Pay Pal, Square, Stripe and other electronic payment processors have revolutionized the world of retail sales, both online and in person. They allow merchants to turn smart phones and tablets into cash registers, freeing them from the need to execute complicated arrangements with large credit card companies.
You won’t find them used by gun shops, though. Spurred by the Obama Administration’s “Operation Choke Point” — targeting law-abiding companies and industries that President Obama found objectionable — these popular payment processors have been discriminating against gun shops for several years.
A California gun shop has had enough. Merced, California-based Gladwin Guns and Ammo filed a class action suit after being denied service by the three companies. They’re hanging their hats on California’s Unruh Civil Rights Act, which states:
All 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.
In a statement to The Daily Caller’s Kerry Picket, Gladwin’s attorney William McGrane said:
the very large non-bank defendants in these cases are allowing their private sense of political correctness to extend so far as to ban even persons who hold valid federal firearms licenses from accepting Electronic Funds Transfers, all in defiance of the Second Amendment to the federal Constitution and the California Unruh Civil Rights Act of 1978.
The net effect of what they are doing is making the legitimate business of selling firearms operate as a cash business only, all in a misguided effort to effectively ban the sale of firearms and related products from the marketplace.
The filing of this suit comes on the heels of Representative Blaine Luetkemeyer’s (R-Mo.) re-introduction of the Financial Institution Consumer Protection Act (FICPA) Bill into the U.S. House.
FICPA would end Operation Choke Point, mandating that “agencies such as the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency . . . could not request or order a financial institution to terminate a banking relationship unless the regulator has material reason. Any account termination requests or orders would be required to be made in writing and rely on information other than reputational risk….”
Luetkemeyer has been introducing this legislation into Congress since 2014, but was unable to make progress due to President Obama’s intransigence. His bill may have a more favorable reception from the Trump Administration.
Disfavored businesses were singled out for harassment under Operation Choke Point, as the NRA’s Stacy Washington relates:
American Spirit Arms based in Arizona was the recipient of rough treatment through its financial institution, Bank of America. The company’s accounts and assets were frozen under suspicion that it was selling firearms online without conducting federally mandated background checks.
Under closer inspection, American Spirit Arms was found to be completely within the law: Every firearm bought online through its website was shipped to a Federal Firearm License holder. Each FFL holder was then responsible for conducting the background check before completing the sale. Not only is this legal, it debunks the widely held leftist trope that any crazy nut can buy a gun online without having a background check.
Despite the freezing of its business assets, American Spirit Arms appears to still be in business. There’s probably a metaphor in there.
As an aside, although they may not have the neat hardware/cloud integration that PayPal and Square offer, there are payment processors that specialize in doing business with Federal Firearms License holders and other politically disfavored businesses. Clearant (backed by the NRA) and SoarPay are two examples. There are others.
UPDATE: TTAG reader (and attorney) TX_Lawyer says: “I’m not sure which category (sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status) they claim they are being discriminated as.”
In the past, the California Supreme Court has construed the Unruh Civil Rights Act as “protecting classes other than those listed on its face.” The listed categories (sex, race, etc.,) have been seen as illustrative, not exhaustive. In 1970, the California Court found that the legislature’s intent was “to prohibit all arbitrary discrimination by business establishments.” This precedent was used by California courts to afford Unruh Act protection to gays and lesbians long before those categories were formally added to the text of the act. See Steven Wylie, “The UNRUH Civil Rights Act: A Weapon to Combat Homophobia in Military On-Campus Recruiting,” 24 Loy. L.A. L. Rev. 1333 (1991) for quotations above and other information.
In Orloff v. Los Angeles Turf Club 36 Cal.2d 734 (1951), the California Court held that the Civil Rights Act barred the manager of a race track from expelling a patron who had acquired a reputation as a man of immoral character.
But in In re: Cox, 3 Cal.3d 205 (1970), the Court held that a “young man, who wore long hair and dressed in an unconventional manner,” was not covered by the Unruh Act when he was ejected from a retail business for…well, wearing long hair and dressing unconventionally. And riding a Honda motorcycle.
This law suit is brilliant ! Simply brilliant.
If bakers are going to be forced to make gey wedding cake, Paypal and other payment processing companies must also be required to serve the entire public- not just the ones they prefer.
But that’s the thing, Sodomites want to make others conform and approve of their sin, but on the other hand they want to deny access to paypal Square etc. on the fact that guns are scary, but in this case its ok to discriminate?!.
Thats like the gun industry saying Paypal must put a gun emoji on all receipts that print from their machines.
