California District Court Holds Song-Beverly Credit Card Act Does Not Prohibit Post-Transaction Collection of Zip Codes, Denies Class Certification

Song-Beverly Credit Card Act Privacy/Cyber Risk & Data Security

On January 28, the U.S. District Court for the Northern District of California denied a motion for class certification filed by a group of plaintiffs seeking to challenge, on behalf of similarly situated individuals, a retailer’s policy that required cashiers to request consumer zip codes in connection with a purchase transaction. Gormley v. Nike, Inc., No, 11-893, 2013 WL 322538 (N.D. Cal. Jan. 28, 2013). The court held that the named plaintiffs failed to demonstrate typicality because their experiences were inconsistent with the policy they sought to challenge. The court explained that while the policy required cashiers to request zip codes after providing the purchased merchandise and a receipt to the customer, each plaintiff testified that the cashier asked for a zip code prior to providing those items. The court disagreed with the plaintiffs’ argument that the timing of the request was irrelevant based on the plaintiffs’ assertion that the California Supreme Court held in  Pineda v. Williams-Sonoma Stores Inc. that a request for a card holder’s zip code violates the Song-Beverly Credit Card Act. The court explained that Pineda only addressed whether zip codes constituted personal identification information, and then chose to follow subsequent district court decisions holding that the Song-Beverly Act prohibits only a request for personal identification information as a condition to completing a credit card transaction.