Fair and Square: California Supreme Court Recognizes Unruh Act Standing in Case Against Online Purveyor

California’s Unruh Civil Rights Act (“Unruh Act”) protect each person’s right to full and equal access to all California business establishments.  Cal. Civ. Code §§ 51(b)., 52. But the extent to which it applies to online forums presents an interesting question.

Earlier this month, the California Supreme Court weighed in with an important decision in White v. Square, Inc. The Court was asked by the Ninth Circuit Court of Appeals, the court hearing the case, whether a plaintiff may bring a claim under the Unruh Act when the plaintiff leaves a website after encountering discriminatory terms and conditions, without entering into any agreement with the service provider. According to the Court, the answer is yes.

The case involves bankruptcy attorney Robert White’s allegations against Square, a company that provides a service to allow individuals or businesses to receive and accept electronic payments. Mr. White wished to use this service for his bankruptcy practice. He visited the website multiple times, reviewed the documents filed in a previous lawsuit against Square and a bankruptcy law firm, and carefully reviewed the terms and conditions. However, when he visited the web page to register for services, he did not proceed because Square's terms and conditions prohibited the use of its services for certain businesses, including the practice of bankruptcy law. Based on his research, Mr. White believed he could not sign the agreement without committing fraud.

He then filed suit under the Unruh Act, but his case was dismissed. The trial court ruled that White could not proceed with his case because he lacked standing. Standing is a legal doctrine that covers who may bring a particular lawsuit. Generally, people can only bring lawsuits under the Unruh Act in which they themselves “ha[ve] been the victim of the defendant’s discriminatory act.” Angelucci v. Century Supper Club (2007) 41 Cal. 4th 160, 175. The California Supreme Court disagreed with the trial court, holding that Mr. White had sufficiently shown that he was injured by Square’s discriminatory terms and conditions.

The California Supreme Court had previously addressed standing under the Unruh Act with respect to physical stores, but the Court had not yet issued an opinion addressing online forums. In Koire v. Metro Car Wash (1985) 40 Cal. 3d 24, a male plaintiff sued several car washes that observed “Ladies’ Day,” on which female patrons were offered discount prices. The California Supreme Court held that the plaintiff established standing because his requests for the same discount price was turned down. In Angelucci v. Century Supper Club (2007) 41 Cal. 4th 160, a group of men sued a nightclub they frequented where they had been paying more than female patrons. The Court held that the men had standing to proceed under the Unruh Act because they had paid the unfair prices, even though they had not asked to pay the same rate as the female patrons. These brick-and-mortar cases demonstrated the broad reach of standing under the Unruh Act, the Court opined.

The California Supreme Court further likened Square’s website to a physical storefront with a sign that reads, “We sell on credit. (Black people must pay cash.)” According to the Court, a person who declines to enter the store has suffered the type of discrimination envisioned by the Unruh Act and has standing to sue under it. No different if the discriminatory posting were online. In another analogy, the Court compared Mr. White’s experience to that of “an individual who intends to take a drink at a shopping mall and leaves upon encountering unattended segregated drinking fountains.” The result remained the same with Square’s website, in the Court’s view of the Unruh Act.

The Court rejected Square’s arguments to the contrary. Square argued that Mr. White did not sign up for the service, so he was never actually subject to the discriminatory terms and conditions. But the Unruh Act protects against discriminatory terms that deter people from engaging a service to begin with, the Court countered. Similarly, the Court rejected the notion that Mr. White would have needed to show that Square had applied its allegedly discriminatory policy on a particular occasion to prevent Mr. White from patronizing the service in the first place. Square also raised the scepter of overlitigation should plaintiffs like White be allowed to proceed under the Unruh Act, but the Court rejected this argument as well, reasoning that such a consideration was for the legislature, not the courts.

The Court also rejected the reasoning of the Court of Appeals in Surrey v. TrueBeginnings, LLC (2008) 168 Cal. App. 4th 414. The plaintiff in Surrey had sought to patronize an online dating site but decided not to after he discovered that men were charged higher rates than women. The Court of Appeals held that the prospective patron lacked standing because he neither attempted to nor actually patronized the services. The White court expressly held the opposite.

If you have faced discrimination by a business or website, contact Bryan Schwartz Law today.