Engel v. Worthington
California Court of Appeal, Fourth District
19 Cal.App.4th 43, 23 Cal.Rptr. 329
September 30, 1993

SONENSHINE, Associate Justice.

David Engel sued Dan Worthington, doing business as Worthington Reunion Photographers, alleging Worthington's refusal to publish a picture of Engel with another man in the portrait section of a high school class reunion memory book violated the Unruh Civil Rights Act. After a bench trial, the lower court ruled for Worthington. We reverse.

BACKGROUND

Worthington operates a photography business specializing in high school reunions. As part of this service, he produces memory books for an additional fee of $6 per book with a minimum order of 125 copies. The book includes a candid section of unidentified graduates attending the reunion. A portrait section of identified alumni and their guests is also included.

After the University High School Class of 1977 Reunion Committee contracted with Worthington, they sent a letter to Engel, a 1977 alumnus, inviting him to the reunion and explaining a memory book would be available. Engel submitted his payment for himself and a guest, and for the book.

During the evening, Engel and his guest attempted to have their picture taken for inclusion in the portrait section of the memory book. Engel completed an identification card and submitted it to the photographer. The photographer told them she would take a picture of Engel alone and one of him and his friend together, but company policy disallowed same-gender pictures of couples to appear in the portrait section. She said their picture might be reproduced in the candid section and suggested Engel telephone Worthington if he was not satisfied.

Engel called Worthington, asking that the couple's photograph be placed in the memory book's portrait section. Worthington testified, "When the call came, ... the gentleman identified himself and in that conversation made it clear that the desire was to put a picture of he [sic] and his life mate, however he used the term, it was clear before I had the conversation by what was said what he represented and what he wanted, and so when the call came, I was very much aware that he was of the homosexual community, and he made a demand at that time, at least I interpreted it as a demand, that his picture and his life mate be included in that book, and I said, 'I'm extremely sorry but there's not the [sic] way it's going to happen,' that 'it is my company, and I don't choose to use that format in the publication of my books....'"

The committee was not pleased. Its letter to Worthington explained it expected that the graduates with their guests would be included in the portrait section. Worthington would not budge. No one was going to tell him how to run his business. He returned the committee's check, declining to publish the memory book.

Engel's underlying complaint sought injunctive relief and damages, alleging discrimination based on gender and sexual orientation. His request for injunctive relief was dismissed by stipulation and the trial court rendered judgment for Worthington on the damage claim.

DISCUSSION

The Unruh Civil Rights Act provides, inter alia, 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, or disability are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever." Section 52, subdivision (a), designed as an enforcement mechanism, mandates that "[w]hoever denies ... or makes any discrimination or distinction contrary to Section 51 ... is liable for each and every offense...."

Worthington concedes his is a business establishment. We therefore address whether Engel comes within a Section 51 protected category and if so, whether he was denied full and equal accommodations. And finally, because we answer those queries affirmatively, we look to whether Worthington's practices were arbitrary and whether either his editorial or First Amendment rights allowed him to withhold the requested services.

SEX IS A PROTECTED CATEGORY

The trial court and the parties focus on Engel's homosexuality. They miss the point.

"[T]here can be [no] dispute that the Act applies to classifications based on sex." (Koire v. Metro Car Wash, 40 Cal.3d 24, 28 (1985).) As a threshold question, it matters not whether Engel is homosexual or heterosexual. Had Engel's guest been female, no controversy would exist. At issue, then, is Worthington's refusal to print Engel's picture, with his guest, in the memory book because both were male.

Section 51 is "not [to] be construed to confer any right or privilege on a person ... which is applicable alike to persons of every sex, color, race, religion ... [and] disability." Worthington maintains, therefore, his discriminatory policies were statutorily acceptable because everyone, regardless of gender, was treated the same: His restriction applied to any two same-sex couples whether father/son or twin sisters.

Worthington misinterprets the statute which may allow restrictive business practices but only when they are applicable alike to persons of either sex. In other words, Worthington could have limited the portraits to graduates only. But, such is not the case here. Worthington's services were gender dependent. Equal application of a discriminatory practice makes it no less violative of the law. (Loving v. Commonwealth of Virginia, 388 U.S. 1, 8 (1967).)

Worthington relies on Beaty v. Truck Ins. Exchange, 6 Cal.App.4th 1455 (1992). There, the court considered "whether an insurer violates the ... Act ... when it refuses to offer a couple cohabitating in a homosexual relationship the same insurance policy and at the same premium it regularly offers to married couples."

