Candelore v. Tinder, Inc., 012918 CAAPP2, B270172

Docket Nº:B270172
Opinion Judge:CURREY, JUDGE
Party Name:ALLAN CANDELORE, Plaintiff and Appellant, v. TINDER, INC., Defendant and Respondent.
Attorney:The Kralowec Law Group, Kimberly A. Kralowec, Kathleen Styles Rogers; Rava Law Firm and Alfred G. Rava for Plaintiff and Appellant. Manatt, Phelps & Phillips, Robert H. Platt, Donald R. Brown and Christopher A. Rheinheimer for Defendant and Respondent.
Judge Panel:We concur: EDMON, P. J., LAVIN, J.
Case Date:January 29, 2018
Court:California Court of Appeals
 
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ALLAN CANDELORE, Plaintiff and Appellant,

v.

TINDER, INC., Defendant and Respondent.

B270172

California Court of Appeals, Second District, Third Division

January 29, 2018

         APPEAL from a judgment of the Superior Court of Los Angeles County, No. BC583162 William F. Highberger, Judge. Reversed.

          The Kralowec Law Group, Kimberly A. Kralowec, Kathleen Styles Rogers; Rava Law Firm and Alfred G. Rava for Plaintiff and Appellant.

          Manatt, Phelps & Phillips, Robert H. Platt, Donald R. Brown and Christopher A. Rheinheimer for Defendant and Respondent.

          CURREY, JUDGE. [*]

         INTRODUCTION

         Tinder, Inc. owns and operates the smartphone-based dating application, Tinder. The original app began, and is still offered, as a free online dating service. It presents users with photos of potential dates. The user can swipe right to express approval, or swipe left to express disapproval. In March 2015, Tinder released a premium service called “Tinder Plus, ” which allows users to access additional features of the app for a monthly fee.

         Plaintiff, Allan Candelore, commenced this action on behalf of himself and a putative class of California consumers who were over 30 years old when they subscribed to Tinder Plus. The complaint alleges that Tinder charges consumers who are age 30 and older $19.99 per month for Tinder Plus, while it charges consumers under the age of 30 only $9.99 or $14.99 per month for the Tinder Plus features.1 Candelore sued for age discrimination in violation of the Unruh Civil Rights Act (Civ. Code, § 51; the Unruh Act or the Act) and the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.; the UCL).2 The trial court sustained Tinder's demurrer without leave to amend, ruling in part that Tinder's age-based pricing practice did not constitute arbitrary or invidious discrimination because it was reasonably based on market testing showing “younger users” are “more budget constrained” than older users, “and need a lower price to pull the trigger.”

         But, as discussed below, the Unruh Act provides broad protection against arbitrary age-based price discrimination. No matter what Tinder's market research may have shown about the younger users' relative income and willingness to pay for the service, as a group, as compared to the older cohort, some individuals will not fit the mold. Some older consumers will be “more budget constrained” and less willing to pay than some in the younger group. We conclude the discriminatory pricing model, as alleged, violates the Unruh Act and the UCL to the extent it employs an arbitrary, class-based, generalization about older users' incomes as a basis for charging them more than younger users. Because nothing in the complaint suggests there is a strong public policy that justifies the alleged discriminatory pricing, the trial court erred in sustaining the demurrer. Accordingly, we swipe left, and reverse.

         STANDARD OF REVIEW

         This appeal followed a judgment of dismissal after the trial court sustained Tinder's demurrer without leave to amend. “The purpose of a demurrer is to test the sufficiency of a complaint by raising questions of law.” (Sargoy v. Resolution Trust Corp. (1992) 8 Cal.App.4th 1039, 1041 (Sargoy).) The court is to accept as true all allegations of fact contained in the complaint. (Id. at pp. 1041-1042) When a demurrer is sustained, the reviewing court must determine whether the complaint alleges sufficient facts to state a cause of action, adopting a liberal construction of the pleading and drawing all reasonable inferences in favor of the asserted claims. (Harris v. Capital Growth Investors XIV (1991) 52 Cal.3d 1142, 1170, fn. 16 (Harris).)