But i would say there is no problem with PayPal and friends to say no you cant use our software because we don’t like guns, that totally fine. but the same principle should apply with cake bakers, wedding venues and others.
Make Liberals and Commies aware of the consequences of there own policies it will scare them.
I didn’t realize there was a difference between liberals and commies. ?
Excellent. Whatever funding and support plaintiffs need, we should provide it. Operation Choke Point and all the other BS interference in how people can exchange money with their banks and merchants for legal products are travesties.
Exactly what I was thinking. This seems a much better alternative to funding the campaigns of politicians who turn out to be bought-and-paid-for thieves 95% (maybe too low) of the time.
Just wait until they eliminate cash. Then the fun really begins!
When that happens some of us will go back to primarily using gold and silver. Seriously if you don’t have a stash of hard currency, you might want to consider it.
Funny thing about “hard assets”. They are only worth what a willing buyer will pay/trade for. If you have a stash of gold and silver, it might be good to have an even larger stash of ammo and guns. Once you start trading in gold/silver, you become a target for everyone who believes they are bigger, faster and better armed than you.
Buy bullets, not gold/silver.
Sam, that’s what I say when my wife asks why I need to make so much ammo. Investing in precious metals – brass and lead.
“Sam, that’s what I say when my wife asks why I need to make so much ammo. Investing in precious metals – brass and lead.”
Good for you !
Would copper, as a precious metal, be a better investment? There is a chronic shortage; prices don’t seem to go down much. In bullet form, copper could be really valuable.
Marginal returns (in the apocalypse) are probably better on the lead investment. After the apocalypse, there is probably going to be a ton of copper just sitting around doing nothing.
“..there is probably going to be a ton of copper just sitting around doing nothing.”
Copper bullets?
Siting around doing nothing?
Curious, that.
“There is a chronic shortage; prices don’t seem to go down much.” There won’t be a shortage.
I look at this as a “Build a new special bathroom law” equivalent for the financial companies.
If the brick and mortar stores have to serve everyone in the way any special group wants/needs to be served, then so do you. Bake that cake!
Bathrooms are easy. Law should be that gender markings on doors are suggestions, you can use any public bathroom you want. In fact, that is precisely how it works in my house, and I bet in yours as well, I don’t tell someone on the second floor that he must climb to the 3rd floor to find a men’s room.
The key difference is your house versus a public place or office. Unless complete strangers use your bathroom daily.
Make the Left adhere to their own laws.
Just another example of the overempowerment of the executive branch and their creating regulation without proper legislation.
Exceedingly wise words.
Or call yourself “The GAYGUNSTORE”…?Seriously howzabout we put anti-2A scum out of business?!?
Call it Rainbow Arms, maybe?
I have never had an issue with using either a debit or credit card at any LGS in my area. I wonder what brought on the special wrath of the three companies he approached?
If is very difficult, in some part of the country, for a merchant to open a new credit card processing account (a real ccard vs a BS paypal account).
Bank of America is often a common denominator in the world of abusive banking “relationships”.
Interesting. We use Stripe to process online renewals for our gun club.
“We use Stripe to process online renewals for our gun club.”
Does either your business name, or the product name that appears on your receipts, have the word “gun” in it?
If not, then that’s probably why Stripe hasn’t caught up to you yet!
If I use Paypal for any gun-related stuff, I make sure the product name is something vague, like “barrel” instead of “gun barrel”, and “magazine” not “Remington 700 magazine”, and “brake” rather than “muzzle brake”. At all costs, avoid using the scary evil letters “AR-15” or “AK-47” or the California-based Paypal will have a conniption!
Try to avoid using the name “Gun” in the name of your business, or you’ll run into problems with payment processors, shippers, etc. (not to mention that if your business has “Gun” in the name, package thieves may target packages to and from the business).
Possible store name:
Fir Ear Man Dammo Co-op
LOL, that’s a good one!
Or just use acronyms that only POTG would understand, like “Alan’s Friendly Neighborhood LGS”
I’m not sure which category (sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status) they claim they are being discriminated as.
None of them. It doesn’t matter because Unruh states “All persons within the jurisdiction of this state are free and equal” and the category list is not exhaustive.
The California Supreme Court has consistently argued that it protected gays before that category was added, for example.
I’d agree with your interpretation if the law said “All persons within the jurisdiction of this state are free and equal and are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever,” but the law says “All 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.”
Your interpretation of the law renders the listing of protected classes meaningless.
See update above.
