It’s Déjà Vu All Over Again: Massachusetts Allows Actions for Violation of Privacy Rights Based on Collection of ZIP Codes

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Massachusetts appears to have followed California’s lead in opening a litigation floodgate over ZIP code collection at the point of sale. In 2011, the California Supreme Court held in Pineda v. Williams-Sonoma Stores, Inc., 246 P.3d 612 (Cal. 2011), that a retailer illegally collects personal identification information (“PII”) when it requests and records ZIP codes from customers paying by credit card. More than 240 class action lawsuits followed.

The Massachusetts Supreme Judicial Court’s recent opinion in Tyler v. Michaels Stores, Inc. (No. SJC-11145) could bring a similar wave of litigation. The Tyler opinion strongly suggests retailers operating in Massachusetts should end the practice of collecting ZIP codes during credit card transactions, and foreshadows future litigation based on this practice. Like the Pineda court, the Massachusetts Supreme Court concluded that a ZIP code constitutes PII under Massachusetts’s credit card PII statute, G.L. c. 93, § 105(a) (“the Credit Card law”). More important for retailers, however, is the Court’s ruling that a plaintiff may bring an action for violation of privacy rights absent identity fraud. This ruling could make Massachusetts the next venue for an explosion of “ZIP code” litigation, and, as we note below, provide reason for retailers to review PII collection policies nationwide.

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Topics:  Credit Cards, Data Protection, Marketing, Personally Identifiable Information, ZIP Codes

Published In: Civil Procedure Updates, General Business Updates, Consumer Protection Updates, Finance & Banking Updates, Privacy Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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