Candelore v. Tinder, Inc. ( 2018 )

Filed 1/29/18
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
ALLAN CANDELORE, B270172
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC583162)
v.
TINDER, INC.,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los
Angeles County, 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.
_________________________
1
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
1 There is some inconsistency in the record about whether
the $19.99 monthly charge applies to individuals “over 30 years
of age” versus “age 30 and older.” For purposes of our decision,
the distinction makes no difference.
2 Statutory references are to the Civil Code, unless otherwise
stated.
2
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).)
3
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
4
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
5
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 the Act’s reach to forms of
discrimination based on characteristics similar to the statutory
classifications – such as “a person’s geographical origin, physical
6
attributes, and personal beliefs.” (Harris, supra, 52 Cal.3d at
p. 1160.) The “personal characteristics” protected by the Act are
not defined by “immutability, since some are, while others are not
[immutable], but that they represent traits, conditions, decisions,
or choices fundamental to a person’s identity, beliefs and self-
definition.” (Koebke v. Bernardo Heights Country Club (2005)
36 Cal.4th 824, 842–843 (Koebke).)
Thus, while not all discrimination is prohibited (see Harris,
supra, 52 Cal.3d at pp. 1160-1161), there is no dispute that, as
relevant here, the Unruh Act proscribes arbitrary discrimination
based on an individual’s age – a personal characteristic similar to
the classifications enumerated in the Act. (See Marina Point,
supra, 30 Cal.3d at p. 730; Pizarro v. Lamb’s Players Theatre
(2006) 135 Cal.App.4th 1171, 1174 (Pizarro) [“Age discrimination
may violate the Act if used as an arbitrary class-based
generalization”]; see also Harris, at p. 1153 [“the Legislature
affirmed that section 51 prohibits age discrimination in the sale
or rental of housing”]; Koebke, supra, 36 Cal.4th at p. 842 [“the
phrase ‘personal characteristic’ in Harris, . . . encompasse[s] both
the categories enumerated in the Act and those categories added
to the Act by judicial construction” prior to the Harris opinion].)
The Act applies not merely in situations where businesses
exclude individuals altogether, but also “where unequal
treatment is the result of a business practice.” (Koire v. Metro Car
Wash (1985) 40 Cal.3d 24, 29 (Koire).) “Unequal treatment
includes offering price discounts on an arbitrary basis to certain
classes of individuals.” (Pizarro, supra, 135 Cal.App.4th at
p. 1174; Koire, at p. 29.)
7
2. Tinder’s Alleged Pricing Model Uses a Personal
Characteristic to Discriminate Against Older
Customers Based on a Generalization About Income
Candelore asserts Tinder’s alleged pricing model violates
the Unruh Act because it discriminates against customers who
are age 30 and over by requiring them to pay more than twice as
much as younger customers to access Tinder Plus. In response,
Tinder maintains this allegation is insufficient to state a claim
for arbitrary age discrimination, because its pricing model
rationally treats “youth [as] a reasonable proxy for economic
disadvantage.” (Italics added.) By Tinder’s account, it is “self-
evident that people under 30 face financial challenges,” and this
“common knowledge provides a reasonable and non-arbitrary
basis for Tinder to offer a discount to people under 30.” The trial
court likewise reasoned that Tinder’s age-based pricing model
was “not ‘arbitrary, invidious or unreasonable’ within the
meaning of the Act” because the complaint admitted “Tinder’s
rationale” was based on market research showing “customers age
30 and younger have less capacity to pay for premium services.”
Although past cases have suggested age can serve as a
reasonable proxy for income, we conclude Tinder’s alleged
practice contravenes “the individual nature of the statutory right
of equal access to business establishments that is afforded ‘all
persons’ by the Unruh Act.” (Marina Point, supra, 30 Cal.3d at
p. 725, italics added.)
