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 Third Amended Complaint (“TAC”) filed by plaintiff Tech Eyes, Inc. (“Plaintiff”), through its Chapter 7 bankruptcy trustee, against Google LLC (“Defendant”).

According to the allegations in the TAC, Plaintiff sells and services telescopes capable of being attached to weapons and operates a website advertising its goods and services. (TAC, ¶¶ 8-9.) Plaintiff entered into a written services agreement with Defendant (“Services Agreement”) whereby it could use the AdWords platform to publish its hyperlinks on Defendant’s webpages. (Id. at ¶¶ 10, 15.) As a participant in the Services Agreement, it could also utilize a service called AdSense which matched AdWords subscribers with third parties seeking to sell advertising space on their websites. (Id. at ¶ 15.)

The process of pairing AdWords subscribers with websites that might display their ads was completely automated and Defendant merely acted as a broker, receiving commissions in return for its work in directing advertising revenues to the third party websites. (Id. at ¶¶ 16-17.) Defendant exercises no publishing control over the advertisements that appear on the third party websites. (Id. at ¶ 18.) Rather, AdWords account holders can choose which websites they want their ads to appear on and the website owners can select the type of advertising content they want to appear on their websites or block unwanted advertisements altogether. (Id. at ¶ 16.) Participation in either the AdWords or AdSense programs was subject to the terms of the Service Agreement, which incorporated a number of policies Defendant made available on its website, including advertising policies. (Id. at ¶ 12.)

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 ¶ 19.) 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 ¶ 20.) 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 ¶ 21.) 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 ¶ 22.)

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 ¶ 23.) Plaintiff subsequently demanded that the suspension be rescinded. (Id. at ¶ 24.) Defendant replied that it had changed its advertising policies and the suspension could be rescinded. (Id. at ¶ 25.) By this time, though, the suspension of the Services Agreement had devastated Plaintiff’s ability to continue its business operations. (Id. at ¶ 26.) Plaintiff filed for bankruptcy the following year. (Id. at ¶ 2.)

Plaintiff claims Defendant arbitrarily discriminated against it and interfered with its ability to participate in the AdSense program on the basis of its occupational status as a seller of gun scopes. (Id. at ¶ 27-28.)

The TAC asserts a single cause of action for violation of Civil Code section 51.5.

Defendant filed a demurrer to the TAC and an accompanying request for judicial notice. Plaintiff opposes the demurrer.

II. Request for Judicial Notice

Defendant seeks judicial notice of: (1) a copy of its “How AdSense works” webpage; (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. Its request is made pursuant to Evidence Code section 452, subdivision (h), which provides for judicial notice of facts that are not reasonably subject to dispute and capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.

The purpose of judicial notice is to serve as a substitute for formal proof, thereby expediting the production and introduction of evidence that would otherwise be admissible. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1564; Mozzetti v. City of Brisbane (1977) 67 Cal.App.3d 565, 578.) “Strictly speaking, a court takes judicial notice of facts, not documents.” (Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 755.) A matter can therefore be subject to judicial notice only if it is reasonably beyond dispute and the introduction of evidence to prove that matter would not be required. (Id.; see also Herrera v. Deutsche Bank Nat. Tr. Co. (2011) 196 Cal.App.4th 1366, 1374; Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113.)

With respect to the “How AdSense works” webpage, Defendant submits it to establish the fact that it exercises publishing control over the AdSense program. (See Opp. at p. 9:20-10:9.) Specifically, Defendant points to language on the webpage indicating users of the AdSense program are subject to its advertising policies and actively monitored for compliance with those policies. This is not a fact that is not reasonably subject to dispute. (See, e.g., Searles Valley Minerals Operations, Inc. v. State Bd. of Equalization (2008) 160 Cal.App.4th 514, 519 [refusing to take judicial notice of materials contained on the website pages of the American Coal Foundation and the U.S. Dept. of Energy]; see also Ragland v. U.S. Bank Nat. Assn. (2012) 209 Cal.App.4th 182, 193 [judicial notice may be taken of the existence of websites but not of the truth of their contents].) Defendant also does not explain or substantiate its contention the webpage includes facts that are not reasonably subject to dispute. Instead, it argues judicial notice of the webpage is proper because it is explicitly referenced in the TAC. However, the cases Defendant cites in support of this proposition are inapposite because the documents submitted for judicial notice in those matters formed the basis of the claims. (See, e.g., Ingram v. Flippo (1999) 74 Cal.App.4th 1280, 1285 [“Since the contents of the letter and media release form the basis of the allegations in the complaint, it is essential that we evaluate the complaint by reference to these documents.”]; Align Tech., Inc. v. Bao Tran (2009) 179 Cal.App.4th 949, 956 [taking judicial notice of a prior settlement agreement in determining if the present claims were barred by such agreement].) Here, though Plaintiff references the webpage in its general explanation of how the AdSense program works, the contents of the webpage do not form the basis of Plaintiff’s discrimination allegations. As such, judicial notice of the webpage is not proper.

