Tuesday, March 27, 2018
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Court of Appeal:
Urban Outfitters Did Not Breach Law by Seeking Customers’ ZIP Codes
Affirms Judge Who Said a Customer Couldn’t Reasonably Suppose a Credit Card Transaction Was Dependent on Supplying Personal Information Where It Was Requested After the Sale
By a MetNews Staff Writer
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The Court of Appeal has affirmed a judgment establishing the Urban Outfitters and a subsidiary did not violate the Song-Beverly Credit Card Act by asking for customers’ ZIP codes after sales were completed. |
The Fourth District Court of Appeal has affirmed a summary judgment in favor of Urban Outfitters in a class action in which it was alleged that the multinational clothing retailer violated the Song-Beverly Credit Card Act by asking customers for their ZIP codes after ringing up sales.
Div. One, in an unpublished opinion by Acting Presiding Justice Richard D. Huffman, filed Friday, also upheld the entirety of a $150,449.49 award in defense costs.
Three plaintiffs brought actions—later consolidated and turned into a class action—under Civil Code §1747.08. That section provides that a merchant may not “[r]equest, or require as a condition to accepting the credit card as payment in full or in part for goods or services, the cardholder to provide personal identification information” which is recorded.
The litigation followed issuance by the California Supreme Court of its 2011 opinion in Pineda v. Williams-Sonoma Stores, Inc. There, then-Justice Carlos Moreno (now retired) wrote for a unanimous court in saying:
“In light of the statute’s plain language, protective purpose, and legislative history, we conclude a ZIP code constitutes ‘personal identification information’ as that phrase is used in section 1747.08. Thus, requesting and recording a cardholder’s ZIP code, without more, violates the Credit Card Act.
On the day that opinion was issued—Feb. 10—Urban Outfitters ceased asking for ZIP codes.
Trial Court Ruling
In granting summary judgment to the clothing company, then-San Diego Superior Court Judge Joel Pressman (now a private judge) found the high court case factually distinguishable. In that case, the plaintiff believed that she was obliged to provide her ZIP code for the transaction to go through.
In the case before him, Pressman said, “no consumer could reasonably perceive that a request for a ZIP code that was made after the card had already been accepted was a condition for acceptance of the card.”
Huffman said there was evidence that supported that finding. He wrote:
“The summaries of store feedback showed that cashiers often completed transactions without obtaining the customers’ zip code and that when customers questioned cashiers about why ZIP codes were collected, cashiers accurately informed customers it was for marketing purposes and was not required to complete a purchase. Because consumers often questioned the request for their zip code and did not provide it to the cashier, the court could fairly infer a reasonable consumer would not believe the information was required to complete a transaction.”
Defense Costs
The plaintiff challenged the award of $57,912.84 to Urban Outfitters in costs in connection with the production of documents.
In its opposition to a motion to tax costs, Urban Outfitters pointed out that in order to accommodate the plaintiffs; discovery requests, it had to engage the services of vendors to go through more than 400,000 documents, producing 1,658 that were responsive.
Pressman said that while the “parties are expected to bear routine discovery costs, the document database in this case was specially required in order to process the unique discovery in this litigation.”
Huffman said that “evidence supported the trial court’s finding that these costs were reasonable and necessary to the litigation and class plaintiffs have not shown this finding constituted an abuse of discretion.”
Gene J. Stonebarger of Folsom, one of the lawyers who successfully represented the plaintiff on appeal in Williams-Sonoma, was among the lawyers unsuccessfully representing the plaintiffs in the appeal in the present case, Dremak v. Urban Outfitters, D071308.
Copyright 2018, Metropolitan News Company