Our Supreme Court’s decision in Marina Point is
controlling. There, the Supreme Court was asked to address
whether, under the Unruh Act, an apartment complex owner
could lawfully refuse to rent its apartments to a family solely
because the family included a minor child. (Marina Point, supra,
8
30 Cal.3d at p. 724.) In the landlord’s action to eject one such
family, the municipal court found that “ ‘[c]hildren are rowdier,
noisier, more mischievous and more boisterous than adults,’ and
upheld the landlord’s policy of excluding all families with minor
children.” (Ibid.) Based on this finding, the landlord defended the
policy on appeal, claiming it was permitted “to achieve its
legitimate interest in a quiet and peaceful residential atmosphere
by excluding all minors from its housing accommodations, thus
providing its adult tenants with a ‘child free’ environment.”
(Id. at p. 725.) The Supreme Court disagreed.
The Supreme Court concluded the landlord’s blanket
exclusion of families with minor children contravened “the
individual nature of the statutory right of equal access to
business establishments that is afforded ‘all persons’ by the
Unruh Act.” (Marina Point, supra, 30 Cal.3d at p. 725, italics
added.) Drawing a parallel to the “individual nature” of the
federal Civil Rights Act, the court embraced the following holding
by the United States Supreme Court regarding the federal
statute: “ ‘The statute’s focus on the individual . . . precludes
treatment of individuals as simply components of a racial,
religious, sexual or national class. If height is required for a job, a
tall woman may not be refused employment merely because, on
the average, women are too short. Even a true generalization
about the class is an insufficient reason for disqualifying an
individual to whom the generalization does not apply.’ ” (Id. at
p. 740, quoting City of Los Angeles, Dept. of Water v. Manhart
(1978) 435 U.S. 702, 708.) Applying this principle to the
landlord’s adults-only policy, the Marina Point court held that,
while the landlord retained the right to exclude persons whose
individual conduct had disrupted its legitimate business
9
pursuits, the Unruh Act did “not permit [the landlord] to exclude
an entire class of individuals on the basis of a generalized
prediction that the class ‘as a whole’ is more likely to commit
misconduct than some other class of the public.” (Marina Point,
at p. 739, second italics added; accord O’Connor v. Village Green
Owners Assn. (1983) 33 Cal.3d 790, 793 (O’Connor) [restrictive
covenant limiting residency to persons over the age of 18 declared
invalid under the Unruh Act].)
Having concluded the “potential misbehavior of children as
a class [did] not justify [the landlord’s] exclusionary practice,” the
Marina Point court turned to whether the policy might
“nonetheless be sustained as reasonable on the ground that the
presence of children basically does not accord with the nature of
[the landlord’s] business enterprise and of the facilities provided.”
(Marina Point, supra, 30 Cal.3d at p. 741.) With respect to this
issue, the court rejected the landlord’s effort to analogize the
restriction to the age-limited admission policies of retirement and
senior living communities, which were supported by “specific
‘age-conscious’ legislative measures” addressed to the “special
housing needs of the elderly in contemporary American society.”
(Id. at p. 742, citing Health & Saf. Code, § 51230 [reserving
proportion of state-financed low income housing for occupancy by
elderly]; 12 U.S.C. § 1701q [federal loan program for housing for
10
elderly families].)3 In light of the public policies reflected in these
legislative enactments, the court recognized that “age
qualifications as to a housing facility reserved for older citizens
can operate as a reasonable and permissible means under the
Unruh Act of establishing and preserving specialized facilities for
those particularly in need of such services or environment.”
(Marina Point, at pp. 742-743.) The court held the landlord
“[could not] plausibly claim that its exclusionary policy serve[d]
any similarly compelling societal interest,” observing, the
landlord could “hardly contend, for example, that the class of
persons for whom Marina Point seeks to reserve its housing
accommodation, i.e., single adults or families without children,
are more in need of housing than the class of persons whom the
landlord has excluded from its apartment complex.” (Id. at
p. 743.)
