Two Jinn, Inc. v. Government Payment Service, Inc.

Filed 2/3/15
CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

TWO JINN, INC.,
Plaintiff and Appellant,
A136984 & A137479
v.
GOVERNMENT PAYMENT SERVICE, (Sonoma County
INC., Super. Ct. No. SCV-247285)
Defendant and Respondent.

I.
INTRODUCTION
Two Jinn, Inc., doing business in California as Aladdin Bail Bonds (Aladdin), a
licensed bail agent, brought this action to enjoin Government Payment Services, Inc.
(GPS) from engaging in bail agent activities in violation of state licensing and
regulatory requirements. The superior court sustained a demurrer to Aladdin’s claim
for false advertising under the federal Lanham Act, 15 U.S.C. section 1125(a).
Thereafter, the court granted a defense motion for summary judgment on Aladdin’s
remaining claims alleging violations of California’s Unfair Competition Law (the
UCL), Business and Professions Code section 17200 et seq., and seeking declaratory
relief. In this appeal from the resulting judgment, Aladdin challenges both the
demurrer and summary judgment rulings.
We conclude that (1) Aladdin lacks standing to maintain a UCL claim;
(2) undisputed evidence submitted by the parties shows that the commercial activities
of GPS associated with its processing of credit or debit card transactions for cash bail

1
payments do not require GPS to obtain a bail bond license; and therefore, GPS is not
in violation of the UCL; and (3) the second cause of action in Aladdin’s second
amended complaint fails to state a Lanham Act claim, as a matter of law. Therefore,
we affirm the judgment entered in favor of GPS below.
II.
STATEMENT OF FACTS
A. The Complaint Allegations
In December 2010, Aladdin filed a second amended complaint and petition for
writ of mandate (the SAC) in which it alleged the following facts: Aladdin does
business in California as Aladdin Bail Bonds, a “duly licensed” bail agent. GPS
purports to be a “financial services entity,” but actually conducts activities “relating to
arranging pretrial release for incarcerated detainees accused of committing both
felonies and misdemeanors, including but not limited to solicitation and transaction of
bail within the meaning of the [Insurance] Code.” Both Aladdin and GPS “provide
pretrial release services to detainees in exchange for a monetary compensation.”
Aladdin performs that service through the posting of surety bonds, while GPS
allegedly performs that service by posting cash bail for detainees.
According to the SAC, GPS solicits clients and posts cash bail for detainees
pursuant to “contractual arrangements” with county sheriffs in Sonoma, Solano,
Marin, Monterey, and Ventura. Aladdin attached copies of these contracts as exhibits
to the SAC. For example, Exhibit B is an “Agreement for Processing Credit or Debit
Card For Cash Bail Payments,” which was executed by GPS’s CEO and the Sheriff-
Coroner of Sonoma County in June 2009. According to that document, GPS agreed to
“process credit/debit card transaction requests for cash bail payments for persons in
the custody of the Sheriff upon their (or their agents[’]) telephone or [I]nternet
request.” GPS agreed these services would be available “at all times,” and that it
would process payments “in real-time and, upon credit/debit card approval, [it would]
transmit a payment receipt document to an authorized agent of the Sheriff” for review

2
and approval. Upon notice of approval, GPS would then “transmit all funds for the
cash bail payments electronically.”
The SAC alleged that these contractual arrangements are unlawful for three
primary reasons. First, GPS’s business activities allegedly require a valid license
under Insurance Code section 1800, subdivision (a), which states that “[a] person shall
not in this state solicit or negotiate in respect to execution or delivery of an
undertaking of bail or bail bond by an insurer, or execute or deliver such an
undertaking of bail or bail bond unless licensed as provided in this chapter . . . .”
Aladdin alleged GPS does not have this required license.
Second, GPS’s contractual arrangements with county sheriffs allegedly violate
other provisions of the Insurance Code regulating the conduct of bail agents by,
among other things, (1) giving GPS exclusive access to detainees wishing to arrange
pretrial release via credit or debit card payments; (2) authorizing GPS to advertise its
services throughout the jails and areas where bail payment can be made; and
(3) obligating GPS to pay sheriffs a percentage of its revenue from the sale of its
services.
Third, Aladdin alleged that advertisements GPS posts in county jails are false,
misleading and confusing to consumers because it employs the terms “Government,”
and “GOV” in combination with a state capitol dome logo to create the false
impression that GPS’s services “are performed either by a government agency” or are
performed by an entity which is “sponsored by or affiliated with the government.”
Aladdin incorporated these general allegations into four causes of action, the
first three against GPS for unlawful business practices under the UCL, false
advertising under the Lanham Act, and declaratory relief to resolve a dispute about
whether GPS’s activities require a bail agent license.
The fourth cause of action was a petition for writ of mandate against the
California Department of Insurance (the Department). Aladdin added this claim to the
SAC after the superior court sustained a demurrer to the first amended complaint and

3
stayed proceedings pursuant to the primary jurisdiction doctrine, finding that the
Department’s position regarding the nature of GPS’s business was critical to a
resolution of this case. In support of the mandate claim, Aladdin alleged that the
California Insurance Commissioner (the Commissioner) was aware of GPS’s unlawful
activities, Aladdin had requested that the Department initiate an enforcement action,
and the Commissioner “refused to initiate or pursue an enforcement action or
otherwise attempt to enforce the [Insurance] Code with respect to Defendant’s
unlawful conduct.”
B. The Department’s Demurrer
In February 2011, the Commissioner filed a demurer to the fourth cause of
action for a writ of mandate. Evidence supporting the demurrer included an October
2010 letter from the Department’s general counsel to Aladdin’s trial counsel in which
the Department officially declined to “exercise primary jurisdiction or initiate an
enforcement action” against GPS. The Department determined GPS was exempt from
the Insurance Code license and regulatory requirements covering the transaction of
bail in California under Government Code section 6159.
Section 6159, subdivision (b) states, in pertinent part: “Subject to subdivisions
(c) and (d), a court, city, county, city and county, or other public agency may
authorize the acceptance of a credit card, debit card, or electronic funds transfer for
any of the following: [¶] (1) The payment for the deposit of bail for any offense not
declared to be a felony or for any court-ordered fee, fine, forfeiture, penalty,
assessment, or restitution. Use of a card or electronic funds transfer pursuant to this
paragraph may include a requirement that the defendant be charged any administrative
fee charged by the company issuing the card or processing the account for the cost of
the transaction. . . .”
Subdivision (c) of section 6159 states that a “public agency desiring to
authorize the use of a credit card, debit card, or electronic funds transfer pursuant to
subdivision (b) shall obtain the approval of the governing body that has fiscal

