Last week, the D.C. Circuit heard oral argument in the lawsuit filed against Urban Outfitters and Anthropologie over their collection of customer ZIP codes at the point of sale. The plaintiffs alleged that the practice of requesting ZIP codes at the point of sale during credit card transactions violated two D.C. statutes, the Consumer Protection
As we previously blogged, in a case concerning retail chain Michaels Stores, the Supreme Judicial Court of Massachusetts (SJC) recently issued a broad ruling regarding the circumstances in which consumers may sue for collection of zip code information during credit card transactions under Massachusetts law. Two separate putative class actions now have been filed…
In a recent decision, the Supreme Judicial Court of Massachusetts (“SJC”) broadly interpreted a statute that governs the personal information that may be collected by a merchant during a credit card transaction. The decision, Tyler v. Michaels Stores, Inc., SJC-1145 (Mass. March 11, 2013), was issued in response to three questions that had been certified to the SJC by a federal district judge in Boston, in connection with a lawsuit alleging violation of Mass. Gen. Laws, ch. 93, §105(a), the Massachusetts analogue to California’s Song-Beverly Act.
Section 105(a) provides that “[n]o business entity that accepts a credit card for a business transaction shall write, cause to be written or require that a credit card holder write personal identification information, not required by the credit card issuer, on the credit card transaction form.” “Personal identification information,” in turn, “shall include, but shall not be limited to, a credit card holder’s address or telephone number.” Violations of Section 105(a) are treated as “unfair and deceptive trade practices” under Mass. Gen. Laws. ch. 93A, §§ 2, 9, which provides “injured” persons a private right of action against any entity that commits an unfair or deceptive trade practice.
The plaintiff in Tyler alleged that Michaels Stores violated §105(a) by requesting her ZIP code during a credit card transaction at one Michaels Stores retail location. The district court agreed that the plaintiff had sufficiently pled a violation of that statute, but nonetheless dismissed the complaint because she had failed to allege a cognizable injury stemming from the violation, which is required to bring an action under Massachusetts’s unfair and deceptive trade practices statute. The court explained that the purpose of §105(a) was to prevent identify fraud, and suggested a plaintiff would need to allege that fraud had occurred because of the alleged violation of §105(a). …
Just under a year has passed since the California Supreme Court ruled that asking for a customer’s ZIP code during a credit card transaction violates California’s Song-Beverly Credit Card Act. According to media reports, the court’s decision in Pineda v. Williams-Sonoma Stores, Inc. has spurred more than 200 suits against California retailers. A roundup of recent developments in Song-Beverly Act litigation:
- A case against Brookstone had been dismissed in May 2010 on the ground that a ZIP code is not “personal identification information” within the meaning of Song-Beverly, but a state appellate court ruled [PDF] that the subsequent contrary decision in Pineda applied retroactively and that the suit against Brookstone could therefore proceed.
- Both state and federal courts in California have now reaffirmed that Song-Beverly does not apply to online transactions (Gonor v. Craigslist, Inc. [PDF]; Salmonson v. Microsoft Corp. [PDF]). According to Mehrens v. Redbox Automated Retail LLC [PDF], Song-Beverly does not apply to transactions conducted at self-service kiosks either. The courts recognized that fraud prevention justifies the collection of ZIP codes in online and kiosk transactions.
- A California federal court preliminarily approved a settlement under which Tiffany and Co. agreed to provide a voucher for either $10 off or free engraving to an estimated class of 90,000 customers; $142,000 in attorneys’ fees to class counsel; and $2,000 to the class representative.
In a decision with implications for all California retailers, the California Supreme Court ruled [PDF] yesterday that a customer may not be asked to provide his or her ZIP code during an in-person credit card transaction. At issue in Pineda v. Williams-Sonoma Stores, Inc. was the scope of California’s Song-Beverly Credit Card Act of 1971, Cal.