Court Denies Motion to Certify Class In Wal-Mart Song-Beverly Act Case

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Oct. 9 --A federal district court Oct. 4 denied a motion to certify a proposed class of Wal-Mart Stores Inc. customers whose telephone numbers and addresses the store allegedly collected in violation of California's Song-Beverly Credit Card Act (Leebove v. Wal-Mart Stores, Inc., C.D. Cal., No. 2:13-cv-01024-R-SH, motion to certify denied 10/4/13).

The U.S. District Court for the Central District of California said that individualized questions predominate over questions common to the proposed class.

The Song-Beverly Credit Card Act, at Cal. Civ. Code § 1747.08, prohibits retailers from requiring that a cardholder provide personal identification information as a condition for accepting a credit card for payment.

The act defines “personal identification information” as “information concerning the cardholder, other than information set forth on the credit card, and including, but not limited to, the cardholder's address and telephone number.” The California Supreme Court held that this information also includes ZIP codes (Pineda v. Williams-Sonoma Stores Inc., 246 P.3d 612 (Cal. 2011) ).

In a complaint filed in February 2013, the plaintiff in the present case alleged that Wal-Mart violates the Song-Beverly Act by requiring that its online customers provide their telephone numbers and/or addresses at the time they make credit card purchases. He said that requesting such information was unnecessary because the store asked for his photo identification--not his phone number or address--when he picked up his merchandise at one of Wal-Mart's stores.

Individualized Proof Necessary

The court denied the plaintiff's motion for class certification on the grounds that “individualized factual and legal questions relating to whether the credit card used by the various class members was a business or consumer card, and whether collecting the personal information was necessary for a special purpose under California Civil Code § 1747.08(c), predominate over questions common to the class.”

The court looked to the definition of “cardholder” in Section 1747.02 of the act, which defines the term as “a natural person to whom a credit card is issued for consumer credit purposes, or a natural person who has agreed with the card issuer to pay consumer credit obligations arising from the issuance of a credit card to another natural person.” It concluded that individualized proof concerning whether each class member's card is a consumer card or a business card is necessary before liability can be established.

Section 1747.08(c)(4) provides an exception to the Song-Beverly Act's prohibition on collecting personal identification information when it “is required for a special purpose incidental but related to the individual credit card transaction, including, but not limited to, information relating to shipping, delivery, servicing, or installation of the purchased merchandise, or for special orders.”

It would be necessary to determine whether Wal-Mart was justified in collecting each proposed class member's information pursuant to this exception before the store's liability could be established, the court said.

For example, the court said, Wal-Mart provided evidence that collecting a customer's phone number is necessary in the event shipping problems arise.

Ean M. Schreiber, Edwin C. Schreiber and Eric A. Schreiber, of Schreiber and Schreiber Inc., in Encino, Calif., represented the named plaintiff. Brandon W. Corbridge, Lisa Boyoung Kim and Scott H. Jacobs, of Reed Smith LLP, in Los Angeles, represented Wal-Mart.


Full text of the court's opinion is available at http://www.bloomberglaw.com/public/document/Joel_Leebove_v_WalMart_Stores_Inc_Docket_No_213cv01024_CD_Cal_Feb.

Full text of the complaint is available at http://www.bloomberglaw.com/public/document/Joel_Leebove_v_WalMart_Stores_Inc_Docket_No_213cv01024_CD_Cal_Feb/1.