Privacy & Cybersecurity Law Blog

As reported in BNA’s Privacy & Security Law Report,on June 25, 2012, a federal district court in California ruled that the California Supreme Court’s 2011 Pineda decision, which held that requesting and recording zip codes during credit card transactions violates the state’s Song-Beverly Credit Card Act, applies retrospectively to OfficeMax’s collection of zip codes from its customers. The Plaintiffs in Dardarian v. OfficeMax had filed a class action lawsuit against OfficeMax over the company’s collection of ZIP code information from customers at the point of sale, a practice that OfficeMax ended the day the Pineda decision was handed down.

Noting that judicial decisions generally apply retrospectively in California unless there are relevant “considerations of fairness and public policy,” the Dardarian court found that applying the Pineda decision retrospectively to OfficeMax was not unfair because that decision “neither expressly overruled California Supreme Court precedent nor did it disapprove a practice impliedly sanctioned by prior decisions.” With respect to public policy considerations, the court agreed with the Plaintiffs that applying the Pineda decision retrospectively would not “undermine the administration of justice” because OfficeMax had engaged in conduct that was deliberately “perilously close to an area of proscribed conduct.” The practical effect of the court’s decision is to enable the existing class action lawsuit to proceed.