Even crediting Tinder’s stated rationale, its alleged
discriminatory pricing model violates the principle articulated in
Marina Point by operating on the “generalized prediction” that
an individual over the age of 30 earns more and is less budget
3 The Marina Point court also found the contemplated
adults-only apartment complex was distinguishable from
businesses such as bars and adult book stores, which could
likewise “be defended by reference to . . . statutorily sanctioned
restriction[s] on the activities of children.” (Marina Point, supra,
30 Cal.3d at p. 741, citing Bus. & Prof. Code, § 25658 [furnishing
alcoholic beverages to person under 21] & Pen. Code, § 313.1
[distributing “ ‘harmful matter’ ” to a minor].)
11
constrained than another individual under the age of 30.4
(Marina Point, supra, 30 Cal.3d at p. 739.) Because we may
reasonably infer that this generalization does not hold for all
members of the respective age classes (see, e.g., Pizarro, supra,
135 Cal.App.4th at p. 1176), we may also infer that Tinder’s
pricing model will, in some cases, result in older individuals who
earn less than some younger users being charged more than
twice what those younger users must pay to access the Tinder
Plus features. A blanket, class-based pricing model like this,
when based upon a personal characteristic such as age,
constitutes prohibited arbitrary discrimination under the Unruh
Act. (See Marina Point, at p. 740 [“ ‘Even a true generalization
about the class is an insufficient reason for disqualifying an
individual to whom the generalization does not apply,’ ” italics
omitted].)
We recognize, however, that past cases have embraced the
notion that age may serve as a reasonable proxy for income in
upholding age-based discounts against Unruh Act claims. (See,
e.g., Starkman v. Mann Theaters Corp. (1991) 227 Cal.App.3d
1491, 1499 (Starkman); Pizarro, supra, 135 Cal.App.4th at
p. 1176; Javorsky v. Western Athletic Clubs, Inc. (2015) 242
Cal.App.4th 1386, 1402-1403 (Javorsky); see also Sargoy, supra,
4 Candelore rightly points out that the complaint alleges only
that Tinder has publicly stated the budget constraints of its
younger users were one among “ ‘a combination of factors’ ” that
led it to adopt the chosen price points for “ ‘certain age
demographics.’ ” We agree with his contention that the allegation
concerning Tinder’s public statement does not preclude him from
amending his complaint should discovery reveal other factors
that influenced Tinder’s pricing decision.
12
8 Cal.App.4th at pp. 1044-1045 [applying rationale to uphold
bank program offering higher interest rates to seniors].) These
cases have invariably relied upon dictum from our Supreme
Court’s opinion in Koire, where, in the course of holding sex-
based price discounts at Ladies’ Day car wash and Ladies’ Night
bar events violated the Act, the court observed that “[c]harging
different prices to children and senior citizens is sometimes
permissible and socially desirable,” in part because “[c]hildren
and elderly persons frequently have limited earning capacities
which justify differential treatment in some circumstances.”
(Koire, supra, 40 Cal.3d at pp. 36–37.) We are mindful that the
dictum of the Supreme Court, “while not controlling authority,
carries persuasive weight and should be followed where it
demonstrates a thorough analysis of the issue or reflects
compelling logic.” (Smith v. County of Los Angeles (1989)
214 Cal.App.3d 266, 297.) Nevertheless, because it conflicts with
the Supreme Court’s holding in Marina Point, which makes
discrimination based on generalized assumptions about an
individual’s personal characteristics “arbitrary” under the Act, we
decline to follow the dictum from Koire on this point. (See Marina
Point, supra, 30 Cal.3d at pp. 738–740.)
