Filed 9/18/26
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
ERIN SCOTT, et al., B345741
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No.
v. 23STCV28662)
ULTA BEAUTY, INC., et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los
Angeles County, William F. Highberger, Judge. Affirmed.
Singleton Schreiber, Benjamin I. Siminou and Jonna D.
Lothyan for Plaintiffs and Appellants.
Ballard Spahr, Stephanie A. Sheridan, Meegan B. Brooks,
Callie A. Castillo; Benesch, Friedlander, Coplan & Aronoff,
Stephanie A. Sheridan, Meegan B. Brooks and Michael D. Meuti
for Defendants and Respondents.
Plaintiffs Erin Scott, Margaret Cruz, Paige Vasseur,
Elizabeth Marie Salcedo, Xochitl Poblano, and Joohyee Kim
(Kim) (collectively, plaintiffs) filed a putative class action against
Ulta Beauty, Inc., and Ulta Salon, Cosmetics & Fragrance, Inc.
(defendants) that alleges defendants violated Civil Code section
1670.8, sometimes called the “Yelp Law.” 1 Among other things,
section 1670.8 prohibits terms in consumer contracts that
purport to restrict consumers’ right to speak about the seller of
goods or services in question (or the goods or services
themselves). (§ 1670.8, subd. (a)(1).) We consider whether the
trial court properly sustained defendants’ demurrer to plaintiffs’
lawsuit without leave to amend based on the court’s
determination that the terms and conditions for defendants’
website—which concern trademark use and website access—do
not limit plaintiffs’ right to criticize defendants.
I. BACKGROUND
A. Defendants’ Website
Plaintiffs’ operative first amended consolidated class action
complaint alleges the checkout process for defendants’ online
store included an acknowledgment that, by placing an order,
1
Plaintiffs’ request that we take judicial notice of Civil Code
section 1670.8 legislative history materials and various superior
court and federal district court orders is denied. (People ex rel.
Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2;
Wm. R. Clarke Corp. v. Safeco Ins. Co. (1997) 15 Cal.4th 882, 888,
fn. 6.)
Undesignated statutory references that follow are to the
Civil Code.
2
customers agreed to be bound by certain Terms and Conditions
(the Terms).
At the time plaintiffs commenced this action, a paragraph
in the Terms with the heading “Trademarks” (the Trademarks
Paragraph) provided as follows: “Graphics, logos, page headers,
button icons, scripts, and service names included in or made
available through the Site are trademarks or trade dress of
ULTA or its licensors. ULTA’s trademarks and trade dress may
not be used in connection with any product or service that is not
ULTA’s, in any manner that is likely to cause confusion among
customers or in any manner that disparages or discredits ULTA.
All other trademarks not owned by ULTA that appear on any
Site are the property of their respective owners, who may or may
not be affiliated with, connected to, or sponsored by ULTA.”
Separate, subsequent paragraphs in the Terms described rules
for user reviews and comments on defendants’ website.
The Terms also provided, in a paragraph with the heading
“Termination of Usage” (the Termination Paragraph), that “Ulta
Beauty may, without incurring any liability to the Customer,
terminate access by such Customer, or suspend any Customer’s
access to all or part of the Site, without notice, for any conduct
that Ulta Beauty, in its sole discretion, believes is in violation of
any applicable law or this Agreement, or is harmful to the
interests of another user, a third-party, a merchant, a sponsor, a
licensor, a service provider, or Ulta Beauty.”
B. Plaintiffs’ Cause of Action for Violation of Section
1670.8
The operative complaint alleges a single cause of action for
violation of section 1670.8.
3
As we shall discuss in more detail, the statute provides “[a]
contract or proposed contract for the sale or lease of consumer
goods or services may not include a provision waiving the
consumer’s right to make any statement regarding the seller or
lessor or its employees or agents, or concerning the goods or
services.” (§ 1670.8, subd. (a)(1).) The statute also makes it
“unlawful to threaten or to seek to enforce a provision made
unlawful under this section, or to otherwise penalize a consumer
for making any statement protected under this section.”
(§ 1670.8, subd. (a)(2).) The statute further provides that “[a]ny
person who violates this section shall be subject to a civil
penalty,” the amount of which varies depending on the number of
violations and whether the violation was “willful, intentional, or
reckless.” (§ 1670.8, subds. (c), (d).)
The operative complaint frames the Trademarks Paragraph
as a violation of section 1670.8, subdivision (a)(1) and the
Termination Paragraph as a violation of section 1670.8,
subdivision (a)(2).