4
responsibility for that agency.” And subdivision (d) provides that, once the necessary
approval is obtained, the agency may execute a contract “with one or more credit card
issuers, debit card issuers, electronic funds transfer processors, or draft purchasers.”
The Department interpreted this statute as permitting “counties and other public
agencies to contract with companies for the payment by credit card, debit card or
electronic funds transfer of nonfelony bail by arrestees.” As the Department’s counsel
explained in his October 2010 letter, “[i]f a company has a valid contract under
Section 6159 to process bail by credit card, the Department reads Section 6159 as
preempting Insurance Code laws related to bail. For example, if a sheriff’s office
contracts with Bank of America to provide Visa and MasterCard services at a jail, we
do not believe Bank of America must obtain a bail license from the Department.”
On March 30, 2011, the superior court sustained the Department’s demurrer to
Aladdin’s mandate claim without leave to amend. In reaching this decision, the court
found that “[a]ny action that the Commissioner can take pursuant to Insurance Code
§ 790.03, et seq. is within the exercise of the Commissioner’s discretion and cannot be
compelled by a writ of mandamus.” The court also found the Commissioner’s
decision to initiate an enforcement action was a matter of discretion which “cannot be
compelled.” (Citing Ins. Code, § 12921.1, subd. (a); Schwartz v. Poizner (2010) 187
Cal.App.4th 592.)
C. GPS’s Demurrer
On August 23, 2011, the court sustained GPS’s demurrer to the SAC’s second
cause of action for false advertising without leave to amend. The court found that
Aladdin failed to state a cause of action under the Lanham Act because the SAC did
not identify any false statement of fact that GPS allegedly made. Instead, the theory
alleged in the SAC was that GPS “uses ‘Government’ and/or the term ‘Gov’ and a
capitol dome logo to imply that Gov is a governmental entity or approved by one.”
In its order sustaining the demurrer, the court recognized that, although Aladdin
labeled its second cause of action as a false advertising claim, the Lanham Act also

5
prohibits “false associations.” However, the court found that a false association claim
is substantively distinct from a false advertising claim with different elements and
standing requirements that were not established by the factual allegations in the SAC.
D. Summary Judgment
On September 19, 2012, the superior court granted a defense motion for
summary judgment on the remaining causes of action in the SAC, the UCL and
declaratory relief claims.1 The court found that the summary judgment evidence
established the following facts: GPS is an electronic funds transfer processor; it
processes credit or debit card transactions for cardholders who deposit cash bail to a
local government entity. It uses common industry practices to “make[] transfers by
electronic means” of the cardholder’s own funds. And, it provides these “electronic
funds transfer processing services for the payment of cash bail from credit or debit
cards” to sheriffs departments pursuant to contractual relationships with Sonoma
County and several other California counties.
Pursuant to defense requests for judicial notice, the court also found that a
company referred to as “EZ Card and Kiosk, LLC” is not a licensed bail agent and
that it has contracts with Madera and Orange Counties to provide the same type of
services GPS provides. The court also took judicial notice of the fact that the
Department officially declined to pursue any action against GPS. Finally, the court
took judicial notice of legislative history material pertaining to Government Code
section 6159 which shows that the intent behind that statute was “to make it easier for
people to pay fines, post bail and to alleviate time spent in jail.”
Based on these facts, the court found that: (1) Aladdin does not have standing
to bring a UCL claim because GPS’s allegedly unfair business practices did not cause
Aladdin to suffer an actual economic injury; (2) GPS’s business activities do not

1
The court also denied Aladdin’s cross-motion for summary judgment, but
that order is not challenged on appeal.

6
require that it comply with the bail agent license requirement and related regulations
set forth in Insurance Code section 1800 et seq.; and (3) GPS’s contracts with county
sheriffs are authorized by Government Code section 6159.
E. Judgment and Appeal
On November 29, 2012, the court entered judgment against Aladdin on both the
SAC and GPS’s cross-complaint for declaratory relief. In support of the judgment,
the court set forth five findings: (1) Aladdin lacks standing to maintain a UCL claim;
(2) Insurance Code section 1800 et seq. does not require that GPS obtain a bail bond
license or otherwise regulate the defendant’s activities; (3) GPS operates an electronic
funds transfer processing system under Government Code section 6159; (4) GPS’s
conduct does not violate the UCL; and (5) the SAC’s second cause of action fails to
state a Lanham Act claim, as a matter of law. The judgment incorporates by reference
the superior court orders sustaining the demurrer to the Lanham Act claim and
granting GPS summary judgment. Aladdin timely appealed.2
III.
SUMMARY JUDGMENT
A. Standard of Review and Issues on Appeal
“We review a summary judgment ruling de novo to determine whether there is
a triable issue as to any material fact and whether the moving party is entitled to
judgment as a matter of law. [Citation.] ‘In practical effect, we assume the role of a
trial court and apply the same rules and standards which govern a trial court’s
determination of a motion for summary judgment.’ [Citation.]” (Bjork v. State Farm
Fire & Casualty Co. (2007) 157 Cal.App.4th 1, 5-6.) “ ‘A trial court properly grants a
motion for summary judgment only if no issues of triable fact appear and the moving
party is entitled to judgment as a matter of law. [Citations.] The moving party bears

2
Aladdin filed two notices of appeal, one from the September 2012 summary
judgment order, and another from the November 2012 judgment. This court granted
Aladdin’s motion to consolidate those appeals.