Our decision to break with Koire’s dictum is bolstered by
the fact that discounts for children and seniors are independently
justified by compelling “social policy considerations as evidenced
by legislative enactments.” (Koire, supra, 40 Cal.3d at p. 38, italics
added.) In Koire, the court remarked that while it “need not
determine the validity of any specific age-based discount,
especially without the benefit of briefing on the issue from parties
actually affected by the practice,” there were “several important
and distinguishing features” that differentiated such practices
13
from the sex-based discounts under review. (Id. at p. 37.) Among
those distinguishing features, the Koire court emphasized that
“[n]umerous statutes in California provide for differential
treatment of children and adults,” “state and federal legislation
ha[d] been enacted to address the special needs of our elderly
citizens,” and “the Legislature ha[d] specifically provided for
certain price discounts for senior citizens.” (Id. at pp. 37-38,
citing, e.g., Civ. Code, § 1556 [limitation on minors’ capacity to
contract]; 42 U.S.C. § 1381 et seq. [supplemental security income
for seniors]; Welf. & Inst. Code, § 12050 et seq. [senior security
benefits]; former Veh. Code, § 13001 [reduced transit fares for
seniors]; Ed. Code, § 89330 [waiver of fees at California State
University campuses for seniors].) Indeed, although the court
identified the limited earning capacities of children and seniors
as an additional justification for differential treatment, that
consideration too was driven by statutory enactments reflecting
the Legislature’s judgment to limit work opportunities for these
age demographics. (Koire, at pp. 37-38, citing, e.g., Lab. Code,
§§ 1285 et seq., 1290 & 1391 [establishing conditions and
sanctions for employing minors]; Gov. Code, § 75000 et seq.
[the Judges’ Retirement Law].)
Although past cases have followed the Koire dictum in
citing generalized assumptions about income disparity as
grounds to uphold age-based price discounts, in most of those
cases the discounts were independently justified by social policy
considerations evidenced in legislative enactments.
(See Starkman, supra, 227 Cal.App.3d at pp. 1499-1500 [citing
statutes limiting child employment and providing public
assistance for seniors as evidence of social policy justifying
discounted movie tickets for children and seniors]; Pizarro, supra,
14
135 Cal.App.4th at p. 1176 [citing United States Supreme Court
case discussing federal Age Discrimination in Employment Act
protections for 40-to-65 age group as justification for “baby-
boomer” discount];5 see also Sargoy, supra, 8 Cal.App.4th at
p. 1045 [statutory enactments favoring retirement established
public policy justifying bank program offering higher interest
rates to senior citizens]; Lazar v. Hertz Corp. (1999)
69 Cal.App.4th 1494, 1503 (Lazar) [because “legislative
scheme . . . expressly approves the adoption of minimum age
requirements by car rental companies,” plaintiff could not
maintain Unruh Act claim on basis of company’s refusal to rent
vehicles to persons under age 25].)6 These statutory enactments,
which reflect the considered judgment of a legislative body to
advance certain social policy objectives by treating children and
seniors differently from the rest of the public, justified the use of
5 The Pizzaro court also observed that providing “discounted
theater admissions to ‘baby-boomers’ to attend a musical about
that generation does not perpetuate any irrational stereotypes,”
thus, recognizing that the price discounts were not based on
“ ‘some arbitrary, class-based generalization’ ” about the age
group, but rather on the fact that the musical was about the
baby-boomer generation. (Pizarro, supra, 135 Cal.App.4th at
p. 1176.)
6 The trial court understandably relied upon these cases in
concluding Candelore could not state a claim because there was
“no basis in the published decisions for applying the Unruh Act to
age-based pricing differentials.” That conclusion, while consistent
with these appellate authorities, failed to recognize that the cases
were fundamentally different than this one because, in each, the
differential treatment at issue was consonant with recognized
public policies reflected in legislative enactments.
15
class-based criteria in those cases, without requiring the courts to
engage in the sort of generalizations about age and income that
run counter to the individual nature of the right secured to all
persons by the Unruh Act. These cases can thus be reconciled
with the Supreme Court’s holding in Marina Point,
notwithstanding their partial reliance on the incongruous dictum
from Koire. (See Marina Point, supra, 30 Cal.3d at p. 742
[recognizing age-limited admission policies of retirement and
senior living communities were supported by “specific ‘age-
conscious’ legislative measures”].)
