Abu Maisa, Inc. v. Flint Mobile, Inc et al

Filing 67

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS FIRST AMENDED COMPLAINT by Judge Jon S. Tigar granting 53 Motion to Dismiss. (wsn, COURT STAFF) (Filed on 12/8/2016)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

ABU MAISA, INC.,
Plaintiff,

8
v.

9
10

GOOGLE, INC., et al.,
Defendants.

11
United States District Court
Northern District of California

Case No. 15-cv-06338-JST
ORDER GRANTING DEFENDANTS’
MOTION TO DISMISS FIRST
AMENDED COMPLAINT
Re: ECF No. 53

Plaintiff Abu Maisa, Inc. brings this purported class action against Defendants Google, Inc.

12
13

(“Google”), Intuit, Inc. (“Intuit”), Paypal, Inc. (“Paypal”), Square Inc. (“Square”), and Stripe, Inc.

14

(“Stripe”), alleging that Defendants violate the California Unruh Civil Rights Act (“Unruh Act”)

15

by prohibiting certain types of businesses from using their services. ECF No. 52. Before the

16

Court is Defendants’ joint motion to dismiss Plaintiff’s first amended complaint. ECF No. 53.

17

The motion will be granted with prejudice.

18

I.

BACKGROUND

19

A.

Factual Background

20

Defendants each enable individuals and businesses “to accept electronic payments without

21

themselves directly opening up a merchant account with any Visa or MasterCard member

22

bank . . . .” ECF No. 52 ¶ 10 (First Amended Complaint (“FAC”)). Plaintiff Abu Maisa, Inc., is a

23

convenience store that sells, in part, cigarettes, drug paraphernalia such as bongs and hookahs,

24

lottery tickets, and adult-oriented entertainment materials including but not limited to adult

25

magazines displaying nude photographs. Id. ¶ 16.

26

Plaintiff alleges that Defendants, whom Plaintiff collectively refers to as “Credit Card

27

Companies,” each maintain lists of “Prohibited Businesses” or “Bad Lists.” ECF No. 52 ¶¶ 11-16.

28

“[D]ue to the fact that [Abu Maisa] falls within several categories of each Bad List,” Abu Maisa

1

has “been deterred and continues to be deterred from attempting to become a customer of

2

[Defendants’].” Id. ¶ 18. While Abu Maisa has never attempted to become a customer of any of

3

the Defendants, it “has visited the [Defendants’] websites on a daily basis on and after December

4

31, 2015.” Id. ¶¶ 18, 34.

5

B.

Procedural History

6

On December 31, 2015, Abu Maisa filed this putative class action against Defendants,

7

raising a single claim under California’s Unruh Civil Rights Act. ECF No. 1. On September 20,

8

2016, Abu Maisa filed a First Amended Complaint, seeking to represent a class of “all Persons

9

who have ever had their Accommodations terminated by Credit Card Companies based on such
Persons’ violation of Bad Lists or who have ever been deterred from attempting to become a

11
United States District Court
Northern District of California

10

customer of Credit Card Companies based on such Persons’ unwillingness to violate Bad List

12

(Class members).” ECF No. 52 ¶ 20. On October 14, 2016, Defendants filed a joint motion to

13

dismiss the FAC, ECF No. 53, which motion the Court now considers.

14

II.

JURISDICTION

15

The Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1332(d)(2). Minimal

16

diversity exists here because Defendants, all Delaware corporations with their principle place of

17

business in California, are citizens of Delaware and California for diversity purposes and at least

18

one class member is alleged to be a citizen of a state other than Delaware and California. Id. ¶¶ 1-

19

6, 22. Additionally, Abu Maisa alleges that “there are hundreds of thousands of Class members.”

20

Id. ¶ 25. Because the minimum statutory damage award under the Unruh Act is $4,000, Cal. Civ.

21

Code § 52, Abu Maisa has pleaded that the amount in controversy exceeds $5,000,000, as required

22

by 28 U.S.C. § 1332(d)(2). Id. ¶ 26.

23

III.

24

LEGAL STANDARD
A complaint must contain “a short and plain statement of the claim showing that the

25

pleader is entitled to relief” to “give the defendant fair notice of what the . . . claim is and the

26

grounds upon which it rests.” Fed. R. Civ. P. 8(a)(2); Bell Atl. Corp. v. Twombly, 550 U.S. 544,

27

555 (2007). “To survive a motion to dismiss, a complaint must contain sufficient factual matter,

28

accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S.
2

1

662, 678 (2009) (internal quotation marks omitted). “A claim has facial plausibility when the

2

plaintiff pleads factual content that allows the court to draw the reasonable inference that the

3

defendant is liable for the misconduct alleged.” Id. The Court must “accept all factual allegations

