Justice Goodwin Liu Photo : Chip Somodevilla ( Getty )

Nearly four years ago, a lone bankruptcy lawyer sued Square, the payment processor run by Twitter CEO Jack Dorsey, challenging the app’s terms of use—despite never signing up. As of yesterday, the case will proceed, thanks to an opinion issued by the California Supreme Court that could have wide-reaching implications for online businesses.




The first thing you need to know is that, for whatever reason, Square’s Prohibited Goods and Services policies include “bankruptcy attorneys or collection agencies,” which you’ll recall is plaintiff Robert White’s line of work. California, where this case was tried and where a plurality of online services are headquartered, is also home to a state law—the Unruh Civil Rights Act—which provides broad protections against discrimination of many kinds, including occupation. But the question remained as to whether White needed 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.

For the time being at least: no.

“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,” Justice Goodwin Liu wrote in court’s unanimous opinion. “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.”


Still, a state Supreme Court opinion more or less granting standing for terms of service discrimination cases opens a variety of options for redress, starting with other banned categories for payment processors. Square also prohibits sale of “occult materials,” PayPal bars the sale of “sexually oriented digital goods”; both forbid drug paraphernalia sales.



Impact Fund—a social justice law non-profit that filed an amicus brief in support of White—cites a variety of related issues that go beyond discrimination based on occupation. “Blind community members who rely on screen-reader software cannot avail themselves of websites, apps, self-service kiosks” that aren’t compatible with such software, as well as those with dexterity issues who “may be timed out of ‘CAPTCHA’ challenge response tests.” In a statement to Gizmodo, Lindsay Nako, the organization’s director of litigation and training wrote, “The court’s order clearly recognizes a standard that allows for meaningful enforcement of our state’s antidiscrimination laws online, where we spend more and more of our lives.”

The Supreme Court noted that the merits of White’s case—beyond his having standing—were outside its purview, and that “mere awareness of a business’s discriminatory policy or practice is not enough for standing under the Act,” but that “entering into an agreement with the business is not required.”

Importantly, giving users legal standing prior to signing the sprawling terms of use endemic to web services—many of which, including PayPal and Square’s, contain arbitration clauses denying users the ability to sue these companies in court—may also create an opening for more class-action lawsuits under the California discrimination law.


We’ve reached out to Square for comment and will update if we hear back.