Source: https://www.consumeradvertisinglawblog.com/2009/11/index.html
Timestamp: 2019-04-20 15:12:34+00:00

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CPSC Recommends Much Needed Guidance, But Will it Stick?
On November 5, 2009, the U.S. Consumer Product Safety Commission (CPSC) published a draft statement of policy providing guidance on the testing and certification requirements of section 102 of the Consumer Product Safety Improvement Act of 2008 (CPSIA). The draft has been presented to the commissioners for ballot vote, and if approved will be published as a formal statement of policy.
Manufacturers and importers -- who have been struggling to comply with CPSIA requirements in the absence of regulations or sufficient guidance from CPSC -- will likely welcome this interim guidance if approved by the Commission.
Menu Labeling - Too Much Information Just Before Thanksgiving?
We’ve probably all had the experience of tasting something really good at a restaurant but not really wanting to know how much butter and cream it has in it. Well, on the eve of the Great Feast, Congress may be preparing to change all that through nationwide menu labeling. Restaurants operating more than 20 locations would be required to list the amount of calories and other nutritional values for standard menu items. The provision, which is buried inside the massive healthcare bills passed by the House and being considered by the Senate, would also set uniform, national standards for menu labeling, preempting state and local laws whose differences have reportedly burdened restaurants and confused consumers.
Specifically, the bills would require restaurants to have a “reasonable basis” for the nutrition information provided. This standard -- currently applicable to voluntary nutrient content claims made by restaurants -- is set forth in regulations under the Nutrition Labeling and Education Act (NLEA) and will allow restaurants to obtain nutrient information for menu items from sources such as recipes, nutrient databases, and analytical testing.
The theory, of course, is that spurred on by menu labeling, restaurants will offer healthier menu items and that consumers will make healthier menu choices. Time will tell. Meanwhile, menu labeling is only one of many provisions in the health care bills that go beyond health insurance to address consumer behavior. Consumer protection lawyers may want to keep an eye out for such provisions as the health care bills move forward.
For a more detailed write-up on this issue, click here.
The holidays are approaching, and once again gift card season is upon us. Gift cards bring the joy of freedom for those who like to choose their own presents, but, for some financial institutions, these cards may bring legal troubles under unfair and deceptive practices laws. Last week, two United States District Court cases within the Third Circuit, Mwantembe v. TD Bank, and Mann v. TD Bank held that plaintiffs could pursue their state claims against banks that the sale of gift cards containing dormancy fees were deceptive and misleading practices. Plaintiffs in both cases were unable to successfully claim that the existence of gift card dormancy fees were illegal, but their claims that the banks’ marketing of these fees is deceptive survived.
Advertising: Representing gift cards containing dormancy fees as “free” or having “no fees” in marketing materials and advertisements.
Term Disclosure: Packaging the terms of the gift cards related to dormancy fees in such a manner that a consumer will not be aware of the terms before purchasing the card, and an ultimate recipient of the gift card would not be aware of the terms either.
Fee Conditions: Conditioning dormancy fees on a length of time following the issue date of the card, but not disclosing the issue date on the gift card.
Card Design: Displaying a “Good Thru” date on the front of the gift card, while the dormancy fees could potentially diminish nearly all of the card’s value before the “Good Thru” date.
Although these gift card cases still remain in litigation, financial institutions should be very cautious about marketing gift cards with the above listed characteristics. Courts, as well as regulatory agencies, are trending towards closer scrutiny and enforcement of laws related to gift cards and unfair and deceptive practices. Banks should review their gift card terms and conditions for compliance not just with the disclosure laws, but also to make sure that the disclosures are clear and not deceptive. A stocking full of coal will be the least of a bank’s holiday worries if the marketing of its gift cards are ruled unfair and deceptive.
