Existing law generally regulates formation and enforcement of contracts, including what constitutes an unlawful contract. Existing law provides that, except as provided, a contract entered into on or after January 1, 2018, to transfer ownership of a dog or cat in which ownership is contingent upon the making of payments over a period of time subsequent to the transfer of possession of the dog or cat is void as against public policy. Existing law provides that a contract entered into on or after January 1, 2018, for the lease of a dog or cat that provides for or offers the option of transferring ownership of the dog or cat at the end of the lease term is void as against public policy.

This bill would provide that a contract entered into on or after January 1, 2025, to transfer ownership of a dog or cat that is offered, negotiated, brokered, or otherwise arranged by a broker and where the buyer is located in California is void as against public policy if specified conditions are met, including that the contract requires a nonrefundable deposit. The bill would require a contract entered into on or after January 1, 2025, between a broker and a buyer who is located in California to include specified information, including that the broker is required to disclose the original source of the dog or cat involved in the contract. The The bill would authorize any court of competent jurisdiction to enjoin a person who offers a contract that contains a term that violates the above-described provisions. The bill would authorize a buyer harmed by a violation to bring a civil action pursuant to that provision against any person in violation of the above-described provisions, and would entitle a prevailing plaintiff to reasonable attorneys fees and costs.

The bill would require, if money has been exchanged pursuant to a contract that is void pursuant to these provisions, the seller to refund the money to the buyer within 30 days of receiving notice that the contract is void. The bill would specify that nothing in its provisions are to be construed to limit a contract for the transfer of ownership of an animal trained as a service animal or police dog, and would define various terms for these purposes.

Existing law generally regulates formation and enforcement of contracts, including what constitutes an unlawful contract. Existing law provides that, except as provided, a contract entered into on or after January 1, 2018, to transfer ownership of a dog or cat in which ownership is contingent upon the making of payments over a period of time subsequent to the transfer of possession of the dog or cat is void as against public policy. Existing law provides that a contract entered into on or after January 1, 2018, for the lease of a dog or cat that provides for or offers the option of transferring ownership of the dog or cat at the end of the lease term is void as against public policy.

This bill would provide that a contract entered into on or after January 1, 2025, to transfer ownership of a dog or cat that is offered, negotiated, brokered, or otherwise arranged by a broker and where the buyer is located in California is void as against public policy if the buyer is in California, specified conditions are met, including that the contract requires a nonrefundable deposit, and the contract does not identify the original source of the dog or cat, including, but not limited to, the breeder. deposit. The bill would require a contract entered into on or after January 1, 2025, between a broker and a buyer who is located in California to include specified information, including that the broker is required to disclose the original source of the dog or cat involved in the contract. The bill would require, if money has been exchanged pursuant to a contract that is void pursuant to these provisions, the seller to refund the money to the buyer within 30 days of receiving notice that the contract is void. The bill would specify that nothing in its provisions are to be construed to limit a contract for the transfer of ownership of an animal trained as a service animal or police dog, and would define various terms for these purposes.

Existing law generally regulates formation and enforcement of contracts, including what constitutes an unlawful contract. Existing law provides that, except as provided, a contract entered into on or after January 1, 2018, to transfer ownership of a dog or cat in which ownership is contingent upon the making of payments over a period of time subsequent to the transfer of possession of the dog or cat is void as against public policy. Existing law provides that a contract entered into on or after January 1, 2018, for the lease of a dog or cat that provides for or offers the option of transferring ownership of the dog or cat at the end of the lease term is void as against public policy.

This bill would provide that a contract entered into on or after January 1, 2025, to transfer ownership of a dog or cat is void as against public policy if the buyer is in California, the contract requires a nonrefundable deposit, and the contract does not identify the original source of the dog or cat, including, but not limited to, the breeder. The bill would require, if money has been exchanged pursuant to a contract that is void pursuant to these provisions, the seller to refund the money to the buyer within 30 days of receiving notice that the contract is void.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2248 (Maienschein) - Contracts: sales of dogs and cats

Bill Summary:

AB 2248 prohibits and makes void contracts for the sale of a dog or cat that require a nonrefundable deposit and do not identify the original source of the animal, including the breeder. AB 2248 also authorizes a buyer harmed by a violation to bring a civil action against any person in violation of the provisions of this bill.

Fiscal Impact:

Unknown, potentially significant workload cost pressures to the courts to adjudicate alleged violations of this measure (Trial Court Trust Fund, General Fund).

Background:

AB 485 (O’Donnell Chapter 740, Statutes of 2017) prohibited a pet store operator from selling a live cat, dog, or rabbit in a pet store unless the animal was obtained from a public animal control agency or shelter, a specified nonprofit, or an animal rescue organization beginning January 1, 2019. The impetus for AB 485 was to help address both overcrowding in California animal shelters and animal sourcing from out-of-state “puppy mills” or “kitten factories.” While AB 485 addressed retail sales in traditional retail storefronts, it did not affect did not affect purchasing pets from out-of-state pet stores, through an on-line marketplace, or from any breeders in this state or outside of California.

Proposed Law:

• Makes void, as against public policy, a contract entered into on or after January 1, 2025, to transfer ownership of a dog or cat that is offered, negotiated, brokered, or otherwise arranged by a broker and where the buyer is located in California, if any of the following circumstances apply:
  • The contract requires a nonrefundable deposit.
  • The contract does not identify the original source of the dog or cat, including, but not limited to, the breeder.
• Requires a contract entered into on or after January 1, 2025 between a broker and buyer who is located in California to include the following information:
  • The broker is required to disclose the original source of the dog or cat involved in the contract.
  • The broker is prohibited from requiring a nonrefundable deposit.
• Requires a seller to refund money to a buyer within 30 days of receiving notice that the contract is void if that money has been exchanged pursuant to a contract that is void.
• Prohibits a person from offering a contract that contains terms in violation of the provisions of this bill.
• Authorizes a person who offers a contract that contains terms in violation of the provisions of this bill to be enjoined by any court of competent jurisdiction.
• Allows a buyer harmed by a violation to print a civil action against any person in violation of the provisions of this bill.
  • Provides that a prevailing plaintiff in an action shall be entitled to reasonable attorney’s fees and costs.
• Provides that nothing in this bill shall be construed to limit a contract for the transfer of ownership of an animal trained as a service animal or a police dog, as defined.
• Defines a “broker” as a person who buys, sells, or offers to sell dogs or cats for resale to another person or entity.

