It pisses me off when companies want charge 3% or more to pay them by credit card.  If you don’t want to take credit cards fine, but don’t profit from it!  Elavon through Costco only charges 1.99% + 25 ¢ (for phone transactions) so don’t lie and try to make profit from a credit card transaction.

California and about 10 other states were trying to prohibit these surcharges https://oag.ca.gov/consumers/general/credit-card-surcharges

But now, starting with the US Supreme Court, surcharges will probably be allowed.  (See Expressions Hair Design https://www.supremecourt.gov/opinions/16pdf/15-1391_g31i.pdf

Technically, Civil Code Section 1748.1(a) prohibits retailers from imposing a surcharge on customers who pay with a credit card, but allows them to offer discounts for cash or check.

There is a work around for merchants, under the first amendment and how this surcharge is advertised.  See 9th Circuit Opinion:  http://cdn.ca9.uscourts.gov/datastore/opinions/2018/01/03/15-15873.pdf

Italian-Colors-CA9

 

 

In White v. Square, Inc. S249248 (August 12, 2019), the California Supreme  Court held that an online business violated the Unruh Act by discriminating  based upon  occupation (or other protected categories of people) and the discriminated person has standing to sue even if the person did not enter into a contract for the services because he/she was in an excluded category.

A bankruptcy lawyer sued Square, the payment processor run by the Twitter CEO, challenging the app’s terms of use—despite never signing up. The California Supreme Court ruled the TOS violated the State Unruh Civil Rights Act by discriminating against him due to his occupation as a bankruptcy lawyer.  This ruling may have far ranging implications to many other businesses that limit who can or cannot enter into an agreement to use their services.  White v. Square 100% reversed the Surrey v. TrueBeginnings, LLC (2008) 168 Cal.App.4th 414 about an online matchmaking service.

For whatever reason, Square’s Prohibited Goods and Services policies include bankruptcy attorneys or collection agencies and many other types of occupations, services and “prohibited” items.  In California where Square is headquartered, the Unruh Civil Rights Act provides broad protections against discrimination including based on a person’s occupation. The issue before the California Supreme Court was does a person need to have entered into an agreement with Square by agreeing to the terms of service in order to have experienced said discrimination barring his “full and equal access” to the service.  The Court said it was not necessary to have entered into an agreement then to be discriminated against because the bankruptcy lawyer was excluded from entering into the agreement by Square’s exclusion of his occupation per its terms of use.

“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,” The court’s unanimous opinion held: “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.”

This ruling may stir up a hornet’s nest of litigation.  For example, Square also prohibits sale of occult materials, adult entertainment oriented products or services and escort services.  PayPal bars the sale of “sexually oriented digital goods”; both forbid drug paraphernalia sales.  Every bank refuses to process credit cards for marijuana dispensaries or persons engaged in sex work.  If the occupation is legal, e.g. a state licensed cannabis dispensary or legal brothel in Nevada, that seems to be a form of occupation based discrimination.

Persons with physical handicaps also may have a cause of action as they are effectively excluded from using the services on the website.  Blind community members who rely on screen-reader software cannot avail themselves of websites, apps, self-service kiosks” that are not compatible with software as well as persons with dexterity issues who may be timed out of ‘CAPTCHA’ challenge response tests.

Another issue to be decided is if no agreement is needed to be discriminated against, is the person discriminated against required under the terms of service of the web site to arbitrate binding upon the discriminated person?  I don’t think so because there is no agreement!  It’s good to be a lawyer 😊

The prohibition against bankruptcy lawyers was still on the Square list of prohibited business activities as of August 14, 2019.

https://squareup.com/help/us/en/article/5089-prohibited-goods-and-services-with-square-point-of-sale

 

 

A stipulated judgment constituted an unenforceable penalty under Civil Code §1671(b) where the stipulated judgment for $2.8 million bore no reasonable relationship to the range of actual damages the parties could have anticipated from a breach of their agreement to settle a dispute for $2.1 million.  (This is established law under Ridgley v. Topa Thrift & Loan Assn. (1998) 17 Cal.4th 970, 977.