Last week, Vonage reached a global settlement with the Attorneys General of 32 states over allegations that the Delaware-based voice over internet protocol (VOIP) service failed to clearly disclose to customers the material terms and conditions of subscriber agreements. Led by Montana, the coordinated AGs claimed, among other things, that Vonage did not give adequate notice that the company required its subscribers to purchase certain equipment in order to utilize promotional services advertised as “free” and that Vonage misled consumers by representing that it was possible to cancel the service but then failing to accept cancellations (and in some cases, allegedly continuing to charge customers for service even after they had attempted to cancel) through a tactic called “saving” the customer.
Under the broad terms of the settlement, Vonage will pay $3 million in fines to the 32 states, provide refunds to certain customers and will amend its consumer advertising and marketing materials, so as to “clearly and conspicuously” disclose certain terms and conditions regarding its equipment and services. In addition to requiring Vonage to reimburse eligible consumers who complain of certain unauthorized charges, the settlement also requires that Vonage retrain its customer service and telemarketing representatives, and that the company modify all of its training and call center “script” materials to comply with the terms of the settlement.
Of particular interest to business is the breadth of the settlement and the detailed and specific requirements contained in the consent order related, for example, to the extent and timing of disclosures and that any representation of “award winning service” must be based on a genuine award from an independent third-party received no more than a year from the date of the representation. While there can be some comfort to companies in deciding to end an investigation by signing a consent order to have a clear statement of the enforcer’s expectations on a going forward basis, such specific injunctive relief, even if by agreement, can make it difficult for settling companies to keep up with the changing competitive tide particularly in dynamic markets. By no means a new issue, how companies advertise free offers and money back guarantees has received considerable focus from both federal and state enforcers in recent years and any company offering such enticements to potential customers to sample a product or service should take great care at looking at how such a program is advertised from top to bottom, including in traditional advertising and also as communicated by third-party marketing on the Internet and by customer service representatives.
Companies that make or market FDA-regulated products are increasingly using Internet and social media tools such as Google searches, Twitter, Facebook and Wikipedia to promote their products and to provide other important information to consumers and health care professionals. While the Internet and social media provide significant benefits to consumers, industry, healthcare professionals and the public as a whole, these forms of media present new legal and regulatory challenges with respect to promotional labeling and advertising, third-party communications about a company’s products, and potential adverse events identified in blogs, chat rooms, and other forms of social media.
On November 12-13, 2009, FDA held a public hearing on the promotion of FDA-regulated medical products using the Internet and social media tools to hear from industry leaders, consumers, public interest groups, and media professionals. The hearing followed a panel-style format in which pre-selected speakers gave prepared remarks with accompanying slide presentations. FDA panel members asked questions of the speakers, but did not otherwise provide prepared remarks or invite participation from the audience.
Internet companies and regulated industry representatives discussed the need to differentiate Internet and social media from other forms of labeling or advertising because, unlike traditional promotional labeling and print or broadcast advertisements, Internet and social media users have a greater ability to control, alter and respond to the promotional messages and other product information they receive. Speakers such as Eli Lilly, sanofi-aventis, and Pharmaceutical Research and Manufacturers of America (PhRMA) agreed that manufacturers should be accountable for online content they control, but noted that manufacturers should not have a broad obligation to police or remove all forms of third-party content about their products.
Many of us are parents and we know many of you are as well. So we decided to take just a quick departure from our normal focus on good business consumer marketing practices to let you know that the FTC has just published an excellent internet safety resource called “Net Cetera: Chatting with Kids About Being Online.” Net Cetera is a guide for parents, particularly the many of us who have kids who are more internet savvy than we are, that gives practical advice on things like social networking to file sharing, from cyberbullying to “sexting.” Net Cetera is available at OnGuardOnline.gov. If you’re interested in ordering free printed copies in bulk you can go here.
President Obama has beefed up consumer protection enforcement at the FTC with the nomination of Julie Brill, the Senior Deputy Attorney General and Chief of Consumer Protection and Antitrust for North Carolina. Brill has an impressive consumer protection resume, with an emphasis on credit reporting and privacy issues.