With respect to the “Dangerous products” policies, it is unclear why Defendant seeks judicial notice of them. While the policies are generally referenced in the TAC, Defendant does not actually rely on them to support any of its arguments. As such, the policies are not necessary or helpful to resolving 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”].)

Accordingly, the request for judicial notice is DENIED as to all three documents.

III. Demurrer

Defendant demurs to the TAC on the ground of failure to state facts sufficient to constitute a cause of action. (See Code. Civ. Proc., § 430.10, subd. (e).)

Plaintiff’s only cause of action is for violation of Civil Code section 51.5 (“Section 51.5”), which prohibits a business establishment from discriminating against, boycotting, blacklisting, or refusing to buy from, contract with, sell to, or trade with any person on account of any characteristic protected by the Unruh Civil Rights Act (Civ. Code, § 51). Under the Unruh Civil Rights Act (the “Unruh Act”), the characteristics protected against discrimination are “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).) Courts have construed the Unruh Act as also covering additional characteristics not enumerated by the Unruh Act, such as occupational status. (See Sisemore v. Master Fin., Inc. (2007) 151 Cal. App. 4th 1386, 1404-05.) The protections under Section 51.5 extend to corporations, which are included in the statute’s definition of “person[s]” protected against discrimination. (Civ. Code, § 51.5, subd. (b).)

Plaintiff alleges Defendant discriminated against it on the basis of its occupational status as a seller and servicer of dangerous weapons when it suspended its Services Agreement and, by virtue of the suspension, excluded it from participation in the AdSense program. Defendant argues this claim fails because the Communication Decency Act immunizes it from liability for conduct it performed in its capacity as a publisher. It also contends Plaintiff lacks standing to sue because it does not allege it tried to use AdSense.

A. Immunity

In 1996, Congress enacted the Communications Decency Act (“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”).)

Defendant argues no cause of action has been stated because Plaintiff’s claim is barred by the CDA. This argument was previously raised in connection with Defendant’s demurrer to the second amended complaint, which asserted a cause of action for violation of the Unruh Act. The demurrer was sustained, in part, on that basis. This Court held immunity under the CDA existed because the conduct Plaintiff sought to hold Defendant liable for was inherently publishing conduct. Plaintiff amended its complaint to instead allege a violation of Section 51.5 based on its exclusion from the AdSense program. Defendant asserts the TAC fails to state a claim because the new allegations still seek to hold it liable for publishing activity. (See Mtn. at p. 7:25-27 [“[T]he nub of the complaint is still the same: [Defendant] is supposedly liable for withholding Plaintiff’s online ads while running other online ads – based on the content of all the ads at issue.”]) In support, it references the exhibits attached to the TAC, which it contends relate only to its conduct in refusing to publish Plaintiff’s AdWords advertisements. It also argues that the exclusion of Plaintiff from the AdSense program was publishing conduct because it exercises publishing control over what material can and cannot be included on AdSense. These arguments are not well-taken.

“[P]ublication involves reviewing, editing, and deciding whether to publish or to withdraw from publication third-party content.” (Barnes v. Yahoo!, Inc. (9th Cir. 2009) 570 F.3d 1096, 1102.) 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.)

With respect to the previous Unruh Act cause of action, because the crux of Plaintiff’s claim was based on Defendant’s decision not to post hyperlinks that would redirect people to its gun scope website and its damages allegations were inextricably tied to this refusal, this Court found the conduct complained of ultimately boiled down to Defendant’s decision to exclude material a third party was seeking to post online. As such, this Court held that constituted publishing activity immunized by the CDA. (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.”])

Here, in contrast, the allegations in the TAC suggest the pleading is no longer predicated on Defendant’s refusal to publish Plaintiff’s hyperlinks through the AdWords program. Specifically, the TAC no longer includes facts relating to Defendant’s decisions to post or not post Plaintiff’s hyperlinks. In fact, Plaintiff avers it is not seeking to hold Defendant liable for conduct it may “otherwise be immunized from…by virtue of the CDA” but, rather, for its discriminatory conduct in interfering with its rights to participate in the AdSense program. (TAC, ¶¶ 29-30.) Though Defendant is correct that many of the exhibits attached to the TAC relate to its refusal to publish Plaintiff’s hyperlinks, the conduct actually complained of in the TAC is Plaintiff’s exclusion from participation in the AdSense program after the suspension of its Services Agreement. (See TAC, ¶¶ 27-30.) As such, to the extent Defendant relies solely on the exhibits to support its argument the conduct at issue is publishing, such reliance is misplaced. (See Hoffman v. Smithwoods RV Park, LLC (2009) 179 Cal.App.4th 390, 400 [in reviewing the sufficiency of a pleading against a demurrer, a court considers not only a complaint’s exhibits but also its allegations].)

