Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comKey Contacts
Back
Consumer data has become an important subject of debate in America
This issue has become more prominent since government leaks revealed that U.S. intelligence organizations have access to vast amounts of meta-data. Much of this data is taken from large tech companies, which routinely collect users’ personal information.
I recently came across a lawsuit in which a divided panel of the California 9th Circuit ruled that Redbox, the automated DVD rental company, did not violate the state’s laws by requiring customers to input their ZIP codes to use the service. Hoping to escalate to a class action lawsuit, California residents John Sinibaldi and Nicolle DeSimone filed a suit against the company that alleged it violated California’s Song-Beverly Credit Card Act by demanding personal information.
What is the Song-Beverly Credit Card Act?
Also known as California Civil Code section 1747.08(a), the Song Beverly Credit Card Act says, in short, that persons and organizations that accept credit cards for business transactions are not allowed to require or request that the cardholder provide them with personally identifiable information as a condition to accepting a credit card as payment. It’s been a pretty hot topic in 2014, considering it was amended early in the year to apply to online credit card transactions of downloadable content.
The Act was put in place in 1971, but was amended in 1991 to address two privacy concerns. According to California’s Song-Beverly Credit Card Act: The Past, Present, and Future, a report by The Bureau of National Affairs, Inc., the primary reasons for the amendment, the largest change of which was the inclusion of the language that barred requests for information, were (1) concerns about consumer spending habits being tracked and then sold, and (2) acts of harassment being conducted by store clerks with access to consumer information.
I find the Song-Beverly Act interesting in that it often gets interpreted to mean any request for personal information in California. This is a serious contrast to the rest of the United States, in which it seems impossible to pay for something at the mall without giving up a ZIP code, email address, favorite color and blood type to the dispassionate clerks behind the counter.
Judges rule in Redbox’s favor
U.S. District Judge Jacqueline Nguyen dismissed the case in a Los Angeles court, and the Pasadena-based federal appeals court affirmed the ruling 2-1 June 6. The argument that Redbox advanced and that the courts upheld is that the company’s gathering of ZIP codes falls under Section 1747.08(c)(1)-(4), which provides exceptions to the prohibitions outlined in the law.
Section 1747.08(c)(1) specifically is the exception used by Redbox, which reads, “If the credit card is being used as a deposit to secure payment in the event of default, loss, damage, or other similar occurrence.”
Judge Richard Clifton wrote for the majority that the Redbox transaction in question fits within the exception. Judge Stephen Reinhardt, the dissenter, explained that he feels that the credit card is being used “to secure the charges that constitute the primary agreement between customers and Redbox, charges that are therefore unrelated to ‘default, loss, damage, or similar occurrence.'”
As the security of consumer information continues to weigh heavily on the public’s mind, I think that it is fair to assume that we will see more lawsuits like this one in the near future.
If you have any questions about this post or would like to discuss your sports and entertainment matters , please contact me, Anthony R. Caruso at www.ScarinciHollenbeck.com.
- Industries: Entertainment & Media
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Author: Scarinci Hollenbeck, LLC
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
Author: Dan Brecher
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
Author: Ronald S. Bienstock
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
Author: Patrick T. Conlon
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Redbox Wins Consumer Data Suit
Author: Scarinci Hollenbeck, LLC
Consumer data has become an important subject of debate in America
This issue has become more prominent since government leaks revealed that U.S. intelligence organizations have access to vast amounts of meta-data. Much of this data is taken from large tech companies, which routinely collect users’ personal information.
I recently came across a lawsuit in which a divided panel of the California 9th Circuit ruled that Redbox, the automated DVD rental company, did not violate the state’s laws by requiring customers to input their ZIP codes to use the service. Hoping to escalate to a class action lawsuit, California residents John Sinibaldi and Nicolle DeSimone filed a suit against the company that alleged it violated California’s Song-Beverly Credit Card Act by demanding personal information.
What is the Song-Beverly Credit Card Act?
Also known as California Civil Code section 1747.08(a), the Song Beverly Credit Card Act says, in short, that persons and organizations that accept credit cards for business transactions are not allowed to require or request that the cardholder provide them with personally identifiable information as a condition to accepting a credit card as payment. It’s been a pretty hot topic in 2014, considering it was amended early in the year to apply to online credit card transactions of downloadable content.
The Act was put in place in 1971, but was amended in 1991 to address two privacy concerns. According to California’s Song-Beverly Credit Card Act: The Past, Present, and Future, a report by The Bureau of National Affairs, Inc., the primary reasons for the amendment, the largest change of which was the inclusion of the language that barred requests for information, were (1) concerns about consumer spending habits being tracked and then sold, and (2) acts of harassment being conducted by store clerks with access to consumer information.
I find the Song-Beverly Act interesting in that it often gets interpreted to mean any request for personal information in California. This is a serious contrast to the rest of the United States, in which it seems impossible to pay for something at the mall without giving up a ZIP code, email address, favorite color and blood type to the dispassionate clerks behind the counter.
Judges rule in Redbox’s favor
U.S. District Judge Jacqueline Nguyen dismissed the case in a Los Angeles court, and the Pasadena-based federal appeals court affirmed the ruling 2-1 June 6. The argument that Redbox advanced and that the courts upheld is that the company’s gathering of ZIP codes falls under Section 1747.08(c)(1)-(4), which provides exceptions to the prohibitions outlined in the law.
Section 1747.08(c)(1) specifically is the exception used by Redbox, which reads, “If the credit card is being used as a deposit to secure payment in the event of default, loss, damage, or other similar occurrence.”
Judge Richard Clifton wrote for the majority that the Redbox transaction in question fits within the exception. Judge Stephen Reinhardt, the dissenter, explained that he feels that the credit card is being used “to secure the charges that constitute the primary agreement between customers and Redbox, charges that are therefore unrelated to ‘default, loss, damage, or similar occurrence.'”
As the security of consumer information continues to weigh heavily on the public’s mind, I think that it is fair to assume that we will see more lawsuits like this one in the near future.
If you have any questions about this post or would like to discuss your sports and entertainment matters , please contact me, Anthony R. Caruso at www.ScarinciHollenbeck.com.