Case Name: Tech Eyes, Inc. v. Google LLC
Case No.: 17CV307381

I. Background

This action arises from a dispute over the suspension of a Google AdWords account. The pleading at issue is the Second Amended Complaint (“SAC”) filed by plaintiff Tech Eyes, Inc. (“Plaintiff”), through its Chapter 7 bankruptcy trustee, against Google LLC (“Defendant”).

According to the allegations in the SAC, Plaintiff sells and services telescopes capable of being attached to weapons and operates a website advertising its goods and services. (SAC, ¶ 8.) On or around February 2012, Plaintiff entered into a written services agreement with Defendant (“Services Agreement”) whereby it could request that Defendant enable hyperlinks that would take any person clicking on the links to Plaintiff’s website (otherwise known as a landing page). (Id. at ¶¶ 1, 11, 13.) Incorporated into the Services Agreement are a number of policies Defendant made available on its website including advertising policies. (Id. at ¶ 15.) Following Plaintiff’s entry into the Services Agreement, its revenue grew from zero to two million dollars. (Id. at ¶ 10.) This revenue was directly traceable to hits Plaintiff got on its website through the hyperlinks Defendant enabled. (Id. at ¶ 13.)

On August 28, 2014, Defendant informed Plaintiff that its policies were going to be amended to prohibit hyperlinking to any webpage advertising the sale or service of any gun components, gun attachments, or products designed to injure an opponent in sport, self-defense or combat. (Id. at ¶ 18.) Defendant informed Plaintiff that these exclusions included gun scopes and crossbows. (Ibid.) Around this time, it suspended the Services Agreement and refused to run Plaintiff’s hyperlinks because Plaintiff was offering to sell knives and crossbows on its website. (Id. at ¶ 19.) On February 10, 2015, after learning that Plaintiff had removed all offers to sell or service knives and crossbows from its website, Defendant rescinded its suspension. (Id. at ¶ 20.) However, that same day, Defendant sent Plaintiff two additional e-mails indicating another suspension of the Services Agreement on the ground the website violated its advertising policies. (Id. at ¶ 21.)

Between February 11 and November 2, 2015, Plaintiff made various objections related to the suspension of the Services Agreement including that Amazon and Walmart offered similar products on their websites but did not have their servicing agreements suspended. (Id. at ¶ 22.) Plaintiff subsequently demanded that the suspension be rescinded. (Id. at ¶ 23.) Defendant replied that it had changed its advertising policies and the suspension could be rescinded. (Id. at ¶ 24.) By this time, though, the suspension of the Services Agreement had devastated Plaintiff’s ability to continue its business operations. (Id. at ¶ 25.) Plaintiff filed for bankruptcy the following year. (Id. at ¶ 2.)

Plaintiff’s SAC asserts two causes of action for violation of the Unruh Civil Rights Act (“Unruh Act” or “Act”) and declaratory relief.

Currently before the Court is Defendant’s demurrer to the SAC and an accompanying request for judicial notice. Plaintiff opposes the demurrer.

II. Request for Judicial Notice

Defendant seeks judicial notice of: (1) the “Google Inc. Advertising Program Terms” contract entered into between the parties; (2) the “Dangerous products or services policy” on which Defendant based its 2014 suspension of Plaintiff’s advertising efforts; and (3) the “Dangerous products or services policy” that was in effect between September 2015 and May 2016.

With respect to the advertising program terms contract, Defendant states judicial notice is proper because it consists of facts not reasonably subject to dispute. This is incorrect. Though courts are permitted to notice facts and propositions that are not reasonably subject to dispute (Evid. Code, § 452, subd. (h), facts typically falling into this category of notice are those “widely accepted as established by experts and specialists in the natural, physical, and social sciences which can be verified by reference to treatises, encyclopedias, almanacs and the like.” (Gould v. Maryland Sound Indus., Inc. (1995) 31 Cal. App. 4th 1137, 1145.) The contract entered into between the parties is not such a fact and Defendant cites no legal authority to support a contrary conclusion. As such, it is not a proper subject of judicial notice under this subdivision.