7
the burden of showing the court that the plaintiff “has not established, and cannot
reasonably expect to establish,” ’ the elements of his or her cause of action.
[Citation.]” (Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, 720.)
Aladdin contends the summary judgment must be reversed without providing
any independent analysis of its declaratory relief claim. By focusing exclusively on
the UCL cause of action, Aladdin implicitly concedes it cannot obtain declaratory
relief if the UCL claim fails. Thus, we confine our review of the summary judgment
rulings to the SAC’s first cause of action alleging unlawful business practices in
violation of the UCL.
“The purpose of the UCL ‘is to protect both consumers and competitors by
promoting fair competition in commercial markets for goods and services.
[Citation.]’ [Citations.]” (Drum v. San Fernando Valley Bar Assn. (2010) 182
Cal.App.4th 247, 252 (Drum).) “The UCL sets out three different kinds of business
acts or practices that may constitute unfair competition: the unlawful, the unfair, and
the fraudulent. [Citations.]” (Rose v. Bank of America, N.A. (2013) 57 Cal.4th 390,
394.) “ ‘ “. . . California courts have consistently interpreted the language of section
17200 broadly.” ’ [Citations.]” (Wilson v. Hynek (2012) 207 Cal.App.4th 999,
1007-1008.) Nevertheless, in addition to proving the elements of his or her claim, a
private party must establish standing to bring a UCL action. (Daro v. Superior Court
(2007) 151 Cal.App.4th 1079, 1097-1098 (Daro).)
As reflected above, judgment was entered against Aladdin on its UCL claim
because evidence produced in the summary judgment proceeding established that
(1) Aladdin lacks standing; and (2) GPS’s business activities are not unlawful or
unfair under the theory alleged in the SAC. Aladdin disputes both of these findings.
B. Aladdin Does Not Have Standing Under the UCL
A “private person has standing to sue under the UCL only if that person has
suffered injury and lost money or property ‘as a result of such unfair competition.’
[Citation.]” (Daro, supra, 207 Cal.App.4th at p. 1098, italics omitted.) To satisfy the

8
UCL standing requirement, the plaintiff must “(1) establish a loss or deprivation of
money or property sufficient to qualify as injury in fact, i.e., economic injury, and
(2) show that that economic injury was the result of, i.e., caused by, the unfair
business practice or false advertising that is the gravamen of the claim.” (Kwikset
Corp. v. Superior Court (2011) 51 Cal.4th 310, 322 (Kwikset).)
1. Lost Customers
Aladdin contends that GPS’s allegedly unfair business practices caused it
economic injury when customers who would otherwise have used Aladdin’s services
used GPS’s services instead. We disagree because the summary judgment evidence
shows that any diversion of customers from Aladdin to GPS did not result from the
fact that GPS does not have a bail bond license, or that it does not comply with other
regulations governing the activities of licensed bail bond agents.
GPS produced evidence that it is not a bail bond agent, and thus, does not
directly compete with Aladdin. It does not sell bail bonds to arrested individuals,
work on behalf of any surety insurer, or post its own money on behalf of a detained
person in order to secure his or her release. Instead, GPS operates an electronic funds
transfer (EFT) service for processing credit and debit card payments of cash bail that
are made to counties pursuant to Government Code section 6159.3
As reflected in our discussion of Aladdin’s unsuccessful mandate claim against
the Department, Government Code section 6159 authorizes counties to accept a credit
card, debit card or other EFT as payment for the deposit of non-felony bail. Thus, this
statute provides arrested and detained individuals with an alternative method of
securing release without having to engage the services of a bail bond agent like
Aladdin. As the superior court found, the legislative history evidence shows that the

3
GPS processes EFT transactions on behalf of government agencies for a
number of purposes including payment of fines, fees and cash bail deposits. It
conducts business in more than 40 states with more than 1,400 government agencies,
including several sheriffs departments in California counties.

9
Legislature created this alternative in order to “make it easier for people to pay fines,
post bail, and to alleviate time spent in jail.”
The record also shows that GPS is not the only company that provides EFT
services to California counties that operate section 6159 cash bail payment systems.
For example, EZ Card and Kiosk provides these same services in Madera and Orange
Counties and, like GPS, it is not a licensed bail agent. Thus, even if GPS were
enjoined from providing its services in California, Aladdin’s customer base would still
have the option of making a cash bail payment with a credit or debit card or other EFT
mechanism.
When a UCL action is based on an unlawful business practice, “there must be a
causal connection between the harm suffered and the unlawful business activity. That
causal connection is broken when a complaining party would suffer the same harm
whether or not a defendant complied with the law.” (Daro, supra, 151 Cal.App.4th at
p. 1099.) Here, GPS’s evidence established a lack of causation by showing that any
diversion of potential customers from Aladdin to GPS results from the Legislature’s
establishment of the cash bail payment system as an alternative to the traditional bail
bond service, and not from the fact that GPS conducts its business without a bail agent
license.
Aladdin contends that the issue of causation cannot properly be decided on
summary judgment. However, in making this assertion, it relies on cases addressing a
different issue, the causation element of a negligence claim. In that context, the
elements of breach of duty and causation are often questions of fact for the jury to
decide. (See, e.g., Phillips v. TLC Plumbing, Inc. (2009) 172 Cal.App.4th 1133,
1139.) However, even in that context summary judgment is appropriate when
causation is a question of law. (Ibid.) Here, Aladdin’s lack of standing was
established as a matter of law because GPS’s evidence broke the alleged causal
connection between Aladdin’s reduced customer base and GPS’s challenged business
activities. That evidence clearly established that Aladdin lost customers because the

10
Legislature enacted Government Code section 6159 and that it would suffer that loss
whether or not GPS obtained a bail bond license.
Alternatively, Aladdin contends that even if causation “is capable of summary
resolution,” GPS failed to carry its burden of showing that it did not injure Aladdin
because there are factual disputes about whether GPS engaged in the activities that
Aladdin characterizes as unlawful. This argument rests on a misunderstanding of
UCL standing which fails to distinguish this independent requirement from the
elements of the claim itself. In order to pursue a UCL claim, the plaintiff must show
that the practices that it characterizes as unlawful caused it to suffer an actual
economic injury. (Kwikset, supra, 51 Cal.4th at pp. 321-322.) The summary
judgment evidence GPS produced shows that Aladdin cannot satisfy that requirement.
Aladdin contends that even if GPS met its initial evidentiary burden, Aladdin’s
evidence creates a “material factual dispute on the issues of causation and standing.”
According to Aladdin, it produced evidence which proves that GPS is not just a card
processor, but also provides other services which facilitate the completion of cash bail
transactions. From Aladdin’s perspective, this evidence establishes two relevant facts:
(1) GPS’s business model requires that it “undertake all of the regulated functions of a
traditional bail agent in order to actually complete cash bail transactions,” and (2) If
GPS did not perform these “regulated bail agent activities,” consumers would not use
the cash bail option, but would instead engage the services of a bail bond agent like
Aladdin.
We disagree with this argument for several independent reasons. First, the
record citation Aladdin provides for its “evidence” simply refers to several pages in a
statement of “undisputed material facts and supporting evidence” that Aladdin filed in
opposition to the summary judgment motion, and not to any underlying evidence.
Many of those statements are argumentative, conclusory and expressly disputed by
GPS. Second, Aladdin’s contention on appeal that GPS “completes cash bail
transactions” is not supported by the evidence we have found in the record going