Staff Comments:

The fiscal impact of this bill to the courts will depend on many unknown factors, including the numbers of violations alleged to have occurred, if parties are able to settle the matter before the filing of an action, and the factors unique to each case. It generally costs about $1,000 to operate a courtroom for one hour. Therefore, if actions are filed as a result of this bill that take 50 or more hours of court involvement, the cost pressures of this measure to the courts would surpass this committee’s Suspense File threshold. Although courts are not funded on the basis of workload, increased staff time and resources may create a need for increased funding for courts from the General Fund (GF) to perform existing duties. Numerous trial court operations are funded through the imposition and collection of criminal fines and fees. However, the Legislature has reduced and eliminated criminal fines and fees over the past decade.

-- END --

SENATE JUDICIARY COMMITTEE

Senator Thomas Umberg, Chair

2023-2024 Regular Session

Bill No: AB 2248 (Author:Maienschein)

Version: May 29, 2024

Hearing Date: June 18, 2024

Fiscal: No

Urgency: No

Consultant: CK

SUBJECT

Contracts: sales of dogs and cats

DIGEST

This bill prohibits offering and makes void contracts that transfer ownership of a dog or cat where such contract requires a nonrefundable deposit or fails to identify the source of the dog or cat. The bill requires contracts for dogs or cats to state the prohibition on nonrefundable deposits and the requirement that the original source be identified.

EXECUTIVE SUMMARY

California has seen a steady trend of state laws aimed at unscrupulous practices in the breeding and selling of cats and dogs. Pet shops have been prohibited from selling them and those offering them up for adoption must meet specified criteria.

However, concerns have grown that problematic sales practices have simply moved online to skirt California’s strong protections.

This bill seeks to address these practices and to provide some transparency by requiring contracts that provide for the transfer of ownership of a dog or cat to identify the original source of the dog or cat, including the breeder. The bill also prohibits a nonrefundable deposit to be charged in connection with such sales. Contracts must include notice of these requirements and any contracts, entered into on or after January 1, 2025, between a broker and a buyer are void if they violate either requirement. The bill authorizes a court to enjoin any person from offering a contract that violates these provisions.

This bill is sponsored by the ASPCA. It is supported by several animal advocacy groups, including Social Compassion in Legislation. No timely opposition was received by this Committee. The bill passed out of the Senate Business, Professions, and Economic Development Committee on a 13 to 0 vote.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Provides that contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law. (Civ. Code § 1668.)
2. Prohibits a pet store from adopting out, selling, or offering for sale a dog, cat, or rabbit. A pet store may provide space for the display of these animals for adoption if displayed by a public animal control agency or shelter, or animal rescue group and provided the store receives no fees. (Health & Saf. Code § 122354.5.)
3. Prohibits displaying animals at a pet store, or an animal rescue group operating a retail establishment from offering dogs, cats, or rabbits, for adoption unless the animals are sterilized and the adoption fees do not exceed $500, as provided. (Health & Saf. Code § 122354.5.)
4. Subjects those in violation to civil penalties and injunctive relief in an action brought on behalf of the people by a district attorney or a city attorney, as provided. (Health & Saf. Code § 122354.5.)
   
5. Requires every breeder of dogs to deliver to each purchaser of a dog a written disclosure containing certain information, including:
6. The breeders name and address and the license number if licensed.
7. The date of the dog’s birth and the date the breeder received the dog.
8. The breed, sex, color, and identifying marks at the time of sale, if any.
9. If the dog is being sold as being capable of registration, the names and registration numbers of the sire and dam and litter number, if known.
10. Specified medical records for the dog. (Health & Saf. Code § 122050.)
    
11. Requires a breeder to maintain a written record on the health, status, and disposition of each dog for a period of not less than one year after the disposition of the dog. (Health & Saf. Code § 122055.)
    
12. Prohibits an online pet retailer, as defined, from offering, brokering or making a referral for a loan or other financing for the adoption or sale of a dog, cat, or rabbit. (Health & Saf. Code § 122191.)
13. Defines “service animal” as any dog that is individually trained to do work or perform tasks for the benefit of an individual with a disability, including a physical, sensory, psychiatric, intellectual, or other mental disability, or that is in training to do that work or perform those tasks. “Service animal” does not include any other species of animals, whether wild or domestic, trained or untrained. (Health & Saf. Code § 113903.)

This bill:

1. Makes void, as against public policy, a contract entered into on or after January 1, 2025, to transfer ownership of a dog or cat that is offered, negotiated, brokered, or otherwise arranged by a “broker” and where the buyer is located in California, if any of the following circumstances apply:
   1. The contract requires a nonrefundable deposit.
   2. The contract does not identify the original source of the dog or cat, including, but not limited to, the breeder.
2. Requires a contract entered into on, or after, January 1, 2025, between a broker and a buyer who is located in California to indicate that the broker is required to disclose the original source of the dog or cat involved in the contract and is prohibited from requiring a nonrefundable deposit.
3. Requires, if money has been exchanged pursuant to a contract that is void pursuant hereto, the seller to refund the money to the buyer within 30 days of receiving notice that the contract is void.
4. Prohibits a person from offering a contract that contains a term in violation hereof. If a person offers a contract that contains such a term, a court may enjoin that person from offering that contract.
5. Provides that nothing therein shall be construed to limit a contract for the transfer of ownership of an animal trained as a service animal or a police dog.
6. Defines the following terms:
   1. “Broker” means a person who buys, sells, or offers to sell dogs or cats for resale to another person or entity.
   2. ”Police dog” means a dog used by a peace officer in the discharge or attempted discharge of their duties and includes a search and rescue dog or a passive alert dog.
   3. “Service animal” has the same meaning as that term is defined in Section 113903 of the Health and Safety Code.

COMMENTS

Regulating the sale of dogs and cats

The Legislature has taken a series of steps to move toward a more humane system for buying and selling pets. AB 485 (O’Donnell, Ch. 740, Stats. 2017) prohibited a pet store operator from selling a live cat, dog, or rabbit in a pet store unless they were obtained from a public animal control agency or shelter, specified nonprofit, or animal rescue or adoption organization, as defined. It also permitted shelters to enter into cooperative agreements with animal rescue or adoption organizations regarding rabbits; required dogs or cats sold in a retail pet store to comply with current spay and neuter laws; provided specified exemptions to the pet warranty law; and permitted an animal control officer, a humane officer, or a peace officer to enforce the pet store prohibition.

AB 2152 (Gloria, Ch. 96, Stats. 2020) went further and prohibited a pet store from selling dogs, cats, or rabbits outright. However, pet stores are allowed to provide space to display animals for adoption if the animals are displayed by either a shelter or animal rescue group, as defined, and establishes a fee limit, inclusive of the adoption fee, for animals adopted at a pet store.

Addressing new avenues for problematic sales of dogs and cats

According to the author:

While retail pet stores are unlawful in California, the pet sales industry has shifted online. Online sales allow puppy mills to continue to service California customers through the cloak of sanitized imagery and obfuscated information. Third-party sellers operate online storefronts featuring hundreds of puppies available to be shipped to customers.

