Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-02745/USCOURTS-caed-2_07-cv-02745-1/pdf.json

Nature of Suit Code: 950
Nature of Suit: Contitutionality of State Statutes
Cause of Action: 28:1332 Diversity-Petition for Removal

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

BRIAN KORN, individually; on

behalf of all others

similarly situated,

NO. CIV. S-07-02745 FCD JFM

Plaintiffs,

v. MEMORANDUM AND ORDER

POLO RALPH LAUREN CORPORATION,

a Delaware Corporation; and

DOES 1 through 50 inclusive,

Defendants.

----oo0oo----

This matter is before the court on defendant Polo Ralph

Lauren Corporation’s (“defendant” or “Polo”) motion to dismiss

or, alternatively, motion to strike portions of plaintiff Brian

Korn’s (“plaintiff” or “Korn”) complaint for violations of the

Song-Beverly Credit Card Act of 1971, California Civil Code §

1747.08. Plaintiff opposes the motions. For the reasons set

Case 2:07-cv-02745-FCD-JFM Document 41 Filed 05/28/08 Page 1 of 14
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1 Because oral argument will not be of material

assistance, the court orders this matter submitted on the briefs. 

See E.D. Cal. L.R. 78-230(h).

2

forth below,1

 defendant’s motions are GRANTED in part and DENIED

in part.

BACKGROUND

On November 2, 2007, plaintiff filed a class action

complaint in the Solano County Superior Court in the State of

California (hereinafter “the complaint”), alleging two causes of

action for violations of California Civil Code § 1747.08, arising

out of defendant’s (1) requests for and recording of telephone

numbers and addresses when a customer pays for goods with a

credit card; and (2) utilization of a credit card form which

contains preprinted spaces for the telephone number and address

of the cardholder. (Compl. ¶ 1). Plaintiff’s complaint

identifies two putative classes, the “Purchase Class” and the

“Refund Class.” (Id. ¶¶ 28, 36). The putative Purchase Class

consists of “all persons in California from whom [d]efendant

requested and recorded personal identification information as

part of a credit card transaction.” (Id. ¶ 28). The putative

Refund Class consists of “all persons in California who entered

into credit refund transactions with [d]efendant, wherein a

credit card transaction form was utilized which contained a preprinted space specifically designated for filling in the

telephone number and/or address of the cardholder.” (Id. ¶ 36). 

On December 19, 2007, defendant removed the action to this court

on the basis of the Class Action Fairness Act of 2005. 

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Plaintiff alleges that on or about July 30, 2007, he

purchased products at defendant’s retail store located in

Vacaville, California. (Id. ¶¶ 15-18). During the sale

transaction, after Polo’s employee informed plaintiff of the

amount due for the product, plaintiff handed the employee his

credit card. (Id. ¶ 18). The employee swiped the card and

entered/recorded the credit card number into an electronic cash

register at the checkout counter. (Id.) The employee requested

personal identification information from plaintiff, including his

telephone number and address. (Id. ¶ 19). Plaintiff was not

informed of the consequences if he did not provide his address

and telephone number. (Id.) Plaintiff gave the employee this

information, and the employee typed and recorded the information

into the electronic cash register. (Id. ¶ 20). The employee

then printed out and handed plaintiff a credit card transaction

form to sign. (Id. ¶ 22). Plaintiff and defendant’s employee

completed the transaction, and plaintiff left the store with his

purchased items. (Id. ¶ 23).

Plaintiff further alleges that on or about August 1, 2007,

plaintiff went to defendant’s same retail store in Vacaville,

California to return a product that he had previously purchased

with a credit card. (Id. ¶ 24). Plaintiff presented defendant’s

employee with a receipt containing the purchase information. 

(Id. ¶ 25). The employee printed out a credit card transaction

form, which previously contained preprinted spaces specifically

designated for filling in the address of the cardholder, but

which contained plaintiff’s address in the preprinted spaces. 

(Id. ¶ 26). The employee handed the form to plaintiff to sign,

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plaintiff signed the form, and the employee processed the credit

card refund. (Id. ¶¶ 26-27).