C. Procedural History
Plaintiffs (except for Kim) commenced this action with a
putative class action complaint filed in 2023, and that action was
later consolidated with a lawsuit that Kim filed. The
consolidated class action complaint alleges the Terms violate
section 1670.8 and violate California’s Unfair Competition Law
(UCL) (Bus. & Prof. Code, § 17200 et seq.).
Defendants demurred to the consolidated class action
complaint, arguing plaintiffs failed to state a cause of action for
violation of section 1670.8 because the Terms do not constitute a
“‘contract or proposed contract for the sale or lease of consumer
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goods or services’” within the meaning of section 1670.8,
subdivision (a)(1). They further argued the Trademarks
Paragraph did not apply to consumer speech generally and, even
if it did, section 1670.8 does not authorize a plaintiff to recover
civil penalties in the absence of a threat by defendants to enforce
a consumer speech prohibition against plaintiffs—and the
Termination Paragraph was not such a threat.
The trial court sustained defendants’ demurrer with leave
to amend. At the demurrer hearing, the court remarked that the
complaint did “not, to [the court’s] perception, allege that we have
had a contract, or proposed contract, for the sale or the lease of
consumer goods or services.” The trial court also stated that “if
all [defendants are] doing is keeping you from having any kind of
use of their trademark contrary to their commercial designers
[sic], then that’s probably within their rights.”
Plaintiffs subsequently filed the operative first amended
consolidated class action complaint. Among other things, the
operative complaint included additional allegations emphasizing
the breadth of the Terms (including that defendants’ trademarks
include the name “Ulta”) and emphasizing the requirement that
purchasers agree to the Terms before making a purchase.
Defendants demurred and again argued plaintiffs did not
allege a contract for the sale of goods or services, a prohibited
non-disparagement provision, or any threat to enforce such a
provision.
The trial court sustained the demurrer without leave to
amend on two independent grounds.
First, the trial court found the Terms highlighted in the
complaint were “nothing more than an assertion of [d]efendants’
trademark and trade dress rights under federal (i.e., Lanham
5
Act) and state law.” The trial court explained “the language of
the trademark provision is very similar to that recommended by
American Jurisprudence forms for use on a website to secure
trademark protections,” and “[t]he language of [d]efendants’
terms of service and the American Jurisprudence form are both
concerned with confusion of customers and disparagement or
discreditation of the marks.” Because “[t]rademark law, both
federal and California, allows claims for disparagement,” the trial
court concluded “the challenged clause of [d]efendants’ terms is
limited to the intellectual property context.” The court believed
this understanding of the Terms was reinforced when considering
the Terms as a whole because other more specific provisions
governed posting of user reviews and comments on defendants’
website—which, in the court’s view, “confirm[ed] there is no
general restriction on use of [d]efendants’ marks to submit
critical reviews of [d]efendants’ products or services.”
Second, and “[a]s an additional ground to sustain the
demurrer,” the trial court reasoned “[a]ny contention that there is
a private right of action for the mere inclusion of a violative
provision in a contract is belied by the text of the Yelp law.
Subdivision (a)(1) merely defines an unlawful and unenforceable
contractual provision,” and a violation of that subdivision was not
actionable alone. Instead, the court believed a violation of
subdivision (a)(2), which defines an unlawful act (“threat[en]ing
to enforce (or actually seeking to enforce) such a provision, or
threat[en]ing to impose some other penalty for violation thereof”),
was necessary to be actionable. And the court found plaintiffs
had not alleged a violation of section 1670.8, subdivision (a)(2)
because the Termination Paragraph was “clearly not a threat to
enforce the [trademark] provision,” and “[t]o the extent it [was] a
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threat of imposition of some other penalty, it [could not] animate
a claim under subdivision (a)(2) because this purported threat
would only penalize improper use of [d]efendants’ marks,
which . . . are not statements protected by the Yelp law.”
Based on its ruling, the trial court entered a judgment of
dismissal in April 2025.