Most sellers offer only minimal initial information and require nonrefundable deposits before providing any specific information regarding a puppy’s origin and the commercial breeder they came from. In short, these businesses collect hundreds of dollars from consumers for just the opportunity to ask questions about the puppy they are interested in. If a consumer learns the name of the seller and has concerns, they must move forward with the contract or lose their deposit. AB 2248 invalidates contracts for online dog or cat purchases if they require a nonrefundable deposit or fail to disclose the breeder of the animal.

This bill seeks to shine the light on these shady practices by requiring any contract between a broker and buyer for the sale of a dog or cat to clearly identify the original source of the pet, including the breeder. To prevent onerous deposit schemes, the bill outright bans requiring a nonrefundable deposit in connection with such transactions.

The bill makes void, as against public policy, any contract that fails to meet these requirements between a broker and a buyer. Such contracts must also clearly state these legal parameters.

A broker is defined as a person who buys, sells, or offers to sell dogs or cats for resale to another person or entity.

The sponsor of the bill, the American Society for the Prevention of Cruelty to Animals, explains the need for the bill:

According to data of publicly available shipping transactions, California is the #1 importer of dogs and cats in the nation. Online sales allow puppy mills to continue to service California customers through the cloak of sanitized imagery and obfuscated information.

A visitor to the site chooses a specific puppy’s picture and then is prompted to pay in full or “reserve” the puppy by placing a deposit. This payment is required before the company will provide anything other than generic information to the consumer. Deposits vary from site to site but one popular site charges nonrefundable deposits of $599, and another recently changed their nonrefundable deposit structure to 25%-100% of the total cost of the puppy. Consumers who do not complete payment within 72 hours forfeit their deposit entirely.

This is all completed prior to the consumer learning the source of an animal, with no way of knowing whether their future pet has been born in a commercial facility, or puppy mill. If a consumer learns the name of the seller and has concerns, they must move forward with the contract or lose their deposit.

Writing in support, the San Francisco SPCA states:

California has taken a strong public policy stance to protect consumers, to promote pet adoption and to shut down these high-volume commercial breeding operations, including banning the purchase of pets at pet stores. Despite this, puppies are being sold to Californians through this online marketplace.

At a time when California’s animal shelters are overflowing with animals who need homes, it is imperative that the state continue its commitment to shutting down the pipeline of puppy mill pups into the state. By requiring source disclosure and eliminating predatory nonrefundable deposits, AB 2248 will help.

Outside of the contractual elements, the law authorizes a court to enjoin a person from offering a contract in violation of this bill. The author states that this is intended to allow consumers to take brokers to court to seek injunctive relief. To clarify this provision, the author has agreed to an amendment that makes this explicit and provides for a prevailing plaintiff’s attorneys’ fees and costs.

The bill also includes one exception. It states that it does not limit a contract for the transfer of ownership of an animal trained as a service animal or a police dog. The author may wish to consider narrowing this exception to ensure that it only applies to buyers that intend to use the dog as a service animal or police dog. Otherwise it could be exploited by crafty brokers claiming to train their dogs as such.

SUPPORT

American Society for the Prevention of Cruelty to Animals (sponsor)

Best Friends Animal Society

San Diego Humane Society

San Francisco SPCA

Social Compassion in Legislation

OPPOSITION

None received

RELATED LEGISLATION

Pending Legislation: None known.

Prior Legislation:

AB 485 (O’Donnell, Ch. 740, Stats. 2017) See Comment 1.

AB 2152 (Gloria, Ch. 96, Stats. 2020) See Comment 1.

PRIOR VOTES:

Senate Business, Professions and Economic Development Committee (Ayes 13, Noes 0)

Assembly Floor (Ayes 73, Noes 0)

Assembly Judiciary Committee (Ayes 10, Noes 0)

**************

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Angelique Ashby, Chair

2023 - 2024 Regular

Bill No: AB 2248 Hearing Date: June 3, 2024

Subject: Contracts: sales of dogs and cats

SUMMARY:

Prohibits a contract for the sale of dogs or cats that requires a non-refundable deposit and do not identify information about the prospective pet and breeder, as specified.

NOTE:

This bill is double-referred to the Senate Committee on Judiciary, second.

Existing law:

1. Prohibits a pet store operator from selling a live dog, cat, or rabbit in a pet store unless the animal was obtained from a public animal control agency or shelter, society for the prevention of cruelty to animals shelter, humane society shelter, or rescue group that is in a cooperative agreement with at least one private or public shelter, as specified. (Health and Safety Code (HSC) § 122354.5(a))
2. Prohibits a public animal control agency or shelter, an animal rescue group displaying animals at a pet store, or an animal rescue group operating a retail establishment from offering dogs, cats, or rabbits for adoption unless the animals are sterilized, and the adoption fees from being more than $500. (HSC § 122354.5(c))
3. Subjects a pet store operator who violates the prohibition on the sale of retail animals, who failed to correct the first notice of a violation to a civil penalty of $1,000 and $5,000 for subsequent violations, as specified. (HSC § 122354.5(d)(2))
   
4. Requires a pet store operator to be responsible for all of the following:
   
5. Maintaining the entire pet store facility in good repair;
   
6. Restricting the entry of pests from outside, ensuring the containment of animals within the pet store;
   
7. Ensuring the pet store’s interior surfaces, including walls and floors are constructed in a manner that permits them to be readily cleaned and maintained;
   
8. Uniformly distributing light, by natural or artificial means, in a manner that permits routine inspection and cleaning, and the proper care of the animals; and,
   
9. When grooming services are offered by a pet store, separating the grooming area from primary animal enclosures, as specified. (HSC § 122351)
   
10. Requires that primary enclosures comply with specified structural standards including the floor being constructed to prevent injury, are impervious to moisture and be sanitized, provide adequate space for the animal, and include an enrichment device appropriate for the animal, and requires primary enclosures for cats to have an elevated platform and birds to be able to extend their wings. (HSC § 122352)
    
11. Requires each pet store operator to ensure that records of all veterinary visits to the pet store are documented in writing as specified. (HSC § 122355(a))
    
12. Defines an “animal rescue group” as any not-for-profit that has tax exempt status under Section 501(c)(3) of the Internal Revenue Code, whose mission and practice is, in whole or part, the rescue and placement of animals into permanent homes, and that does not breed animals, or obtain animals in exchange for payment or compensation from any person that breeds or brokers animals. (HSC § 122354.5(e))
    
13. Requires every breeder of dogs to deliver each purchaser of a dog a written disclosure containing all of the following:
    
14. The breeders name and address and the license number if licensed by the United States Department of Agriculture (USDA);
    
