The State Supreme Court Shakes it Up for Retail Businesses

more+
less-

In a decision that deals a potentially harsh blow to retailers struggling to weather a troubled economy, the California Supreme Court held in Pineda v. Williams-Sonoma Stores Inc., 2011 DJDAR 2278 (Feb. 10, 2011), that ZIP codes constitute "personal identification information" under the Song-Beverly Credit Card Act (California Civil Code Section 1747.08). This will generally expose retailers who request such information from customers paying with a credit card to penalties of up to $1,000 per request. The decision almost certainly will lead to a wave of putative class action litigation against retailers across California, including those who relied on lower court opinions blessing these information requests. And it likely will chill retailers' marketing and anti-fraud efforts, while impeding customer efforts to obtain the full benefirts of the retailers' services and products. Pineda creates a situation fraught with danger for any retailers attempting to market to its own customers while seeking in good faith to comply with the law.

[Note: This article appeared in the Los Angeles Daily Journal on February 16, 2011.]

LOADING PDF: If there are any problems, click here to download the file.