         FACTS AND PROCEDURAL BACKGROUND

         In addition to the factual allegations set forth in the Introduction to this opinion, Candelore's complaint included the following excerpt from a news report on the website TakePart, offering Tinder's justification for its age-based pricing: “The logic Tinder executives supplied for the age-related pricing? It benefits their bottom line. ‘During our testing we've learned, not surprisingly, that younger users are just as excited about Tinder Plus, but are more budget constrained, and need a lower price to pull the trigger, ' Tinder's vice president of corporate communications, Rosette Pambakian, told TakePart in an email. [¶] ‘We've priced Tinder Plus based on a combination of factors, including what we've learned through our testing, and we've found that these price points were adopted very well by certain age demographics, ' Pambakian wrote.”

         Tinder demurred to each cause of action, arguing the complaint failed to state a claim because (1) age-based pricing does not “implicate the irrational, invidious stereotypes” that the Unruh Act was intended to proscribe; (2) the public statement by Tinder's executive, as quoted in the complaint, “refute[d] any notion that the alleged discrimination in pricing [was] arbitrary”; and (3) age-based pricing is neither “unlawful” nor “unfair” under the UCL.

         The trial court sustained Tinder's demurrer without leave to amend. With respect to the Unruh Act claim, the court ruled (1) there is “no basis in the published decisions for applying the Unruh Act to age-based pricing differentials”; (2) “Tinder's rationale that customers age 30 and younger have less capacity to pay for premium services” demonstrates “the differential is not ‘arbitrary, invidious or unreasonable' within the meaning of the Act”; and (3) Tinder's alleged pricing furthers the “ ‘public policies' ” of “(a) increased access to services for the general public and (b) profit maximization by the vendor, a legitimate goal in our capitalistic economy.” As for the UCL claims, the court ruled (1) Candelore's failure to allege an Unruh Act violation defeats his “ ‘unlawful' ” prong claim; and (2) the alleged business practice is not “ ‘unfair' ” under the UCL because “it is entirely proper for Tinder to charge alternative prices in the pursuit of profit maximization” and “the rationale for this price distinction (quoted by plaintiff in the Complaint...) is a sufficient business reason for doing so.”

         The trial court entered judgment for Tinder, from which Candelore appeals.

         DISCUSSION

         1. Overview of the Unruh Act

         “Enacted in 1959, the Unruh Act secures equal access to public accommodations and prohibits discrimination by business establishments. Its predecessor, our state's first public accommodations statute, became law in 1897.” (Harris, supra, 52 Cal.3d at p. 1150.) “The 1897 act was patterned in part after the National Civil Rights Act of 1875 (18 Stat. 335, ch. 114, §§ 1 2) which guaranteed to all persons within United States jurisdiction ‘the full and equal enjoyment of the accommodations, advantages, facilities, and privileges of inns, public conveyances on land or water, theaters, and other places of public amusement....' ” (Harris, at p. 1150, fn. 3.) After the United States Supreme Court invalidated the federal act, many states, including California, responded by enacting their own statutes assuring access to public accommodations on a nondiscriminatory basis. (Id. at pp. 1150-1151, fn. 3., citing Civil Rights Cases (1883) 109 U.S. 3.)

         The Unruh Act provides that “[a]ll persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.” (§ 51, subd. (b).) The Act's “fundamental purpose” is “to secure to all persons equal access to public accommodations ‘no matter' ” their personal characteristics. (Harris, supra, 52 Cal.3d at p. 1169.) To accomplish this purpose, the Act prohibits “arbitrary discrimination by business establishments.” (In re Cox (1970) 3 Cal.3d 205, 216 (Cox); Sargoy, supra, 8 Cal.App.4th at p. 1043 [the Act renders unlawful “arbitrary, invidious or unreasonable discrimination”].)

         Although its text identifies particular kinds of discrimination - such as sex, race, and national origin - this list is “illustrative, rather than restrictive, ” and the Unruh Act's proscription against arbitrary discrimination extends beyond these enumerated classes. (Cox, supra, 3 Cal.3d at p. 212; Marina Point, Ltd. v. Wolfson (1982) 30 Cal.3d 721, 730, 732 (Marina Point).) Nevertheless, the enumerated categories, bearing the “common element” of being “personal” characteristics of an individual, necessarily confine...

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