11
beyond Aladdin’s “statement of undisputed material facts.” This evidence appears to
relate only to GPS’s business activities outside California that are not material to this
dispute. Third, Aladdin’s observation that GPS’s services would be regulated by the
Insurance Code if it were a bail bond agent does not constitute evidence that GPS is
actually a bail bond agent.
In sum, evidence that GPS provides support services to cash bail payment
programs operating under Government Code section 6159 does not alter our
conclusion that Aladdin’s shrinking customer base does not establish UCL standing.
As the superior court found, economic injury resulting from the loss of customers who
use a credit card, debit card or other EFT to pay cash bail results from the existence of
the statutory system authorized by section 6159, not from the fact that GPS does not
have a bail bond license.
2. Investigation Costs
Alternatively, Aladdin contends it has standing because it suffered an economic
injury by incurring “significant costs and expenses” to investigate the “nature, scope
and extent of Defendant’s conduct.” To support this contention, Aladdin relies on the
declaration of Justin Pinney, its associate general counsel and director of corporate
compliance. Pinney confirmed that Aladdin used employees and paid outside vendors
to investigate GPS’s conduct. He stated that Aladdin paid money to hire outside
counsel, obtain copies of GPS’s contracts, and to determine which California counties
were involved with GPS’s allegedly unlawful activities. Pinney also stated that
Aladdin incurred expenses by diverting staff to investigate GPS’s activities. In this
regard, Pinney estimated that he personally spent between 6 and 15 hours “conducting
pre[-]litigation activities.”
These “pre-litigation” costs do not establish standing to bring a UCL claim
because they are not an economic injury caused by the business practices that Aladdin
characterizes as unlawful. Rather, as Pinney’s declaration confirms, the reason
Aladdin incurred pre-litigation expenses was to generate evidence. Aladdin then used

12
that evidence to support this lawsuit. “Plaintiffs cannot establish standing to pursue a
UCL claim based on expenses incurred in order to bring their UCL claim. If they
could, the requirement that individuals show they lost money or property ‘as a result’
of the challenged practice in order to have standing to sue under the UCL would be
meaningless. [Citation.]” (Robinson v. HSBC Bank USA (N.D. Cal. 2010) 732
F.Supp.2d 976, 989.)
Aladdin mistakenly relies on Havens Realty Corp v. Coleman (1982) 455 U.S.
363 (Havens). Havens was a federal action against a realty company for racial
steering in violation of the Fair Housing Act. One issue before the high court was
whether a nonprofit community organization plaintiff—Housing Opportunities Made
Equal (HOME)—had standing to bring the action. (Id. at pp. 367, 379.) In its
complaint, HOME alleged that it had “ ‘been frustrated by defendants’ racial steering
practices in its efforts to assist equal access to housing through counseling and other
referral services,’ ” and that it “ ‘has had to devote significant resources to identify
and counteract the defendant’s [sic] racially discriminatory steering practices.’ ” (Id.
at p. 379.) The Havens court found these allegations were sufficient to withstand a
motion to dismiss for lack of standing. (Ibid.) The court reasoned that if the
defendants’ steering practices “have perceptibly impaired HOME’s ability to provide
counseling and referral services for low- and moderate-income homeseekers, there
can be no question that the organization has suffered injury in fact. Such concrete and
demonstrable injury to the organization’s activities—with the consequent drain on the
organization’s resources—constitutes far more than simply a setback to the
organization’s abstract social interests . . . .” (Ibid., fn. omitted.)
Relying on Havens, Aladdin attempts to characterize its pre-litigation costs as
“Havens expenses.” But, unlike this case, the Havens plaintiff alleged that it could
not continue to provide its services to the public without expending resources to
“ ‘counteract’ ” the defendants’ unlawful activity. (Havens, supra, 455 U.S. at
p. 379.) This allegation was sufficient to establish standing because proving it would

13
show that the allegedly illegal conduct impacted HOME’s operating budget, causing it
an actual economic injury. Here, proof that Aladdin spent money to investigate
GPS’s activities would not show that those allegedly unfair business activities had any
independent economic impact on Aladdin’s bail bond business. Beyond that, Havens
does not hold or intimate that a party can manufacture an economic injury by
incurring investigation costs to generate evidence for its lawsuit.
Aladdin also relies on Buckland v. Threshold Enterprises, Ltd. (2007) 155
Cal.App.4th 798 (Buckland), overruled on another ground in Kwikset, supra, 51
Cal.4th at page 337. There, an individual and her organization brought an action to
prevent defendants from marketing their skin lotions and creams. The claims of the
individual plaintiff were dismissed pursuant to a demurrer. One issue on appeal was
whether Aladdin had standing to bring a UCL claim when the “only loss of money or
property she identified was her expenditures of funds to buy respondents’ allegedly
defective products . . . .” (Buckland, at p. 813.)
Because the injury in fact standing requirement is rooted in the federal
constitution, the Buckland court consulted federal authority. (Buckland, supra, 155
Cal.App.4th at pp. 815-816.) It found that the circuit courts were divided “over
whether the costs an organization incurs to pursue litigation are sufficient, in
themselves, to establish injury in fact.” (Id. at p. 815.) According to the Buckland
court, the majority view is that “ ‘[a]n organization cannot, of course, manufacture the
injury necessary to maintain a suit from its expenditure of resources on that very
suit,’ ” but “funds expended independently of the litigation to investigate or combat
the defendant’s misconduct may establish an injury in fact. [Citations.]” (Ibid.) The
Buckland court adopted this rule and applied it to the individual plaintiff in that case.
Ultimately, the court held that the plaintiff had not suffered an injury in fact because
she purchased the defendant’s product for the purpose of establishing standing and she
could not identify any expenditure she made independently of the litigation. (Id. at
p. 816.)

