Commentary Addressing Risks and Opportunities Through the Lifecycle of Data, Technology, Advertising and Innovation

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On February 10, 2011, the California Supreme Court issued a decision in <a href="http://dataprivacymonitor.bakerhostetlerblogs.com/wp-content/uploads/sites/5/2011/02/Pineda-v-Williams-Sonoma.pdf">Pineda v. Williams-Sonoma</a>&nbsp;(.pdf), finding that a ZIP code constitutes &ldquo;personal identification information&rdquo; under California&rsquo;s Song-Beverly Credit Card Act of 1971 (the &ldquo;Song-Beverly Act&rdquo;).&nbsp; The Song-Beverly Act prohibits retailers from requesting and recording "personal identification information" as a condition of a credit card transaction.&nbsp; Accordingly, unless a statutory exception applies, a retailer that requests or requires that a customer provide a zip code as a condition of accepting a credit card transaction violates the Song-Beverly Act.&nbsp; A retailer is subject to a civil penalty of up to $250 for the first violation and up to $1,000 for each subsequent violation. The plaintiffs bar reacted quickly to the Supreme Court&rsquo;s decision&mdash;at least <a href="http://www.reuters.com/article/2011/02/16/us-classaction-creditcards-idUSTRE71F7AL20110216">20 class-action </a>complaints have been filed in the week following the decision.&nbsp; The Pineda decision likely caught many by surprise because, as recently as September 30, 2010, a&nbsp;California appellate court had ruled that a ZIP code did not fall under the statutory definition of &ldquo;personal identification information.&rdquo;

California Retailers Who Collect Zip Codes In Credit Card Transactions May Now Face Class Action Lawsuits