For 20 years Brill was an Assistant Attorney General for Consumer Protection and Antitrust for the state of Vermont. There she brought enforcement actions against tobacco and pharmaceutical companies, and focused much of her time on the reform and enforcement of privacy laws affecting consumers. She was responsible for strengthening Vermont’s controversial law preventing companies from collecting, and selling, information on which drugs doctors most frequently prescribe. Brill has also testified before Congress regarding the Fair Credit Reporting Act and the Financial Data Protection Act. She stated that identity theft is a “serious and rapidly growing crime” and argued that Congress should create a national baseline standard for credit reporting and financial data protection and allow states to enact laws that are more protective of consumers. Brill has also taken a strong stance on affiliate sharing, noting that “greater consumer protections to guard against such practices should be incorporated into both federal law and state law.” If confirmed she would likely be a strong backer of the Commission’s existing priorities.
President Obama’s second nominee, Edith Ramirez is a partner at Quinn Emanuel in Los Angeles, Ramirez focuses the majority of her practice on copyright and trademark infringement. Ramirez has worked for President Obama one other time. While at Harvard Law School, Ramirez was a member of The Harvard Law Review under Editor in Chief Obama. Ramirez does not appear to have much in the way of a consumer protection record. However, she is a member of the Board of Commissioners for the Los Angeles Department of Water and Power. The Mayor of Los Angeles appointed Ramirez to the Commission in 2005, calling for a commitment to a “cleaner and greener” Los Angeles, while providing “reliable and cost-efficient water and power to 3.8 million customers.” The Board of Commissioners has attempted to meet these goals, and have aggressively reviewed contracts, lobbying costs, and executive perks, while arguing for more transparency within the Department.
The possible creation of a new consumer financial protection agency has been the subject of significant media coverage and speculation. As the spirited debate continues as to whether the best way to protect consumers from financial fraud is to create a new agency or expand the resources of the FTC, the FTC has taken this opportunity to lobby for enhanced powers overall, regardless of whether enforcement power for consumer financial protection is ultimately ceded to a new agency.
The Consumer Financial Protection Agency Act of 2009 (H.R. 3126) was originally introduced on July 8, 2009. Although the primary purpose of the bill is to establish a Consumer Financial Protection Agency, it also contains provisions amending the Federal Trade Commission Act (FTC Act) to enhance the FTC’s current enforcement authority. The House Committee on Financial Services voted to approve the bill on October 22, 2009, and the House Committee on Energy and Commerce followed one week later. No similar bill has yet been introduced in the Senate, though Senate Banking Committee Chairman Chris Dodd released a draft proposal regarding financial reform on November 10, 2009. His draft proposal does not include similar provisions expanding FTC authority.
Streamlining the process by which the FTC promulgates rules.
H.R. 3126 includes many of the requested enhancements to FTC authority. Specifically, it provides that the FTC may seek a civil penalty for any violation of the Federal Trade Commission Act, whereas currently the FTC Act provides only that the FTC may seek a civil penalty for violations of a “rule under this chapter respecting unfair or deceptive acts or practices…” H.R. 3126 also makes it unlawful for any person to provide “substantial assistance” to another in violating the FTC Act or any other act enforceable by the FTC. To do so would be considered an unfair or deceptive act under Section 5 of the FTC Act, and thus subject to FTC enforcement. H.R. 3126 finally streamlines the rulemaking proceedings under the FTC Act to dispose with numerous existing notice and comment requirements. This change essentially would give the FTC the authority to use the Administrative Procedure Act notice and comment procedures to promulgate rules rather than the more cumbersome and time-consuming procedures outlined in Section 18 of the FTC Act.