15. The date of the dog’s birth and the date the breeder received the dog;
    
16. The breed, sex, color, and identifying marks at the time of sale, if any;
    
17. If the dog is being sold as being capable of registration, the names and registration numbers of the sire and dam and litter number, if known;
    
18. A record of inoculations and worming treatments administered, if any, to the dog as of the time of sale, including dates of administration and the type of vaccine or worming treatment;
    
19. A record of any veterinarian treatment or medication received by the dog while in the possession of the breeder and either of the following:
    
20. The dog has no known disease or illness; or,
    
21. The dog has no known congenital or hereditary condition that adversely affects the health of the dog at the time of sale or that is likely to adversely affect the health of the dog in the future. (HSC § 122050(a))
    
22. Requires a breeder to maintain a written record on the health, status, and disposition of each dog for a period of not less than one year after the disposition of the dog. (HSC § 122055)
    
23. States that it is unlawful for a breeder to fail to do any of the following:
    
24. Maintain facilities where the dogs are kept in a sanitary condition;
    
25. Provide dogs with adequate nutrition and potable water;
    
26. Provide adequate space appropriate to the age, size, weight and breed of dog, as specified;
    
27. Provide dogs with a rest board, floormat, or similar device that can be maintained in a sanitary condition;
    
28. Provide dogs with adequate socialization and exercise;
    
29. Wash hands before and after handling each infectious or contagious disease; and,
    
30. Provide veterinary care without delay when necessary. (HSC § 122065)
    
31. Prohibits an online pet retailer, as defined, from offering, brokering or making a referral for a loan or other financing for the adoption or sale of a dog, cat, or rabbit. (HSC § 122191).

This bill:

1. Makes a contract entered into on, or after January 1, 2025, to transfer ownership of a dog or cat that is offered, negotiated, brokered, or otherwise arranged by a broker and where the buyer is located in California void against public policy if any of the following circumstances apply:
   
2. The contract requires a non-refundable deposit; and,
   
3. The contract does not identify the original source of the dog or cat, including, but not limited to, the breeder.
   
4. Requires a contract entered into on or after January 1, 2025, between a broker and a buyer who is located in California to include both of the following information:
   
5. The broker is required to disclose the original source of the dog or cat involved in the contract; and,
   
6. The broker is prohibited from requiring a nonrefundable deposit.
   
7. Requires the seller to refund the money to the buyer within 30 days of receiving notice that the contract is void, if that money has been exchanged pursuant to a contract that is void, as specified.
   
8. Prohibits a person from offering a contract that contains a term, which violates 1) or 2) above, and authorizes a court to enjoin a person from offering a contract containing a term that violates the above provisions.
   
9. States that the provisions of this bill shall not be construed to limit a contract for the transfer of ownership of an animal trained as a service animal or a police dog.
   
10. Defines the following for purposes of this bill:
    
11. “broker” to mean a person who buys, sells, or offers to sell dogs or cats for resale to another person or entity.
    
12. “police dog” to mean a dog used by a peace officer in the discharge or attempted discharge of their duties and included, but is not limited to, a search and rescue dog or a passive alert dog.
    
13. “service animal” has the same meaning as the term defined in the health and safety code.
    

FISCAL EFFECT:

Unknown. This bill is not keyed fiscal.

COMMENTS:

1. Purpose. The American Society for the Prevention of Cruelty to Animals is the sponsor of this bill. According to the author, “While retail pet stores are unlawful in California, the pet sales industry has shifted online. According to data of publicly available shipping transactions, California is the #1 importer of dogs and cats in the nation. Online sales allow puppy mills to continue to service California customers through the cloak of sanitized imagery and obfuscated information.
   
   Third-party sellers operate online storefronts featuring hundreds of puppies available to be shipped to customers. These sites display photos and provide minimal information about a puppy, such as their age and breed. A visitor to the site chooses a specific puppy’s picture and then is prompted to pay in full or “reserve” the puppy by placing a deposit. This payment is required before the company will provide anything other than generic information to the consumer. Deposits vary from site to site but two of the most popular sites charge nonrefundable deposits of $599.

These sites operate similarly to pet stores – handling the sales, advertising, payment and typically shipping. As with pet stores, these sellers are offering puppies from commercial breeders. The name and access to the commercial breeder is typically restricted until after the sale is complete. Specific contract terms detailing the responsibilities of the seller are also not provided before the deposit is collected. In short, these businesses collect hundreds of dollars from consumers for just the opportunity to ask questions about the puppy they are interested in.

If a consumer learns the name of the seller and has concerns, they must move forward with the contract or lose their deposit. Consumer complaints describe bait and switch tactics where once the deposit is paid, the full contract gives the seller “flexibility” the buyer would not have accepted. Some of these complaints include receiving pets that are sick or are a different from what was pictured at the point of sale.

The non-refundable deposits are used purely as sales tactic, designed to close a sale by using sunk cost to encourage the consumer to move forward or, in the event the consumer declines, collect $600. This process gives the consumer no opportunity to consider the responsibilities and obligations under the contract or research the person that bred their dog in order to make an informed choice.

Misleading marketing tactics, predatory financial behaviors, and a gap in regulations are allowing online brokers to take advantage of consumers and allowing puppy mills to continue to reach Californians when searching for a new companion.”

1. Background.

Retail Sale of Pets. In 2017, the Legislature passed, and the Governor signed AB 485 (O’Donnell Chapter 740, Statutes of 2017), which prohibited, a pet store operator from selling a live cat, dog, or rabbit in a pet store unless the animal was obtained from a public animal control agency or shelter, a specified nonprofit, or an animal rescue organization beginning January 1, 2019. The impetus for that bill was to help address both overcrowding in California animal shelters and animal sourcing from out-of-state “puppy mills” or “kitten factories.” While AB 485 addressed retail sales in traditional retail storefronts, it did not affect did not affect purchasing pets from out-of-state pet stores, through an on-line marketplace, or from any breeders in this state or outside of California.

Prior to the passage of AB 485, retail pet stores acquired animals from a variety of sources, including out-of-state puppy mills or large scale animal breeding facilities. "Puppy Mills" or "Kitty Factories" are common terms for large commercial breeding facilities, which mass produce animals for sale at retail markets. It is estimated that there are 10,000 puppy mills in the United States. Some states with the highest number of puppy mills include Missouri, Ohio, and Iowa. These large-scale breeding empires are separate from other types of breeders, who produce a smaller quantity of animals. Prior to the passage of AB 485, there were no restrictions on where pet stores acquired animals for retail sale and it varied depending on the seller. The only state requirements for pet stores pertained to operational requirements including animal enclosure requirements, record retention, and how often the pet store operator must be present among others. Those operational requirements for pet stores did not change with SB 485, only the sourcing of the animal.. AB 485 did not prohibit a pet store from operating; it only placed specific requirements on the source of the animal.