Plaintiff asserts that defendant utilized and continues to

utilize a “Telephone and Address Capture Policy,” whereby

defendant’s cashiers both request and record telephone numbers,

addresses, and credit card numbers from customers using credit

cards at the point-of-sale in defendant’s retail establishments. 

(Id. ¶ 47). Plaintiff also asserts that defendant utilized, in

each and every credit card refund transaction, a credit card form

which contained preprinted spaces designated for filling in the

telephone number and address of the cardholder, in violation of §

1747.08(a)(3). (Id. ¶ 53). Plaintiff seeks, on behalf of

himself, the Purchase Class, and the Refund Class, civil

penalties in amounts up to $1000 per violation and preliminary

and permanent injunctive relief.

STANDARD

On a motion to dismiss, the allegations of the complaint

must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322

(1972). The court is bound to give plaintiff the benefit of

every reasonable inference to be drawn from the “well-pleaded”

allegations of the complaint. Retail Clerks Int’l Ass’n v.

Schermerhorn, 373 U.S. 746, 753 n.6 (1963). Thus, the plaintiff

need not necessarily plead a particular fact if that fact is a

reasonable inference from facts properly alleged. See id. 

Nevertheless, it is inappropriate to assume that the

plaintiff “can prove facts which it has not alleged or that the

defendants have violated the . . . laws in ways that have not

been alleged.” Associated Gen. Contractors of Calif., Inc. v.

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Calif. State Council of Carpenters, 459 U.S. 519, 526 (1983). 

Moreover, the court “need not assume the truth of legal

conclusions cast in the form of factual allegations.” United

States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th

Cir. 1986).

Ultimately, the court may not dismiss a complaint in which

the plaintiff has alleged “enough facts to state a claim for

relief that is plausible on its face.” Bell Atlantic Corp. v.

Twombly, 127 S. Ct. 1955, 1974 (2007). Only where a plaintiff

has not “nudged [his or her] claims across the line from

conceivable to plausible,” is the complaint properly dismissed. 

Id. “[A] court may dismiss a complaint only if it is clear that

no relief could be granted under any set of facts that could be

proved consistent with the allegations.” Swierkiewicz v. Sorema

N.A., 534 U.S. 506, 514 (2002) (quoting Hudson v. King &

Spalding, 467 U.S. 69, 73 (1984)). 

ANALYSIS

A. Claim of Plaintiff and the Putative Purchase Class

Plaintiff asserts a claim for violation of California Civil

Code § 1747.08(a)(2) on behalf of himself and the putative

purchase class. Plaintiff alleges that this claim arises out of

defendant’s “Telephone and Address Capture Policy,” which was

demonstrated during the course of plaintiff’s July 30, 2007

purchase transaction. Defendant asserts that this claim should

be dismissed because plaintiff failed to allege that Polo

requested or required this information as a condition to

accepting the credit card as payment.

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2 The Florez court noted that although the California

Supreme Court has considered certain aspects of class action

certification under the statute, it was the first California

court to consider the precise meaning of § 1747.08. Florez, 108

Cal. App. 4th at 450 n.3 (citing Linder v. Thrifty Oil Co., 23

Cal. 4th 429 (2000)). 

6

Section 1747.08(a)(2) is part of the Song-Beverly Credit

Card Act. The statute was designed to promote consumer

protection through the imposition of fair business practices. 

Young v. Bank of Am., 141 Cal. App. 3d 108, 114 (1983). “Such a

law is remedial in nature and in the public interest and is to be

liberally construed to the end of fostering its objectives.” Id.

(quoting Continental Cas. Co. v. Phoenix Constr. Co., 46 Cal. 2d

423, 434 (1956)). 

Specifically, § 1747.08 provides, in relevant part, that no

corporation that accepts a credit card for the transaction of

business shall “[r]equest, or require as a condition to accepting

the credit card as payment . . ., the cardholder to provide

personal identification information.” Cal. Civ. Code §

1747.08(a)(2) (West 2008). For purposes of the statute, personal

information includes, but is not limited to, the cardholder’s

address and telephone number. Cal. Civ. Code § 1747.08(b). The

Act was amended in 1991 by adding the word “request” to the

statute. The effect of this addition is the crux of the issue

presented by defendant’s argument.