At the October 29, 2009 markup, the House Energy and Commerce Committee adopted an amendment proposed by Representative Waxman providing that, in addition to exclusive authority to commence civil actions relating to injunctive relief and consumer redress, the FTC has exclusive authority to commence actions to obtain civil penalties. Chairman Leibowitz issued a statement expressing appreciation, particularly for Waxman’s work.
No further action is scheduled for H.R. 3126 at this time, though differences between the approaches of the two House Committees with respect to various provisions have led both Barney Frank, Chairman of the Financial Services Committee, who characterized a Waxman amendment relating to the leadership of the proposed new agency as a “big mistake,” and Waxman, who indicated that he would have further changes during the floor debate, to suggest that resolving differences may have to wait until H.R. 3126 reaches the floor of the House.
In a recent federal Florida decision, Smith v. W.R. Wrigley Jr. Co, the Court denied a motion to dismiss claims brought on behalf of a putative class alleging that Defendant Wrigley’s claims “that its Eclipse® gum brand is ‘scientifically proven to help kill the germs that cause bad breath’ as a result of the ‘natural ingredient,’ Magnolia Bark Extract (‘MBE’)” were false, deceptive, and likely to deceive. Plaintiff asserted two causes of action -- violation of Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”) and breach of express warranty.
As to the FDUTPA claim, Wrigley argued that Plaintiff only made “conclusory allegations” that the gum caused her to suffer “actual damages.” Critical to the Court’s decision was the fact that Florida courts have allowed diminished value to serve as “actual damages” under the FDUTPA, and that Plaintiff had alleged that Wrigley was able to “charge a price premium” for the Eclipse® gum based on the allegedly false statements.
The Court distinguished Prohias v. Pfizer which involved allegations that advertising Lipitor as reducing the risk of heart disease in women or elderly patients was deceptive. The Court distinguished the Lipitor case on the grounds that, in that case, the court found that “the fact that [the plaintiffs] currently take Lipitor, in light of the information they have, requires me to conclude that they take Lipitor for its cholesterol-reduction or other undisputed health benefits, and therefore cannot claim to have suffered any damage from the alleged misleading statements about Lipitor’s coronary benefits.” Likewise, the Court distinguished Frye v. L'Oreal USA, a case where plaintiff alleged that the defendants marketed lipstick as “safe for use” when it contained dangerous amounts of lead, on the grounds that, in that case, there was “no allegation that the presence of lead in lipstick ha[d] any observable economic consequences.” Thus, the Court’s Wrigley decision appears to hinge on Plaintiff’s allegation of a “price premium” associated with the deceptive advertising.
Whether Plaintiff’s claims of paying too much for gum that does not prevent bad breath will survive remains to be seen, as it is one thing to allege damages based on a premium price and quite another to prove such damages on a classwide basis (a blog for another day). But the case represents another court’s attempt to clarify the allegations of damages sufficient to survive judgment on the pleadings, here under a Florida consumer protection statute, in a consumer false advertising case.
Another point of interest is that the Complaint in support of the false advertising allegations is based on a decision earlier this year by the National Advertising Division of the Council of Better Business Bureaus, Inc. (“NAD”) recommending modification of Wrigley’s campaign, which is on appeal to the National Advertising Review Board. While not the subject of the motion to dismiss decision, it is an interesting question as to what weight, if any, NAD decisions can or should be given by a court in either a Lanham Act false advertising challenge or a consumer fraud case. NAD can be an excellent low-cost, fairly speedy forum for resolution of competitor’s disputes over the truthfulness of advertising claims. When NAD issues a decision, however, it is based on an incomplete record limited to party submissions and issued quickly, albeit by NAD staff lawyers who specialize exclusively in this area, but lawyers working under the tight time constraints of the self-regulatory process. The NAD decisions are thoughtful and comprehensive, but they are hearsay. Whether and how courts consider NAD decisions in litigation is an emerging question we are watching with great interest.