The only outlier is Javorsky, where the court approved a
luxury health club’s age-based discount for 18- to 29-year-olds,
despite scant indication of a legislative policy favoring
differential treatment for this age group. (Javorsky, supra,
242 Cal.App.4th at p. 1404.)7 The Javorsky court held the age-
based discount was nevertheless justified because “(1) it expands
7 While concluding a supporting statutory enactment was
unnecessary to uphold the discriminatory policy, the Javorsky
court noted that “the law is not entirely bereft of indications that
persons under 30 – including students and those just beginning
their careers – might feel economic pressures worthy of attention
and assistance as a public policy matter.” (Javorsky, supra,
242 Cal.App.4th at p. 1404.) In support of that observation, the
court cited statements made by Senator Durbin in connection
with Congressional debate over extending the dependent
coverage provisions of the Affordable Care Act to 24- and 25-year-
olds. (Ibid., citing Remarks of Sen. Durbin, 155 Cong. Rec. 32915
(2009).) Notwithstanding Senator Durbin’s remarks, however, the
Javorsky court acknowledged that “[n]o statute or published
decision identifies 18 to 29 year olds in the San Francisco Bay
Area as a ‘financially disadvantaged’ group entitled to a ‘luxury’
health and fitness club.” (Javorsky, at p. 1403.)
16
access to beneficial, recreational activities; (2) it benefits an age
group with limited financial resources; and (3) it does not
perpetuate any invidious stereotypes.” (Id. at p. 1401.) With
respect to the second point, the plaintiff argued “[a]ge brackets
[were] poor indicators of income,” citing census data and other
evidence offered in opposition to the health club’s motion for
summary judgment showing that “people age 28 have equal to or
greater median income than people ages 33, 35, 41, 44, 46, 47, 49,
and 51 to 89.” (Id. at p. 1403.) The Javorsky court rejected the
argument, responding that the Unruh Act required only a
showing that “persons ages 18 to 29, as a group, have less income
than persons age 30 and over” to demonstrate the discriminatory
practice was “not arbitrary.”8 (Ibid., italics added.) Respectfully,
we find that reasoning to be inconsistent with the “individual
nature” of the right secured by the Unruh Act, which protects
individuals from unequal treatment based on generalizations
8 The Javorsky court also remarked that the plaintiff’s
argument, if accepted, “would obliterate all age-based discounts –
including those upheld in Starkman and Pizarro – since all age
groups include persons with higher incomes and persons with
lower incomes.” (Javorsky, supra, 242 Cal.App.4th at p. 1403.)
That conclusion ignores the fact that the age-based discounts in
Starkman and Pizarro were independently justified by
compelling social policy considerations as evidenced by legislative
enactments – a justification which, as discussed, has been
present in all cases upholding age-based business practices,
except Javorsky. (See Starkman, supra, 227 Cal.App.3d at
pp. 1499-1500; Pizarro, supra, 135 Cal.App.4th at pp. 1175-1176;
Sargoy, supra, 8 Cal.App.4th at p. 1045; Lazar, supra,
69 Cal.App.4th at p. 1503.)
17
about “a group” to which they belong.9 (Marina Point, supra,
30 Cal.3d at p. 739-740; Koire, supra, 40 Cal.3d at pp. 35-36.)
The danger of using age as a proxy for income to justify
age-discriminatory pricing becomes more apparent when one
acknowledges that such pricing operates not merely as a
“discount” for the favored age group, but effectively as a
surcharge on the disfavored one. (See Koire, supra, 40 Cal.3d at
p. 34 [“plaintiff was adversely affected by the price discounts”
insofar as “he had to pay more than any woman customer, based
solely on his sex”].) Were Tinder’s justification sufficient,
generalizations about the relative incomes of different age groups
could be employed to rationalize higher prices for all consumers
30 and older in even the most essential areas of commerce – such
as grocery shopping, gasoline purchases, etc. – even in instances
where an individual did not in fact enjoy the economic
advantages that are presumed about his or her age group as a
whole. (See Marina Point, supra, 30 Cal.3d at p. 739 [warning
that Unruh would be “drastically undermined” if class-based
discrimination could be justified simply because a business had
9 Tinder filed a request asking this court to take judicial
notice of (1) several charts published by the United States Census
Bureau regarding “ ‘Selected Characteristics of People 15 Years
Old and Over by Total Money Income,’ ” and (2) a declaration
offered by the defendant’s expert in Javorsky, purporting to
analyze census data regarding the financial resources of different
age demographics in California. Because we conclude group data
about income by age demographic is insufficient to justify the
alleged discrimination, we deny Tinder’s request for judicial
notice. (See People ex rel. Lockyer v. Shamrock Foods Co. (2000)
24 Cal.4th 415, 422, fn. 2 [“any matter to be judicially noticed
must be relevant to a material issue”].)