14
 Relying on Buckland, Aladdin contends that it has standing because it incurred
expenses independently of this litigation to investigate and combat GPS’s allegedly
unlawful activity. However, this contention is not supported by Pinney’s declaration,
the only evidence that Aladdin references. Indeed, Pinney expressly conceded that
Aladdin’s investigation constituted “pre[-]litigation activities.”
Ignoring this fact, Aladdin insists that, “[w]ell before any litigation was
considered,” it expended significant time and resources investigating and
documenting GPS’s activities in order to assist government regulators and convince
them to uniformly enforce the law. We find no evidence in Pinney’s declaration or
anywhere else that Aladdin’s investigation was conducted independently of this
lawsuit. While the record shows that Aladdin shared its evidence with the
Department, it did so as part of this litigation in order to support its petition for a writ
of mandate. Thus, Aladdin has failed to identify any evidence supporting its
remarkable claim that it investigated GPS’s activities for non-litigation reasons.
For all of these reasons, we conclude that the trial court did not err in granting
summary judgment on the ground that Aladdin lacked standing to bring the remaining
claims asserted in the SAC that were not dismissed on demurrer.
C. GPS’s Business Practices Were Not Unlawful or Unfair Under the UCL
As noted in our factual statement, the superior court granted summary
judgment not only because Aladdin lacked standing but also because the evidence
established that GPS’s business activities are not unlawful and unfair as required for a
claim brought under the UCL. We agree with the trial court that the summary
judgment evidence establishes Aladdin cannot prove its UCL claim based on the
theory of liability alleged in the SAC.
“The UCL’s unlawful prong ‘ “ ‘borrows’ violations of other laws and treats
them as unlawful practices” that the unfair competition law makes independently
actionable. [Citation.]’ [Citation.]” (Jenkins v. JPMorgan Chase Bank, N.A. (2013)
216 Cal.App.4th 497, 520.) Furthermore, even if a business practice is not unlawful,

15
it may violate the UCL if it is deemed “unfair” as that term has been defined by the
pertinent case law. (Cel-Tech Communications, Inc. v. Los Angeles Cellular
Telephone Co. (1999) 20 Cal.4th 163.) Here, Aladdin’s theory of liability is that
GPS’s business practices violate the license and regulatory requirements imposed on
bail bond agents by Insurance Code section 1800 et seq., and are not authorized by
Government Code section 6159.4 As we will explain, this theory is legally flawed and
unsupported by factual evidence.
1. The Insurance Code Provisions
Section 1800, subdivision (a) (section 1800(a)) states: “An insurer shall not
execute an undertaking of bail except by and through a person holding a bail license
issued as provided in this chapter. A person shall not in this state solicit or negotiate
in respect to execution or delivery of an undertaking of bail or bail bond by an insurer,
or execute or deliver such an undertaking of bail or bail bond unless licensed as
provided in this chapter, but if so licensed, such person may so solicit, negotiate, and
effect such undertakings or bail bonds without holding or being named in any license
specified in Chapter 5 of this part.”
There does not appear to be any case authority construing the scope of the
licensing requirement imposed by section 1800(a). However, the plain language of
this statute imposes the requirement on persons who solicit, negotiate or arrange for
the execution of an “undertaking of bail or a bail bond by an insurer.”
A bail bond is defined in section 1800.4 as “any contract not executed by a
surety insurer for or method of release of person arrested or confined on account of
any actual or alleged violation of the provisions of any law of this or any other State
or of any municipality in the State of California, including any release by means of
cash or other property deposited in lieu of bail under the provisions of sections 1295

4
During the remainder of our analysis, statutory references to section 1800 and
its subdivisions refer to the Insurance Code. Statutory references to section 6159 refer
to the Government Code.

16
and 1298 of the Penal Code whereby the attendance in court when required by law
and obedience to orders and judgment of any court by the person released is
guaranteed.” An undertaking of bail is similar to a bail bond except that “[a]n
‘undertaking’ is executed by sureties only, while a ‘bond must be executed by both
the principal and sureties.’ [Citation.]” (Associates Capital Services Corp. v. Security
Pac. Nat. Bank (1979) 91 Cal.App.3d 819, 823-824.)
The evidence below shows that GPS does not provide services related to the
posting of an undertaking of bail or a bail bond by an insurer. Unlike Aladdin, GPS is
not a bail bond agent for an insurance company. Instead, GPS processes credit and
debit card payments of cash bail that are made to government agencies pursuant to
section 6159. Aladdin failed to produce evidence which materially disputes this fact.
Thus, the summary judgment evidence establishes that GPS does not provide any
services in California which require a bail bond license.
Aladdin’s contrary arguments are based on an erroneous interpretation of
section 1800(a). Aladdin appears to concede that the first sentence of this statute
pertains only to persons acting as insurers. However, it contends that the second
sentence broadly applies to third parties by prohibiting “unlicensed persons from
advertising, negotiating, or participating in a bail transaction for compensation where
the bail contract is issued by someone else.” Thus, according to Aladdin, GPS
violates this provision because it participates in bail transactions and charges a fee for
card processing services.
We disagree. By its express terms, section 1800(a) is limited to insurers and to
individuals who solicit, negotiate, or arrange for the posting of an undertaking of bail

17
or a bail bond by an insurer.5 It does not purport to regulate third parties who provide
card processing services to counties operating a cash bail payment program
established under section 6159.
Aladdin goes on to argue that section 1800, subdivision (b) (section 1800(b))
supports its contention that section 1800(a) broadly applies to all bail related
commercial activity whether or not that activity is conducted by or on behalf of an
insurer. Section 1800(b) states: “For purposes of this section, ‘solicit’ shall include
any written or printed presentation or advertising made by mail or other publication,
or any oral presentation or advertising by means of telephone, radio, or television
which implies that an individual is licensed under this chapter, and any activity in
arranging for bail which results in remuneration to the individual conducting that
activity.”
Aladdin’s theory is that GPS solicits bail under section 1800(a) because its
activities are covered by the broad statutory language in section 1800(b) which
defines “solicit” as “any activity in arranging for bail which results in remuneration to
the individual conducting that activity.” However this broad definition must be
viewed within the scope of subdivision (a), which expressly limits the license
requirement to those who “solicit . . . in respect to execution or delivery of an
undertaking of bail or bail bond by an insurer . . . .”
Aladdin also argues that limiting the reach of the section 1800(a) license
requirement to bail activities conducted by or on behalf of an insurer is inconsistent
with the broad statutory definition of a “bail bond,” which includes “any contract not

5
Aladdin advocates for a broad construction of the statutory term “by an
insurer” which would include any person who promises to indemnify another person
by assuming a contractual obligation to pay if a certain event occurs. Even under
Aladdin’s broad definition, we find no evidence in this record that GPS is an insurer
or the agent of an insurer. Indeed undisputed evidence incorporated into the SAC
shows that GPS provides EFT services to government agencies who operate cash bail
payment systems authorized by section 6159.