Following in the finest traditions of legislative “punting”, Massachusetts' General Court (the less than obvious name for the state legislature), passed data security legislation in 2007 and charged the Massachusetts Office of Consumer Affairs and Business Regulation (“OCABR”) to “adopt regulations relative to any person that owns or licenses personal information about a resident of the commonwealth.” Two years, multiple drafts, and several public hearings later, OCABR recently released what it’s calling final data security regulations, which will take effect this coming March. Despite all the angst about a revolution in regulation from both businesses and privacy advocates over the past two years, the final regulations borrow concepts liberally from the FTC, some states’ data security or breach notification laws, and unsurprisingly, federal requirements for information systems security. The regulations mandate both general approaches and specific security practices.
So, what’s in the final regulations, in two sentences? Individuals or businesses, who own, license, store or maintain, personal information about Massachusetts’ residents, have to develop and follow written and comprehensive risk-based information security programs. These programs create a process, carried out by identified people, to evaluate the sensitivity of information and mandate appropriate protections. If this approach sounds familiar, it should be. Ask any IT security professional what the Federal Information Security Management Act (FISMA) requires of federal agencies, and compare the duties imposed by section 17.03 of the regulations to the National Institute of Standards and Technology ("NIST") risk-management framework for designing and implementing information systems security, and you should get the same picture -- implement a process rather than specific technologies, and recognize parties, protections, and the sensitivity of data all vary widely. It is no surprise that OCABR shifted to a risk-based, rather than the one-size-shoe-fits-all approach reflected in earlier drafts of the Massachusetts regulation, following a series of comments from businesses and other interested parties.
What is new, and potentially problematic for some, is that the regulations additionally require specific protections for personal information stored or transmitted electronically. Although many of the section 17.04 protections are fairly standard (for example, secure access controls and user authentication procedures), some go further, such as the requirement to encrypt personal information transmitted across public or wireless networks, or stored on laptops and other portable devices. In this, Massachusetts goes beyond other states which have passed laws requiring encryption of social security numbers before transmission over the Internet, and more recently encryption of any personal information before transmission outside a business’s own secure system. Any laptop or portable device containing personal information about Massachusetts residents will have to be encrypted, not just protected by a password.
The good news? Encryption and other specific computer security measures are only required “to the extent technically feasible” by the regulations. The bad? The regulations don’t define what “technically feasible” means. OCABR suggests in a FAQ something is technically feasible “if there is a reasonable means through technology to accomplish a required result.” The next question -- if something is technically possible but economically prohibitive under the circumstances is it a “reasonable means through technology” -- is somewhat of an open question. Although OCABR staff that drafted the regulation willingly admit they borrowed liberally from FTC concepts of reasonable security which look at many surrounding circumstances including the size of a company, the sensitivity of information involved, and possibly the cost of a particular practice, OCABR’s FAQ intimates economic considerations don’t factor into whether a practice is technically feasible. While it is probable that businesses may seek additional clarification, at least on this point, any person who has not already come into compliance now has one more chance to meet the compliance deadline. Again.
Yesterday, the Attorneys General for the states of New York and Texas announced that settlements had been reached with social networking site Tagged.com over claims that Tagged misappropriated the identities and email address books of its members and sent millions of deceptive and unsolicited emails promoting use of its site. In New York, the company has agreed to pay $500,000 in penalties and costs and to adopt “industry-leading measures” to govern the use of its members’ personal information; in Texas, the company will pay $250,000 in penalties and costs and will implement new data privacy and security features.
With more than 80 million members worldwide, Tagged bills itself as the third-largest internet-based social networking site in the U.S., after Facebook and MySpace. Previously, Tagged requested that members provide the company access to their email address books during the enrollment process (through a process termed “import your friends”). Those contacts were then sent auto-messages purporting to be from the new member. Under its agreements with New York and Texas, Tagged will need to seek specific consent before accessing its members’ address books and will need to disclose specifically how that data will be used (including by whom and for how long). The Texas judgment also requires Tagged to designate a “corporate level compliance representative” to oversee its compliance with the terms of the agreed-upon judgment and that state’s data and privacy protection laws, as well as to respond to consumer complaints or inquiries regarding Tagged’s privacy guidelines.