Moreover, the Court is not persuaded the conduct complained of in the TAC amounts to quintessential publishing activity protected by the CDA. To support a contrary conclusion, Defendant cites portions of the “How AdSense works” webpage it submitted for judicial notice which it claims demonstrate that its regulation of the AdSense program boils down to publishing decisions regarding what advertisements to direct or not direct to third party websites. (See Opp. at 9:20-10:9.) However, as the Court declined to take judicial notice of this webpage, its contents cannot be considered in evaluating the sufficiency of the TAC.

Taking the TAC as pled, there are no allegations suggesting Plaintiff’s exclusion from the AdSense program was an act of publishing. Plaintiff avers Defendant “makes no active decisions on which ads are placed with any website” but instead allows its subscribers to choose which websites to appear on. (TAC, ¶ 16.) It further alleges Defendant merely acts as a broker connecting AdWords subscribers to third party websites. (Id. at ¶ 17.) As such, the facts as alleged do not reveal that Defendant acted in a publishing capacity in its running of the AdSense program. Further, as mentioned, the conduct complained of no longer appears to be a publishing act by Defendant (i.e. refusal to post hyperlinks based on the content therein). Rather, Plaintiff couches the conduct at issue as Defendant’s interference with its right to participate in the AdSense program based on its status as a seller of dangerous weapons. Based on the allegations as presented, the Court cannot definitively conclude at this juncture that the conduct complained of is publishing conduct immunized by the CDA.

The demurrer is therefore not sustainable on the basis Defendant is immunized from liability through the CDA.

B. Standing

Standing is the right of a party to obtain relief in court and goes to the existence of a cause of action. (Color-Vue, Inc. v. Abrams (1996) 44 Cal.App.4th 1599, 1604; Pillsbury v. Karmgard (1994) 22 Cal.App.4th 743, 757 (“Pillsbury”.) Accordingly, if a complaint is brought by a party who lacks standing to sue, the pleading is subject to a general demurrer. (Pillsbury, supra, 22 Cal.App.4th at 757.)

Defendant contends Plaintiff lacks standing to sue because it does not allege it paid for or attempted to pay for participation in the AdSense program, citing Surrey v. TrueBeginnings (2008) 168 Cal.App.4th 414 (“Surrey”) in support. It concludes Plaintiff only alleges discrimination in the abstract, which is insufficient to maintain a claim under Section 51.5.

There is a general dearth of case law regarding claims brought under Section 51.5, as opposed to the Unruh Act, but the standing inquiry under either statute is the same. (See Osborne v. Yasmeh (2016) 1 Cal.App.5th 1118, 1134 (“Osborne”).) “The focus of the standing inquiry is on the plaintiff, not on the issues he or she seeks to have determined; he or she must have a special interest that is greater than the interest of the public at large and that is concrete and actual rather than conjectural or hypothetical.” (Surrey, supra, 168 Cal.App.4th at 417.) In order to have standing to sue under the Unruh Act, therefore, a plaintiff must demonstrate he or she has been “been the victim of the defendant’s discriminatory act.” (Angelucci v. Century Supper Club (2007) 41 Cal.4th 160, 175; see also Midpeninsula Citizens for Fair Housing v. Westwood Investors (1990) 221 Cal.App.3d 1377, 1383 (“Midpeninsula”), emphasis added [standing under the Unruh Act extends to persons “actually denied full and equal treatment by a business establishment – that is, to victims of the discriminatory practices”].) Absent a showing the plaintiff has “personally experienced” discrimination, he or she cannot establish standing. (Osborne, supra, 1 Cal.App.5th at 1134.)

For example, in Surrey, the court held that the mere fact the plaintiff became aware of a discriminatory policy did not constitute a denial of his anti-discrimination rights under the Unruh Act. (168 Cal.App.4th at 418.) It further stated that because the plaintiff did not even attempt to avail himself of the services at issue, his “interest in preventing discrimination is arguably no greater than the interest of the public at large.” (Id. at 419.) It therefore concluded the plaintiff lacked standing to bring a claim under the Unruh Act. Similarly, in Osborne, the court held that a plaintiff has standing when he or she “presents himself or herself to a business establishment, and is personally discriminated against.” (Osborne, supra, 1 Cal.App.5th at 1133-34.)

