ZIP-lined Out of Court: Williams-Sonoma Obtains Dismissal of New Jersey ZIP Code Collection Suit

On September 26, Judge William Walls of the U.S. District Court for the District of New Jersey ruled that a putative class action lawsuit against home goods retailer Williams-Sonoma failed to state a claim under New Jersey law. In Feder v. Williams-Sonoma Stores, Inc., the plaintiff sought damages for purported violations of New Jersey’s Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”) after a Williams-Sonoma employee allegedly required the plaintiff to provide her zip code as part of a credit card transaction. The TCCWNA prohibits, among other things, the offering, entering into, giving or displaying a written consumer contract or notice “which includes any provision that violates any clearly established legal right of a consumer” under New Jersey or Federal law. In somewhat confusing fashion, the plaintiff’s complaint alleged that the electronic credit card transaction forms into which Williams-Sonoma enters consumers’ zip codes constituted consumer contracts that were subject to TCCWNA and that the collection of consumer zip codes on such forms violated the TCCWNA.

New Jersey law, like California law, does restrict the collection of personal information in connection with credit card purchases in some ways. However, New Jersey’s law does not provide for a private right of action. Therefore, the plaintiff in this case attempted to invoke the New Jersey law though the TCCWNA, which does provide for a private right of action. But unfortunately for the plaintiff, her complaint failed to allege the existence of a written contract containing a provision that explicitly violated the applicable New Jersey law on the subject so as to trigger the TCCWNA. Rather, Judge Walls rightly concluded that even assuming that the credit card transaction form constituted a written consumer contract, as plaintiff alleged it did, the “existence of the recorded zip code itself, which consists solely of numbers, does not constitute a contract provision that violates the plaintiff’s rights.” As such, the complaint failed to state a claim under the TCCWNA and required dismissal. The court also denied the plaintiff’s request to file an amended complaint because, in his opinion, the proposed amended complaint failed to either set forth any additional factual support for plaintiff’s allegation that the credit card transaction form constituted a written contract or allege any written provision of such “contract” violated her rights. Thus, according to Judge Walls, the amended complaint would fail for the same reasons as the original complaint.

The district court’s decision in this case supports what many people hope will continue to be the case, i.e., that it will be a challenge for plaintiffs’ lawyers to successfully transplant the California Supreme Court’s recent decision in Pineda v. Williams-Sonoma, Inc. (see this blog post) into other jurisdictions.