The court recognized the issue was not "discrimination on the basis of sexual orientation," but whether services which are offered to married people can be refused to two cohabitating but unmarried adults. The court, relying on the state's strong public policy favoring marriage, concluded yes. "[N]o court has extended the Unruh Act to claimed discrimination on the basis of marital status and we shall not be the first to do so." The Beaty court noted, "[T]here is no question defendant's [practice] ... is uniform and without regard to any of the categories set forth in Civil Code Section 51" (emphasis added.)

Beaty is inapt here. The policy did not violate the Act because services were uniformly denied to people not covered under it. Our facts are different. Sex is a protected category. Worthington refused to extend a service to Engel because he and his guest were male.

ENGEL WAS DENIED FULL AND EQUAL SERVICE

The trial court found Engel had not been denied services because there was no contract to provide them. Once again, the parties focus on the wrong issue. The trial court's error was more egregious than simply misconstruing the contract. Engel's rights are statutorily based; they are not contractually dependent.

"[T]he Unruh Civil Rights Act is designed to address concerns 'not only with access to business establishments, but with equal treatment of patrons in all aspects of the business.'" (Starkman v. Mann Theatres Corp., 227 Cal.App.3d 1491, 1496 (1991).) Engel's suit does not depend on the existence of an enforceable contract between Worthington and the committee.

REASONABLE BUSINESS PRINCIPLES

The trial court found Worthington's actions were based on reasonable business procedures and sound business practices. A review of the record discloses Worthington claimed four business reasons for his policy.

Worthington testified the printing of the memory book was "a losing proposition" but that it was his "form of advertising." He therefore had to keep "the book at a controllable size and predictable size, ... so [he was] not going to be losing any more money than [he] happen[ed] to lose in the process in the making of those books." In other words, the memory book was a loss leader. If he printed a photograph of all alumni with a guest in the portrait section, the book would cost too much. Moreover, deviations from the procedures would make it impossible to identify the graduate and the guest. His computer program was designed to use "one [identification] card for every possible situation that [came] to [him]." Graduates cannot simply stand on one side because those who are being photographed often prefer one side to the other because of scars or other cosmetic reasons. As he explained, it "would have been a major economic problem, ... it isn't my business to sit in and concentrate on a hundred different reunions I serve every year and try and recall who had a special request." He testified proper identification of the graduates was a business necessity. He also explained pictures of men and women sold better than same-gender pictures and his goal was to take as many pictures as possible that would sell.

Recently, our Supreme Court explained the policies motivating business exceptions to the Act. "[L]egitimate business interests may justify limitations on consumer access to public accommodations. (See, e.g., [In re ] Cox. 3 Cal.3d [205] [1970] ['A business establishment may, of course, promulgate reasonable deportment regulations that are rationally related to the services performed and the facilities provided.']; Frantz v. Blackwell, 189 Cal.App.3d 91, 95-96 (1987) [refusal to sell house to speculator in potential competition with defendant did not violate the Act]; Reilly v. Stroh, 161 Cal.App.3d 47, 53 (1984) [segregation of persons under 21 in restaurant not arbitrary in view of legal requirements imposed on proprietor relating to consumption of alcoholic beverages by minors]; Ross v. Forest Lawn Memorial Park, 153 Cal.App.3d 988, 992-993 (1984) [cemetery's policy of private funerals that excluded 'punk rockers' did not violate the Act]; Wynn v. Monterey Club, 111 Cal.App.3d 789, 798 (1980) [agreement to bar from gambling establishment a pathological gambler who had written bad checks was 'good business and social practice' that did not violate the Act].) In each case, the particular business interests of the purveyor in maintaining order, complying with legal requirements, and protecting a business reputation or investment were recognized as sufficient to justify distinctions among its customers." (Harris v. Capital Growth Investors XIV, 52 Cal.3d 1142, 1162 (1991).)

None of the above-stated reasons is present here. Neither Worthington's economic interests nor his desire to best identify the graduates can be compared to the situations described above. And this is true no matter how well intentioned Worthington may have been. Economic reasons, per se, have never been recognized as exceptions to the Act. Indeed, as stated in Koire v. Metro Car Wash, supra, discriminatory practices do not qualify as reasonable business practices because they are profitable. "[T]he fact that a business enterprise [is] '"proceed[ing] from a motive of rational self-interest"' [does] not justify discrimination." If a business owner could avoid the Act's mandates simply by relying on economic defenses, exceptions would eviscerate the rule.