Moreover, the Court is not inclined to take judicial notice of the contract because it is not necessary or helpful to the issues raised in the demurrer. (See Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748, fn. 6 [declining to take judicial notice of materials that are not “necessary, helpful or relevant”].) The SAC alleges the existence of the contract between the parties and there is no apparent dispute over the interpretation or meaning of its terms. (See FAC, ¶ 15.) What is in dispute is whether the actions Defendant took violated the Unruh Act. Judicial notice of the contract is neither helpful nor necessary to resolve this issue.

With respect to the “Dangerous products” policies, Defendant did not attach copies of the documents to its request despite representations to the contrary. (See Cal. Rules of Court, rule 3.1306(c) [a party requesting judicial notice of material must provide the court and each party with a copy of the material].) Though Defendant states in a footnote that the policies were also attached to a declaration it submitted in support of its demurrer in the prior action between the parties, it is Defendant’s responsibility to furnish the Court with a copy for its examination. (See Id.; see also Evid. Code, § 453 [party must furnish court with sufficient information to enable it to take judicial notice of a matter].) As such, the request for notice of the two “Dangerous products” policies is defective.

For the reasons stated, the request for judicial notice is DENIED as to all three documents.

III. Demurrer

Defendant demurs to the first cause of action for violation of the Unruh Act and the second cause of action for declaratory relief, on the ground of failure to state facts sufficient to constitute a claim. (See Code. Civ. Proc., § 430.10, subd. (e).)

A. First Cause of Action

The first cause of action is for violation of the Unruh Act, which provides in relevant part that “[a]ll persons within the jurisdiction of the state are free and equal” no matter their “sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status.” (Civ. Code, § 51, subd. (b).) The Act broadly outlaws arbitrary discrimination on the basis of protected characteristics in public accommodations and business establishments. (See Ibid.; Jankey v. Song Koo Lee (2012) 55 Cal.4th 1038, 1044.) Since its enactment, courts have construed the statute to cover additional characteristics not enumerated by the Act. (See Sisemore v. Master Fin., Inc. (2007) 151 Cal. App. 4th 1386, 1404.) One such category is occupational status, which now forms another basis upon which discrimination may not occur. (Id. at 1405.) Any person denied his or her rights under the Act may be entitled to damages. (Civ. Code, § 52, subd. (a).)

Plaintiff alleges Defendant violated the Unruh Act by discriminating against it on the basis of its occupational status as a seller and servicer of dangerous weapons. Defendant argues Plaintiff cannot state a cause of action because the Act only applies to discrimination against individuals and not to a corporation such as Plaintiff. Though Defendant does not use the word “standing,” its assertion essentially amounts to a contention Plaintiff lacks standing to assert an Unruh Act claim. Defendant further contends that, even if Plaintiff has standing, it did not engage in any wrongful conduct because its advertising policy was facially neutral and it did not arbitrarily discriminate against Plaintiff. Finally, Defendant argues this claim fails because the Communication Decency Act immunizes it from liability for conduct it performed in its capacity as a publisher.

1. Standing

Plaintiff alleges it is part of a protected class of persons under the Unruh Act. Defendant disagrees, arguing corporations are not encompassed within the meaning of “persons” as used in the Act. It contends the statutory language clearly demonstrates the Act was only intended to redress discrimination against individuals or natural persons because the enumerated list of personal characteristics that are protected (e.g. sex, race, disability and sexual orientation) can only apply to individuals and not corporations. Defendant further asserts it has found no case brought under the Unruh Act that did not involve acts of discrimination against individuals. In the sole case it found where a corporation successfully alleged discrimination under the Act, that discrimination was inextricably tethered to discriminatory acts taken against the individual members of the corporation who were named plaintiffs in addition to the corporation. (See Rotary Club of Duarte v. Board of Directors (1986) 178 Cal.App.3d 1035.)

