Filed 4/30/03
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
FLORA FLOREZ et al.,
Plaintiffs and Appellants,
G030590
v.
(Super. Ct. No. 01CC00335)
LINENS ‘N THINGS, INC.,
OPINION
Defendant and Respondent.
Appeal from a judgment of the Superior Court of Orange County, William
F. McDonald, Judge. Reversed.
Fineman & Associates, Neil B. Fineman; The Anderson Law Firm and
Martin W. Anderson for Plaintiffs and Appellants.
Cooley Godward, Michael G. Rhodes and Allison H. Goddard for
Defendant and Respondent.
*
*
*
Flora Florez, suing on behalf of herself and others, appeals from a judgment
of dismissal entered after a demurrer to her complaint against Linens ‘N Things, Inc.,
(LNT) for violations of the Song-Beverly Credit Card Act (Civ. Code, § 1747.8)1 and
unfair business practices was sustained without leave to amend. Because the allegation
that the store improperly requests personal identification information from its customers
is sufficient to state a viable cause of action, we reverse.
I
According to the allegations of the second amended complaint, Florez
visited an LNT store on July 16, 2001, and brought various items to the cashier for
purchase.2 Pursuant to the store’s “Telephone Capture Policy,” the cashier asked Florez
for her telephone number. Florez obliged, believing it was required to complete the
transaction, and the cashier typed the information into the electronic cash register.
Producing her credit card, Florez then paid for her purchases.
Many retailers use credit card transaction forms with imprinted spaces for
addresses and telephone numbers, leading consumers to believe this information is
necessary to complete a purchase. The information acquired by the retailer is then used
to create customer records for business purposes, like mailing lists for in-house marketing
efforts or is sold to direct-mailing specialists. LNT uses computer software that performs
a reverse telephone search capable of matching an address to a phone number.
Assembling the various pieces of the puzzle, the store created a record containing
Florez’s name, credit card number, telephone number, and address. The contents of this
record can be viewed, printed, distributed, and sold by the store.
1
All further statutory references are to the Civil Code unless otherwise
noted.
2
“‘An appellate court’s “‘only task in reviewing a ruling on a demurrer is to
determine whether the complaint states a cause of action.’” . . .’” (Gentry v. eBay, Inc
(2002) 99 Cal.App.4th 816, 824.) The superior court’s decision is reviewed de novo, and
we assume the truth of all facts properly pleaded by the plaintiff.
2
II
At the heart of this dispute is the proper interpretation of section 1747.8. It
provides, in relevant part, as follows: “(a) Except as provided in subdivision (c), no
person, firm, partnership, association, or corporation which accepts credit cards for the
transaction of business shall do either of the following: [¶] (1) Request, or require as a
condition to accepting the credit card as payment in full or in part for goods or services,
the cardholder to write any personal identification information upon the credit card
transaction form or otherwise. [¶] (2) Request, or require as a condition to accepting the
credit card as payment in full or in part for goods or services, the cardholder to provide
personal identification information, which the person, firm, partnership, association, or
corporation accepting the credit card writes, causes to be written, or otherwise records
upon the credit card transaction form or otherwise.” (Italics added.)
As defined by the statute, “‘personal identification information’” means,
“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.”
(§ 1747.8, subd. (b).)
Section 1747.8 is part of the Song-Beverly Credit Card Act, designed to
promote consumer protection. The act “imposes fair business practices for the protection
of the consumers. ‘Such a law is remedial in nature and in the public interest [and] is to
be liberally construed to the end of fostering its objectives.’” (Young v. Bank of America
(1983) 141 Cal.App.3d 108, 114; see also Pitney-Bowes, Inc. v. State of California
(1980) 108 Cal.App.3d 307, 324.)3
We begin with a brief synopsis of the parties’ contentions on appeal.
Florez argues section 1747.8, subdivision (a)(2) is violated when a retailer who accepts
3
No California court has yet had the occasion to consider the precise
meaning of section 1747.8. In Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, the
California Supreme Court considered certain aspects of class action certification under
the statute.
3
credit cards either requests personal identification information, such as a telephone
number, or requires such information as a condition of credit card payment. In its
original form, the statute only prohibited retailers from requiring and recording a
consumer’s personal identification information. A 1991 amendment added the word
“request” at the beginning of subdivision (a)(2).
LNT responds it may request personal identification information before a
customer announces his or her preferred method of payment, and no authority prevents a
retailer from assembling a database of personal customer information (excluding credit
card information), if the customer knowingly and voluntarily supplies it. But if the
information is acquired as part of a credit card transaction, the collection and use of such
data is prohibited unless the retailer first advises the customer this information is not
required to complete the purchase.
The key issue, as the parties see it, is the effect of the 1991 amendment
adding the word “request” to the statute. LNT argues the legislative history confirms the
phrase “as a condition to accepting the credit card” modifies the word “request.” Florez,
on the other hand, relies on language in the Enrolled Bill Report of the California
Department of Consumer Affairs, Assembly Bill No. 1477: “This bill would prohibit
requesting or requiring” personal information “[s]ince the card issuer already has that
information, there is no need for the retailer to request it (some retailers request it for
mailing list purposes).” Thus, we are told, a retailer’s “request” is prohibited even if the
customer responds on a voluntary basis.
We review issues of statutory interpretation under a de novo standard.
(Heavenly Valley v. El Dorado County Bd. Of Equalization (2000) 84 Cal.App.4th 1323,
1334.) We look first at the statutory language, and if it is clear and unambiguous, we
apply it according to its terms. (People v. Jones (1993) 5 Cal.4th 1142, 1146.) At the
same time, we note section 1747.8 is a consumer protection statute, and the retailer’s
request for personal identification information must be viewed from the customer’s
4
standpoint. In other words, the retailer’s unannounced subjective intent is irrelevant.
