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Party City Corp. v. Superior Court of San Diego County

December 19, 2008


Petition for writ of mandate from an order of the Superior Court of San Diego County, William R. Nevitt Jr., Judge. Petition granted. (San Diego County Super. Ct. No. 37-2007-00075158-CU-MC-CTL).

The opinion of the court was delivered by: Huffman, Acting P. J.


This writ proceeding arises from an order denying the motion of Party City Corporation (Petitioner) for summary judgment in a prospective class action brought by Rebecca J. Palmer (plaintiff or real party in interest) under the Song-Beverly Credit Card Act of 1971, Civil Code section 1747 et seq. (the "Act"; all further statutory references are to the Civ. Code unless noted). Section 1747.08, subdivision (a)(2) of the Act prohibits merchants that accept credit cards in transacting business from making requests that the cardholder provide "personal identification information" concerning the cardholder, and from recording that information. According to petitioner, when the trial court denied its motion for summary judgment, the court erroneously interpreted the definition in section 1747.08 of the term "personal identification information," with respect to requesting and recording postal zip code information in a transaction. (§ 1747.08, subd. (b); Code Civ. Proc., § 437c.) Petitioner contends the plain language and the legislative history of that provision do not support any conclusion that a merchant's requesting and recording a customer's zip code amounts to the requesting and recording of protected "personal identification information" that is "concerning the cardholder" (§ 1747.08, subd. (b)), because a zip code provides generalized group location identification, rather than "personal identification information" "concerning a cardholder."

We agree that the trial court erroneously interpreted the definitional portions of section 1747.08, on several grounds: on a plain language basis, with respect to related federal regulatory definitions of the meaning and purpose of zip codes, and with respect to the interpretation of legislative history that shows the Act's principal statutory purposes. Petitioner is entitled to summary judgment on the complaint on the threshold definitional issue presented in the pleadings. The petition will be granted, and a related judicial notice request by plaintiff, concerning other superior court rulings on the same issue in different cases, will be denied.


A. Transaction and Nature of Proceedings

In September 2007, plaintiff filed her complaint in one cause of action, pleading a putative class action for declaratory relief and civil penalties for alleged violations of the Act that occurred when one of petitioner's cashiers asked for and recorded her five-digit zip code before completing her credit card transaction. She alleges that section 1747.08, subdivision (a)(2) prohibits any requesting and recording of a plaintiff's zip code in connection with a credit card transaction, because under section 1747.08, subdivision (b), the zip code is protected "personal identification information" in this context.*fn1

In her class action allegations, plaintiff identifies common questions of law and fact arising from such practices and procedures, including whether petitioner has a company policy or practice to request and record "personal identification information" from class members during credit card transactions.*fn2 She seeks statutory damages pursuant to section 1747.08, subdivision (e), up to maximum civil penalties of $250 for the first violation and $1,000 for each subsequent violation. Attorney fees under Code of Civil Procedure section 1021.5 are sought.

In her substantive allegations, plaintiff contends that "[u]pon information and belief, the 'personal identification information' is then used by Party City to further its own business purposes, including target marketing to increase product sales." Additionally, these business practices are alleged to allow petitioner "to gain an unfair business advantage over its competitors by collecting customers' 'personal identification information' by, among other things, directly marketing its products to consumers with a known interest in those products"; and that "by collecting customers' 'personal identification information,' Party City unnecessarily exposes customers to the potential for credit card fraud and identity theft . . . ." (Despite those generalized claims, only violations of the Act are pled, not any unfair business practices under the Unfair Competition Law; Bus. & Prof. Code, § 17200, et seq.)

B. Summary Judgment Motion

Petitioner moved for summary judgment or adjudication that there had been no violation of the Act as alleged because, as a matter of law, a zip code is not "personal identification information" within the statutory definitions. Petitioner alternatively argued that in any case, plaintiff did not show undisputed facts that the cashier required her to provide the five-digit zip code information, or recorded it, as a condition to accepting her credit card as payment in her transaction. Petitioner trains its cashiers to ask for the customer's zip code before the type of payment is known, and to enter "99999" into the register if the customer does not provide a zip code, and then to complete the transaction.*fn3

Statutory interpretation rules were argued by each side in the moving and opposing papers, with respect to the key issue of whether a zip code constitutes "personal identification information" as defined by section 1747.08, subdivision (b). Petitioner's separate statement supplied definitions of the term from federal postal regulations, and explained petitioner's policy to use zip code information requested from customers for demographic purposes, to send promotional mailers to various zip codes throughout the country.*fn4 The declaration of the attorney for petitioner attaches deposition excerpts from plaintiff, together with United States Census Bureau publications, to demonstrate that as of the year 2000, there were approximately 24,953 individual addressees in the zip code of this plaintiff. In the zip code for the superior court that decided this case, there were 27,494 individual addressees in the year 2000.