In Red & White Distribution v. Osteroid Enterprises, a stipulation provided for entry of judgment for $700,000 more than the settlement amount to be paid plus interest and attorneys’ fees. The Appellate Court held that the judgment with the additional $700,000 was an unenforceable penalty under section Civil Code 1671.  There were some unusual issues in this case including the debtor alleging it had paid most of the settlement amount in gold and had a receipt.

The appellate court stated it is publishing this case to remind parties how to properly provide for an incentive for prompt payment, e.g. a carrot not a stick!

The court citing with approval Jade Fashion & Co., Inc. v. Harkham Industries, Inc. (2014) 229 Cal.App.4th 635 at 649, that “it is permissible under section 1671 for the parties to agree to a discount for timely payment of an admitted debt. (Jade Fashion, supra, 229 Cal.App.4th at p. 649.) Thus, based on Jade Fashion, if the parties stipulate that the debt is a certain number, they may agree that it may be discharged for that number minus some amount. They may also agree that in the event the debtor does not timely make the agreed payments, a stipulated judgment may be entered for the full amount.”

Red & White Distribution v. Osteroid Enterprises – filed Aug. 9, 2019, Second District, Div. Four
Cite as 2019 S.O.S. 3888  (B291188)

The U.S. Supreme Court just FUCT’d the Lanham Act.  The Lanham Act (15 U.S.C. § 1052(a)) prohibits the registration of “immoral[] or scandalous” trademarks. Respondent founded a clothing line that uses the trademark FUCT. The U.S. Patent and Trademark office decided the trademark was prohibited under the Lanham Act. The U.S. Supreme Court held that the prohibition on “immoral[] or scandalous” trademarks was facially unconstitutional, stating: “There are a great many immoral and scandalous ideas in the world (even more than there are swear words), and the Lanham Act covers them all.  It therefore violates the First Amendment.” (Iancu v. Brunetti (U.S., June 24, 2019) 2019 U.S. LEXIS 4201.)

https://www.supremecourt.gov/opinions/18pdf/18-302_e29g.pdf

P.S. FUCT  is reportedly an acronym for “Friends U Can’t Trust”.

The day after a responsive pleading was due, plaintiff’s lawyer sent defendant a letter and an email telling her that the time to respond was past due and threatening entry of default if a responsive pleading was not filed by the next business day. When a pleading was not filed by 3:00 p.m. the next business day, plaintiff’s counsel filed a request for entry of default. Defendant quickly hired a lawyer who filed a motion to set aside the default pursuant to Code of Civil Procedure § 473, subdivision (b). The trial court denied defendant’s motion to set aside the default, despite a fact-filled declaration describing how defendant had been up to her neck taking care of urgent personal circumstances.  The Court of Appeal reversed and quoted from Code of Civil Procedure § 583.130 that “. . . all parties shall cooperate in bringing the action to trial or other disposition,” and concluded: “Attorneys who do not do so are practicing in contravention of the policy of the state and menacing the future of the profession.” (LaSalle v. Vogel (Cal. App. 4th Dist., Div. 3, June 11, 2019) 36 Cal.App.5th 127.) Continue Reading Lawyer Civility Includes More Than a Pro Forma Attempt to be Civil” (LaSalle v. Vogel (2019) 36 Cal.App.5th 127.)

Plaintiff sued for fraudulent transfer. Defendants then paid the judgment, but instead of dismissing his complaint, plaintiff amended it to seek damages caused by the delay in paying the judgment. The trial court sustained defendants’ demurrer. On appeal, plaintiff argued his amended complaint asserted a common law fraudulent transfer claim, which gives rise to consequential and punitive damages. Reversing, the Court of Appeal agreed with plaintiff, stating: “Accordingly, the damages alleged by Berger fall within the scope of recoverable tort damages and satisfy the damage element for a fraudulent transfer claim for purposes of demurrer.” (Berger v. Varum (Cal. App. 1st Dist., Div. 1, June 3, 2019) 35 Cal.App.5th 1013.)  Lessons, 1.  Timely pay your debts, 2. Always get a release of claims!

Employers with 5 or more employees (not including independent contractors), must provide at least 2 hours of sexual harassment training to all supervisory employees and at least one hour of sexual harassment training to all non-supervisory employees by January 1, 2020, and once every 2 years thereafter.  An employer includes a person who regularly receives the services of five or more persons providing services pursuant to a written contract, such as from a temporary employment staffing company.