What does matter is whether a consumer would perceive the store’s “request” for
information as a “condition” of the use of a credit card.
Viewed from this perspective, we think there is nothing ambiguous or
unclear about the statute. By its plain language, it prohibits a “request” for personal
identification information in conjunction with the use of a credit card. As the Senate
Committee on Judiciary Analysis of Assembly Bill No. 1477 explains, section 1747.8
was amended to add the word “Request,” and “[t]his bill would clarify that persons may
neither require nor request, as a condition to accepting the credit card, the taking or
recording of personal identification information from the cardholder. (Current law states
such information may not be required, but does not prohibit requesting such
information.)”
We note that nothing prevents a retailer from soliciting a consumer’s
address and telephone number for a store’s mailing list, if that information is provided
voluntarily. Retailers are not without options in this regard. A merchant can easily delay
the request until the customer tenders payment or makes his or her preferred method of
payment known. If the payment is made with cash, and the customer is so inclined,
personal identification information can be recorded at that time. Alternatively, retailers
could delete a customer’s personal identification information as soon as the customer
reveals an intention to pay by credit card. In other words, the statutory mandate can
hardly be described as draconian. None of these alternatives represents any great
imposition on retailers.
On the other hand, a policy of obtaining more information than credit card
companies require to complete a transaction creates a conflict with credit card company
rules prohibiting a retailer from refusing a sale if a consumer refuses to provide this
additional information on a credit card transaction form. Section 1747.8 dovetails with
policy by prohibiting the solicitation of information obtained under the false pretense that
5
the transaction cannot or will not be completed without it. Because we think section
1747.8 unambiguously includes a request for personal identification information, we
conclude the trial court erred in sustaining the demurrer to this cause of action.
Legislative history further supports our conclusion. As we pursue that task,
we keep the following admonition in mind: “It is a well-established canon of statutory
construction that a court should go beyond the literal language of the statute if reliance on
that language would defeat the plain purpose of the statute . . . .” (Bob Jones University
v. United States (1983) 461 U.S. 574, 586.)
Our inquiry begins with the California Assembly Committee on Finance
and Insurance, Background Information Request on Assembly Bill No. 2920: “AB 2920
seeks to protect the personal privacy of consumers who use credit cards to purchase
goods or services by prohibiting retailers from requiring consumers to provide addresses,
telephone numbers and other personal information that is unnecessary to complete the
transaction and that the retailer does not need.” (Italics added.) In essence, the original
enactment (Stats. 1990, ch. 999, § 1 [A.B. No. 2920]) was a response to two principal
privacy concerns. “[F]irst, that with increased use of computer technology, very specific
and personal information about a consumer’s spending habits was being made available
to anyone willing to pay for it; and second, that acts of harassment and violence were
being committed by store clerks who obtained customers’ phone numbers and
addresses.”4
LNT insists its employees did nothing to suggest the provision of a
telephone number was a requirement or condition of payment by credit card. Because
there was no discernible link between the request and the use of the credit card, LNT
claims section 1747.8 does not apply here. As LNT interprets it, section 1747.8 allows a
retailer to request consumer telephone numbers before the manner of payment is known
4
At oral argument, counsel for LNT could not explain how the retailer’s
interpretation of the statute addressed either one of these concerns.
6
because the timing of the request eliminates any concern that the provision of such
information is a condition of credit card payment.
The argument is not persuasive. As evidenced by the 1991 amendment,
section 1747.8 is designed to prevent a “request” for personal information, because a
customer might perceive that request as a condition of credit card payment. In effect, the
1991 amendment prevents a retailer from making an end-run around the law by claiming
the customer furnished personal identification data “voluntarily.” In fact, the Enrolled
Bill Report of the California Department of Consumer Affairs, Assembly Bill No. 1477
(1991-1992 Reg. Sess.), specifically addressed this problem, noting “[t]his bill would
prohibit requesting or requiring that information.” As we read it, the legislative intent
suggests the 1991 amendment simply clarified that a “request” for personal identification
information was prohibited if it immediately preceded the credit card transaction, even if
the consumer’s response was voluntary and made only for marketing purposes.
The obvious purpose of the 1991 amendment was to prevent retailers from
“requesting” personal identification information and then matching it with the
consumer’s credit card number. LNT’s interpretation leads to an absurd conclusion, i.e.,
the retailer may evade the statutory prohibition by rushing to obtain the information
before the customer makes his or her payment preference known. That interpretation, if
allowed, would completely undermine the purpose of the statute.5
Based on our review, we conclude the addition of the word “request” to
section 1747.8 bars a preliminary request for personal identification information.
Accordingly, the allegations in Florez’s second amended complaint were sufficient to
5
We note the Legislative Counsel’s Digest of the 1991 amendment
specifically states that “[t]his bill would provide that the merchant in such a transaction
may neither request identification information, nor require that information as a condition
to acceptance of the card . . . .” (Legis. Counsel’s Dig., Assem. Bill No. 1477 (19911992 Reg. Sess.) p. 1).
7
state a cause of action for a violation of section 1747.8, and we reverse the judgment of
dismissal.
III
The second cause of action, for violations of Business and Professions
Code section 17200, is itself premised on a violation of section 1747.8. Raising what is
in effect a “house of cards” argument, LNT claims Florez’s Business and Professions
Code section 17200 claim must fail because she cannot state a viable cause of action
under section 1747.8. Given our conclusion that Florez has pleaded a valid claim under
section 1747.8, we think the opposite is true.
The judgment is reversed with directions to overrule the demurrer to
Florez’s second amended complaint. Florez shall recover her costs on appeal.
ARONSON, J.
WE CONCUR:
BEDSWORTH, ACTING P. J.
MOORE, J.
8
