In a case with major implications for retailers and marketers, the Supreme Court of California ruled on February 10, 2011 that state law prohibits businesses from requesting and recording ZIP codes from consumers prior to credit card transactions, including requests for use in marketing. Pineda v. Williams-Sonoma Stores, Inc., S178241 (Cal., Feb. 10, 2011). Numerous other states have laws similar to California’s that regulate merchant practices with respect to collecting and recording personal information in connection with a credit card purchase.
The impact of the Court’s decision is not limited to future practices. The Court also held that its interpretation of the statute applies retroactively, thereby opening the door to class action consumer lawsuits based on businesses’ prior requests for ZIP codes for marketing purposes. Within days of the Court’s ruling, over a dozen cases have already been filed in California against major retailers. Courts can impose statutory damages of up to $1000 per violation of the law.
Drawing on our expertise in the arenas of privacy and class action defense, Venable drafted an amicus brief for the Direct Marketing Association supporting the defendant retailer’s arguments. We summarize the California Supreme Court’s ruling below.
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