SAN FRANCISCO (Legal Newsline) -- The California Supreme Court ruled Monday that online retailers are allowed to require customers to provide their home addresses and phone numbers to make credit card purchases.

Under the state's Song-Beverly Credit Card Act of 1971, which governs the issuance and use of credit cards, retailers are prohibited from requesting or requiring as a condition to accepting the credit card as payment the cardholder write "any personal identification information upon the credit card transaction form or otherwise."

The credit card act also prohibits retailers from requesting or requiring the cardholder to provide personal identification information, which the retailer writes, causes to be written or otherwise records "upon the credit card transaction form or otherwise," and from utilizing a credit card form which contains "preprinted spaces specifically designed for filling in any personal identification information of the cardholder."

The state's high court, in its 26-page ruling, pointed to Pineda v. Williams-Sonoma Stores Inc. in 2011.

The Court considered, in that case, whether the credit card act is violated when a retailer requests and records a customer's ZIP code during a credit card transaction.

It concluded that a ZIP code does, indeed, constitute personal identification information within the meaning of the statute and that the credit card act forbids a retailer from requesting or recording such information.

Like Pineda, the case at issue involves a similar asserted violation of the act.

Plaintiff David Krescent alleged in his complaint that defendant Apple Inc. requested or required him to provide his address and telephone number as a condition of accepting his credit card as payment.

However, unlike Pineda, which concerned the purchase of a physical product at a traditional brick-and-mortar business, the case at-hand concerns the purchase of an electronic download via the Internet.

In its 4-3 decision this week, the Court ruled after "careful consideration of the statute's text, structure and purpose" that the law does not apply to online purchases in which the product is downloaded electronically.

Justice Goodwin Liu authored the majority opinion. Chief Justice Tani Gorre Cantil-Sakauye and justices Kathryn M. Werdegar and Carol A. Corrigan concurred.

Justices Joyce L. Kennard and Marvin R. Baxter, along with Barbara J.R. Jones, presiding justice of the Court of Appeal, First Appellate District, Division Five, dissented.

"Our dissenting colleagues warn that today's decision 'relegate[s] to the dust heap' the 'robust' consumer protection... at the heart of section 1747.08 and represents a 'major loss for consumers' that 'leaves online retailers free to collect and use the personal identification information of credit card users as they wish,'" Liu wrote.

"These ominous assertions, though eye-catching, do not withstand scrutiny. As we explain, existing state and federal laws provide consumers with a degree of protection against unwanted use or disclosure of personal identification information."

Liu continued, "The Legislature may believe these measures are inadequate and, if so, may enact additional protections. Or the Legislature may believe that existing laws, together with market forces reflecting consumer preferences, are sufficient."

The majority noted that it is not its role to "opine on the important policy issue."

"We merely hold that section 1747.08 does not govern online purchases of electronically downloadable products because this type of transaction does not fit within the statutory scheme," Liu concluded.

Kennard contends in her dissent that the majority's decision leaves Internet retailers free to demand personal information from credit card-using customers and to resell that information to others.

"The majority's decision is a major win for these sellers, but a major loss for consumers, who in their online activities already face an ever-increasing encroachment upon their privacy," she wrote.

From Legal Newsline: Reach Jessica Karmasek by email at

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