18
executed by a surety insurer,” and any “method of release,” including the payment of
cash bail. However, as the trial court emphasized in its summary judgment ruling, a
bail bond is not “any” contract or method of release, but a specific type of contract or
method of release pursuant to which the attendance of the released person is
“guaranteed.” (§ 1800.4.)
GPS submitted evidence regarding the nature and scope of its services through
the declaration of its president and chief operating officer, Mark MacKenzie. For a
fee, GPS contacts a cardholder’s issuing bank on behalf of the government agency to
verify that the debit or credit cardholder possesses sufficient funds or credit with its
card company to pay the charge. If funds are available, and payment is authorized,
GPS forwards the authorization to the participating agency. The card issuing bank
then captures the funds from the cardholder’s account and transmits the payment to a
“gateway” organization affiliated with GPS. That affiliate then wires the funds to a
GPS account from where they are paid out to the participating agency, usually
pursuant to an automated deposit system but sometimes by payment of a check.
According to MacKenzie the settlement of the funds into the agency’s account occurs
within 48 hours after authorization from the cardholder’s bank. GPS does not play
any role in the exoneration or forfeiture of a cash bail payment. If any part of the
payment is returned to the cardholder, that payment is made directly by the Agency to
the cardholder who posted the cash bail.
Aladdin concedes that GPS has no involvement in the procedures governing the
exoneration and forfeiture of bail. (See Pen. Code, § 1300.) Nevertheless, it argues
that GPS guarantees the appearance of the released detainee because that person is
released after GPS obtains authorization for the card charge, but before the payment is
actually transmitted to the Agency. Thus, Aladdin’s theory is that GPS acts as a
guarantor of the bail payment during that interim period of up to 48 hours because in
at least one of the contracts that Aladdin produced, GPS assumed contractual
responsibility for handling card charge “reversals” or “chargebacks.”

19
 As explained above, a bail bond is a contract or method of release pursuant to
which the released person’s appearance in court is guaranteed. (§ 1800.4.) Even if
we could be persuaded to characterize a contractual assumption of responsibility for a
credit card chargeback as a “guarantee,” that provision is part of an administrative
services contract between GPS and a government agency pursuant to which the
chargeback risk is allocated to GPS. It is not evidence that GPS has ever posted cash
bail as a guarantee that the released person would subsequently appear in court.
GPS produced evidence that it handles a card holder’s funds solely for
administrative purposes, that the funds are always the property of the cardholder, and
that it is “only acting to provide remote payment service for the benefit of [the] payee
(debit/credit cardholder).” Aladdin failed to produce any evidence to the contrary.
Thus, the record shows that GPS is not a guarantor within the meaning of section
1800.4.
Alternatively, Aladdin argues that even if GPS is not a guarantor, it participates
in the execution of a bail bond because the cardholder’s payment itself constitutes a
“guarantee” that brings the transaction within the definition of a bail bond. However,
under this version of Aladdin’s theory, the parties to the alleged bail bond transaction
are the cardholder and the government. GPS would not need a license to process the
cardholder’s payment on behalf of the government because it would not be soliciting,
negotiating or executing a bail bond by an insurer. (§ 1800(a).)
Changing course, Aladdin argues that even if section 1800(a) does not require
that GPS obtain a bail agent license, GPS’s business activities are covered by section
1800.75, which states: “No person shall advertise or hold himself out as engaging in
the business of executing, delivering, or furnishing bail bonds or undertakings of bail
whether or not for consideration without holding at the time thereof all proper licenses
required by this chapter.” Aladdin contends that section 1800.75 imposes an
“independent” licensing requirement which casts a broader net than section 1800(a)

20
because it does not contain the qualifying phrase “by an insurer” which appears in
section 1800(a), but instead applies to anyone who advertises for bail.
Section 1800.75 does not impose an “independent” license requirement, but
expressly incorporates license requirements imposed by other provisions of “this
chapter.” Section 1800(a), the only statute on which Aladdin relies that does impose a
license requirement, applies only to persons who provide services related to an
undertaking of bail or the posting of a bail bond by an insurer. As explained above,
GPS is not a bail bond agent and does not need a bail bond license because it does not
provide services relating to the posting of an undertaking of bail or a bail bond by an
insurer.
2. Government Code Section 6159
As discussed above, section 6159 establishes a method for arrested or detained
people to secure temporary release without having to engage the services of a bail
bond agent by authorizing counties to accept debit and credit card payments and EFTs
for the payment of cash bail for a non-felony offense. (§ 6159, subd. (b)(1).)
Section 6159 defines an EFT as “any method by which a person permits
electronic access to, and transfer of, money held in an account by that person.”
(§ 6159, subd. (a)(6).) Counties that operate section 6159 cash bail payment systems
are expressly authorized to execute contracts with third-party EFT processors, and to
allow those service providers to charge a fee for the cost of the transaction. (§ 6159,
subds. (b)(1), (d).) Section 6159 does not require that a third-party EFT service
provider have a bail bond license.
We have already summarized the evidence GPS produced to establish that it
provides EFT services to California counties pursuant to section 6159. This evidence
also shows that GPS’s third-party service contracts with California counties are not
unlawful because they are expressly authorized by section 6159.
Aladdin contends that section 6159 does not “excuse” EFT processors from
their “obligations to comply with any other laws that their conduct triggers, including

