Class Action

Yesterday's Supreme Court arguments: Pineda v. Williams-Sonoma and Bruns v. E-Commerce

By Kimberly A. Kralowec

I attended yesterday morning's arguments, which were the first over which new Chief Justice Tani Cantil-Sakauye presided.  Associate Justice Kennard, the most senior of the associate justices, delivered a very nice welcoming address, which she said will be reported in the official reports.  She talked about the history of discrimination experienced in this country by immigrants of Filipino and other Asian descent, and said that Chief Justice Cantil-Sakauye represents the embodiment of the American dream.

The Clerk, Mr. Ohlrich, told us before the justices took the bench that they had received an email Tuesday from former Chief Justice Ronald George, who is currently vacationing in the antarctic, heading soon to Chile.  (Will this impact the timing of the eagerly-anticipated opinion in the Kwikset case, or the other cases in which Chief Justice George heard arguments last year?  I don't know.  If anyone deserves a vacation, he does!)

My purpose in attending the arguments today was not to provide the kinds of reports that I normally do.  But I will briefly share some of my thoughts on the first two cases on the calendar.

The first case argued was Pineda v. Williams-Sonoma Stores, Inc., no. S178241, which raises this issue:

Does a retailer violate the Song-Beverly Credit Card Act of 1971 (Civ. Code, § 1747 et seq.), which prohibits retailers from recording a customer?s ?personal identification information? when the customer uses a credit card in a transaction, by recording a customer?s zip code for the purpose of later using it and the customer?s name to obtain the customer?s address through a reverse search database?

The trial court and the Court of Appeal both answered "no."  In the Supreme Court, the questioning largely focused on whether part of a person's address (namely, the zip code) was "personal identification information," which "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."  Civ. Code § 1747.08(b) (emphasis added). 

Based on the questions, I think most of the justices are leaning in favor of the plaintiff on this issue.   These days, a person's name plus their zip code is enough information to find out their address, which is precisely what the Legislature meant to prevent retailers from obtaining from credit card customers.  The justices' questions revealed keen interest not only in the plain text but also the legislative history.  Justices Kennard and Werdegar both quoted from legislative history reports during the argument. 

The only defense point that seemed to make any headway was offered by counsel for the Gap, participating as amicus curiae.  She explained that the Gap collects zip codes from customers but does not use them to obtain addresses.  Instead, the Gap uses them for market analysis and making decisions such as where to open new stores.  She said that in the twenty years since the statute was enacted, no enforcement actions were ever brought on the theory that collecting zip codes was unlawful, and no judicial decision had ever so held.  She argued it would be unfair (perhaps rising to the level of a due process violation) to impose civil penalties on retailers under such circumstances. 

(This reminded me of the Supreme Court's decision some years ago in Kearney v. Salomon Smith Barney, Inc. , 39 Cal.4th 95 (2006).  There, the Court held that California law prohibited recording telephone calls without both parties' consent (and that California law trumped Georgia law, which permitted recording with just one party's consent).  The Court further held, however, that this ruling would apply only to future conduct.) 

That argument was well presented and the justices were definitely listening to it.  On balance, however, I think the questioning suggests that the plaintiff has a very good chance of prevailing in this case.

The second case argued was Bruns v. E-Commerce Exchange, Inc., no. S172684, which presents this issue:

Does a stay of discovery constitute a stay of the action within the meaning of Code of Civil Procedure section 583.340, subdivision (c), such that the period during which discovery was stayed should be excluded in determining the time within which the action had to be brought to trial?

I did not focus on this case when the Court of Appeal decided it in March 2009, but it could be highly relevant in class action litigation.  The action itself was a putative class action, one of several coordinated actions pending in Los Angeles County Superior Court.  The Court of Appeal opinion details a series of stays, some of discovery, some of law and motion, some of all proceedings, beginning almost immediately after the case was filed.  Bruns v. E-Commerce Exchange, Inc., 72 Cal.App.4th 488 (2009).

Discovery stays are not unusual in complex litigation, so the Supreme Court's decision could impact how the five-year rule is calculated in many class action cases.  Based on the questioning (which was somewhat quieter than in Pineda), I think many of the justices were open to the argument that periods during which a case is partially stayed, and discovery cannot be conducted, should not be counted as part of the five years. 

Full post as published by The UCL Practitioner on January 06, 2011 (boomark / Pineda v. Williams-Sonoma and Bruns v. E-Commerce&linkurl=http://mail.uslaw.com/library/Class_Action/Yesterdays_Supreme_Court_arguments_Pineda_v_WilliamsSonoma_Bruns_v_ECo.php?item=965316' rel=nofollow title='The UCL Practitioner'>email).