II. DISCUSSION
The trial court correctly determined the Trademarks
Paragraph does not compel a waiver of a consumer’s right to
make statements critical of defendants. The clause prohibiting
use of defendants’ trademarks to disparage or discredit
defendants must be construed in light of how the Terms describe
what defendants’ trademarks are (website appearance and
functionality items) and in light of the full context of the
Trademarks Paragraph—which, naturally, is focused on
trademark violations and not customer comments (which are
instead addressed separately in the Terms). Insofar as plaintiffs
additionally argue the Termination Paragraph by itself is also a
compelled waiver of consumers’ speech rights (as opposed to a
threat to enforce the Trademarks Paragraph) that argument fails
too, and for similar reasons. Acknowledging defendants’
discretion to terminate or suspend use of their website for
“conduct . . . harmful to the interests of . . . [defendants]” does not
constitute a general waiver of consumers’ right to criticize
defendants. 2
2
Plaintiffs argue, contrary to a recent published decision
(Arterberry v. Peet’s Coffee, Inc. (2026) 122 Cal.App.5th 33), that
violating section 1670.8, subdivision (a)(1) must alone be
actionable to avoid a chilling effect, i.e., stifling the speech of
7
A. Overview of Section 1670.8
Section 1670.8 took effect on January 1, 2015. To reiterate
the pertinent statutory language, subdivision (a)(1) states “[a]
contract or proposed contract for the sale or lease of consumer
goods or services may not include a provision waiving the
consumer’s right to make any statement regarding the seller or
lessor or its employees or agents, or concerning the goods or
services,” and subdivision (a)(2) makes it “unlawful to threaten or
to seek to enforce a provision made unlawful under this section,
or to otherwise penalize a consumer for making any statement
protected under this section.”
By section 1670.8’s terms, parties may not contract around
the provisions of subdivision (a)—they are unwaivable. (§ 1670.8,
subd. (b) [“Any waiver of the provisions of this section is contrary
to public policy, and is void and unenforceable”].) The civil
penalties for a violation of section 1670.8 are “not to exceed two
thousand five hundred dollars ($2,500) for the first violation, and
five thousand dollars ($5,000) for the second and for each
subsequent violation, to be assessed and collected in a civil action
brought by the consumer, by the Attorney General, or by the
district attorney or city attorney of the county or city in which the
consumers who acquiesce in speech-limiting contractual terms
and thus never require silencing via a threat of legal reprisal.
Because we hold plaintiffs do not state a claim for violation of
section 1670.8, subdivision (a)(1), we need not and do not decide
whether Arterberry is wrongly decided and a plaintiff may
recover penalties even in the absence of a threat to enforce an
offending contract.
8
violation occurred.” 3 (§ 1670.8, subd. (c).) Section 1670.8,
subdivision (e) cautions, however, that the statute “shall not be
construed to prohibit or limit a person or business that hosts
online consumer reviews or comments from removing a statement
that is otherwise lawful to remove.”
B. Plaintiffs Have Not Stated a Cause of Action Under
Section 1670.8 Based on the Trademarks Paragraph
We will assume for the sake of argument that plaintiffs
adequately alleged the Terms constitute a contract for the sale of
consumer goods within the meaning of section 1670.8. The
Trademarks Paragraph, however, is not a waiver of plaintiffs’
right to make any statement regarding defendants, their
employees or agents, or their goods or services.
“‘“The fundamental goal of contractual interpretation is to
give effect to the mutual intention of the parties.” [Citation.]
“Such intent is to be inferred, if possible, solely from the written
provisions of the contract.” [Citation.] “If contractual language is
clear and explicit, it governs.” [Citation.]’ [Citation.]” (Powerine
Oil Co., Inc. v. Superior Court (2005) 37 Cal.4th 377, 390; accord,
§§ 1638 [“The language of a contract is to govern its
interpretation, if the language is clear and explicit, and does not
involve an absurdity”], 1639 [“When a contract is reduced to
writing, the intention of the parties is to be ascertained from the
writing alone, if possible”].)
A contract provision is ambiguous if it is capable of two or
more constructions, both of which are reasonable. (Powerine,
3
Penalties are available in increased amounts for “willful,
intentional, or reckless” violations. (§ 1670.8, subd. (d).)
9
supra, 37 Cal.4th at 390; County of San Diego v. Ace Property &
Casualty Ins. Co. (2005) 37 Cal.4th 406, 415.) But “‘[c]ourts will
not adopt a strained or absurd interpretation in order to create
an ambiguity where none exists.’ [Citation.]” (Alameda County
Flood Control & Water Conservation Dist. v. Department of Water
Resources (2013) 213 Cal.App.4th 1163, 1180.) In particular, a
provision is not ambiguous merely because it “is susceptible to
more than one meaning” when “isolated from its context.”
(Diamond v. Schweitzer (2025) 110 Cal.App.5th 866, 884; accord,
§ 1641 [“The whole of a contract is to be taken together, so as to
give effect to every part, if reasonably practicable, each clause
helping to interpret the other”].)