While social networking sites and other web-based member communities face intense competition to reach and enroll new members, these companies must be careful to ensure that their recruiting efforts do not run afoul of the data security and privacy laws of the jurisdictions in which their members live.
Directly advertising to consumers through blogs is an ever increasing trend, tapping into the fact that consumers are turning to the internet before making almost any kind of purchase. Faced with ever increasing choices of products and services in conjunction with ever tightening belts, consumers are using any available tool to make smart purchasing decisions, from mascara and protein bars to cars and houses.
Once the financial power of the blog was recognized, the rise of the “fakosphere” replete with fake blogs (“flogs”) was a foregone conclusion.
Brad Sullivan who writes on consumer fraud and internet scam issues for MSNBC, chronicles the rise of the fakeosphere and how it operates. He states that many flogs are carefully crafted to look exactly like a real blog complete with user comments and lively chat. The flogs will even include a few somewhat negative or skeptical comments regarding the product or service for sale to increase credibility.
If flogs disclose that they are flogs, they may avoid running afoul of the new guidelines. While flogs can be used as a legitimate advertising technique, the FTC appears to be looking upon them with an especially beady eye due to the inherently deceptive nature of the idea of flogs. Thus, advertisers who are using flogs to market to consumers should err on the side of making the advertising nature of the flog extremely clear as it is as not yet clear and conspicuous what type of disclosures the FTC would consider to be adequate for this form of advertising. For the FTC’s views on what is clear and conspicuous as far as disclosures on websites, click here.
Is Lawsuit Over Beer Sponsored Football Sweepstakes All Wet?
The “Coors Light Silver Ticket Sweepstakes” promotes the opportunity for 256 grand prize winners to receive two tickets to a 2009 NFL regular season game and 125 first place winners to receive a $100 NFLShop.com gift certificate. According to the contest rules, a contestant must obtain an official entry code — either from purchasing a Coors Light product or by receiving a code by mail free of charge from Coors — and enter the code via text message or on the Internet to see if he or she is a winner.
According to the Complaint, plaintiff purchased a Coors Light product “for the sole purpose of entering into the sweepstakes.” When plaintiff attempted to enter his official code, however, he was informed that the code was invalid. The Complaint alleges this was not an isolated problem but instead claims that defendants received several hundred complaints of invalid codes but continued operating the contest without disclosing the fact that invalid entry codes had been printed.
The official rules for the “Coors Light Silver Ticket Sweepstakes” contain a limitation of liability clause that covers printing errors. It could be an interesting question as to whether this would cover the fact pattern alleged by plaintiff — that up to 5 million official entry codes were invalid. More interesting questions in the case will likely include whether there was any injury, as the defendants provided a means of obtaining entry codes free of charge. Are there any other putative class members like plaintiff who allegedly only bought beer for the chance to enter the sweepstakes (sounds like something we might have said to our parents when we were 18) and if so, how do you identify those consumers as distinct from those who enjoy the Silver Bullet with or without a valid contest entry code?
US businesses that use plant-based products, to create paper, lumber, furniture and even certain types of cosmetics, perfumes, and plant-based pharmaceuticals, have reason to be concerned. Even though early this fall, the US Department of Agriculture (USDA) announced that it once again would delay enforcement of the new Lacey Act import declaration requirements for paper and wood pulp products, other far-reaching provisions in the Lacey Act’s amendments (including the declaration requirement itself) are already in effect. Those provisions may end up revolutionizing how American businesses buy and use plant-based products.