Large Animal Breeders “Puppy Mills” and Federal Animal Welfare Laws. Mass-produced, commercial animal breeders are typically scrutinized for notably poor treatment of the animals including producing sick animals, inhumane treatment, and poor living conditions, such as sore paws from being stuck in wired cages, cages that do not meet USDA standards, and dogs over-reproducing. According to 2021 statistics provided by the Humane Society of the United States (HSUS), HSUS estimates that 213,978 dogs are kept solely for breeding at USDA licensed facilities, and over 1 million puppies are produced at those facilities.

In current practice, pets, like dogs and cats, sold in out-of-state pet stores, or on-line through retail, pet stores are offered by brokers who purchase the puppies directly from the large breeding enterprises. Often times, the puppy mills do not sell directly to the consumers, but rather to large animal brokers who then make the animals available to the pet retailers. This animal-broker scenario can make it difficult for a consumer to determine the source of the animal. Brokers, and those who transport these animals, are required to register with the USDA.

The federal Animal Welfare Act was passed by Congress in 1966 and establishes minimum standards for the care and treatment of animals bred for commercial sale, exhibited to the public, used in biomedical research or commercial transport. The USDA is responsible for overseeing the commercial dog breeding industry. Animal breeders who sell to pet stores in states that allow it, and who sell to consumers via the Internet are required to hold a license. However, as noted by various animal welfare organizations, federal laws provide a minimal level of specificity for animal care and violations are often found in many commercial breeding organizations, while others operate underground making enforcement of the laws difficult and challenging. Unfortunately, the USDA licensing stamp, does not ensure that a licensed facility breeding dogs or cats, is following the law, providing the required kennel space, or meeting any of the health and safety requirements.

Online Retail Sales of Pets. The landscape for retail sales has not only shifted for the purchase of consumer goods and products, it has shifted for the purchase of pets and pet products. Across the country, numerous jurisdictions and a few other states including Washington, Illinois, Maine, Maryland, New York, and Oregon have also established restrictions on retail pet stores selling live dogs, cats, or rabbits. The ease and convenience of the online marketplace, along with shifting consumer habits have increased consumer sales activities online.

According to an online article in Time from April 2023, Puppy Mills Have Now Gone Digital. What a Vet Wants You to Know, it was noted that many online animal retailers portray the animals as healthy, with cute bows and seasonal themed backgrounds, which are more likely quick photo-ops, than actual living conditions, and determining the true origins through these sites can be challenging. As noted by the author and sponsor, California is the number one importer of animals, and “Online sales allow puppy mills to continue to service California customers through the cloak of sanitized imagery and obfuscated information.”

The Better Business Bureau released a report in 2017 related to online puppy scams and updated the report in 2022. In 2017, the BBB conducted a study titled: Puppy Scams: How Fake Online Pet Sellers Steal from Unsuspecting Buyers. That study noted that fraud in online pet sales was on the rise and that American consumers had filed “tens of thousands” of complaints through various organizations. The BBB reported in 2022, that pet scam reports to the BBB were in decline since the original report; however, the costs to consumers for the scams had increased.

In an effort to help protect California consumers who seek to purchase pets online, this bill would deem any sales contract for a pet void and against public policy if the contract requires a non-refundable deposit and does not identify the source, typically the breeder, of a prospective pet. The bill also provides that any money exchanged pursuant to such a contract must be refunded within 30 days. However, as currently drafted, this bill does not provide specific enforcement tools for a consumer whom may have purchased an animal via a contract that should be voided as prescribed by this bill. It would be up the individual consumer to address the issue through private litigation.

This bill does provide an exemption to those animals contracted to be trained for use as a service animal (such as a guide dog or signal dog) and those animals that are trained for police or law enforcement use.

1. Related Legislation. AB 2380 (Maienschein, Chapter 548, Statutes of 2022) prohibits an online pet retailer, as defined, from offering a loan or other financing for the adoption or sale of a dog, cat, or rabbit.

AB 2152 (Gloria, O’Donnell), Chapter 96, Statutes of 2020) Prohibits a pet store from selling dogs, cats, or rabbits, but allows a pet store to provide space to display animals for adoption if the animals are displayed by either a shelter or animal rescue group, as defined, and establishes a fee limit, inclusive of the adoption fee, for animals adopted at a pet store.

AB 2445 (O’Donnell, Chapter 145, Statutes of 2018) requires a pet store operator to maintain records to document the health, status, and disposition of each animal it sells for a period of not less than two years, and provide to the prospective purchaser of any animal the veterinary medical records, as specified, and the pet store return policy including the circumstances, if any, under which the pet store will provide follow-up veterinary care for the animal in the event of illness. This bill also requires that an animal shelter, as specified, or a rescue group that supplies an animal to the pet store provide, if requested by the pet store operator, the terms under which the animal is being transferred to the pet store, including certain specified information.

AB 485 (O’Donnell, Chapter 740, Statutes of 2017) prohibited, beginning January 1, 2019, a pet store operator from selling a live cat, dog, or rabbit in a pet store unless they were obtained from a public animal control agency or shelter, specified nonprofit, or animal rescue or adoption organization, as defined; permits a public or private shelter to enter into cooperative agreement with animal rescue or adoption organizations regarding rabbits; requires dogs or cats sold in a retail pet store to comply with current spay and neuter laws; provides specified exemptions to the pet warranty law; and permits an animal control officer, a humane officer, or a peace officer to enforce the pet store prohibition.

AB 1491 (Caballero, Chapter 731, Statutes of 2017) declares as void against public policy a contract for the purchase of a dog or cat which is made contingent on making of payments over a period of time, or other types of lease-to-own agreements that do not immediately transfer ownership of the animal to the purchaser.

1. Arguments in Support. The San Francisco ASPCA writes in support and notes, “California has taken a strong public policy stance to protect consumers, to promote pet adoption and to shut down these high-volume commercial breeding operations, including banning the purchase of pets at pet stores. Despite this, puppies are being sold to Californians through this online marketplace. At a time when California’s animal shelters are overflowing with animals who need homes, it is imperative that the state continue its commitment to shutting down the pipeline of puppy mill pups into the state. By requiring source disclosure and eliminating predatory nonrefundable deposits, AB 2248 will help.”
   
2. Policy Issues for Consideration.

Enforcement. This bill does not provide an enforcement tool, which would likely require individuals to pursue litigation to address any grievances.

Exemptions. This bill would allow an exemption for those contracts for an animal “trained” as a service dog or a police dog. As currently drafted, this exemption might be broad, as any dog could be represented to be “trained” for purposed of being a service dog or a police dog and provided to any consumer who may not utilize the animal in that capacity. The exemption may be overbroad and potentially lead to unintended confusion and a possible loophole. The author should continue to work with stakeholders to ensure that the exemption for service dogs and law enforcement dogs is appropriate.

