Retailers were dealt a blow in February when the California Supreme Court ruled in Pineda v. Williams-Sonoma, Inc. that a zip code constitutes “personal identifciation information” under the Song-Beverly Credit Card Act of 1971, thus prohibiting retailers from requesting such information. Although the California legislature responded quickly by proposing legislation that would limit the effects of the Pineda decision, the retailers (and their insurers) were dealt another blow when the California State Assembly passed a watered down version of the bill that would apply only to gas stations.
As we reported here, in the wake of the Pineda decision, more than 150 class action lawsuits were filed against retailers of all sizes. California Assemblymember Henry T. Perea responded by introducing Assembly Bill 1219 that would have exempted from the prohibition retailers who collect zip codes soley for the prevention of fraud, theft or identity theft. The California Assembly, however, has re-written the bill to limit it to situations in which a credit card is used “in a sales transaction at a retail motor fuel dispenser or retail motor fuel payment island automated cashier.” The amended bill passed the Assembly on June 3, 2011 and is now before the California Senate.
Limiting this bill to gas stations is a significant blow to the California retailers and their insurers, both of which are grapling with the class action lawsuits that have been filed and continue to be filed for alleged violations of the Song-Beverly Act. It suggests that the California legislature is less than sympathetic to the industry and that going forward, retailers will find little relief from the retroactive Pineda decision.
Watch this space for updates on the status of the bill as it moves through the California Senate.