The question necessarily presented is whether “persons” as it is used in the Unruh Act includes corporations. This is an issue of statutory interpretation because “persons” is not defined in the Act.
“The touchstone of statutory interpretation is the probable intent of the Legislature.” (Quarterman v. Kefauver (1997) 55 Cal.App.4th 1366, 1371.) The first step in determining intent is to look to the actual words of the statute, giving them a plain and commonsense meaning. (California Teachers Assn. v. Governing Bd. of Rialto Unified School Dist. (1997) 14 Cal.4th 627, 632-633.) When ascertaining legislative intent, a statute must be examined as a whole. (Select Base Materials v. Board of Equal. (1959) 51 Cal.2d 640, 645.) If the words are clear and unambiguous, there is no need for resort to other indicia of legislative intent. (California Fed. Savings & Loan Assn. v. City of Los Angeles (1995) 11 Cal.4th 342, 349.) If, however, a latent ambiguity exists, a court may turn to legislative history for guidance. (Stanton v. Panish (1980) 28 Cal.3d 107, 115.)

Plaintiff argues it is a “person” within the meaning of the statute because Civil Code section 14 (“Section 14”) generally provides that a “person” includes corporations as well as natural persons. This argument is not persuasive.

Plaintiff cites no authority supporting the proposition that Section 14’s definition of “person” was intended to be incorporated into the Unruh Act and there is nothing on the face of the Act indicating its protections were intended to extend to corporations. In the context of the civil rights statutes, where the Legislature intended “person” to include a corporation it specifically said so. (See Civ. Code, § 51.5, subd. (b) [stating that as used in that section a “person” includes any person, firm, association, organization, partnership, business trust, corporation, limited liability company, or company.] Though Plaintiff brings its claim under “Civil Code sections 51 et seq. (Unruh Act),” the Unruh Act consists of Civil Code section 51 alone. (See Semler v. Gen. Elec. Capital Corp. (2011) 196 Cal. App. 4th 1380, 1404 [“The Act is contained solely in Civil Code section 51.”]; see also Osborne v. Yasmeh (2016) 1 Cal. App. 5th 1118, 1126 [same].) Under the Unruh Act, the weight of authority indicates the statute’s protections were intended for natural persons or individuals, not corporations.

The Act is found in a part of the Civil Code that is titled “Personal Rights” and courts interpreting its provisions have held that its language strongly suggests it was intended to protect individuals. (Midpeninsula Citizens for Fair Hous. v. Westwood Inv’rs (1990) 221 Cal.App.3d 1377, 1383; see also Koire v. Metro Car Wash (1985) 40 Cal.3d 24, 34 [acknowledging a cause of action under the Unruh Act is of an “individual nature”]; Marina Point, Ltd. v. Wolfson (1982) 30 Cal.3d 721, 740 [“[T]he 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.”]; Martin v. Int’l Olympic Comm. (9th Cir. 1984) 740 F.2d 670, 677 [the rights protected by the Act are “enjoyed by all persons, as individuals.”].) It is also significant to note that though the Unruh Act does not specifically define what a “person” is for purposes of its general anti-discrimination provision in subdivision (a), later provisions in the statute reference “individuals.” For example, “genetic information” is defined as including “the individual’s genetic tests,” the “genetic tests of family members of the individual,” and the “manifestation of a disease or disorder in family members of the individual.” (Civil Code, § 51, subd. (e)(2)(A) (emphasis added).) Subdivision (f) of the statute also provides that “[a] violation of the right of any individual” under the Americans with Disabilities Act constitutes a violation of this section. (Civil Code, § 51, subd. (f) (emphasis added).)

