As noted previously on this blog, retailers have been rattled in the aftermath of the California Supreme Court’s holding earlier this year in Pineda v. Williams-Sonoma Stores, Inc., 246 P.3d 612 (2011). In Pineda, the Court held that Williams-Sonoma violated California’s Song-Beverly Credit Card Act of 1971 by requesting and recording a customer’s zip code, evidently for marketing purposes, in the course of a retail purchase using her credit card.In the months that followed release of the Pineda decision, state legislators observed that hundreds of class action lawsuits had been filed against retailers (including online retailers).
The California Legislature has now passed, and Governor Brown has signed, legislation creating a limited exemption to the Song-Beverly Act, but only retail gas stations can benefit from the exemption. Introduced at the behest of the Western States Petroleum Association, the legislation permits collection of zip code information only in transactions conducted at a “retail motor fuel dispenser” or a “retail motor fuel payment island automated cashier” and solely for purposes of preventing fraud, theft or identity theft.
Sponsors of the legislation observed that prevention of fraud, theft and identity theft are consistent with Song-Beverly’s goal of enhanced consumer protection. Nevertheless, at the time of this writing only gas stations have protection from the wave of Song-Beverly class action litigation, and it remains to be seen whether the Legislature will enact a broader amendment to protect other retailers from the lawsuits.