4

in the complaint as true and construe the pleadings in the light most favorable to the nonmoving

5

party.” Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). Dismissal can be based on the

6

lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal

7

theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533–34 (9th Cir. 1984). “The

8

tenet that a court must accept a complaint’s allegations as true is inapplicable to threadbare recitals

9

of a cause of action’s elements, supported by mere conclusory statements.” Ashcroft v. Iqbal, 556
U.S. 662, 663 (2009). “[F]ailure to allege statutory standing results in failure to state a claim on

11
United States District Court
Northern District of California

10

which relief can be granted . . . .” Petzchke v. Century Aluminum Co., 729 F.3d 1104, 1109 (9th

12

Cir. 2013). Where amending the complaint would be “futile,” the Court may dismiss the

13

complaint with prejudice. See Square, 2016 WL 4791748, at *4.

14

IV.

DISCUSSION1

15

A.

The Unruh Civil Rights Act

16

The Unruh Civil Rights Act provides that “[a]ll persons within the jurisdiction of this state

17

are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin,

18

disability, medical condition, marital status, or sexual orientation are entitled to the full and equal

19
20
21
22
23
24
25
26
27
28

1

Both Plaintiff and Defendants have made a request for judicial notice of filings in the related
case of White v. Square, Inc., No. 15-CV-04539-JST. Pursuant to Federal Rule of Evidence
201(b), “[t]he court may judicially notice a fact that is not subject to reasonable dispute because it:
(1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and
readily determined from sources whose accuracy cannot reasonably be questioned.” The Court
“must take judicial notice if a party requests it and the court is supplied with the necessary
information.” Fed. R. Evid. 201(c)(2). Defendants ask that the Court take judicial notice of its
unpublished order denying the plaintiff’s motion for reconsideration in White v. Square, Inc., No.
15-CV-04539-JST (ECF No. 58). Plaintiff asks that the Court take judicial notice of several
filings in the same case (ECF Nos. 54, 57, 58, 64). “We may take judicial notice of court filings
and other matters of public record.” Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741,
746 n.6 (citing Burbank-Glendale-Pasadena Airport Auth. v. City of Burbank, 136 F.3d 1360,
1364 (9th Cir. 1998)). Accordingly, the Court grants Defendants’ request for judicial notice as to
Exhibit A, and Plaintiff’s request for judicial notice as to Exhibits 1-4.
3

1

accommodations, advantages, facilities, privileges, or services in all business establishments of

2

every kind whatsoever.” Cal. Civ. Code § 51(b). Section 51.5(a) of the Act further provides that

3

“[n]o business establishment of any kind whatsoever shall discriminate against . . . or refuse to . . .

4

contract with . . . any person in this state on account of any characteristic listed or defined in

5

subdivision (b) or (e) of Section 51 . . . because the person is perceived to have one or more of

6

those characteristics.” Section 52(a) provides that “[w]hoever denies, aids or incites a denial, or

7

makes any discrimination or distinction contrary to Section 51, 51.5, or 51.6, is liable for each and

8

every offense for the actual damages, and any amount that may be determined by a jury, or a court

9

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

11
United States District Court
Northern District of California

10

court in addition thereto, suffered by any person denied the rights provided in Section 51, 51.5, or

12

51.6.” The California Supreme Court has stated: “That the [Unruh A]ct specifies particular kinds

13

of discrimination—color, race, religion, ancestry, and national origin—serves as illustrative, rather

14

than restrictive, indicia of the type of conduct condemned.” In re Cox, 3 Cal. 3d 205, 212 (1970).
Defendants’ Motion to Dismiss

15

B.

16

While this is the first motion to dismiss in this case, Defendants correctly point out that the

17

Court “recently dismissed with prejudice a nearly-identical case because the plaintiff failed to

18

establish statutory standing.” ECF No. 53 at 1; see White v. Square, Inc., No. 15-CV-04539-JST,

19

2016 WL 4791748, at *4 (N.D. Cal. Sept. 14, 2016).2 Like the plaintiff in Square, Abu Maisa

20

“never became a customer” of Defendants. ECF No. 52 ¶ 34. And as in Square, the Court relies

21

on Surrey v. TrueBeginnings, LLC, 168 Cal. App. 4th 416–19 (2008), for the proposition that

22

under California law, “a person must tender the purchase price for a business’s services or

23

products in order to have standing to sue it [under the Unruh Act] for alleged discriminatory

24

practices relating thereto.” Surrey, 168 Cal. App. 4th at 416. Because Abu Maisa does not allege

25

that it attempted to subscribe to Defendants’ services, but instead merely alleges that it “visited”

26

Defendants’ websites “on a daily basis on and after December 31, 2015, and has thereby . . . been

27
28

2

Plaintiff’s counsel in Square is also Plaintiff’s counsel here.
4

1

deterred from attempting to become a customer,” Abu Maisa does not have statutory standing to

2

sue Defendants under the Unruh Act. ECF No. 52 ¶¶ 18, 34.

