Archibald v. Cinerama Hawaiian Hotels, Inc.

Citations: 73 Cal. App. 3d 152; 140 Cal. Rptr. 599; 1977 Cal. App. LEXIS 1807Docket: Civ. 16378

Court: California Court of Appeal; September 6, 1977; California; State Appellate Court

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In Marybelle Archibald v. Cinerama Hawaiian Hotels, Inc., the Court of Appeals of California addressed an appeal regarding a judgment of dismissal based on demurrers sustained without leave to amend. The plaintiff's first amended complaint, which asserted a class action on behalf of California residents who had been guests at Hawaiian hotels operated by various defendants, included three causes of action for breach of an innkeeper's duty. 

The first cause of action claimed that the hotel rates charged to the plaintiff were higher than the "Kamaaina" rate available to local residents, thereby constituting unlawful discrimination. The second cause of action alleged a conspiracy among the defendants to engage in these discriminatory practices. The third cause of action contended that the defendants violated various California laws and engaged in unfair and deceptive practices contrary to state public policy.

The trial court ruled that the complaint failed to state sufficient facts to constitute a cause of action, leading to the dismissal. The plaintiff argued that her claims were valid despite the general demurrers, claiming the trial court erred. However, the court noted that the plaintiff had opted not to amend her complaint when given the opportunity, which meant that her case was presumed to be as strong as possible, with any ambiguities resolved against her. The first cause of action was argued to breach common law duties of an innkeeper and implied violations of constitutional rights regarding equal protection and commerce.

Plaintiff has submitted a selective analysis regarding the common law duties of innkeepers, economic principles of laissez-faire, state equal rights laws related to accommodations, constitutional rights for residents versus travelers, and the distinction between "discounts" and "overcharges" in hotel pricing. The first cause of action alleges that rates charged to the plaintiff and her class are higher than those for Hawaii residents but does not claim that these rates differ from those charged to other nonresidents or that they are unreasonable. The complaint refers to the rates for nonresidents as a "surcharge," claiming discrimination, while identifying a "Kamaaina rate" as a discount for local residents. 

The plaintiff argues that innkeepers have a duty to charge the same rates to all guests and bases her case on established legal texts, asserting that innkeepers must provide equal service without discrimination. However, it is noted that the common law primarily addresses the prevention of excessively high rates and does not deem discounts offered to attract certain customers as unlawful. Additionally, the common law concern for reasonable charges applies differently when a guest has made an advance reservation, which negates the implied necessity for equal treatment in emergency lodging situations. The legal authorities referenced suggest that innkeepers are permitted to set reasonable rates and offer discounts as they see fit.

The common law emphasizes equal treatment for travelers, ensuring no unreasonable rates or payments exclude individuals. It does not concern itself with the reasonableness of rates per se or with the existence of discounts aimed at specific groups. The case does not provide a valid reason to alter established common law regarding innkeepers. The plaintiff's reliance on *Neptune City v. Avon-By-The-Sea* is inappropriate; that case involved state obligations to ensure equal access to public trust lands, which is not applicable to privately owned hotels. Moreover, the constitutional claims raised by the plaintiff, including the equal protection clause and the right to travel, require state action, which is absent in this situation. There are no allegations suggesting that the State of Hawaii influenced the allegedly discriminatory hotel rate policies. The plaintiff cites California's Unruh Civil Rights Act, claiming its violation by the defendants, but the Act applies only within California and cannot extend to Hawaii. Thus, a state cannot impose regulations on activities in another state, regardless of its citizens' welfare.

Bigelow v. Virginia addresses the application of Civil Code sections 51 and 52, concluding that they are not relevant to the case at hand. The court determined that the plaintiff was neither arbitrarily excluded from a business premise nor discriminated against, and failed to allege any tort, breach of contract, or other actionable wrong, justifying the trial court's decision to sustain the demurrers to the first cause of action. 

The second cause of action, which alleges conspiracy related to the first, was also dismissed. The court emphasized that civil conspiracy cannot exist independently without an underlying wrongful act that results in damages. Since the first cause of action lacked an actionable wrong, the second cause was equally unviable.

In the third cause of action, the plaintiff claimed violations of unspecified laws and unfair practices, but again failed to reference specific laws or provide substantive allegations. The court found no California statute mandating uniform hotel rates, noting that the only relevant statute (Civil Code section 1863) pertains to rate posting and does not support the plaintiff's claims. The common law duty of innkeepers to accommodate guests was also reiterated, indicating that wrongful refusal without just cause may lead to civil liability or misdemeanor charges.

Incorporating the second cause into the third did not remedy its deficiencies, as there was still no actionable conspiracy. Consequently, the trial court's decision to sustain the demurrer for the third cause of action was upheld. The judgment was affirmed, with one judge concurring but expressing a different perspective on the conspiracy allegations regarding differential hotel rates for mainland tourists versus "Kamaainas."

The second count of the complaint alleges conspiracy through price-rigging, constituting a contract that restrains competition. Injured parties may potentially pursue a common law tort action for intentional deprivation of economic advantage, citing relevant case law. However, the prevalence of federal and state antitrust laws raises doubts about the viability of such common law claims. The case falls under federal antitrust jurisdiction due to its connections to interstate commerce, making it exclusively within the federal courts' purview, and outside California state courts' subject-matter jurisdiction.

The current appeal focuses on the merits of the pleading, which is fundamentally a venue dispute, with plaintiffs aiming to retain the case in California while defendants seek to transfer it elsewhere. The defense’s strategy appears to mischaracterize the claim as a common law issue instead of a federal antitrust violation. The plaintiffs are pursuing $300 million in general damages and an additional $300 million in punitive damages across three causes of action. The document also draws parallels to common carrier rate practices, noting that California law permits reasonable rate differentials without constituting unlawful discrimination. Additionally, it references the Unruh Civil Rights Act, which guarantees equal accommodations and services regardless of demographic factors, along with its enforcement provisions.