Source: https://www.gordonrees.com/publications/2013/courts-side-with-retailers-that-sought-customers-personal-information
Timestamp: 2019-04-23 12:08:16+00:00

Document:
Recent State and Federal Court Opinions Demonstrate Limitations on the Reach of California’s Song-Beverly Credit Card Act.
In Apple, Inc. v. Superior Court (Docket Number S199384, Feb. 4, 2013), the California Supreme Court addressed the issue of whether § 1747.08 prohibits an online retailer from requesting or requiring personal identification information from a customer as a condition to accepting a credit card as payment for an electronically downloadable product. The court held that it does not, finding that online transactions do not fit into the statutory scheme of § 1747.08.
The defendant, Apple, Inc., operates a popular online store and website known as iTunes, where customers can purchase and download digital audio and video files. The plaintiff, David Krescent, filed his complaint against Apple on behalf of members of a putative class, alleging that Apple violated § 1747.08 by requiring him to provide his telephone number and address to complete online purchases he made at the iTunes website. While there are several exceptions provided by § 1747.08 (including transactions where the retailer is contractually or legally required to obtain a customer’s personal identification information), Krescent alleged that none of these exceptions applied to Apple’s online transactions actions and there was no reason for Apple to request and record his telephone number to complete the online credit card transactions.
Apple demurred to the complaint on the ground that § 1747.08 does not apply to online transactions. After the trial court overruled the demurrer and the Court of Appeal denied Apple’s writ of mandate, the California Supreme Court granted Apple’s petition for review.
The Apple decision should provide some protection to certain online retailers – i.e., those that sell electronically downloadable products – from liability under § 1747.08. Nevertheless, the court also noted that online consumers enjoy other protections under the law, including the California Online Privacy Protection Act of 2003. The court also cited the federal Telephone Consumer Protection Act as a limitation on commercial use of telephone numbers.
In addition to the Apple decision, the U.S. District Court for the Northern District of California recently denied a motion for class certification in Gormley v. Nike, Inc. (No. 11-00893; 2013 U.S. Dist. LEXIS 11278, Jan. 28, 2013), finding the class representatives were not typical. Moreover, the court found that the timing of a request for personal identification information is pertinent to whether a violation occurs.
Notwithstanding Nike’s policies and procedure, all three of the class representative plaintiffs testified in depositions that they had not received their receipts before the Nike cashier asked them for their ZIP codes. Based on that testimony, the court found that the named plaintiffs’ experiences at Nike were inconsistent with Nike’s “Information Capture Policy.” Because the complaint challenged Nike’s “Information Capture Policy,” the named plaintiffs were not typical of the class they sought to represent. The plaintiffs therefore failed to satisfy Rule 23(a) of the Federal Rules of Civil Procedure and the court denied the motion for class certification.
If you have questions concerning your company’s compliance with any of the important laws and regulations discussed in this article, please contact Craig J. Mariam or William F. Small with the Consumer Protection Litigation Group at Gordon & Rees LLP.

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