Plaintiffs maintain the clause barring any disparaging or
discrediting use of defendants’ trademarks is a waiver of
consumers’ “right to make any statement regarding” defendants
within the meaning of section 1670.8, subdivision (a)(1).
(Plaintiffs do not argue there has been a violation of subdivision
(a)(2) of section 1670.8.) They believe “it is impossible for a
consumer to make a negative statement about a business’s goods
or services if the consumer is prohibited from using that seller’s
name in a way that ‘disparages’ or ‘discredits’ the business.” But
read in context—the proper analytical method—the challenged
clause in the Trademarks Paragraph is neither ambiguous nor
reasonably construed as a waiver of rights protected by section
1670.8.
The “disparages or discredits” language appears in a
paragraph with a “Trademarks” heading and is the last in a list
of three categories of proscribed uses that are directed at
protecting defendants’ website. This, again, is the paragraph’s
pertinent language: “Graphics, logos, page headers, button icons,
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scripts, and service names included in or made available through
the Site are trademarks or trade dress of ULTA or its licensors.
ULTA’s trademarks and trade dress may not be used [1] in
connection with any product or service that is not ULTA’s, [2] in
any manner that is likely to cause confusion among customers or
[3] in any manner that disparages or discredits ULTA.” 4
The disparage or discredit clause in this last sentence (like
the clauses that precede it) is used only in context of trademark
and trade dress violations, and the paragraph enumerates what
trademarks or trade dress are at issue—graphics, logos, page
headers, button icons, scripts, and service names. These are
website functionality and appearance items unlikely to be used,
and certain not to be used in any meaningful way, in customer
comments. There is accordingly no reason to understand the
disparage or discredit clause as limiting or waiving consumers’
right to speak—and this is all the more true when a separate
paragraph in the Terms is dedicated to addressing the topic of
customer reviews (and permits such reviews that do not contain
“Prohibited Content,” including “spam,” threats, violation of
4
Defendants’ appellate brief reads the pertinent language as
including only the second and third of these limitations on the
use of their trademarks (use in any manner likely to cause
confusion and use in any manner that disparages or discredits
ULTA). That reading, however, does not account for the comma
that appears after “product or service that is not ULTA’s.” (This
misunderstanding is yet further reason, if any were needed, for
use of the Oxford comma.)
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privacy rights, infringement of intellectual property rights, and
“otherwise objectionable” material). 5
Moreover, even assuming the Trademarks Paragraph’s
limitations did extend beyond the website-related items the
paragraph identifies to broader aspects of trademark or trade
dress, the disparage or discredit clause is still properly
understood in light of the two preceding clauses via the concept of
noscitur a sociis (“it is known by its associates”). (Seid Pak Sing
v. Barker (1925) 197 Cal. 321, 341; see generally Kaatz v. City of
Seaside (2006) 143 Cal.App.4th 13, 40 [“‘“In accordance with this
principle of construction, a court will adopt a restrictive meaning
of a listed item if acceptance of a more expansive meaning
would . . . make the item markedly dissimilar to the other items
in the list”’”].) The two clauses that precede the disparage or
discredit clause are obviously not focused on bona fide customer
speech or reviews; they are focused on actions another market
seller might take, in connection with a product or service, to
confuse customers or otherwise undermine defendants’ brand. 6
Giving only the disparage or discredit clause a more expansive
construction, one where a sentence first directed at competing
products and services suddenly shifts to a sweeping ban on any
consumer criticism of defendants’ business, would make the
5
Plaintiffs’ suggestion on appeal that restrictions on user
reviews violate section 1670.8 in their own right lacks merit.
Plaintiffs did not allege this theory in the operative complaint,
and the relevant provision cannot be construed as waiving a
consumer’s right to criticize defendants in any case.
6
The Terms apply to all users of defendants’ website—not
just those who complete a purchase through the website.
12
challenged clause “markedly dissimilar” from the items preceding
it. 7 Because the pertinent context indicates the challenged
language is not intended to restrict consumer speech, we have no
basis to indulge a snippet-based reading of the provision to
manufacture grounds for a lawsuit. (§ 1648 [“However broad
may be the terms of a contract, it extends only to those things
concerning which it appears that the parties intended to
contract”].)