This seeming focus on the rights of an individual is consistent with the legislative history of the Act which arose out of California’s original public accommodations statute. (See Warfield v. Peninsula Golf & Country Club (1995) 10 Cal.4th 594, 608.) As originally framed, the statute in 1897 provided that “[a]ll citizens within the jurisdiction of this state are entitled to the full and equal accommodations, advantages, facilities and privileges of inns, restaurants, hotels, eating houses, places where ice cream or soft drinks of any kind are sold for consumption on the premises, barber shops, bath houses, theaters, skating rinks, public conveyances and all other places of public accommodation or amusement.” (Ibid.) This statute was later amended to add specific categories of prohibited discrimination (e.g. race, color, religion, sex and disability) and broaden the type of business establishments covered, but it is clear that the Act at its inception was designed to protect individual citizens against discrimination. (See Curran v. Mount Diablo Council of the Boy Scouts (1998) 17 Cal. 4th 670, 686.)

Plaintiff does not cite to and the Court is unaware of any authority stating that a corporation has standing to bring an Unruh Act claim for discriminatory action taken solely against it and not in connection with discrimination against its individual members. Though it argues that corporations have been covered as “persons” under the Religious Freedom Restoration Act and Fair Housing Act, this argument is incongruous. The Supreme Court’s interpretation of the standing requirements under these federal statutory schemes do not determine the scope of standing provided under California’s Unruh Act. (See Midpeninsula, supra, 221 Cal.App.3d at 1385 [“Standing requirements will vary from statute to statute based upon the intent of the Legislature and the purpose for which the particular statute was enacted.”])

Accordingly, as a corporation, Plaintiff does not appear to have standing to bring a cause of action under the Unruh Act.

2. Wrongful Conduct

Even if Plaintiff did have standing, Defendant argues it did not violate the Unruh Act because its policies were facially neutral and it did not engage in arbitrary discrimination.

With respect to the purported neutrality of its policies, Defendant argues its policy prohibiting the promotion of rifle scopes and other weapons applied to all users of its AdWords platform regardless of their occupation. It concludes its policy was facially neutral and the fact it had a disparate impact on Plaintiff did not make it actionable. (Dem. at p. 12-13, citing Turner v. Ass’n of Am. Med. Colleges (2008) 167 Cal.App.4th 1401 (“Turner”); Harris v. Capital Growth Inv’rs XIV (1991) 52 Cal.3d 1142 (“Harris”); Belton v. Comcast Cable Holdings, LLC (2007) 151 Cal.App.4th 1224 (“Belton”).) In opposition, Plaintiff argues the “Dangerous products or services policy” directly targeted sellers of dangerous products and was therefore not facially neutral. Plaintiff’s argument is well-taken.

The policy at issue here was not neutral on its face and the cases Defendant cites in support of its argument are distinguishable. Turner addressed the issue of the timing requirement for a medical school entrance exam, Harris analyzed a landlord’s income requirement for prospective requirements, and Belton dealt with a cable provider’s policy of only providing music service as part of a cable television package. (Turner, supra, 167 Cal.App.4th at 1409; Harris, supra, 52 Cal.3d at 1168; Belton, supra, 151 Cal.App.4th at 1238.) The courts in each of these cases held the policies at issue did not violate the Unruh Act because they were neutral with respect to the protected characteristics (e.g. race, gender or disability). Here, in contrast, Defendant’s policy prohibiting the promotion of weapons is framed as the “Dangerous products or services policy.” It therefore is not neutral with respect to the protected characteristic Plaintiff is claiming, which is its occupational status as a seller of gun scopes and other weapons. (See SAC, ¶¶ 5, 8.) Instead, the policy directly implicates it.

With respect to the argument it did not engage in arbitrary discrimination against Plaintiff, Defendant contends Plaintiff fails to plead arbitrary discrimination against gun scope sellers because the SAC alleges that other sellers of gun scopes (i.e. Walmart and Amazon) did not have their services agreements suspended. As such, it asserts Plaintiff cannot allege that discrimination against gun scope sellers occurred. In opposition, Plaintiff argues the lack of discrimination against others who were similarly situated does not beg the conclusion that no discrimination occurred. Defendant cites no legal authority in support of its conclusion and provides no analysis of what constitutes arbitrary discrimination under the Unruh Act. The Court is therefore not persuaded the Unruh Act cause of action fails on the basis that no arbitrary discrimination occurred.

