8 ms·
California Supreme Court: Transaction is not required to sue online providers
- deleted 7y ago[deleted]
- kccqzy 7y agoI hope this title can be clarified, but that although a transaction is indeed not required, an intention to enter into a transaction seems to be required. > 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.
- myrryr 7y agoHow does that interact with understanding that some businesses carry a lot more risk than others?
- hamandcheese 7y agoThose business should price the risk into their fees?
- myrryr 7y agoI agree, but would that be considered discrimination?
- ineedasername 7y agoIn this case, the business with the risk is the bank lending the money through the credit card. And credit card purchases made just before declaring bankruptcy are highly scrutinized as potential fraud. Paying the lawyer with additional debt you're attempting to get discharged would seem to fall under that category. As a result, in practice, you won't find bankruptcy lawyers accepting CC payments from their clients. If they accept CC payments, it must be from someone other than the client. (family, friend, etc.) 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.
- ineedasername 7y agoI don't view any of this as having to do with business risk, as the article dealt primarily with who had standing to sue, not about the actual practices/policies of Square. 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] [0] https://www.law.cornell.edu/uscode/text/11/523 https://www.law.cornell.edu/uscode/text/11/523
- austincheney 7y agoAn intention to enter into an online transaction for the point of a business agreement is any attempt to create any online account. This is particularly true for social media where the user is the product and their data is a revenue generating business commodity immediately available regardless of whether that user ever returns to the site. 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.
- anw 7y agoThis is an interesting article, and one that is important for people who run a SMB in California to take note of. > 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.
- joecasson 7y agoI agree with you on the risk. 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.
- hamandcheese 7y agoIt seems you might be right: > 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.
- stefan_ 7y agoThis is the same nonsense discussion we are having with the unfiltered NSA data collection: you know it's happening, they say it's happening, but no one can have standing to sue because you know, you being spied on is secret. Standing should never be the hurdle these kinds of claims fail on.
- mrandish 7y ago
- deleted 7y ago[deleted]
- TACIXAT 7y agoIs this going to affect similar practices for all payment processors? I feel almost any payment processor refuses to deal with "vice" business (porn, gambling) due to high risk of fraud. This will be very interesting if they are no longer allowed to do that.
- jedberg 7y agoThey'll just make the fees be 110% of the transaction or something similar. That's how credit card processors do it now. 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.
- mritun 7y agoIsn't that discrimination too if we go by this precedent? IceCreme? We can't refuse you, but it's $4500 for you! Where do you draw the line? Litigation is expensive!
- staller 7y agoI'm curious about this too. If your business has high risk than raising your fees for select people sounds like discrimination. Raising them for your whole platform could really hurt your business
- lotsofpulp 7y agoThe fees are raised due the riskier nature of the business, not due to “select people”.
- lotsofpulp 7y agoIt’s not $4,500 for “you”, it’s $4,500 for a specific line of business that experiences higher losses.
- CWuestefeld 7y agoWhat about the discrimination against gun dealers? 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.
- rgbrenner 7y agoTo require a transaction would mean you can discriminate based on anything and everything. Exclude black people from entering your store? no problem because they haven't bought anything. 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.
- ueudrjjj 7y agoWhile not an invalid point, it's worth noting that this case deals mostly with occupational discrimination and not racial discrimination which is arguably a red herring here. Debt collectors for example, from my reading, were among certain groups barred from accessing Square.
- deleted 7y ago[deleted]
- deleted 7y ago[deleted]
- netcan 7y agoWell, that seems to be the analogy the judge saw... and common law works by analogy. 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.
- klipt 7y ago> discriminating against a class of corporations is a violation of civil rights This seems obviously true if eg the class in question is the corporation owner's race or sex.
- hamandcheese 7y ago> However, it is unclear whether a class containing members bound by arbitration agreements can be certified. At the same time, the broad conception of statutory standing under the Unruh Act would be much less effective as a deterrent if class certification were denied based on the inclusion of class members who have signed arbitration agreements. While the White court declined to address the class certification issue, similar classes containing members bound by arbitration agreements have been certified in California federal district court cases against Uber and Toyota. 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.
- pm_me_ur_fullz 7y agoA few years ago Silicon Valley Bank wouldn't open an account for an entity with blockchain in the name, no matter what it actually did. 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!
- ThePowerOfFuet 7y ago>and accelerant
- cjensen 7y agoYes and no. This means you can sue despite not being a customer. It does not mean your suit will succeed.
- pm_me_ur_fullz 7y agoI understand, it just won't be dismissed for "not having standing" on the plaintiff's side. Progress!
- Quanttek 7y agoGreat ruling! Anything else would've been quite absurd or inconsistent as it would allow for e.g. a grocerer to pin a "whites only" sign onto the door and anyone deterred would not have standing. I also want to laud the beautiful design of the webpage.
- LatteLazy 7y agoThe ruling seems reasonable, the law... Very surprising. Since when is line of work/business a protected class? And its also not clear whether the "person" applying needs to be a natural person or if it can be an llc etc. I wasn't aware LLCs could suffer discrimination (at least not directly)...
- deleted 7y ago[deleted]
- sio8ohPi 7y agoThe 9th circuit discusses this briefly at the bottom of page 7 here: http://cdn.ca9.uscourts.gov/datastore/opinions/2018/06/07/16-17137.pdf 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).
- LatteLazy 7y agoIt's interesting. 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?
- surfpel 7y agoThose industries you mentioned may be more likely to have fraudulent transactions. In that case it makes sense not work with them then. You should have every right to deny service to them and the law supports you on that.
- sio8ohPi 7y agoI'm not a lawyer, but it's not clear to me that the law does actually support you in that. Quoting the CA supreme court, in Marina Point v Wolfson: > 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/30/721.html https://law.justia.com/cases/california/supreme-court/3d/30/...
- TomMckenny 7y agoSquare bans the use of its service for debt collection. The ruling says doing so is a violation of civil rights. 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.
- asdfasgasdgasdg 7y agoWas there a final ruling in the suit? Or was it simply decided that Square could not use this particular argument to get the suit dismissed.
- Gaelan 7y agoThe latter, I believe: > 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.
- ccostes 7y agoThe court did not rule on whether civil rights were violated, only that they have standing to bring their case: 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/s249248.html https://law.justia.com/cases/california/supreme-court/2019/s...
- apple4ever 7y agoI believe that any payment processor should be prohibited from denying any legal business its services. Its a restraint of trade and should not be permitted.
- valuearb 7y agoWhen a panel of lawyers is asked if someone can be sued, the answer is always yes.
- based2 7y ago& historical pre-transaction contexts should be available for online transactions. Ex: How to complain, if a transaction is cut and then the price raised automagically.