SUPPORT AND OPPOSITION:

Support:

San Francisco ASPCA

Opposition:

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2248

Author:(Maienschein)

As Introduced Ver:February 8, 2024

Majority vote

SUMMARY

Prohibits contracts for the sale of dogs and cats that require non-refundable deposits and do not identify information about the prospective pet and breeder.

Major Provisions

1. Provides that on or after January 1, 2025, a contract to transfer ownership of a dog or cat is void as against public policy if all of the following are met:
   1. The buyer is in California;
   2. The contract requires a nonrefundable deposit; and
   3. The contract does not identify the original source of the dog or cat, including, but not limited to, the breeder.
2. Requires that if money has been exchanged pursuant to a contract that is void pursuant to 1), the seller is to refund the money to the buyer within 30 days of receiving notice that the contract is void pursuant to 1).
3. Prohibits a person from offering a contract that violates 1).
4. Authorizes a court to issue injunctive relief to prevent the enforcement of a contract that violates 1).

COMMENTS

Reflecting its status as a national leader in the "Adopt Don't Shop" movement to promote the adoption of shelter pets over the purchase of pets from breeders, California has banned the purchase of animals from pet stores, unless the sale is conducted through a partnership with an animal shelter to place an adoptable pet into a home for a fee. This has essentially driven animal breeders out of most of the California market. While some small-scale, non-commercial breeders exist, most persons in California seeking purebred puppies and kittens now need to look out of state. This market dynamic, however, has given rise to an online pet sales marketplace whereby Californians seeking puppies from out of state breeders are being forced to put down significant, often non-refundable, deposits for animals they have never seen. The author notes that, too frequently, these online markets (and associated apps) are deceiving customers and taking advantage of California consumers. This bill would combat these bad actors by prohibiting non-refundable deposits for the purchase of dogs and cats; and requiring online pet sellers to disclose information about a pet's breeder in the initial sales contract.

Given that many of California's animal shelters are frequently filled to capacity, a Los Angeles-based non-profit called Last Chance for Animals created the "Adopt Don't Shop" movement to promote the adoption of shelter pets over the purchase of animals from pet stores and large-scale breeders (https://wagabonding.com/why-i-stopped-saying-adopt-dont-shop/). The Legislature subsequently adopted policies to promote the adoption of animals, including by prohibiting the sale of animals in pet stores, unless the animals were from an animal shelter. (AB 485 (O'Donnell) Chapter 740, Statutes of 2017) As a result of these actions, several online retailers developed platforms seeking to bypass the prohibitions of AB 485. Amid the pet buying frenzy spurred by pandemic-era stay-at-home orders, several of these retailers developed complex financing mechanisms to prey on consumers seeking to buy purebred puppies. Seeking to better protect consumers from these predatory schemes, the Legislature enacted AB 2380 (Maienschein) Chapter 548, Statutes of 2022, prohibiting online pet retailers from offering consumer loans for the purchase of a dog or cat. Despite these protections, online pet retailers continue to seek to undermine California's efforts to promote pet adoption.

As noted above, since California banned pet stores from selling puppies and kittens, an online market has emerged to sell pets to Californians. This largely unregulated market has caused significant problems for California consumers. According to the proponents of this measure, online sellers frequently post generic pictures of a dog or cat and try to pass it off as the animal for adoption. Based on consumer reviews shared with the Judiciary Committee, these websites also frequently do not share specific information about an animal until a non-refundable deposit is given, and even then, consumers are not provided information about the dog's or cat's medical condition, family lineage, or the specific breeder of the pet. Consumer complaints about these websites also include poor customer service and their refusal to refund deposits when a pet purchase is cancelled as a result of the seller's actions. As a result of these practices, California consumers are at risk of paying thousands of dollars to unscrupulous actors with little recourse should the transaction go awry.

Seeking to protect California consumers who seek to purchase pets online, this bill deems any sales contract for a pet void and against public policy if the contract requires a non-refundable deposit and does not identify the source, typically the breeder, of a prospective pet. The bill also provides that any money exchanged pursuant to such a contract must be refunded within 30 days. Finally, the bill authorizes both contract damages as well as injunctive relief to stop a website or an out-of-state breeder from offering pet sales in California that are not in accordance with the provisions of this bill.

This bill adopts two methods for enforcing the prohibition against contracts with non-refundable deposits. The primary enforcement method would be a contract action, filed by a prospective buyer, to negate an unlawful contract. Due to the size of these contracts, the actions would almost certainly be dealt with in small claims court. A plaintiff's primary recovery would likely be the value of the deposit or any other funds paid under the contract. This bill also authorizes a person to seek an injunction against a pet seller to prevent them from continuing to operate in violation of this bill.

As a result of California banning the sale of dogs and cats, many pet breeding operations in California have shut down. Accordingly, this bill primarily impacts out-of-state pet sellers and may implicate the dormant commerce clause prohibition of discriminating against out-of-state businesses. (see, e.g. West Lynn Creamery, Inc. v. Healy (1994) 512 U.S. 186.) However, this bill is likely to withstand scrutiny, notwithstanding its disproportionate impact on out-of-state businesses. For example, while many California breeders no longer operate, any breeding is not per se banned in California. Indeed, many farms and ranches have small breeding operations ancillary to their primary business. This bill applies equally to those operations, as well as out-of-state breeders. Additionally, this bill also applies to non-breeders. Should a family pet unexpectedly have puppies or kittens and that family sought to sell the pets, they could not seek a non-refundable deposit. Accordingly, while this bill may impact more non-California businesses due to the state's efforts to promote pet adoption, it does not treat those businesses any differently than in-state actors and thus should not run afoul of the dormant commerce clause.

According to the Author

While retail pet stores are unlawful in California, the pet sales industry has shifted online. Online sales allow puppy mills to continue to service California customers through the cloak of sanitized imagery and obfuscated information. Third-party sellers operate online storefronts featuring hundreds of puppies available to be shipped to customers.

Most sellers offer only minimal initial information and require nonrefundable deposits before providing any specific information regarding a puppy's origin and the commercial breeder they came from. In short, these businesses collect hundreds of dollars from consumers for just the opportunity to ask questions about the puppy they are interested in. If a consumer learns the name of the seller and has concerns, they must move forward with the contract or lose their deposit. AB 2248 invalidates contracts for online dog or cat purchases if they require a nonrefundable deposit or fail to disclose the breeder of the animal.