For the reasons stated, the demurrer cannot be sustained on the ground that Defendant did not engage in conduct violative of the Unruh Act.

3. Immunity

Defendant argues the federal Communications Decency Act (“CDA”) immunizes it from liability because the conduct complained of arose out of actions it took in its role as a publisher of third-party content. In opposition, Plaintiff contends the SAC seeks to hold Defendant liable not for a decision to publish or not publish content but for Defendant’s own illegal and discriminatory conduct. It also argues the existence of a contract between the parties served as a waiver of the CDA defense.

In 1996, Congress enacted the CDA, which immunizes providers of interactive computer services against liability arising from content created by third parties. (See 47 U.S.C. § 230(c)(1) [“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”]; Fair Hous. Council of San Fernando Valley v. Roommates.Com, LLC (9th Cir. 2008) 521 F.3d 1157, 1162.) The CDA operates to bar claims if: (1) the defendant is a provider or user of an interactive computer services; (2) the information the plaintiff seeks to hold the defendant liable for is provided by another information content provider; and (3) the plaintiff’s claim seeks to hold the defendant liable as the “publisher or speaker” of that information. (Sikhs for Justice “SFJ”, Inc. v. Facebook, Inc. (N.D. Cal. 2015) 144 F.Supp.3d 1088, 1094 (“Sikhs for Justice”).)

The parties do not appear to dispute that Defendant is a provider of interactive computer services and the information at issue (i.e. the advertising hyperlinks and their corresponding landing pages) were provided by “another information content provider” (i.e. Plaintiff). Their disagreement hinges on whether the conduct complained of was an act of publishing protected by the CDA.

In determining whether a theory of liability treats a defendant as a publisher, the name of the cause of action is not controlling. (Barnes v. Yahoo!, Inc. (9th Cir. 2009) 570 F.3d 1096, 1102.) Instead, what matters is “whether the duty the plaintiff alleges the defendant violated derives from its conduct as a publisher or speaker.” (Ibid.) “[P]ublication involves reviewing, editing, and deciding whether to publish or to withdraw from publication third-party content.” (Ibid.) As such, decisions to exclude material that third parties seek to post online, not remove content that has been posted online, or delete user profiles on social networking sites, have all been held to be quintessential publishing activity immunized from liability under the CDA. (See Sikhs for Justice, supra, 144 F.Supp.3d at 1094; Barnes, supra, 570 F.3d at 1098-99; Riggs v. MySpace, Inc. (9th Cir. 2011) 444 Fed.Appx. 986, 987.)

One case cited by Defendant in its demurrer is particularly instructive in this instance. In Sikhs for Justice, the plaintiff was a nonprofit organization dedicated to human rights advocacy for religious minorities in India. (Sikhs for Justice, supra, 144 F.Supp.3d at 1090.) As part of its advocacy efforts, it ran a Facebook page through which it organized a number of political and advocacy campaigns. (Ibid.) At some point, Facebook blocked access to the plaintiff’s page in India without prior notice or explanation. (Ibid.) The plaintiff then sued Facebook for discrimination on the grounds of race, religion, ancestry and national origin. (Ibid.) The district court held the plaintiff’s claim was entirely based on Facebook’s blocking of the plaintiff’s page, which is publisher conduct immunized by the CDA. (Id. at 1095.)