EDITORIAL PRIVILEGE AND FIRST AMENDMENT RIGHTS

Worthington maintains "restricting his publisher's editorial rights is barred by freedom of the press. [He] has asserted a right not to have his publication used to promote a lifestyle and social agenda contrary to his opinions as the publisher." To be sure, the general rule favors his position. (See Leeb v. DeLong, 198 Cal.App.3d 47, 52 (1988).)

Pines v. Tomson, 160 Cal.App.3d 370 (1984), is instructive. In Pines, two Jewish businessmen were not allowed to place their advertisement in the Christian Yellow Pages because they "could not and would not sign nor utter the 'born-again' Christian oath." Indeed, the telephone directory would "only accept advertisements placed by a person who affirms orally and in writing that he [or she] has accepted Jesus Christ as his [or her] personal savior and is a 'born again' Christian."

The court found this restriction violative of the Act, noting the injunction "merely requires appellants to act in a nondiscriminatory manner toward all prospective advertisers. A legal compulsion by court order to refrain from discriminating against advertisers on the basis of religion can hardly be characterized as an endorsement. In any event, appellants can publish whatever disclaimers are necessary to assure that their compliance with the court order to treat all advertisers equally is not confused with indorsement."

The Pines court observed that allowing non-Christians to advertise might be repugnant to the defendants but recognized, "Paragraph 1 is the sine qua non of the trial court's injunction. Although it undeniably infringes on appellants' freedom of religious association by requiring them to do business with non-Christians despite their preference to the contrary, that infringement is amply justified by the compelling state interest in eradicating invidious discrimination. Religious liberty 'embraces two concepts,--freedom to believe and freedom to act. The first is absolute, but in the nature of things, the second cannot be.'"

Pines ' mandates are clear. Worthington, no matter what his personal beliefs, may not exclude a portrait from the memory book because of gender.

Worthington's assertions to the contrary, this is not a prior restraint issue. Worthington is merely prohibited from discriminating in the offering of his services; he is not prevented from publishing his opinions.

CONCLUSION

Justice Arabian noted in Pines, "Oliver Wendell Holmes once remarked, 'I long have said that there is no such thing as a hard case. I am frightened weekly, but always when you walk up to the lion and lay hold the hide comes off and the same old donkey of a question of law is underneath.'"

Such is certainly the situation here. When stripped to its bare essentials, this case is nothing more than a business owner trying to run his business the way he wants. Maybe based on sound business reasons, maybe not. It does not matter. If he is going to include a portrait section of graduates and their guests in the reunion memory book, he cannot differentiate on the basis of the graduate's and/or his or her guest's race, sex, or religion. "While we cannot, except by case-by-case analysis, dictate the morals of the marketplace, we can pronounce that acts of discrimination, practiced ingeniously or ingenuously, cannot stand in this hallowed hall where the injured apply for justice." (Pines v. Tomson, supra.)

The judgment is reversed. The trial court is directed to enter judgment for Engel and set a hearing on damages and attorney fees to be awarded pursuant to Civil Code Section 52.

CROSBY, Associate Justice, concurring.

This is a simple case even after the Supreme Court's devastation of the Unruh Civil Rights Act in Harris v. Capital Growth Investors XIV, 52 Cal.3d 1142, 1162 (1991). Although the Harris majority reached the remarkable conclusion that discrimination based on economic interests is not covered by the act, it did grudgingly recognize and validate cases decided in favor of victims of arbitrary discrimination based on sex and homosexuality, notwithstanding defendants' claims of sincere business justifications. (Koire v. Metro Car Wash, 40 Cal.3d 24 (1985); Rolon v. Kulwitzky, 153 Cal.App.3d 289 (1984).) For example, describing the holding of Koire, the Harris court stated, "[W]e recognized that the Unruh Act did not prohibit businesses from making economic distinctions among customers so long as the criteria used were not based on personal characteristics and could conceivably be met by any customer."

Here a business sought to justify arbitrary individual discrimination against a same-sex couple, that is discrimination based on individual characteristics, for its own alleged economic interests. This was not token or de minimis discrimination of the type condemned in Koire, but an exclusion from a commercial service or product offered to others.