Arguments in Support

This bill is sponsored by the American Society for the Prevention of Cruelty to Animals and supported by several other animal advocacy organizations. In support of the bill the American Society for the Prevention of Cruelty to Animals writes:

For decades, the ASPCA has worked to limit the puppy mill pipeline, a predatory industry that makes cruel, out-of-state breeding conditions profitable by misleading consumers with wholesome images and manipulative financial tactics. California itself has been a leader in this area, prohibiting the sale of cats and dogs at retail pet stores to limit the sale of commercially bred animals in the state. Unfortunately, though, the puppy mill pipeline is still alive and well in California, online.

According to data of publicly available shipping transactions, California is the #1 importer of dogs and cats in the nation. Online sales allow puppy mills to continue to service California customers through the cloak of sanitized imagery and obfuscated information. Sellers such as Little Puppies Online, Premier Pups, and Puppy Spot operate online storefronts featuring hundreds of puppies available to be shipped to customers. These sites display bright photos and provide minimal information beyond a puppy's age and breed.

A visitor to the site chooses a specific puppy's picture and then is prompted to pay in full or "reserve" the puppy by placing a deposit. This payment is required before the company will provide anything other than generic information to the consumer. Deposits vary from site to site but one popular site charges nonrefundable deposits of $599, and another recently changed their nonrefundable deposit structure to 25%-100% of the total cost of the puppy. Consumers who do not complete payment within 72 hours forfeit their deposit entirely.

This bill addresses these practices by voiding contracts that have required a nonrefundable deposit and failed to disclose the original source of a dog or cat. The bill also requires sellers to return money to the buyers within 30 days if the contract is voided.

Arguments in Opposition

No opposition on file.

FISCAL COMMENTS

None

VOTES

ASM JUDICIARY: 10-0-2

YES: Kalra, Dixon, Bauer-Kahan, Bryan, Connolly, Maienschein, McKinnor, Pacheco, Reyes, Sanchez

ABS, ABST OR NV: Haney, Waldron

UPDATED

VERSION: February 8, 2024

CONSULTANT: Nicholas Liedtke / JUD. / (916) 319-2334 FN: 0002655

Date of Hearing: March 12, 2024

ASSEMBLY COMMITTEE ON JUDICIARY

Ash Kalra, Chair

ABPCA Bill Id:AB 2248

Author:(Maienschein) – As Introduced Ver:February 8, 2024

SUBJECT: Contracts: sales of dogs and cats

KEY ISSUE: should contracts for the purchase of a dog or cat be deemed against public policy if the contract requires a non-refundable deposit and omits specified information about the dog or cat?

SYNOPSIS

California has been a national leader in the effort to promote pet adoption and to shut down “puppy mills.” In 2017, California banned the purchase of new pets at pet stores. As a result of this effort, a robust and unregulated online marketplace has emerged to sell puppies and kittens to California consumers. Given the lack of oversight of these websites, Californians are frequently required to remit non-refundable deposits for a pet, but have no guarantees regarding the pet’s health, lineage, or other claims made about the pet. Seeking to curtail this practice, this bill would prohibit contracts that require non-refundable deposits for the purchase of a pet and would require all purchase contracts to disclosure information about the pet and the breeder. Any consumer who signs a contract in violation of this bill would be entitled to recover all of their costs from the seller.

This measure is sponsored by the American Society for the Prevention of Cruelty to Animals who note that the pet sale websites targeted by this bill frequently deceive consumers and undercut California’s efforts to eliminate inhumane pet breeding operations. This measure has no known opposition.

SUMMARY: Prohibits contracts for the sale of dogs and cats that require non-refundable deposits and do not identify information about the prospective pet and breeder. Specifically, this bill:

1. Provides that on or after January 1, 2025, a contract to transfer ownership of a dog or cat is void as against public policy if all of the following are met:
   1. The buyer is in California;
   2. The contract requires a nonrefundable deposit; and
   3. The contract does not identify the original source of the dog or cat, including, but not limited to, the breeder.
2. Requires that if money has been exchanged pursuant to a contract that is void pursuant to 1), the seller to refund the money to the buyer within 30 days of receiving notice that the contract is void pursuant to 1).
3. Prohibits a person from offering a contract that violates 1).
4. Authorizes a court to issue injunctive relief to prevent the enforcement of a contract that violates 1).

EXISTING LAW:

1. Prohibits the following provisions to be contained within contracts:
   1. Those contrary to a provision of law;
   2. Those contrary to the express policy of existing law, even if not expressly prohibited; and
   3. Those otherwise contrary to good morals. (Civil Code Section 1667.)
2. Provides that contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law. (Civil Code Section 1668.)
3. Provides that if a court finds, as a matter of law, a contract or any clause of a contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result. (Civil Code Section 1670.5.)
4. Provides that a provision in a contract liquidating the damages for the breach of the contract is valid unless the party seeking to invalidate the provision establishes that the provision was unreasonable under the circumstances existing at the time the contract was made. (Civil Code Section 1671 (b).)
5. Prohibits a pet store from a adopting out, selling, or offering for sale a dog, cat, or rabbit unless the animals are displayed by either a public animal control agency or shelter, or animal rescue group. (Health and Safety Code Section 122354.5 (a)-(b).)
6. Provides that a violation of 5) may be enforced by a district attorney or city attorney and may result in the awarding of injunctive relief. (Health and Safety Code Section 122354.4 (g).)
7. Prohibits an online pet retailer, as defined, from offering, brokering, making a referral for, or otherwise facilitating a loan or other financing option for the adoption or sale of a dog, cat, or rabbit. (Health and Safety Code Section 122191.)

FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.

COMMENTS: Reflecting its status as a national leader in the “Adopt Don’t Shop” movement to promote the adoption of shelter pets over the purchase of pets from breeders, California has banned the purchase of animals from pet stores, unless the sale is conducted through a partnership with an animal shelter to place an adoptable pet into a home for a fee. This has essentially driven animal breeders out of most of the California market. While some small-scale, non-commercial breeders exist, most persons in California seeking purebred puppies and kittens now need to look out of state. This market dynamic, however, has given rise to an online pet sales marketplace whereby Californians seeking puppies from out of state breeders are being forced to put down significant, often non-refundable, deposits for animals they have never seen. The author notes that, too frequently, these online markets (and associated apps) are deceiving customers and taking advantage of California consumers. This bill would combat these bad actors by prohibiting non-refundable deposits for the purchase of dogs and cats; and requiring online pet sellers to disclose information about a pet’s breeder in the initial sales contract. In support of this measure the author states:

While retail pet stores are unlawful in California, the pet sales industry has shifted online. Online sales allow puppy mills to continue to service California customers through the cloak of sanitized imagery and obfuscated information. Third-party sellers operate online storefronts featuring hundreds of puppies available to be shipped to customers.