18
“reason to believe that the class, taken as a whole, might present
greater problems than other groups”].) It is inconceivable that an
antidiscrimination law like the Unruh Act would countenance a
grocer charging an unemployed 31-year-old patron twice as much
as an employed 28-year-old customer merely on the basis of
market testing showing that those over the age of 30 “as a group”
generally earn more than 18- to 29-year-olds. Nor have the
parties identified any legislative pronouncements that would
justify such a departure from the Unruh Act’s language and
provenance. Insofar as the Act entitles individuals to “full and
equal accommodations, advantages, facilities, privileges, or
services in all business establishments of every kind whatsoever”
(§ 51, subd. (b), italics added), it follows that the same analysis
must apply evenly to arguably less essential commercial services,
such as premium features of an online dating app or luxury
health club memberships.
Consistent with Marina Point, we conclude Tinder’s alleged
discriminatory pricing model cannot be justified by a
generalization about the relative incomes and budget limitations
of the two implicated age groups. We turn now to whether the
public policies cited by the trial court compelled the finding that
Tinder’s alleged discrimination was justified, as a matter of law.
3. The Complaint’s Allegations Do Not Compel the
Finding that Public Policy Justifies Tinder’s Age-
based Classification
In sustaining the demurrer, the trial court concluded
Tinder’s alleged age-based pricing model was justified by “ ‘public
policies’ ” that promote “(a) increased access to services for the
general public and (b) profit maximization by the vendor, a
legitimate goal in our capitalistic economy.” Similar justifications
19
were rejected by the Supreme Court in Koire when advanced by
the bar owner in defense of its Ladies’ Nights discounts. Further,
while our Supreme Court recognized in Harris that vendors may
pursue legitimate business interests by making economic
distinctions among customers, it held such distinctions were
permissible because they employed criteria that could conceivably
be met by any customer, regardless of the customer’s personal
characteristics. (Harris, supra, 52 Cal.3d at p. 1163.) The
Supreme Court’s holdings in Koire and Harris control our
resolution of this issue.
Drawing on its prior holding in Marina Point, our Supreme
Court in Koire explained that an otherwise prohibited
“discriminatory practice” will be upheld as reasonable, and
therefore not arbitrary, “when there is a strong public policy in
favor of such treatment.” (Koire, supra, 40 Cal.3d at p. 31, citing
Marina Point, supra, 30 Cal.3d at pp. 742-743.) The Koire court
continued: “Public policy may be gleaned by reviewing other
statutory enactments. For example, it is permissible to exclude
children from bars or adult bookstores because it is illegal to
serve alcoholic beverages or to distribute ‘ “harmful matter” ’ to
minors. [Citations.] This sort of discrimination is not arbitrary
because it is based on a ‘compelling societal interest’ [citation]
and does not violate the Act.” (Koire, at p. 31, citing Marina
Point, at p. 743.)
In Koire, the Supreme Court rejected the argument that
increasing patronage among women at Ladies’ Day carwash
events and Ladies’ Night bar events was a sufficiently compelling
societal interest to justify discriminatory sex-based pricing.