The facts here are strikingly similar to those in Sikhs for Justice. Though Plaintiff at varying times couches the wrongful conduct at issue as “suspension” or “termination” of its Services Agreement, its Unruh Act cause of action is entirely based on Defendant’s decision to not post hyperlinks that would redirect people to Plaintiff’s gun scope website. (See SAC, ¶ 19-21, 24, Exh. 3, pg. 1 [“[W]e won’t be able to run any of your ads that link to that site, and any new ads pointing to that site will also be disapproved. Here’s what you can do to fix your site and hopefully get your ad running again.”], pg. 2 [“Unfortunately, we won’t be able to show your ads on Google.”]) In fact, the damages allegations inextricably arise out of Defendant’s refusal to publish its hyperlinks, which it claims devastated its business operations. (See Id. at ¶ 25.) Finally, the SAC alleges that under the terms of the Services Agreement, Plaintiff could request that Defendant “enable certain hyperlinks subject to Google’s rights to “publish or not publish” content. (Id. at ¶ 16.) As such, the conduct complained of is immunized by the CDA because it ultimately boiled down to Defendant’s decision to exclude material a third party was seeking to post online. (See Sikhs for Justice, supra, 144 F.Supp.3d at 1095 [“[R]emoving content is something publishers do, and to impose liability on the basis of such conduct necessarily involves treating the liable party as a publisher.”])

Plaintiff’s arguments to the contrary are not persuasive. Plaintiff asserts the CDA does not immunize a defendant from liability where the conduct at issue is its own illegal conduct but the cases it cites in support are distinguishable. In Anthony v. Yahoo Inc. and Demetriades v. Yelp, Inc., the courts declined to apply the CDA because the conduct at issue was the defendants’ own statements as compared to “information provided by another content provider.” (See 47 U.S.C. § 230(c)(1) (emphasis added); Anthony v. Yahoo, Inc. (N.D. Cal. 2006) 421 F.Supp.2d 1257, 1262 [addressing allegation the defendant itself knowingly created and sent users false dating profiles]; Demetriades v. Yelp, Inc. (2014) 228 Cal.App.4th 294, 313 [dealing with an allegation the defendant itself, and not a third party, made misrepresentations regarding the accuracy of its filter.]) This case, in contrast, is not predicated on information and statements produced by Defendant itself but on content created by Plaintiff as a third party.

In Airbnb v. City & Cty. of San Francisco, the court held the CDA did not apply where the defendant sought to challenge an ordinance prohibiting it from collecting illegal booking fees because the conduct being regulated was not publishing conduct. 217 F.Supp.3d 1066, 1073 (N.D. Cal. 2016). Here, in contrast, the Unruh Act cause of action is fundamentally predicated on allegations that Defendant refused to publish hyperlinks because they routed users to websites that sold dangerous weapons. As such, the conduct at issue is an act of publishing that is subject to the immunity provisions of the CDA.

The argument that the existence of a contract between the parties served as a waiver of the CDA defense is also erroneous. It does not further elaborate on this contention and merely cites Barnes, supra, in support of its conclusion. Plaintiff’s reliance on this case is completely misplaced because Barnes does not stand for the proposition that the existence of any contract between parties operates as a waiver of the CDA defense. In Barnes, the court held that parties can contract around the CDA’s baseline rule of immunity by agreeing to be held to a different a standard. (Barnes, supra, 570 F.3d at 1108.) Here, there is no indication the parties contracted around CDA immunity. As such, by default, the CDA applies where the conduct at issue is an act of publishing.

Accordingly, the demurrer to the SAC on the basis of CDA immunity is sustainable.

4. Conclusion

For the reasons stated, the demurrer to the first cause of action on the ground of failure to state facts sufficient to constitute a cause of action is SUSTAINED with 10 days’ leave to amend on the bases of lack of standing and CDA immunity.

B. Second Cause of Action

The second cause of action for declaratory relief alleges a controversy exists between the parties based on provisions in the Services Agreement that allow Defendant to discriminate against Plaintiff based on its occupational status as a gun scope seller. Plaintiff alleges judicial intervention is required to settle this controversy.

Defendant does not specifically discuss this cause of action in its demurrer. Presumably, the demurrer to this claim is based on the standard that if a declaratory relief cause of action is wholly derivative of a statutory claim, it necessarily follow a cause of action for declaratory relief is not stated. (See Ball v. FleetBoston Fin. Corp. (2008) 164 Cal.App.4th 794, 800.)

Here the declaratory relief cause of action is clearly derivative of the claim for a violation of the Unruh Act. Accordingly, the demurrer to the second cause of action is SUSTAINED with 10 days’ leave to amend.