John Sinibaldi v. Redbox Automated Retail

dissenting.

This case presents a question of statutory interpretation of a section of California’s Song-Beverly Credit Card Act, a consumer protection statute intended to prevent merchants from demanding personal information from consumers as a condition of their ability to pay by credit card. Florez v. Linens ‘N Things, Inc., 108 Cal.App.4th 447, 452 , 133 Cal.Rptr.2d 465 (2003). The California Legislature deemed that unless such information, which includes addresses, phone numbers, and ZIP codes, was necessary to complete the transaction, there was no legitimate purpose to its acquisition. Absher v. Auto-Zone, Inc., 164 Cal.App.4th 332, 345 , 78 Cal.Rptr.3d 817 (2008). Accordingly, it enacted section 1747.08 of the California Civil Code, which prohibits the collection of personal information in connection with a credit card transaction, with some limited exceptions, including the exception at issue here: The prohibition does not apply *710 “[i]f the credit card is being used as a deposit to secure payment in the event of default, loss, damage, or other similar occurrence.” Cal. Civ.Code § 1747.08(c)(1).

As the majority states, we have no guidance from the California Supreme…

Opinion by Judge CLIFTON; Dissent by Judge REINHARDT.

OPINION

Plaintiffs John Sinibaldi and Nicolle Di-Simone appeal the dismissal of a putative class action alleging violations of California’s Song-Beverly Credit Card Act of 1971, which prohibits retailers from collecting personal identification information in connection with credit card transactions. See Cal. Civ.Code § 1747.08. Defendant Redbox Automated Retail, LLC operates self-service kiosks throughout California and elsewhere in the United States. Customers use the kiosks to rent movies and video games, using credit and debit cards to pay the charges. As part of the process, Redbox requires customers who obtain discs from the kiosks to provide their ZIP codes. Plaintiffs allege that, by imposing that requirement on customers using credit cards in California, Redbox has violated the Act.

We conclude that Redbox’s alleged conduct does not violate the Act. The statute exempts certain transactions, including those where “the credit card is being used as a deposit to secure payment in the event of default, loss, damage, or similar occurrence.” Cal. Civ.Code § 1747.08(c)(1). The Redbox transaction fits within that exception.…

I. Background

Redbox owns and operates more than 30,000 kiosks nationwide. The kiosks are usually located outside retail locations, including grocery stores, drug stores, and fast-food restaurants. Living up to the name, each Redbox kiosk is bright red. It can hold approximately 630 discs representing 200 unique movie titles or video games. No employee is present to tend to the kiosk on an ongoing basis. The transaction with the customer is fully automated.

To rent a movie or game at a Redbox kiosk, the customer uses a touch screen to select from the titles displayed. After selecting one or more titles and proceeding to the check-out screen, the customer is prompted to swipe a credit or debit card through a built-in card reader. The kiosk screen then displays the following statement: “For security reasons, please enter the ZIP code associated with your card’s billing address, and press ‘ENTER.’” After the customer enters a 5- digit number and the transaction representing one day’s worth of charges clears, the kiosk vends the selected titles.

1 According to the complaint, it is not necessary to enter the ZIP code associated with the card’s billing address for the transaction to…