(Koire, supra, 40 Cal.3d at p. 33.) The court reasoned that the
asserted objective was “a far cry from the social policies which
20
have justified other exceptions to the Unruh Act,” like the
“compelling societal interest in ensuring adequate housing for the
elderly which justifies differential treatment based on age.”
(Ibid.) The same analysis holds with respect Tinder’s purported
objective here. Unlike children’s and senior’s discounts, which are
justified by compelling societal interests that can be “gleaned
[from] statutory enactments” (id. at p. 31), whatever interest
society may have – if any – in increasing patronage among those
under the age of 30 who may be interested in the premium
features of an online dating app, that interest is not sufficiently
compelling to justify discriminatory age-based pricing that may
well exclude less economically advantaged individuals over the
age of 30 from enjoying the same premium features.
As for profit maximization, we have no quarrel with the
trial court’s conclusion that it can be an acceptable business
objective and can be advanced by price discrimination. As anyone
who has attended an auction can attest, individuals may and
often do value goods and services differently. Some are willing
and able to pay a higher price than others for the same product.
And, as any student of elementary microeconomics knows, sellers
of goods and services could (at least theoretically) maximize
profits if they could engage in price discrimination by charging
higher prices to those consumers willing to pay them, and lower
prices to the rest. For example, a seller might offer several
versions of its product, with different features, trim, branding,
etc., each at a different price, in an effort to increase overall
profits. Or a seller might seek to attract bargain hunters by
offering temporary price reductions during a sale or other
promotion. But the quest for profit maximization can never serve
21
as an excuse for prohibited discrimination among potential
customers.
The Koire court made this point emphatically. It directly
addressed and rejected the contention that a merchant’s interest
in profit maximization could justify discriminatory sex-based
pricing, relying again on its prior holding in Marina Point. The
Koire court explained:
“In Marina Point, this court held that the fact that a
business enterprise was ‘ “proceed[ing] from a motive
of rational self-interest” ’ did not justify
discrimination. [Citation.] This court noted that ‘an
entrepreneur may pursue many discriminatory
practices “from a motive of rational self-interest,”
e.g., economic gain, which would unquestionably
violate the Unruh Act. For example, an entrepreneur
may find it economically advantageous to exclude all
homosexuals, or alternatively all nonhomosexuals,
from his restaurant or hotel, but such a “rational”
economic motive would not, of course, validate the
practice.’ [Citation.] It would be no less a violation of
the Act for an entrepreneur to charge all
homosexuals, or all nonhomosexuals, reduced rates in
his or her restaurant or hotel in order to encourage
one group’s patronage and, thereby, increase profits.
The same reasoning is applicable here, where
reduced rates were offered to women and not men.”
(Koire, supra, 40 Cal.3d at p. 32.) And, the same reasoning is
likewise applicable here, where Tinder allegedly offers reduced
rates to those under the age of 30, but not individuals who are
30 or older.
22
Recognizing that a business’s interest in maximizing profits
is insufficient to justify discrimination based on an individual’s
personal characteristics does not preclude a business like Tinder
from employing rational economic distinctions to broaden its user
base and increase profitability. (See Harris, supra, 52 Cal.3d at
p. 1163.) But, as Koire and Harris teach, those distinctions must
be drawn in such a way that they could conceivably be met by
any customer, regardless of the customer’s age or other personal
characteristics. (See Koire, supra, 40 Cal.3d at p. 36; Harris, at
p. 1163.) For instance, Tinder could establish different
membership levels for its Tinder Plus service that would allow
more budget constrained customers, regardless of age, to access
certain premium features at a lower price, while offering
additional features to those less budget conscious users who are
willing to pay more. Tinder could also offer discounts for
purchasing several months of Tinder Plus in advance that would
likewise allow budget constrained users cheaper access to its
premium features, without arbitrarily discriminating against
older users on the basis of age. “The key,” as our Supreme Court
put it in Koire, “is that the discounts must be ‘applicable alike to
persons of every sex, color, race, [and age, etc.]’ (§ 51), instead of
being contingent on some arbitrary, class-based generalization.”
