California Court Finds That Song-Beverly Credit Card Act Does Not Apply to Online Transactions

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Following the California Supreme Court’s decision in Pineda v. Williams-Sonoma Stores, Inc., more than 200 lawsuits have been filed against retailers doing business in California. These cases have been brought under the Song-Beverly Credit Card Act of 1971 (the “Act”), which prohibits businesses from requesting cardholders to provide “personal identification information” during credit card transactions and then recording that information. Although the lawsuits have primarily been directed against brick-and-mortar retailers, several online retailers, including Amazon.com, PayPal, Craigslist, StubHub, and Ticketmaster have also been sued. This has raised significant questions about whether the Act extends to online transactions. Fortunately, the San Francisco Superior Court has offered some good news for online retailers.

On August 24, 2011, the San Francisco Superior Court dismissed a Song-Beverly Act lawsuit against Craigslist, finding that the Act “on its face does not apply to online transactions” and that “the applicable case law, legislative intent and public policy indicate that such transactions are not, and should not be, encompassed by [the Act].”

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