3

Abu Maisa’s Opposition makes two arguments, neither of which have merit. First, Abu
Maisa relies on Botosan v. Paul McNally Realty, 216 F.3d 827 (9th Cir. 2000), which, as the

5

Court noted in Square, has “been explicitly rejected by the California Court of Appeal in Reycraft

6

v. Lee, 177 Cal. App. 4th 1211, 1227 (2009) (“We also reject plaintiff’s reliance on the Ninth

7

Circuit’s decision in Botosan.”). Square, 2016 WL 4791748, at *4. Abu Maisa argues that

8

accepting the California courts’ rejection of Botosan is “ignoring vertical stare decisis.” ECF No.

9

54 at 2. Not so. “[W]hen (1) a federal court is required to apply state law, and (2) there is no

10

relevant precedent from the state’s highest court, but (3) there is relevant precedent from the

11
United States District Court
Northern District of California

4

state’s intermediate appellate court, the federal court must follow the state intermediate appellate

12

court decision unless the federal court finds convincing evidence that the state’s supreme court

13

likely would not follow it.” Toomer v. United States, 615 F.3d 1233, 1237 n.1 (9th Cir. 2010)

14

(quoting Ryman v. Sears, Roebuck & Co., 505 F.3d 993, 995 (9th Cir. 2007)). Abu Maisa does

15

not cite any California authority for the proposition that the California Supreme Court would

16

endorse its reading of Botosan.

17

Second, Abu Maisa argues that it has been presented with a “Catch-22” because

18

Defendants are “request[ing]” that Abu Maisa “lie to sign up with them or otherwise lose all rights

19

to sue them under Unruh Law.” ECF No. 54 at 1. Abu Maisa’s argument that the tender

20

requirement “require[s] lies” is a mischaracterization of the facts. As Defendants point out, Abu

21

Maisa is “free not to” sign up for Defendants’ services, but no one has threatened it with any harm,

22

such as a promissory fraud action against it, if it does. ECF No. 58 at 4-5.

23

Moreover, Abu Maisa’s argument does not change the fact that it has not met the tender

24

requirement. The cases Abu Maisa cites are unpersuasive. The Court analyzed both Scaduto v.

25

Esmailzadeh, No. 07-cv-4069, 2007 WL 8435679 (C.D. Cal. Aug. 9, 2007), and Angelucci v.

26

Century Supper Club, 41 Cal. 4th 160 (2007), in its motion to dismiss in Square, concluding under

27

identical circumstances that neither case supported the plaintiff’s position or eliminated the

28

requirement that plaintiff meet the tender requirement. Square, 2016 WL 4791748, at *5, *7 n.2.
5

1

While Abu Maisa argues in conclusory fashion that the Unruh Law must be liberally construed,

2

none of the cases cited to that effect eliminate the tender requirement. ECF No. 54 at 1-2. The

3

citation Abu Maisa provides in its notice of new authority, ECF No. 59, Osborne v. Yasmeh, 1

4

Cal. App. 5th 1118 (2016), also fails to support its position. That case held that “tender of

5

payment of a discriminatory fee is not required to establish standing under the Unruh Act where a

6

disabled individual has personally experienced discriminatory treatment at a business

7

establishment.” 1 Cal. App. 5th at 1135 (emphasis added). Because Abu Maisa is not “a disabled

8

individual [who] has personally experienced discriminatory treatment,” tender is still required.

9

See id.; see also id. at 1133 (“agree[ing]” with the reasoning in Surrey v. TrueBeginnings, 168
Cal. App. 4th 414 (2008) that “a plaintiff who only learns about the defendant’s allegedly

11
United States District Court
Northern District of California

10

discriminatory conduct, but has not personally experienced it, cannot establish standing”).

12

Ultimately, the Court finds that California case law requires the Court to grant Defendants’

13

motion to dismiss the FAC because Abu Maisa has not sufficiently pleaded statutory standing

14

under the Unruh Act. Angelucci, 41 Cal. 4th at 170; Surrey, 168 Cal. App. 4th at 416-19.

15

CONCLUSION

16

Defendants’ motion to dismiss the FAC is granted. Because the Court has addressed

17

multiple complaints containing the same deficiency and none have remedied the respective

18

plaintiff’s lack of statutory standing, the Court concludes that amendment would be futile.

19

Accordingly, the Court dismisses the FAC with prejudice.

20

The Case Management Conference currently scheduled for December 14, 2016 is vacated.

21

IT IS SO ORDERED.

22

Dated: December 8, 2016

23
24
25

______________________________________
JON S. TIGAR
United States District Judge

26
27
28
6