(Koire, at p. 36; accord Harris, at p. 1163 [“discounts based on
quantity, advance reservations, time of purchase or other
conditions ‘which any patron could satisfy’ [are] ‘clearly
permissible’ ”].)
As alleged, Tinder’s pricing model discriminates against
users age 30 and over, and the complaint’s allegations do not
compel the finding that this discrimination is justified by a strong
public policy in favor of such differential treatment. While we
23
make no judgment about the true character of Tinder’s pricing
model, or whether evidence exists to establish a sufficient
justification for charging older users more than younger users, we
conclude the complaint’s allegations are sufficient to state a claim
for age discrimination in violation of the Unruh Act. The trial
court erred in sustaining Tinder’s demurrer to the Unruh Act
claim.
4. The Complaint States a Claim for Violation of the
UCL
The UCL prohibits, and provides civil remedies for, “unfair
competition,” which includes “any unlawful, unfair or fraudulent
business act or practice.” (Bus. & Prof. Code, § 17200.) Its
purpose “ ‘is to protect both consumers and competitors by
promoting fair competition in commercial markets for goods and
services.’ [Citations.] In service of that purpose, the Legislature
framed the UCL’s substantive provisions in ‘ “broad sweeping
language” ’ [citations] and provided ‘courts with broad equitable
powers to remedy violations’ [citation].” (Kwikset Corp. v.
Superior Court (2011) 51 Cal.4th 310, 320.)
The UCL’s “unlawful” prong “borrows violations of other
laws . . . and makes those unlawful practices actionable under the
UCL.” (Lazar, supra, 69 Cal.App.4th at p. 1505.) “ ‘[V]irtually any
law or regulation – federal or state, statutory or common law –
can serve as [a] predicate for [an] . . . “unlawful” [prong]
violation.’ ” (Paulus v. Bob Lynch Ford, Inc. (2006)
139 Cal.App.4th 659, 681.) Because we conclude the complaint
adequately states a claim for violation of the Unruh Act, we also
conclude the allegations are sufficient to state a claim under the
“unlawful” prong of the UCL. (See Klein v. Chevron U.S.A., Inc.
(2012) 202 Cal.App.4th 1342, 1384.)
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Further, in view of our conclusion that Tinder’s alleged
discriminatory pricing model violates the public policy embodied
in the Unruh Act, the UCL’s “unfair” prong provides an
independent basis for relief on the facts alleged. The standard for
finding an “unfair” practice in a consumer action is
“ ‘intentionally broad, thus allowing courts maximum discretion
to prohibit new schemes to defraud. [Citation.] The test of
whether a business practice is unfair “involves an examination of
[that practice’s] impact on its alleged victim, balanced against the
reasons, justifications and motives of the alleged wrongdoer. In
brief, the court must weigh the utility of the defendant’s conduct
against the gravity of the harm to the alleged victim . . . .
[Citations.]” . . . [A]n “unfair” business practice occurs when that
practice “offends an established public policy or when the practice
is immoral, unethical, oppressive, unscrupulous or substantially
injurious to consumers.” [Citation.]’ ” (Smith v. State Farm
Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 718-719;
accord Ticconi v. Blue Shield of California Life & Health Ins. Co.
(2008) 160 Cal.App.4th 528, 539.)
As discussed, the Unruh Act protects “all persons” from
status-based discriminatory business practices that operate to
deprive innocent individuals of “full and equal accommodations,
advantages, facilities, privileges, or services in all business
establishments of every kind whatsoever.” (§ 51, subd. (b);
Marina Point, supra, 30 Cal.3d at p. 740.) Insofar as the
complaint sufficiently alleges a violation of the Act and the public
policy it embodies, a claim for violation of the UCL has also been
stated.
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DISPOSITION
The judgment is reversed. Candelore is entitled to his costs.
CERTIFIED FOR PUBLICATION
CURREY, J.*
We concur:
EDMON, P. J.
LAVIN, J.
* Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.
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