Class Action

Class Action Defense Cases–Pineda v. Williams-Sonoma: California Supreme Court Holds ZIP Codes Constitute “Personal Identifiable Information” Within Meaning Of California’s Song-Beverly Act

By Michael J. Hassen

Trial Court Erred in Dismissing Class Action Complaint because Retailer Request for ZIP Codes Violated Song-Beverly Consumer Protection Statute California Supreme Court Holds

Plaintiff filed a putative class action against retailer Williams-Sonoma alleging that it violated California’s Song-Beverly Credit Card Act of 1971 (one of the State’s consumer protection statutes) by asking her for her ZIP code at the time of her purchase. Pineda v. Williams-Sonoma Stores, Inc., 51 Cal.4th 524 (Cal. 2011) [Slip Opn., at 1]. In relevant part, Song-Beverly “prohibits businesses from requesting that cardholders provide ‘personal identification information’ during credit card transactions, and then recording that information.” Id. According to the allegations underlying the class action complaint, plaintiff provided her ZIP code because she believed it was required in order to complete her credit card purchase. Id., at 1-2. More importantly, the class action alleged that Williams-Sonoma “subsequently used her name and ZIP code to locate her home address.” Id., at 2. Defense attorneys demurred to the class action complaint on the grounds that a ZIP code is not personal identification information within the meaning of Song-Beverly. Id., at 3. The trial court sustained the demurrer, and the Court of Appeal affirmed based, in part, on Party City Corp. v. Superior Court, 169 Cal.App.4th 497 (Cal.App. 2008), which had previously held that “a ZIP code, without more, does not constitute personal identification information.” Id., at 3-4 (citation omitted). The California Supreme Court granted review and reversed.

As noted above, the class action complaint alleged that defendant requested that customers provide ZIP codes at point of sale. Pineda, at 2-3. The thrust of the class action complaint was that “[a]t the end of the transaction, defendant had plaintiff’s credit card number, name, and ZIP code recorded in its database.” Id., at 3. The Supreme Court summarized the critical facts as follows: “Defendant subsequently used customized computer software to perform reverse searches from databases that contain millions of names, e-mail addresses, telephone numbers, and street addresses, and that are indexed in a manner resembling a reverse telephone book. The software matched plaintiff’s name and ZIP code with plaintiff’s previously undisclosed address, giving defendant the information, which it now maintains in its own database. Defendant uses its database to market products to customers and may also sell the information it has compiled to other businesses.” Id. (italics added). It is undisputed that defendant could not, consistent with Song-Beverly, have asked plaintiff for her home address; the issue presented was whether defendant could, consistent with Song-Beverly, have asked plaintiff for her ZIP code and then use it to obtain her home address.

Full post as published by Class Action Defense Blog on March 24, 2011 (boomark / email).