Other settled principles of contract interpretation support a
narrow, trademark-focused reading of the Trademarks
Paragraph. Plaintiffs’ reading of the paragraph to establish a
predicate for a section 1670.8 lawsuit clashes with section 1643’s
rule that “[a] contract must receive such an interpretation as will
make it lawful, operative, definite, reasonable, and capable of
being carried into effect, if it can be done without violating the
intention of the parties.” Similarly, plaintiffs’ reading also
clashes with section 3541’s maxim that “[a]n interpretation which
gives effect is preferred to one which makes void.” 8
7
“Disparage,” at least, is often used as a term of art in the
intellectual property field. (See, e.g., Hartford Casualty Ins. Co.
v. Swift Distribution, Inc. (2014) 59 Cal.4th 277, 291 [tort of
project disparagement involves a “knowingly false or misleading
publication that derogates another’s property or business and
results in special damages”].) But our analysis does not hinge on
assigning a technical or non-technical meaning to “disparage” or
“discredit.” As we have explained, the fuller context in which
these words are used in the Trademarks Paragraph indicates the
restrictions in that paragraph are focused on other market sellers
and do not apply to speech by bona fide consumers.
8
Plaintiffs’ argument that an ambiguous contract must be
construed against the drafting party is no help to them. As
13
C. Plaintiffs Do Not State a Cause of Action Under
Section 1670.8 Based on the Termination Paragraph
As we have already mentioned, the Termination Paragraph
establishes “Ulta Beauty may, without incurring any liability to
the Customer, terminate access by such Customer, or suspend
any Customer’s access to all or part of the Site, without notice, for
any conduct that Ulta Beauty, in its sole discretion, believes is in
violation of any applicable law or this Agreement, or is harmful to
the interests of another user, a third-party, a merchant, a
sponsor, a licensor, a service provider, or Ulta Beauty.”
Requiring website users to acknowledge they may be
blocked from a company’s website for engaging in “conduct” that
“is harmful to the interests of . . . [the company]” cannot
reasonably be construed as a waiver of the user’s “right to make
any statement regarding” the company. First, on its face, there is
nothing in this provision that prohibits consumers from making
any statement regarding defendants. At most, the provision
section 1654 expressly provides, this canon applies only where
other canons do not resolve the meaning of a contract. (§ 1654
[“In cases of uncertainty not removed by the preceding rules
[concerning interpretation of contracts], the language of a
contract should be interpreted most strongly against the party
who caused the uncertainty to exist”].) That is not the case here.
Moreover, applying this canon would mean giving a narrow
construction to the trademark provision—i.e., making it
minimally restrictive. The upshot of the argument to the
contrary made by plaintiffs’ attorneys is the odd scenario where
they appear to argue against their clients’ interests, i.e., to argue
the contract should be interpreted—though it is unclear whether
it must be—to bar their clients from engaging in commercial
speech concerning defendants.
14
reserves defendants’ right to respond by blocking a consumer’s
access to their website. Whether or not defendants’ actions under
this provision might, in specific cases, run afoul of section 1670.8,
subdivision (a)(2)’s proscription of conduct “otherwise penaliz[ing]
a consumer for making any statement protected under this
section,” plaintiffs did not allege they were blocked from
accessing defendants’ website. The bare fact that an agreement
potentially gives a company the means to violate subdivision
(a)(2) does not demonstrate a violation of subdivision (a)(1).
Otherwise, any reservation of the right to block consumer access
to a retail website would violate subdivision (a)(1)—even with an
express acknowledgment that the company may not do so in
retaliation for speech regarding the company.
Plaintiffs, however, contend the reference to
“conduct . . . harmful to the interests of . . . [defendants]” is
“virtually identical to the non-disparagement provision in [an]
infamous Utah case that inspired section 1670.8.” The Utah case
involved a company that sought liquidated damages for an online
review under a contract that prohibited any action that
negatively impacted the company. (See, e.g., Sen. Com. on
Judiciary, Analysis of Assem. Bill No. 2365 (2013-2014 Reg.
Sess.) June 24, 2014, at 3-4.) There is no indication, however, the
contract language at issue in the Utah case was merely a
condition on website access. (To the contrary, it apparently
triggered a monetary sanction.) And because the companies’
enforcement efforts would presumably fall within subdivision
(a)(2), we need not assume the Legislature deemed any language
resembling isolated terms in the Utah case to be violative of
section subdivision (a)(1).
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DISPOSITION
The judgment is affirmed. Defendants are awarded costs
on appeal.
CERTIFIED FOR PUBLICATION
BAKER, J.
We concur:
HOFFSTADT, P. J.
KIM (D.), J.
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