Congress first enacted the Lacey Act in 1900—the first ever federal wildlife protection statute—to protect native bird species. The Act was amended a few times over the ensuing decades and, in recent years, served mainly to outlaw the importation, acquisition, or purchase of wildlife taken in violation of another jurisdiction’s laws—be that another state, federal land, or a foreign nation. For example, in a recent case, the National Oceanic and Atmospheric Administration and Immigration and Customs Enforcement relied on the Lacey Act to arrest and prosecute a group of individuals engaged in importing into the United States massive quantities of illegally poached South African rock lobster, crimes which made the perpetrators millions of dollars. (Full disclosure: one of the authors of this post, Marcus Asner, led this prosecution, United States v. Bengis et al., while serving as an AUSA in the SDNY) .
Possibly the most significant recent changes to the Lacey Act came in 2008. In response to increasing concerns about illegal logging around the world, Congress considerably expanded the Lacey Act so that it now covers plants and parts of plants — including plant products — taken in violation of foreign law. To be precise, as of May 22, 2008, it now is unlawful to acquire, possess, import, export, sell, transport or purchase any plant products if the plants were taken or exported in violation of a state, federal or foreign law or international agreement.
May I have your zip code? Jessica Pineda didn’t like that question from a Williams-Sonoma store clerk, and sued for invasion of her privacy rights. But the question was perfectly legal. On October 23, 2009, the California Court of Appeal held in Pineda v Williams-Sonoma it was not unlawful for Williams-Sonoma to ask Pineda for her zip code at the time of purchase, even if that zip code was later used to obtain, view, and distribute her addresses to third parties. The Court’s rationale in Pineda may be useful in determining what other information merchants can lawfully request from consumers and what may later be done with that information without violating the consumer’s privacy rights.
Based on Williams-Sonoma’s alleged conduct, Pineda filed a putative class action alleging violations of California’s Song-Beverly Credit Card Act and her constitutionally recognized right to privacy. The trial court ultimately dismissed both claims and the Court of Appeal affirmed. In holding that Williams-Sonoma had not violated the Song-Beverly Act or Pineda’s privacy rights, the Court of Appeal relied upon two critical findings.
First, the Court found that while the Song-Beverly Act does prohibit merchants from asking credit cardholders for “personal identification information”, zip codes are not protected. Specifically, the Court noted that the Legislature included clear examples of what constituted “personal identification information” under the Act, including a “cardholder’s address and telephone number.” Construing the word of the statute, and relying on an earlier court decision addressing the same issue, the Court explained these examples indicated the Legislature intended to protect “facially individualized information,” and not “group” type information, like zip codes. The Court stated this reasoning was not lessened by the allegation that Williams-Sonoma used Pineda’s zip code to obtain her address using computer search engines. “Simply put,” the Court stated, the Act does not protect zip codes, and whether it should because a zip code can later be used to obtain an address, is an argument “best presented to the Legislature.” The Court’s reasoning here suggests that under the Song-Beverly Act it may be entirely lawful for a merchant to request other types of information that at least facially do not solely relate to the specific customer including a zip code, state of residence, city of residence, or area code.
Second, the Court found Pineda had not stated a claim for invasion of privacy under the California Constitution because she had not satisfied the “serious invasion of privacy” requirement. Pineda’s theory, the Court explained, was that she suffered a serious invasion of privacy when Williams-Sonoma allegedly obtained her zip code and then used it (along with her name and credit card) to obtain, print, and distribute to third parties her address. But nowhere in Pineda’s complaint was there any allegation that her address was not otherwise publicly available or that she had taken any effort to protect such information. “Without such facts, using a legally obtained zip code to acquire, view, print, and distribute or use an address that is otherwise publicly available does not amount to an offensive intrusion of her privacy.” As such, there was no invasion of Pineda’s privacy rights.
Retailers face extreme competitive pressures, and appropriate customer communication can be a significant competitive advantage. They must, however, carefully assess the detailed privacy laws and regulations that vary from one jurisdiction to another in order to end up, as Williams-Sonoma did, on the winning side of a consumer claim.

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