In contrast, here, though Plaintiff generally alleges it was excluded from participation in the AdSense program based on its status as a seller of dangerous weapons, it does not affirmatively allege it actually attempted to participate in AdSense and was prevented from doing so. Nor does it allege it presented itself to AdSense and was discriminated against by being denied access to the platform. Rather, as pointed out by Defendant, Plaintiff merely avers Defendant’s suspension of its Services Agreement “interfered” with its ability to participate in the program. (See TAC, ¶ 30.) In this Court’s view, there is no appreciable difference between a vague allegation of an inability to avail oneself of a service and an allegation of mere awareness of a discriminatory policy. (See Surrey, supra, 168 Cal.App.4th at 418.) As such, Plaintiff does not allege a personal experience of discrimination sufficient to confer standing to sue under Section 51.5.

In opposition, though not clearly articulated, Plaintiff appears to advance three arguments supporting its purported standing to allege a violation of Section 51.5.

First, Plaintiff contends “[t]here is no requirement…that the plaintiff have a personal stake in the outcome of the controversy,” citing Jasmine Networks, Inc. v. Superior Court (2009) 180 Cal.App.4th 980 (“Jasmine”) in support. (Opp. at p. 5:16-20.) Its reliance on this case is misplaced because the issue before the court in Jasmine was not what constituted standing for purposes of alleging a claim under Section 51.5. Rather, Jasmine involved a trade secret misappropriation claim. In this context, the court discussed the general issue of whether the subject matter jurisdiction of California courts is limited by the “case or controversy” (i.e. standing) requirement in federal courts. (Id. at 991.) As such, Jasmine has no applicability here. Plaintiff otherwise does not cite any authority supporting the proposition a party need not have standing to bring a claim under Section 51.5.

Second, Plaintiff argues that it need not allege a direct injury to establish standing. Specifically, it asserts the suspension of its AdWords account is sufficient to establish indirect injury in the form of its consequent preclusion from the AdSense program. In support, it cites cases holding that entities indirectly affected by a boycott have standing to assert a violation of the Cartwright Act. Plaintiff concludes “[i]t follows that the Legislature intended to allow even those without a direct injury to have standing under [Section 51.5].” (Opp. at p. 7:10-11.) This argument lacks merit.

For one thing, the cases Plaintiff relies on do not stand for the proposition that standing under the Cartwright Act can be conferred by means of an indirect injury. (See B.W.I. Custom Kitchen v. Owens-Illinois, Inc. (1987) 191 Cal.App.3d 1341, 1350; Clayworth v. Pfizer, Inc. (2010) 49 Cal.4th 758, 763.) Even assuming they did, Plaintiff’s position is unsubstantiated.

The Cartwright Act is the state’s principal antitrust legislation and generally outlaws any agreements that restrain trade or competition or which fix or control prices. (In re Cipro Cases I & II (2015) 61 Cal.4th 116, 136 (“In re Cipro”).) The purpose of the Cartwright Act fundamentally differs from the purpose of Section 51.5. While the Cartwright Act’s principal goal is the preservation of consumer welfare, the purpose of the Unruh Act and Section 51.5 is to protect against arbitrary discrimination based on a person’s status. (Compare In re Cipro, supra, 61 Cal.4th at 136 with Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 96.) Given the dissimilarity between the respective objectives of these statutes, it is unclear why standing for purposes of the Cartwright Act would confer standing to sue for discrimination under Section 51.5. As such, Plaintiff’s contention is flawed.

Finally, Plaintiff asserts that, under Osborne, supra, it need not allege it paid some type of fee to establish it has standing to bring a discrimination claim under Section 51.5. Rather, Plaintiff contends it need only allege it “directly experienced a denial of rights” or that it “present[ed] himself or herself to a business establishment and [wa]s personally discriminated against.” (Opp. at p. 8:22-24; 9:5-6.) This argument is flawed because, while Plaintiff is correct it need not allege it paid a fee to bring a discrimination claim, it otherwise ignores the fact that – even under its own framing of the standing requirement – it has not sufficiently alleged standing. Put another way, Plaintiff fails to allege it “directly experienced” a denial of its rights or that it “presented itself” to AdSense and was discriminated against. As Defendant points out, Plaintiff does not even allege it ever tried to avail itself of the AdSense platform.

Accordingly, the demurrer is sustainable on the basis Plaintiff fails to allege standing under Section 51.5.

C. Conclusion

For the reasons stated, the demurrer to the TAC is SUSTAINED with 10 days’ leave to amend.