Government Code § 12950.1 “(i) (1) For purposes of this section only, “employer” means any person regularly employing five or more persons or regularly receiving the services of five or more persons providing services pursuant to a contract, or any person acting as an agent of an employer, directly or indirectly, the state, or any political or civil subdivision of the state, and cities.

The cost to the employer should be mitigated because this law also requires the Department of Fair Employment and Housing to develop or obtain 1-hour and 2-hour online training courses on the prevention of sexual harassment in the workplace on the department’s Internet Web site.

Senate Bill 1343 is codified as Government Code §§ 12950 and 12950.1. Effective January 1, 2019. Compliance deadline is January 1, 2020.

Prior law prohibiting an employer from asking or relying upon the applicant’s salary history is modified. Employers may now inquire into an applicant’s salary expectation for the position being applied for such as for seniority or merit.  Sexual based salary decisions remain illegal.  Labor Code §§ 432.3 and 1197.5. Effective January 1, 2018.

An employer cannot require the execution of a release or non-disparagement agreement in exchange for any condition of employment and broadened non-employee harassment. Changes to the laws concerning harassment, discrimination, etc. (Government Code § 12940, 12965, 12923, 12950.2, and 12964.5) broadened the definition of harassment to include any type of harassment, not merely sexual, for which an employer may be responsible when committed by a non-employee. The law also makes it unenforceable to require a release or non-disparagement agreement in order to obtain or keep a job.

The legislature took notice of Justice Ruth Bader Ginsburg statements in her concurrence in Harris v. Forklift Systems (1993) 510 U.S. 17 by enacting Government Code §§ 12940, 12965, 12923, 12950.2, and 12964.5. Effective January 1, 2019.

The limitation as to release agreements is if it is a condition to new or continued employment except if is part of a negotiated settlement agreement for an existing dispute.  See Government Code § 12964.5 which provides in pertinent part:

Government Code § 12964.5: (a) It is an unlawful employment practice for an employer, in exchange for a raise or bonus, or as a condition of employment or continued employment, to do either of the following:

(1) (A) For an employer to require an employee to sign a release of a claim or right under this part.

(B) As used in this section, “release of claim or right” includes requiring an individual to execute a statement that he or she does not possess any claim or injury against the employer or other covered entity, and includes the release of a right to file and pursue a civil action or complaint with, or otherwise notify, a state agency, other public prosecutor, law enforcement agency, or any court or other governmental entity.

(2) (A) For an employer to require an employee to sign a nondisparagement agreement or other document that purports to deny the employee the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment.

(B) For purposes of this paragraph, “information about unlawful acts in the workplace” includes, but is not limited to, information pertaining to sexual harassment or any other unlawful or potentially unlawful conduct.

(b) Any agreement or document in violation of this section is contrary to public policy and shall be unenforceable.

(c) (1) This section does not apply to a negotiated settlement agreement to resolve an underlying claim under this part that has been filed by an employee in court, before an administrative agency, alternative dispute resolution forum, or through an employer’s internal complaint process.

The primary published case is Del Monte Properties & Investments, Inc. v. Dolan (2018) 26 Cal.App.5th Supp. 20, 24.  In Del Monte the Court held that the landlord must prove that the actual losses caused by late payment of rent were extremely difficult or impracticable to determine. Moreover, an agreement to the term setting the amount is not enough.   Landlord must show that the losses caused by late payment of rent in this case were extremely difficult or impracticable to determine, liquidated damages were not justified under Civil Code § 1671.  

The Court also held that “Setting the liquidated damages to a percentage of the contract price demonstrates a purpose other than compensating losses. Garrett v. Coast & Southern Fed. Sav. & Loan Assn., 9 Cal.3d at 740. Some analysis of actual losses is required prior to setting the amount. Util. Consumers’ Action Network, Inc. v. AT&T Broadband of Southern California, Inc. (2006) 135 Cal.App.4th 1023, 1031. Post-hoc rationalization will be rejected. In re Cellphone Termination Fee Cases, 193 Cal.App.4th at 328.
(Del Monte Properties & Investments, Inc. v. Dolan (2018) 26 Cal.App.5th Supp. 20, 24 )