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The State Supreme Court Shakes It Up for Retail Businesses

Donna L. Wilson & John W. McGuinness

February 16, 2011

In a decision that deals a potentially harsh blow to retailers still struggling to weather a troubled economy, the state Supreme Court last week held in Pineda v. Williams-Sonoma Stores Inc., 2011 DJDAR 2278 (Feb. 10), that ZIP codes constitute "personal identification information" under the Song-Beverly Credit Card Act (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 the state, including those who have relied on earlier lower court opinions blessing such 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.

Published in the Los Angeles Daily Journal