SAN FRANCISCO — Half a dozen credit card networks discriminate in keeping “bad lists” that prohibit the selling of adult-oriented materials, psychic services and paraphernalia such as bongs and hookahs, according to a class-action suit filed on Thursday.
The class suit, filed by convenience store operator Abu Maisa, alleges that Google, Intuit, Square, Stripe, Flint Mobile and PayPal each incorporate a “bad list” that sets boundaries of what the operator can and can’t sell.
Abu Maisa claims in the suit, filed at San Francisco federal court, that it has been so handcuffed on the types of products it sells, it can’t even offer Penthouse magazine on its shelves for fear of risk that its accounts would be shut.
Attorney William McGrane of McGrane LLP, who filed the case on behalf of Abu Maisa, told XBIZ that the claim aims at the civil rights violations of business categories that are being arbitrarily being discriminated against because of their lawful occupation.
The suit, which includes exhibits of each of the six credit card companies’ “bad lists,” involves “attempts by many large credit card processing companies … to infringe free speech by outlawing those who are engaged in [legal businesses],” McGrane said.
“[E]ach and every other category of ‘bad lists’ are either so vaguely described as to be unintelligible or else constitute an entirely lawful business/business activity under any and all applicable federal and state laws,” the suit said, noting that the practice is contrary to California’s Unruh Civil Rights Act.
Under the Unruh Civil Rights Act, all persons are entitled to full and equal accommodations, advantages, facilities, privileges, or services in all business establishments, including both private and public entities.
McGrane estimates that the six credit card companies could be on the hook for $1 billion in minimum statutory liability in the Abu Maisa claim, which seeks other class members, including those who similarly sell adult-oriented products and have been faced with the companies’ “bad lists.”
If the case is certified for class action, plaintiffs could be entitled to recover minimum statutory damages of $4,000.