With respect to computer security issues, petitioner's marketing personnel provided declarations and deposition excerpts stating that (1) customers' names and credit card numbers are immediately encrypted in a store's computer system and are completely inaccessible to anyone in the store ; (2) plaintiff has never been contacted by anyone from the store, or received any mail addressed to her name from the store; (3) at the end of a sales day at the store, transaction information is downloaded to a computer server and routed to the corporate IT system; (4) various programs distribute the transaction information to different departments at corporate headquarters for purposes such as auditing, loss prevention, and marketing; (5) zip code information is made available only to the company's marketing department, and zip code data is transmitted there alone, without customer names or credit card numbers; and (6) the company does not maintain a system or database that would allow it to locate a particular California customer's address or phone number utilizing only zip code, name or credit card number.

In opposition, plaintiff contended that triable issues of material fact remained on whether the request was a condition of accepting her credit card, based on her testimony that the cashier asked for the zip code before the credit card transaction was complete and did not inform her that providing the information was voluntary. Plaintiff argued the statutory scheme is remedial and should be liberally interpreted in favor of privacy concerns. The only evidentiary support identified in her separate statement was her own deposition testimony about her personal experience that once a retailer has her credit card number and her zip code, "I've had my identity stolen before with less information than that."*fn5

C. Trial Court Ruling and Writ Petition; Judicial Notice in Opposition; Amicus Curiae Briefing

The court issued a tentative ruling and confirmed it as final: "The language of section 1747.08(b) is clear and unambiguous and the cardholder's zip code falls within its definition of 'personal identification information.' " The trial court also found there were triable issues about whether obtaining a zip code was a condition of completing the credit card transaction (but see fn. 3, ante).*fn6

This petition followed. In response, plaintiff filed opposition, including a request for judicial notice of trial court orders in two unrelated pending superior court cases, on the same issues concerning the definition of personal identification information in section 1747.08, subdivision (b). Petitioners object in their reply papers that such trial court orders do not constitute binding authority. We deferred this request to the merits panel, and will address it post.

We issued an order to show cause and granted petitioner's request for a stay of the trial court proceedings, including an upcoming motion for certification of the proposed class. We granted an application to file an amicus curiae brief on behalf of petitioner, from the California Retailers Association. In addition, we issued an order allowing further amicus curiae briefing on behalf of plaintiff, although none was filed.



Although pretrial writ relief is sparingly granted, where the trial court's ruling may properly be evaluated as to its correctness or erroneousness as a matter of law, and where leaving it in place may substantially prejudice the petitioner's case, appellate courts may entertain a writ petition. (Omaha Indemnity Co. v. Superior Court (1989) 209 Cal.App.3d 1266, 1274-1275 (Omaha Indemnity).) If the petitioner lacks an adequate means for seeking timely relief, such as a direct appeal, or where the petitioner may incur prejudice that is not correctable on appeal due to the challenged ruling, the appellate courts may decide to intervene. (Id. at p. 1274.) The criteria for allowing writ relief will be applied depending upon the facts and circumstances of the particular case. (Ibid.)

Here, we deem it appropriate for this court to review this petition for writ of mandate in challenge of the summary judgment ruling, to determine the correctness of the trial court's legal determinations on the motion's statutory interpretation questions. (Code Civ. Proc., § 437c.) In this case, "the issue tendered in the writ petition is of widespread interest [citation])" and "presents a significant and novel constitutional issue [citation]," and further, "conflicting trial court interpretations of the law require a resolution of the conflict [citation.]." (Omaha Indemnity, supra, 209 Cal.App.3d 1266, 1273.)

Petitioner's motion for summary judgment was made on two grounds, the second of which was that a zip code is not "personal identification information" within the meaning of section 1747.08, subdivision (b). To resolve this legal issue, we will address the statutory interpretation arguments presented by each side, and our resolution of those issues makes it unnecessary to address the alternative grounds for the motion (i.e., whether there were undisputed facts here that petitioner did not request any information from the plaintiff as a condition of accepting her credit card). The trial court was presented with only legal questions on undisputed facts on the statutory interpretation of the terminology of the statute, and therefore this summary judgment ruling may be appropriately addressed likewise, on a de novo basis, in this writ proceeding. (See fn. 3, ante.)

At the outset, we address plaintiff's judicial notice request regarding (1) a December 27, 2006 Los Angeles Superior Court order in a similar case, denying defendant Burlington Coat Factory's motion for a preliminary injunction and making a related finding that collecting zip codes on credit card purchases is a violation of the Act (together with a later docket sheet indicating that on March 8, 2007, the Second District Court of Appeal summarily denied that defendant's writ petition challenging that ruling), and (2) a June 17, 2008 Los Angeles Superior Court order ...

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