Justice Broussard said, "The effect of the [Harris] majority's holding today is that the poor no longer have standing to challenge arbitrary and invidious discrimination against them as a class under the Unruh Act." Approval of discrimination against poor females in rental housing, despite their ability to pay the rent, was a shocking enough turnabout in the Supreme Court's Unruh Civil Rights Act jurisprudence. But our dissenting colleague reads Harris even more broadly and perniciously, in a way that threatens to wipe out the act itself. The upshot of his opinion would be that any class in society, not just the poor (who have virtually no Unruh Civil Rights Act protection after Harris), could lose its civil rights protection if there is some sort of economic or business justification for what would otherwise be viewed as arbitrary discrimination.

This is a misreading of Harris, and a very dangerous notion to boot. Many businesses would be tempted to engage in arbitrary discrimination if it increased profits and could be defended on that basis. Business judgment was probably the bus company's excuse in Montgomery, Alabama, just as it was in Koire v. Metro Car Wash, supra; O'Connor v. Village Green Owners Association, 33 Cal.3d 790, 794 (1985); Marina Point, Ltd. v. Wolfson, 30 Cal.3d 721, 732 (1982); and In re Cox, 3 Cal.3d 205 (1970), all cases belying the rationale of my colleague's dissent.

Harris, Justice Broussard correctly predicted, "is sure to invite litigants to press the courts to limit the Unruh Act even more...." This case is a fine example of that. It illustrates why the Supreme Court should reexamine, or the Legislature should overturn, Harris.

I concur in the reversal with directions to enter judgment for plaintiff.

MOORE, Acting Presiding Justice, dissenting.

I dissent. In an effort to achieve what they consider to be a more palatable result, the majority seize upon a different theory of discrimination than that focused on by plaintiff, refuse to follow Harris v. Capital Growth Investors XIV, 52 Cal.3d 1142, 1175 (1991), the Supreme Court's most recent pronouncement on the scope of the Unruh Civil Rights Act, and ignore the substantial evidence rule.

Initially, the majority decide this case on a theory only tangentially asserted by plaintiff. While plaintiff sought recovery from discrimination based on both gender and sexual orientation, the focus of this case was the claim defendant's policy against same-sex photographs constituted discrimination based on sexual orientation.

During opening statement, plaintiff's counsel mentioned only sexual orientation discrimination. At one point the trial judge asked plaintiff's attorney, "What is the wrong committed by the defendant, according to your client?" Counsel replied, "The defendant has a policy which arbitrarily discriminates against homosexuals." Later, the court again asked, "The issue was raised in our earlier discussions about discrimination on account of sexual orientation. Is that the keystone of the discrimination here? Is that what you are getting at?" Counsel's reply was "Yes." Only during argument at the end of trial did plaintiff's counsel argue defendant's policy constituted both gender and sexual orientation discrimination.

We reversed the judgment in plaintiff's first appeal because the trial court failed to prepare a statement of decision. The trial court issued a statement that focused almost solely on discrimination based on sexual orientation. The only mention of other forms of discrimination are elliptic references in paragraphs eight and nine of the statement of decision. Paragraph eight states defendant created and implemented his photographing procedures "outside of any feeling against, or any consideration of potential effect upon, any group, particularly homosexuals." Paragraph nine declared defendant's policy "concerning single sex photographs [is] not discriminatory either toward homosexuals or other people." Although plaintiff filed objections to the statement of decision, he did not object on the ground it failed to consider his gender discrimination claim. (See In re Marriage of Arceneaux, 51 Cal.3d 1130, 1133-1134 (1990).)

In his appellate briefs plaintiff barely mentions gender discrimination. The arguments in plaintiff's opening and reply briefs focus almost solely on plaintiff's claim of discrimination based on sexual orientation.

Nonetheless, declaring the parties "miss the point," the majority alter the focus of this appeal and reverse the trial court based on plaintiff's gender discrimination claim. This cavalier attitude reflects the majority's result-oriented approach to this case.

Concerning the merits of the appeal, even assuming defendant's policy could be viewed as gender discrimination, the reversal of the trial court's judgment is erroneous. Contrary to the majority, one "seeking to establish a case under the Unruh Act must plead and prove intentional discrimination." (Harris v. Capital Growth Investors XIV, supra.) "[T]he language of the Act suggests that intentional acts of discrimination ... was the object of the legislation." Citing Civil Code Section 52, the Act's enforcement provision, the Supreme Court further noted, "The references to 'aiding' and 'inciting' denial of access to public accommodations, to making discriminations and restrictions, and to the commission of an 'offense' imply willful, affirmative misconduct on the part of those who violate the Act." Furthermore, a business establishment may justify distinctions between customers because of legitimate business interests, including "protecting a business reputation or investment."