21
the bail statutes and regulations.” That may be true, but Aladdin misconstrues the
relevant inquiry. The question presented by this appeal is whether GPS must possess
a bail bond agent license in order to provide EFT processing services to county
agencies in this state. As explained above, section 1800(a) imposes that license
requirement on specific categories of people, which does not include EFT processors.
Beyond that, section 6159 expressly authorizes counties to establish cash bail
programs, to employ service providers like GPS who do not have a bail bond license,
and to allow those third-party service providers to charge a fee for their services.
Thus, the two statutes are consistent and, when construed together, they reinforce our
conclusion that GPS’s business activities do not require a bail bond license.
Aladdin next argues that it produced evidence which creates a material factual
dispute as to whether GPS is really an EFT processor. Aladdin asserts this evidence
shows that GPS does not “operate” under section 6159 because it “writes felony bail,”
while section 6159 is limited to non-felony charges. Aladdin’s evidence consists of
computer docket records from a handful of Sonoma County felony cases which it has
cross-referenced against a report of EFT transactions that GPS processed in California
between 2005 and 2011. At best, this evidence shows that GPS processed EFT
charges that were accepted by Sonoma County as payment of cash bail in felony
cases. But, it does not support Aladdin’s very different contention that GPS “writes
felony bail.” Aladdin has conceded that GPS does not post its own money for
detained individuals and plays no role in the exoneration or forfeiture of bail. Beyond
that, the evidence shows that GPS does not guarantee that the individual who is
released after the cardholder posts cash bail will subsequently appear in court. Thus,
GPS does not “write” felony bail.
Furthermore, Aladdin’s contention that GPS does not “operate” under section
6159 rests on the erroneous legal premise that the statute requires third-party service
providers to reject card payments made to pay cash bail in felony cases. Section 6159
authorizes counties to accept EFT payments of cash bail in non-felony cases but does

22
not impose any obligation on the EFT processor to ensure that the payments are used
only in non-felony cases.6 Elsewhere in its appellate brief, Aladdin contends that the
fact that section 6159 does not regulate GPS’s business activities actually helps prove
its “point,” which is that GPS’s activities are regulated by section 1800. We disagree.
As we have already explained, section 1800 does not apply to GPS’s business because
it does not solicit, arrange or post undertakings of bail or bail bonds by an insurer.
Aladdin also asserts it produced evidence that GPS’s business includes a
panoply of bail-related services other than processing EFT payments, and that GPS
has touted these services in other litigation in which it has been involved. Aladdin
contends that this evidence create a material factual dispute as to whether the services
GPS provides through its contracts with several county sheriffs in this state are unfair
and unlawful because GPS does not comply with section 1800 et seq. While there
appears to be no dispute that GPS provides counties with support services in addition
to processing card payments of cash bail, this evidence does not create a material
factual dispute precluding summary judgment because these ancillary services do not
involve the solicitation, negotiation, or execution of an undertaking of bail or bail
bond by an insurer which would bring them under the terms of section 1800 et seq.
3. Insurance Regulations
In its SAC, Aladdin alleged on information and belief that GPS’s business
activities violate several insurance regulations set forth in Title 10 of the California
Code of Regulations (10 CCR). Aladdin contends these insurance regulations are
independent predicate laws supporting its UCL claim against GPS.

6
For this reason, Sonoma County has a policy that arrested or detained people
are permitted to post cash bail only after the Sheriff’s office confirms they have “been
arrested on misdemeanor charges” and “are eligible to post bail by this method.” To
the extent Aladdin believes that Sonoma or some other California county is violating
the provision of section 6159 limiting the payment of cash bail to non-felony cases, it
has sought legal redress against the wrong entity.

23
 As examples, Aladdin invokes regulations which prohibit a “bail licensee”
from giving gifts to public officials (10 CCR § 2078); soliciting detained persons for
bail (10 CCR § 2074); and charging excessive and/or impermissible fees for its
services (10 CCR §§ 2081-2082). The term “bail licensee” is defined by the
regulations as one who holds a license specified in section 1801 of the Insurance
Code. (10 CCR § 2054.1.) Since the evidence establishes that GPS does not hold or
need to hold a bail agent license, Aladdin’s reliance on these regulations does not give
rise to a material factual dispute.7
IV.
THE DEMURRER RULING
A. Standard of Review
“A demurrer tests the sufficiency of the plaintiff’s complaint, i.e., whether it
states facts sufficient to constitute a cause of action upon which relief may be based.
[Citations.] In determining whether the complaint states facts sufficient to constitute a
cause of action, the trial court may consider all material facts pleaded in the complaint
and those arising by reasonable implication therefrom; it may not consider
contentions, deductions or conclusions of fact or law. [Citations.] The trial court also
may consider matters of which it may take judicial notice. [Citations.] A demurrer
should not be sustained without leave to amend if the complaint, liberally construed,
can state a cause of action under any theory or if there is a reasonable possibility the
defect can be cured by amendment. [Citations.]” (Young v. Gannon (2002) 97
Cal.App.4th 209, 220.)
Two separate standards of review potentially apply to an appeal from a
judgment sustaining a demurrer. (G. L. Mezzetta, Inc. v. City of American Canyon
(2000) 78 Cal.App.4th 1087, 1091.) “ ‘. . . First, the complaint is reviewed de novo to

7
GPS contends that it produced evidence that it does not, in any event, engage
in the activities addressed by these regulations. Aladdin does not dispute or even
address this contention in its reply brief.

24
determine whether it contains sufficient facts to state a cause of action. [Citation.] In
doing so, we accept as true the properly pleaded material factual allegations of the
complaint, together with facts that may be properly judicially noticed. Reversible
error exists only if facts were alleged showing entitlement to relief under any possible
legal theory. [Citations.] [¶] Second, where the demurrer is sustained without leave
to amend, reviewing courts determine whether the trial court abused its discretion in
doing so. [Citations.] On review of the trial court’s refusal to grant leave to amend,
we will only reverse for abuse of discretion if we determine there is a reasonable
possibility the pleading can be cured by amendment. Otherwise, the trial court’s
decision will be affirmed for lack of abuse. [Citations.]’ ” (Id. at pp. 1091-1092; see
also Hernandez v. City of Pomona (1996) 49 Cal.App.4th 1492, 1497-1498.)
In this case, Aladdin did not request leave to amend its second cause of action
in the trial court and it does not seek that opportunity here either. Rather, Aladdin
steadfastly maintains that the SAC states a cause of action for false advertising under
the Lanham Act. Thus, we independently review the SAC to determine if Aladdin
alleged facts sufficient to support its false advertising claim.
B. Aladdin Did not Allege A Cause of Action Under The Lanham Act
Section 43 of the Lanham Act “authorizes suit against persons who make false
and deceptive statements in a commercial advertisement about their own or the
plaintiff’s product. [Citations.]” (Jarrow Formulas, Inc. v. Nutrition Now, Inc. (9th
Cir. 2002) 304 F.3d 829, 835.) “A prima facie case requires a showing that (1) the
defendant made a false statement either about the plaintiff’s or its own product; (2) the
statement was made in a commercial advertisement or promotion; (3) the statement
actually deceived or has the tendency to deceive a substantial segment of its audience;
(4) the deception is material, in that it is likely to influence the purchasing decision;
(5) the defendant caused its false statement to enter interstate commerce; and (6) the
plaintiff has been or is likely to be injured as a result of the false statement, either by

