaintiff who has transacted with a defendant and who has been subject to discrimination has standing under the Act. (See, e.g., Angelucci , supra , 41 Cal.4th at pp. 175–176, 59 Cal.Rptr.3d 142, 158 P.3d...