When an appellate court is faced with a challenge to the sufficiency of the evidence supporting a questioned finding, the standard of review is the substantial evidence rule. (Bancroft-Whitney Co. v. McHugh, 166 Cal. 140, 142 (1913).) The presumption is in favor of the judgment and if the evidence is in conflict, an appellate court will not disturb the trial court's findings. (Orange County Employees Assn. v. County of Orange, 205 Cal.App.3d 1289, 1293 (1988).) All factual matters, including inferences reasonably drawn from the evidence, are viewed most favorably to the prevailing party and in support of the judgment. (Bancroft-Whitney Co. v. McHugh, supra.)

On issues of credibility, an appellate court defers to the trial court. (Nestle v. City of Santa Monica, 6 Cal.3d 920, 925 (1972); Ayala v. Southwest Leasing & Rental, Inc., 7 Cal.App.4th 40, 44 (1992).) "[N]either conflicts in the evidence nor '"testimony which is subject to justifiable suspicion ... justif[ies] the reversal of a judgment, for it is the exclusive province of the [trier of fact] to determine the credibility of a witness and the truth or falsity of the facts upon which a determination depends."' Testimony may be rejected only when it is inherently improbable or incredible, i.e., '"unbelievable per se,"' physically impossible or '"wholly unacceptable to reasonable minds."'" (Oldham v. Kizer, 235 Cal.App.3d 1046, 1065 (1991).)

The trial court expressly found defendant's photographing procedures constituted "reasonably sound business practices in that they reasonably relate to valid marketing concerns," and that defendant chose not to publish the photograph of plaintiff and Underwood based on his company's standard policy and not because of a discriminatory intent. The evidence, while conflicting, supports the trial court's findings.

Defendant testified the memory book in which the portraits are displayed is an option he makes available to reunion committees for a small additional fee if the committee orders a minimum of 125 copies. However, defendant claimed the book is a promotional vehicle to advertise his business. He makes a profit from taking and selling photographs to the reunion attendees, not from publishing the memory books. To control the size of the memory book and to ensure graduates are properly identified, defendant instituted a policy of not inserting same sex photographs in the portrait section. Defendant denied his photographing procedures were established with a discriminatory intent or purpose. In fact, prior to the reunion involved in this lawsuit, defendant never had a problem with his policy.

Two of defendant's employees also testified at trial. Each stated that when trained by defendant neither had ever heard him express a discriminatory motive for his policy against same sex photographs.

There is evidence that defendant had made exceptions to his no same sex photographs in the past, and plaintiff argues this evidence establishes that defendant's refusal in this case was because of his homosexuality. However, the trial court found defendant's refusal was based on his standard business procedure and was not due to a discriminatory intent. The majority, while questioning the veracity of defendant's testimony, does not find it to be inherently improbable. Consequently, the trial court's implied finding defendant was a credible witness stands. Based on the record before us, we should not disturb its finding defendant did not act with a discriminatory intent.

With regard to the existence of a contract between defendant and the reunion committee to produce a memory book, the trial court found the booking agreement between defendant and the committee contained an offer by defendant to publish the memory book. But when the committee submitted its order for the memory book, it requested defendant include in the book the photograph of plaintiff and Underwood, and all other classmates and guests that had their pictures taken at the reunion. The request constituted a counter offer which defendant rejected. Thus, a binding contract to produce a memory book never arose.

An acceptance which is not absolute and unqualified is a new proposal which has the effect of terminating the offeree's power of acceptance, unless a contrary intent has been manifested. Plaintiff contends the committee's request did not vary the terms of the previous offer and therefore was not a counter offer. But the trial court found that the booking agreement did not give the reunion committee the right to determine the number, composition, selection or placement of photographs in the memory book and, on appeal, plaintiff does not dispute this finding.

While paying minimal lip service to the substantial evidence rule, the majority focus on those portions of the evidence supporting a result in favor of plaintiff. Thus, even this venerated rule is sacrificed to ensure that what the majority perceives to be a politically correct result is achieved.