25
direct diversion of sales from itself to the defendant, or by a lessening of goodwill
associated with the plaintiff’s product. [Citations.]” (Id. at p. 835, fn. 4.)
Here, the SAC does not state facts which if proven would satisfy the first
element of a false advertising claim because it does not identify an allegedly false
statement that appeared in the defendant’s commercial advertisement or promotion.
Instead, the theory alleged in the SAC is that GPS’s advertising violates the Lanham
Act because it is conceptually misleading. By using words like “gov” and
“government,” and a capitol dome as its logo, GPS allegedly misleads consumers to
believe that it is affiliated with or endorsed by the government. In other words,
Aladdin’s theory is that even though GPS did not make a provably false statement, its
advertising is nevertheless unlawful because it misleads consumers to believe that it is
a government agency or affiliate.
A Lanham Act claim can be based on a theory of “false association,” i.e., that
the defendants made “false representations concerning the origin, association, or
endorsement of goods or services through the wrongful use of another’s distinctive
mark, name, trade dress, or other device . . . . [Citations.]” (Waits v. Frito-Lay, Inc.
(9th Cir. 1992) 978 F.2d 1093, 1108.) However, to have standing to bring such a
claim, the plaintiff must possess a commercial interest in the misused mark, name or
device or in the good or service that is allegedly being misrepresented. (Id. at
pp. 1109-1110 [and authority cited there].) In this case, even if Aladdin had requested
leave to amend its pleading, we cannot conceive of facts it could allege in order to
establish that it suffered this type of commercial injury.
Aladdin contends the Lanham Act “prohibits misleading advertisements, not
those containing direct false factual assertions, and it specifically prohibits misleading
statements that the competitor is associated with, endorsed by, or approved by
another, including the government.” This argument conflates two distinct theories for
alleging a claim under the Lanham Act. As explained above, a claim may be based on
a false statement of fact, or it can be based on an advertisement which uses a distinct

26
name or mark to create a false association. Here, the SAC does not identify a false
statement in a GPS advertisement. Nor does that pleading allege facts which, if
proven, would give Aladdin a commercial interest in the distinctive names or marks
that the defendant allegedly used to create a false association with the government.
Aladdin mistakenly relies on Trafficschool.com, Inc. v. Edriver, Inc. (C.D. Cal.
2008) 633 F.Supp.2d 1063 (Edriver).8 In that case, an internet provider of consumer
referrals to traffic schools and driver’s education classes was found liable for false
advertising under the Lanham Act. The plaintiff had alleged that the defendant’s
website, DMV.ORG, contained several false statements. After a court trial, the
district court concluded that although none of the challenged statements were
“literally false,” the evidence showed that one or more of them was “literally true but
likely to mislead or confuse consumers” to believe that the defendant’s website was
owned by or affiliated with the government. (Id. at pp. 1074, 1075-1080.)
Aladdin contends that Edriver illustrates that “[m]isleading consumers into
believing a private company is actually a government agency is a sufficient basis on
which to allege a Lanham Act false advertising claim.” However, Edriver was not a
pleading case; it did not address or even consider what allegations are sufficient to
allege a false advertising claim. Furthermore, Aladdin overlooks that EDriver
expressly confirms that the first element of false advertising under the Lanham Act is
“a false statement of fact.” (Edriver, supra, 633 F.Supp.2d at p. 1074.)
Edriver does support the proposition that a false statement can either be
literally false or literally true but materially misleading. (Edriver, supra, 633
F.Supp.2d at p. 1074.) The Edriver court found that although the defendant’s
statements were literally true, they constituted false advertising because they actually
misled consumers to believe that defendant’s website was an official government

8
Edriver was reversed in part on a ground not relevant to this appeal.
(TrafficSchool.com, Inc. v. Edriver, Inc. (9th Cir. 2011) 653 F.3d 820.)

27
website. But this ruling does not help Aladdin because its SAC does not identify any
actual statement in a GPS advertisement that allegedly misled or deceived consumers.
As reflected in our factual summary, the SAC allegations identified words rather than
statements; Aladdin alleged that the use of the words “gov” and “government” was
misleading. But it did not allege that these isolated words were used in a statement of
fact that was provably false or misleading.
Aladdin argues that its pleading allegation that GPS’s advertising is misleading
is sufficient for purposes of a demurrer because that allegation must be accepted as
true. (Citing Guerrero v. Superior Court (2013) 213 Cal.App.4th 912, 925-926.) The
correct rule is that “ ‘we assume the truth of all properly pleaded facts’ ” and those
that can be implied or inferred from the facts that were expressly alleged. (Id. at
p. 925.) The bare allegation that GPS’s advertising is misleading is not a properly
pleaded fact; it is a legal conclusion which may not be considered when ruling on a
demurrer. (Young v. Gannon, supra, 97 Cal.App.4th at p. 220.)
For all these reasons, we conclude the demurrer to the second cause of action
was properly sustained.
IV.
DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to GPS.

28
 _________________________
RUVOLO, P. J.

We concur:

_________________________
REARDON, J.

_________________________
RIVERA, J.

29
Trial Court: Sonoma County Superior Court

Trial Judge: Hon. Elliot Daum

Counsel for Appellant: Robert W. Hicks & Associates and Robert W.
Hicks, Kenneth R. Wright

Counsel for Respondent: Dillon & Gerardi and Scott Alan Miller

Abbey, Weitzenberg, Warren & Emery and
Mitchell B. Greensberg

30