To 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.
Well, 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.
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.
Precisely. This is a "win" in terms of providing standing to litigate issues that previously would have been precluded under arbitration clauses, or through lack of transaction per the Surrey v. TrueBeginnings precedent, which is what was overturned.
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.
You might look up the recent Comcast v. National Association of African American-Owned Media for how alleged race discrimination against a corporation can happen in practice.
Suppose I make it a known policy to reject as client all companies with at least one Asian owner, Asian major shareholder or Asian board member. If my company is a major market player (or if this policy were widespread) then this creates an incentive for companies to avoid having Asians in those positions, and puts all Asians at a disadvatage. That seems like a civil rights issue to me.
You also need to have either no competition, (or incompetent) and some barrier to entry. Otherwise companies will just by from your competitor.
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.
85 years ago such policies existed in Europe with Jews instead of Asians as the target, in the current climate you might instead substitute "Asian" with "Chinese". The race doesn't really matter, it's the concept that matters.
You are missing the point. Your logic means no business can refuse to deal with any public company, because any company of any size has a(n) $ETHNICITY shareholder.
> Your logic means no business can refuse to deal with any public company, because any company of any size has a(n) $ETHNICITY shareholder.
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.
I think you are bypassing the issue the GP was addressing: You said the scenario described by the GGP was absurd. The GP provided a concrete example of that scenario.
GP was disputing your characterization of the example as absurd, nothing more.
You can always start with "more than 50% of shares held by $ETHNICITY", and if you notice that you have an effect you can slowly lower the limit to allow fewer and fewer $ETHNICITY shareholders.
If we’re talking globally then plenty of examples of that exist right now.
I don’t know your gender, race, ethnicity, religion, or country of origin, but I can guarantee someone you’re going to have issues doing business because of discrimination. Saying X in not an issue in a country where X is protected/prohibited/regulated etc is a very week argument for getting rid of the associated laws.
You would need to show intent either way. If the intent is proven to discriminate based one of several owners I think the protection would still apply.
An interesting example of this I'll mention that I have personal experience with (I know someone processing these complaints).
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.
While 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.
This is what I came away with as well. I really don't understand how Surrey v. TrueBeginnings became relevant jurisprudence outside of its own idiosyncrasies.
This 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.
> 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).
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.
California can require the company to pay the all or the majority of fees for arbitration, and this has been used by large groups of individuals to band together and arbitrate at the same time, costing great deals of money and burden to a company, forcing them to settle.
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.
If a business is facing 60000 arbitration claims from customers they are not a small business anymore and presumably should be able to handle the burden of arbitration customer disputes.
You’d presume so, but in fact they cannot. The reason that so many companies adopted forced arbitration was explicitly because it made such actions uneconomical for consumers to actually enter arbitration.
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.
I was a licensed arbitrator. I am aware of how arbitration works and what it is supposed to accomplish.
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.
Sorry, I just want to clarify as I may have misread "should" (English is a marvelous language :D )
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.
The whole point of companies forcing arbitration clauses onto their customers was to save money by denying customers the appropriate legal avenue for recourse. If the company didn't want to face 60000 arbitration cases they shouldn't have blocked their customers from filing a single class action lawsuit.
I agree with you. With collective action this can become a very powerful tool for consumers, and just saying "they're a big company they can afford it" really misses the point.
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.
This 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.
> 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.
Drive by lawsuits for discrimination? I'd like to hear more about how this would work.. Is this a thing? Like you would go sue a perfectly legitimate and non-discriminatory business for excluding black people, even though no such discrimination exists? And how would they win that? And how many attempts before they lose their license and/or are barred from bring any more cases?
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.
So your example is a website that does violate the ADA. I understand that ADA compliance is hard for websites... that's not a legal issue so much as a technical issue. We do treat support for the blind, et al as an afterthought. So is your complaint here that the ADA is being enforced? Like we should just get rid of the ADA because people aren't complying? Or are you upset the ADA doesn't say: please make your best effort? Better support for the disabled in our front end frameworks would be awesome.. It is too bad there isn't more focus on it.
I'll bite the bullet and say it: If the ADA requires UC Berkeley to take down 20,000 hours of lecture videos[1] because some of them lacked subtitles and some lacked audio descriptions of slides, then the ADA needs to be changed. And any university that commits civil disobedience by not removing such content is making the world a better place.
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.
The ADA may not require it, but the compliance costs it imposes are a strong disincentive for publishing.
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.".
I think what you're missing is that the websites may be 100% in compliance with the ADA- the site owners simply can't risk the expense & uncertainty of a lawsuit, so they settle. It's (legal) extortion, the law is simply the vehicle by which they do it. And it certainly doesn't make the world a better place for the disabled, it's just a payoff for the attorneys. It is literally the same concept as patent trolling.
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
Does this not also disincentivize the little guy from taking on BigCorp? I might be willing to put up tens of thousands of dollars to fight for justice but I can't risk owing millions to BigCorp lawyers if a judge or jury disagrees.
>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,
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.
oh no, I have absolutely no complaint. I 100% support the ADA and think it is incredibly underused. The way we treat people who are disabled in this country is morally indefensible. The ADA doesn't go nearly far enough, and the burden should not be on the person who needs access.
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-...
You might hope that the risk of legal damages would spur better technological solutions. Businesses won't take these issues seriously unless it impacts their bottom line, so that's the point of these laws.
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.
I 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,” […]
An 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.
I 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]
In 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.
The 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)...
If I'm reading this correctly, there was not actually a ruling on whether or not line of work/occupation is a protected class. The ruling had to do only with standing: White could sue even though they had not actually done business with Square.
Per the article: Finally, the court declined to address whether occupational discrimination is covered by the Unruh Act
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.
> 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?
I'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.
Is 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.
They'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.
What 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.
I can't speak for gun dealers but for defense companies that also sell to consumers, think high end gun optics, there is fraud. And law enforcement is just an interested in investigating it as any other business ( Not at all) But I don't think any more fraud than any other online business.
I'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
Stripe has a list of restricted businesses too. I been toying with the idea of building a new virtual world, but still very early... And sounds like getting the whole economy system is going to be a huge pain, plus other rules too. However there's plenty of other things to tackle first anyways.
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.
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...
Square 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.
The 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]
> 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
I 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.
A 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!
> 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.
& 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.
Great 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.
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.