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In what may be the first ruling of its kind, a federal judge has denied certification of a class of California consumers alleging that GNC salespeople illegally asked for their ZIP codes as part of their credit card transactions. On Nov. 17, U.S. District Judge James Otero in Los Angeles found that, in order to pursue claims under California’s Song-Beverly Credit Card Act of 1971, the prospective class members needed to have “reasonably believed” that they had to provide their personal information in order to complete a credit card transaction. The class certification decision is the first in more than 150 actions filed in the wake of a Feb. 10 California Supreme Court ruling in Pineda v. Williams-Sonoma Stores Inc. That ruling found that ZIP codes were “personal identification information,” which businesses are prohibited from requiring or requesting as part of a credit card sale under Song-Beverly, said attorney Susan Germaise, a partner in the Los Angeles office of McGuireWoods, who represents General Nutrition Corp. (GNC). She said Otero’s ruling could assist lawyers in similar cases queued up for certification issues. “What he said was there’s no evidence there was a uniform policy that was enforced,” she said. “The other issue he addressed was the potential class members’ perception of the request — whether the individual consumer reasonably believed that providing information was a condition of consummating the credit card transaction.” The plaintiffs’ attorney, Christopher Ridout of Ridout & Lyon in Long Beach, Calif., plans to file a motion for reconsideration. In his ruling, Otero found that Ridout had failed to cite evidence supporting claims that GNC had a “uniform policy” of asking for ZIP code information from its customers. “Moreover, if the personal information is requested as opposed to required, whether there has been a violation of the Act would depend upon whether the individual consumer reasonably believed that providing his personal information was a condition of consummating the credit card transaction,” he wrote. “This analysis will vary with each consumer, based on factors such as when during the credit card transaction the information was requested and the exact wording of the request.” Otero also harshly criticized Ridout’s legal acumen, finding that he could not adequately represent such a class had it been certified. He specifically addressed a citation in Ridout’s motion for class certification of the 9th Circuit’s ruling upholding certification in Dukes v. Wal-Mart Inc., the largest gender discrimination case in history. That decision was “famously reversed” this year by the U.S. Supreme Court, he wrote. “Plaintiff’s counsel claim to be skilled at prosecuting class actions, but appear to be unfamiliar with arguably the most influential Supreme Court decision of the past decade,” he concluded. “This suggests to the Court either that Plaintiff’s counsel are not familiar enough with class actions to competently represent a class or that this motion was mere boilerplate, a rote class certification motion that is updated only to fit in the facts of the particular case without checking whether the cases cited remain valid points of law. Either way, Plaintiff’s counsel have not established that they are capable of adequately representing the class.” GNC, in court documents, had argued that the plaintiff was a poor class representative because she testified that she was unaware of having filed two other similar suits in her name and that Ridout was inadequate as counsel for a potential class because he cited the 9th Circuit’s overruled Dukes decision. The case, originally brought on March 16 in Los Angeles County, Calif., Superior Court, alleged that GNC requested or required its customers to provide “personal identification information” when they purchased items at its California stores using a credit card. Such a policy, the suit said, was in violation of Song-Beverly, or California Civil Code 1747.08. Song-Beverly was amended in 1991 to prohibit businesses from requesting, not just requiring, “personal identification information,” and then recording that material. The statute provides civil penalties of $250 for each violation, and $1,000 for subsequent violations. The act defines “personal identification information” as things like an address and phone number. The California Supreme Court’s Pineda decision, however, expanded that definition to include ZIP codes, overruling a California appellate ruling in 2008 that had found otherwise. The suit against GNC was brought by Norma Rothman, a woman who claims she was asked to provide her ZIP code while buying items last year at GNC’s store in Seal Beach, Calif. She sought certification of a class of consumers who experienced the same request while making credit card purchases at GNC’s California stores during the past year. In moving for certification, Ridout cited GNC’s estimate that it collected or stored ZIP codes as part of 798,000 credit card transactions during the past year. But Germaise, in opposing certification, disputed those numbers, noting that about 40 percent of the transactions involved customers who had provided their ZIP codes and other personal information while voluntarily enrolling in a Gold Card membership. GNC also said it had not enforced a policy of requesting ZIP codes since January 2009. “The purpose of the Act is to protect consumers from unwittingly providing personal identification information, not protect them where they have already voluntarily provided that information to the retailer,” Germaise wrote. In his ruling, Otero agreed with GNC that Rothman had not addressed exemptions to the act, such as enrollees in the Gold Card program or consumers who were requested to provide ZIP code information for shipping or delivery purposes. The proposed class also did not limit its members to those whose personal information was recorded, he added. Otero did find that Ridout had met one of the four standards for class certification — although inadvertently. Although he failed to offer sufficient evidence regarding the number of individuals who had their personal information requested, GNC provided a customer service study conducted at 68 random stores indicating that in 82 percent of the transactions a sales associate did not request a ZIP code. “Although this information is presumably proffered for the purpose of showing that requesting ZIP code information is the exception rather than the rule, the information actually highlights the large number of individuals from whom Defendant did request ZIP code information,” he wrote. “Eighteen percent of 798,000 is still over 140,000, which is more than enough to meet the numerosity requirement.” Ridout said he planned to file a motion for reconsideration on Nov. 28. If Otero rejects that motion, he said he “absolutely” plans to appeal to the U.S. Court of Appeals for the 9th Circuit. He said the judge had not considered three exhibits that would have addressed GNC’s policy of asking customers for ZIP codes during credit card transactions. “We needed to file an application with the court and file the exhibits under seal, which had to be done manually,” he said. “Our attorney service did not get those to chambers until nearly 1 1/2 hours after the court had issued its ruling. So, therefore, the court could not possibly have considered the evidence that was placed before it in connection with that ruling.” As to Otero’s questions regarding his legal background, Ridout said the Dukes citation was a mistake. “But that is because the briefs were done, the initial brief was done, prior to the issuance of the Dukes opinion,” he said. “And that’s the reason why this cite was in there. And…it was a complete oversight but remained in there at the time it was ultimately filed.” Amanda Bronstad can be contacted at [email protected].

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