In Florez v. Linens ‘n Things, Inc.,2 the court held “the

addition of the word ‘request’ to § 1747.08 bars a preliminary

request for personal identification information” in conjunction

with a credit card transaction. 108 Cal. App. 4th 447, 453

(2003). The court noted that § 1747.08 is a consumer protection

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statute and thus, a retailer’s request for personal

identification must be analyzed from the viewpoint of the

consumer. Id. at 451. As such, the dispositive question is

“whether a consumer would perceive the store’s ‘request’ for

information as a ‘condition’ of the use of a credit card.” Id.

The court first looked at the plain language of the statute and

held that it unambiguously prohibited the request of personal

identification information in conjunction with the use of a

credit card. Id. at 451-52. The court also analyzed the

legislative history of § 1747.08 and noted that numerous

legislative reports further supported the court’s conclusion. 

Id. at 452-53 (“[T]he legislative intent suggests the 1991

amendment simply clarified that a ‘request’ for personal

identification information was prohibited if it immediately

preceded the credit card transaction, even if the consumer’s

response was voluntary and made only for marketing purposes.”). 

As such, the Florez court held that a plaintiff need not allege

that a defendant’s request for personal identification

information was a condition to accepting the credit card in order

to sufficiently state a cause of action for violation of §

1747.08. Id. at 451, 453. Rather, a plaintiff may state a cause

of action by alleging that a defendant requested such information

in conjunction with a credit card transaction. Id.

Plaintiff’s complaint sufficiently alleges that defendant

requested personal identification information in conjunction with

a credit card transaction. Plaintiff alleges that he gave

defendant’s employee his credit card and that the employee

swiped, entered, and/or recorded his credit card information. 

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(Compl. ¶ 18). Plaintiff further alleges that defendant’s

employee then requested plaintiff’s telephone number and address

without informing plaintiff of the consequences if plaintiff did

not provide this information. (Id. ¶ 19). 

Defendant argues that the court’s decision in Florez is

distinguishable because, in Florez, the plaintiff specifically

alleged that she believed she was required to give her personal

information in order to complete the transaction and plaintiff

has not specifically alleged such facts in this case. 

Defendant’s argument is without merit. The court’s holding in

Florez was based upon its analysis and interpretation of the

plain language of the statute, and the court did not rely upon or

mention the plaintiff’s specific allegation that she believed the

request was a condition in arriving at its conclusion. 108 Cal.

App. 4th at 450-54. A plain reading of the statute, as further

supported by legislative intent, supports the Florez court’s

holding that a defendant is not allowed to request such

information because “a customer might perceive that request as a

condition of credit card payment.” Id. at 453 (emphasis added). 

As such, plaintiff need not expressly allege that he believed

such information was necessary to complete the transaction. 

Moreover, even if such actual subjective belief was necessary to

state a cause of action for a violation of § 1747.08, under

liberal notice pleading standards, a court may reasonably infer

from plaintiff’s allegations that he felt compelled to provide

personal identification information to complete the credit card

transaction. 

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Therefore, defendant’s motion to dismiss plaintiff’s claim

for a violation of § 1747.08(a)(2) is DENIED. 

B. Claim of Plaintiff and the Putative Refund Class

Plaintiff also asserts a claim for violation of California

Civil Code § 1747.08(a)(3) on behalf of himself and the putative

refund class. Plaintiff alleges that this claim arises out of

defendant’s use of a credit card form that contains preprinted

spaces specifically designated for filling in the telephone and

address of the cardholder in each and every refund transaction,

which was demonstrated during the course of plaintiff’s August 1,

2007 refund transaction. Defendant asserts that this claim

should be dismissed because § 1747.08 does not apply to credit

card refund transactions.

Section 1747.08(a) provides that no corporation that accepts

credit cards for the transaction of business shall:

(1) Request, or require as a condition to accepting

the credit card as payment . . . the cardholder to

write any personal identification information upon

the credit card transaction form or otherwise.