0.2 Research/Shepardize California Unruh Civil Rights Act / review cases (w/TX_Lawyer).
My prediction is that the gun shops will go the way of the Honda ridin’ hippie.
Most of what follows is a rant against stupid leftist jurists who don’t care what words are in front of them. You’ve been warned.
I’m not surprised that a bunch of left wing jurists would read a statute to mean something different than what it says. That’s just not what the statute says.
Gorsuch said “wouldn’t be easier if just did what the statute says” in oral arguments for one of the first cases (maybe the first) argued before him on the Supreme Court.
“prohibit all arbitrary discrimination” – based on the Honda ridin’ hippie case, I’m guessing arbitrary means whatever the California Supreme Court says it means. I guess they don’t know what irony means either.
For those who don’t know, there are rules for how legislation is supposed to be interpreted. These are generally referred to as “Canons of Construction.” There is a famous criticism of the canons that any canon can be countered with another and canons are therefore just a justification for a preferred conclusion.
One is “[e]xpressio unius est exclusio alterius (‘the express mention of one thing excludes all others’)
Items not on the list are impliedly assumed not to be covered by the statute or a contract term. However, sometimes a list in a statute is illustrative, not exclusionary. This is usually indicated by a word such as ‘includes’ or ‘such as.'” – Wikipedia. (Funnily enough, Wikipedia’s list of words indicating that a list is non-exclusive is an excellent example of a list that is clearly non-exclusive. My favorite example of such language is “including, but not limited to.” This one indicates, twice, that it is non-exclusive. It’s kind of like saying “this list isn’t exclusive. We really mean it).”
Another canon is the “[r]ule against surplusage
Where one reading of a statute would make one or more parts of the statute redundant and another reading would avoid the redundancy, the other reading is preferred.” – Wikipedia. (This rule is one of my chief criticisms of using the due process clause of the 14A to incorporate the Bill of Rights which has its own due process clause, meaning almost all of the Bill of Rights is surplusage. Just read the f*ing privileges and immunities clause as it was meant to be and there is no need for a ridiculous reading of due process).
Another is “statutes granting privileges or relinquishing rights are to be strictly construed.” – Caldwell v. United States, 250 U.S. 14, 20 (1919).
The California Supreme Court’s reading of the statute violates these canons. I can’t find a canon that clearly supports their interpretation. (I’m sure someone else can. There are a lot of canons of construction, and they haven’t been very popular since somewhere around 1950, so they weren’t a really big deal when I was in law school).
If I had to bet, I’d go with you on this.
You shouldn’t have fixed your typo. That would have been really funny.
LOL! I don’t text and tell.
Two, those that worship blued steel and those of us that have a blue steel addiction.
I’d really hope there was more to the American Spirit arms case, because if not it seems some agent just forgot to actually read the laws.
Paypal discriminates against small gun shops.
Big corporate purveyors of death and destruction are OK.
That’s why you can get a pile of ammo from Academy with free shipping and pay for it with Paypal.
to lawyer contributor:
the pertinent clause is “in all business establishments of any kind whatsoever”. if *any* protected class has a statistically relevant, relative increase in the use of non-bank payment services for any thing or any reason, then a non-bank payment service that denies service to any legal business is, by law, discriminatory.
https://en.wikipedia.org/wiki/Disparate_impact
Normally, disparate impact has to be a somewhat explicit part of the statute. There are also a bunch of loopholes. Then again, I wouldn’t be surprised by California judges ignoring the law as written and making stuff up.
“Then again, I wouldn’t be surprised by California judges ignoring the law as written and making stuff up.”
Pretty much like the SC making up law when they placed exceptions on the EO regarding travel of people from six named terror incubators.
Exactly like that. If that’s what they did. I haven’t read any of that stuff and don’t have a background in immigration law.
I think it’s a great idea to make gun shops do business in cash. Hey, you know who ELSE does business in cash? Legal marijuana dealers.
There is a fairly decent size LGS in my area that was financed by MMJ. The MJ dealers needed someplace to put their cash, the SF vets starting the store needed investors, the MJ dealers needed security, the vets needed investors in a security company…
A synergistic, serendipitous relationship. I wish them all well, may they thrive, and in doing so, stick it to those whom need sticking.
Here is a gun friendly, second amendment proponent providing firearms merchant accounts, https://hrma-llc.com/firearms-merchant-account/ welcoming licensed gun dealers. Proudly accepting this vertical.
you have to select the right company that offers high risks merchant accounts and that same company that knows the industry well for this to work.
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