Most sellers offer only minimal initial information and require nonrefundable deposits before providing any specific information regarding a puppy’s origin and the commercial breeder they came from. In short, these businesses collect hundreds of dollars from consumers for just the opportunity to ask questions about the puppy they are interested in. If a consumer learns the name of the seller and has concerns, they must move forward with the contract or lose their deposit. AB 2248 invalidates contracts for online dog or cat purchases if they require a nonrefundable deposit or fail to disclose the breeder of the animal.

California has been a national leader in the “Adopt Don’t Shop” movement to ensure shelter pets find loving homes. Given that many of California animal shelters are frequently filled to capacity, a Los Angeles-based non-profit called Last Chance for Animals created the “Adopt Don’t Shop” movement to promote the adoption of shelter pets over the purchase of animals from pet stores and large-scale breeders. (https://wagabonding.com/why-i-stopped-saying-adopt-dont-shop/.) The Legislature subsequently adopted policies to promote the adoption of animals, including by prohibiting the sale of animals in pet stores, unless the animals were from an animal shelter. (AB 485 (O’Donnell) Chap. 740, Stats. 2017.) As a result of these actions, several online retailers developed platforms seeking to bypass the prohibitions of AB 485. Amid the pet buying frenzy spurred by pandemic-era stay-at-home orders, several of these retailers developed complex financing mechanisms to prey on consumers seeking to buy purebred puppies. Seeking to better protect consumers from these predatory schemes, the Legislature enacted AB 2380 (Maienschein) Chap. 548, Stats. 2022, prohibiting online pet retailers from offering consumer loans for the purchase of a dog or cat. Despite these protections, online pet retailers continue to seek to undermine California’s efforts to promote pet adoption.

As a result of California’s efforts to promote pet adoption, unsavory online breeders have started to enter the California market. As noted above, since California banned pet stores from selling puppies and kittens, an online market has emerged to sell pets to Californians. This largely unregulated market has caused significant problems for California consumers. According to the proponents of this measure, online sellers frequently post generic pictures of a dog or cat and try to pass it off as the animal for adoption. Based on consumer reviews shared with the Committee, these websites also frequently do not share specific information about an animal until a non-refundable deposit is given, and even then, consumers are not provided information about the dog’s or cat’s medical condition, family lineage, or the specific breeder of the pet. Consumer complaints about these websites also include poor customer service and their refusal to refund deposits when a pet purchase is cancelled as a result of the seller’s actions. As a result of these practices, California consumers are at risk of paying thousands of dollars to unscrupulous actors with little recourse should the transaction go awry.

This bill protects those seeking to get animals from out-of-state breeders. Seeking to protect California consumers who seek to purchase pets online, this bill would deem any sales contract for a pet void and against public policy if the contract requires a non-refundable deposit and does not identify the source, typically the breeder, of a prospective pet. The bill also provides that any money exchanged pursuant to such a contract must be refunded within 30 days. Finally, the bill authorizes both contract damages as well as injunctive relief to stop a website or an out-of-state breeder from offering pet sales in California that are not in accordance with the provisions of this bill.

The bill uses contract remedies as the primary method of enforcement. This bill adopts two methods for enforcing the prohibition against contracts with non-refundable deposits. The primary enforcement method would be a contract action, filed by a prospective buyer, to negate an unlawful contract. Due to the size of these contracts, the actions would almost certainly be dealt with in small claims court. A plaintiff’s primary recovery would likely be the value of the deposit or any other funds paid under the contract. This bill also authorizes a person to seek an injunction against a pet seller to prevent them from continuing to operate in violation of this bill. However, it seems unlikely that an individual consumer would take on the financial burden of trying to enjoin unlawful conduct on the behalf of all Californians. Accordingly, as the bill advances the author may wish to consider adding public prosecutors to the bills enforcement provisions. Unlike an individual consumer, a city attorney or county counsel would have the resources needed to pursue such an action on behalf of the public.

Because of the market dynamics for pets in California, this bill does not discriminate against out-of-state breeders and should not implicate the Dormant Commerce Clause. As a result of California banning the sale of dogs and cats many pet breeding operations in California have shut down. Accordingly, this bill would primarily impact out-of-state pet sellers and may implicate the dormant commerce clause prohibition of discriminating against out-of-state businesses. (see, e.g. West Lynn Creamery, Inc. v. Healy (1994) 512 U.S. 186.) However, this bill is likely to withstand scrutiny, notwithstanding its disproportionate impact on out-of-state businesses. For example, while many California breeders no longer operate, any breeding is not per se banned in California. Indeed, many farms and ranches have small breeding operations ancillary to their primary business. This bill would apply equally to those operations, as well as out-of-state breeders. Additionally, this bill would also apply to non-breeders. Should a family pet unexpectedly have puppies or kittens and that family sought to sell the pets, they could not seek a non-refundable deposit. Accordingly, while this bill may impact more non-California businesses due to the state’s efforts to promote pet adoption, it does not treat those businesses any differently than in-state actors and thus should not run afoul of the dormant commerce clause.

ARGUMENTS IN SUPPORT: This bill is supported by the American Society for the Prevention of Cruelty to Animals. In support of the bill they write:

For decades, the ASPCA has worked to limit the puppy mill pipeline, a predatory industry that makes cruel, out-of-state breeding conditions profitable by misleading consumers with wholesome images and manipulative financial tactics. California itself has been a leader in this area, prohibiting the sale of cats and dogs at retail pet stores to limit the sale of commercially bred animals in the state. Unfortunately, though, the puppy mill pipeline is still alive and well in California, online.

According to data of publicly available shipping transactions, California is the #1 importer of dogs and cats in the nation. Online sales allow puppy mills to continue to service California customers through the cloak of sanitized imagery and obfuscated information. Sellers such as Little Puppies Online, Premier Pups and Puppy Spot operate online storefronts featuring hundreds of puppies available to be shipped to customers. These sites display bright photos and provide minimal information beyond a puppy’s age and breed.

A visitor to the site chooses a specific puppy’s picture and then is prompted to pay in full or “reserve” the puppy by placing a deposit. This payment is required before the company will provide anything other than generic information to the consumer. Deposits vary from site to site but one popular site charges nonrefundable deposits of $599, and another recently changed their nonrefundable deposit structure to 25%-100% of the total cost of the puppy. Consumers who do not complete payment within 72 hours forfeit their deposit entirely.

AB 2248 addresses these practices by voiding contracts that have required a nonrefundable deposit and failed to disclose the original source of a dog or cat. The bill also requires sellers to return money to the buyers within 30 days if the contract is voided.

REGISTERED SUPPORT / OPPOSITION:

Support

American Society for the Prevention of Cruelty to Animals

Opposition

None on file

Analysis Prepared by: Nicholas Liedtke / JUD. / (916) 319-2334