(2) Request, or require as a condition to accepting

the credit card as payment . . . the cardholder to

provide personal identification information, which

the . . . corporation accepting the credit card

writes, causes to be written, or otherwise records

upon the credit card transaction form or

otherwise.

(3) Utilize, in any credit card transaction, a credit

card form which contains preprinted spaces

specifically designated for filling in any

personal identification information for the

cardholder.

Cal. Civ. Code § 1747.08(a). Defendant argues that in the

context of the statute, § 1747.08(a)(3) applies only to purchase

transactions, not refunds. Plaintiff contends that the plain

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language of the statute demonstrates that § 1747.08(a)(3) applies

to the use of preprinted forms in all credit card transactions,

including refunds.

It is well settled under California’s rules of statutory

interpretation that “if the text is unambiguous and provides a

clear answer, [the court] need go no further.” Microsoft Corp.

v. Franchise Tax Bd., 39 Cal. 4th 750, 758 (2006) (citing Hoechst

Celanses Corp. v. Franchise Tax Bd., 25 Cal. 4th 508, 519

(2001)). However, where the statutory language is ambiguous or

could support multiple readings, the court may consult extrinsic

sources. Id. The meaning of a statute is discerned from reading

the statute as a whole, not from reading sentences or clauses in

isolation. Leroy T. v. Workmen’s Comp. Appeals Bd., 12 Cal.3d

434, 438 (1974); see also Beecham v. Unites States, 511 U.S. 368,

372 (1994). 

When viewed in isolation, the meaning of § 1747.08(a)(3) is

clear; this subsection prohibits the use of preprinted forms in

all credit card transactions, including refunds. See Romeo v.

Home Depot U.S.A., Inc., 06-cv-1505, 2007 WL 3047105, *5 (S.D.

Cal. Oct. 16, 2007). However, in the context of the entirety of

§ 1747.08(a) and alongside the companion liability provisions set

forth in (a)(1) and (a)(2) that prohibit the request or

requirement of personal identification only in regards to credit

card purchases, the court finds that the meaning of (a)(3) is

ambiguous and supports multiple readings. See id. Specifically,

it is unclear whether (a)(3) was intended to apply to all credit

card transactions or whether, in accordance with (a)(1) and

(a)(2), it was intended to apply only to purchase transactions. 

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See id. Moreover, the statute limits the seeking of civil

penalties to “the person paying with a credit card.” Cal. Civ.

Code § 1747.08(e) (emphasis added). Therefore, the court may

look to extrinsic sources, such as legislative history, to

discern the meaning of § 1747.08(a)(3).

The legislative history of the Song-Beverly Act demonstrates

that its purpose is “to protect the personal privacy of consumers

who pay for transactions with credit cards.” (Assembly Comm. on

Fin. and Ins., AB 2920, Mar. 19, 1990, Ex. A to Def.’s Req. for

Judicial Notice, file Mar. 21, 2008) (emphasis added). The bill

was introduced to address the state of existing law, which did

not authorize of forbid a merchant from “requiring a customer to

provide a telephone number or other information on a transaction

form as a prerequisite for use of a credit card as payment for a

transaction.” (Id.) (emphasis added). Further, the remedy

provided by the statute for private litigants allows civil

penalties only to those private plaintiffs who paid by credit

card. Cal. Civ. Code § 1747.08(e). There is no mention of

refund transactions in the remedy provisions. Moreover,

plaintiff proffers no evidence that the California legislature

considered refund transactions in drafting this statute. As

such, in context of the ambiguity created by (a)(1) and (a)(2)

and in light of the legislative history of the statute, the court

holds that the term “credit card transaction” in § 1747.08(a)(3)

relates only to the use of preprinted forms during credit card

purchases. 

This court’s holding is consistent with the only other

courts to address this issue. In Romeo v. Home Depot U.S.A.,

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3 The TJX court noted that although petitioner had

proffered substantial evidence that the legislative history as

well as the interpretation of the statute by the Legislative

Counsel supported the court’s analysis, the court need not rely

on extrinsic evidence to construe § 1747.08(a) because the

meaning was clear from the language of the statute. (Id. at 10).

12

Inc., the District Court for the Southern District of California

similarly held that § 1747.08(a)(3) applied only to the use of

preprinted forms during credit card purchases, not refund

transactions. Romeo, 2007 WL 3047105, at *6-7. In addition to

finding that this holding was supported by legislative history,

the Romeo court also noted that interpreting subsection (a)(3) to

include refund transactions “would lead to an absurd result.” 

Id. at *7. Specifically, the court recognized that such an

interpretation “would outlaw solicitation of cardholder

information during a refund through the use of a preprinted form,

but allow the same solicitation if made orally.” Id. This court

agrees.

Similarly, in The TJX Companies, Inc. v. Caldwell, the

California Court of Appeal for the Fourth Appellate District held

that to interpret the prohibition in subsection (a)(3) “to apply

to transactions beyond those covered in the first to subdivisions

leads to the anomalous conclusion that for return transactions,

it is acceptable to requires or require cardholders to furnish

personal information but they may not be requested or required to

do so on forms designed for this purpose.” (Def.’s Notice of

Issuance of Court of Appeal Opinion, filed May 22, 2008, at 9). 

Moreover, the TJX court also noted that the return of merchandise

implicates different considerations than the purchase of the

same, such as the substantial opportunities for fraud.3 Id. As

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such, the court held that § 1747.08 does not apply to merchandise

returns. This court also agrees with the holding of the only

California court to address this issue. 

Therefore, defendant’s motion to dismiss plaintiff’s claim

for a violation of § 1747.08(a)(3) is GRANTED. 

C. Injunctive Relief

Finally, defendant asserts that plaintiff’s request for

injunctive relief should be stricken because plaintiff is not

authorized to secure such relief under § 1747.08. Section

1747.08 provides, in relevant part:

Any person who violates this section shall be subject

to a civil penalty . . . to be assessed and collected

in a civil action brought by the person paying with a

credit card, by the Attorney General, or by the

district attorney or city attorney of the county or

city in which the violation occurred. . . . When

collected, the civil penalty shall be payable, as

appropriate, to the person paying with a credit card

who brought the action, or to the general fund of

whichever governmental entity brought the action to

assess the civil penalty.

The Attorney General, or any district attorney or city

attorney within his or her respective jurisdiction, may

bring an action in the superior court in the name of

the people of the State of California to enjoin

violation of subdivision (a) . . . .

Cal. Civ. Code § 1747.08(e)-(f) (emphasis added). 

“[W]here a new right is created by statute, the party

aggrieved by its violation is confined to the statutory remedy if

one is provided.” Estate of Starkweather, 64 Cal. App. 4th 580,

593 (1988); see De Anza Santa Cruz Mobile Estates Homeowners

Ass’s v. De Anza Santa Cruz Mobile Estates, 94 Cal. App. 4th 890,

912 (2001) (“Where a statute creates new rights and obligations

not previously existing in the common law, the express statutory

remedy is deemed to be the exclusive remedy available for

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statutory violations.”); see also Religious Tech. Ctr. v.

Wollersheim, 796 F.2d 1076, 1088 (9th Cir. 1986) (“[W]here a

statute expressly provides a particular remedy or remedies, a

court must be chary of reading others into it.”). 

When enacted, the Song Beverly Act addressed the existing

law that neither authorizes nor forbade merchants from requiring

personal information as part of a credit card transaction. (See

Ex. A to Def.’s Req. for Judicial Notice). As such, the statute

created new rights. A plain reading of the statute as a whole

reveals, unambiguously, that plaintiffs may sue for civil

penalties while the Attorney General or other government actor

may sue for both civil penalties and injunctive relief. 

Plaintiff, as a private citizen, is confined to the statutory

remedy of civil penalties as expressly provided in § 1747.08(e). 

Therefore, defendant’s motion to strike plaintiff’s claim

for injunctive relief is GRANTED. 

CONCLUSION

For the foregoing reasons, defendant’s motion to dismiss is

GRANTED in part and DENIED in part. Defendant’s motion to strike

is GRANTED. 

IT IS SO ORDERED.

DATED: May 28, 2008

 FRANK C. DAMRELL, Jr.

UNITED STATES DISTRICT JUDGE

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