Wal-Mart Wants ZIP Code Class Action Lawsuit Denied

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Wal-Mart Stores Inc. urged a federal judge Thursday to deny certification to a proposed class action lawsuit accusing the retail giant of violating state law by asking California customers to disclose their ZIP codes to complete credit card transactions, arguing that the plaintiffs’ motion lacks evidence and seeks to represent an “overbroad” Class with no legal claim.

The lead plaintiffs in the Wal-Mart ZIP code class action lawsuit allege that a California law, the Song-Beverly Credit Card Act, bars retailers like Wal-Mart from asking for and keeping a record of personal information in credit card transactions. California residents Amy Fraiser and Paula Haug allege in the Wal-Mart ZIP code class action lawsuit that they both were asked to provide their ZIP codes when using their credit cards to make purchases at Wal-Mart.

On May 8, Fraiser and Haug motioned for certification of the class action lawsuit.

In its June 5 reply, Wal-Mart argued that Class certification is not appropriate because the lead plaintiffs cannot demonstrate that their claims are common to everyone in their proposed Class.

“Plaintiffs offer anecdotal evidence of a handful of their personal transactions as if that were enough to prove a ‘common policy’ applicable to all putative Class Members,” Wal-Mart said.

The retailer also argued that under the law, stores are allowed to request personal identification information (PII) from customers when they are contractually obligated to do so by a credit card company.

“Several card companies have developed ZIP code verification protocols which systematically and instantaneously match the ZIP code entered at the point of sale with the billing ZIP code on the credit card account,” Wal-Mart said. “AmEx has such a program, and since 2005 the Program has been a part of the Wal-Mart/AmEx agreement.”

Wal-Mart also holds such an agreement with DiscoverCard.

Wal-Mart also argues that even if the lead plaintiffs were able to establish that Wal-Mart did violate the law when it asked for ZIP codes, the amount of the penalty under the law would vary for Class Members. Finally, Wal-Mart argues that the lead plaintiffs did not demonstrate that they represent the proposed Class Members.

These claims, therefore, “can only be determined by examining the circumstances of each transaction,” Wal-Mart said in its motion to deny certification of the Wal-Mart class action lawsuit. “Such individualized inquiry is not well-suited for treatment on a Class basis.”

The lead plaintiffs, Amy Fraiser and Paula Haug, are represented by James M. Lindsay of Lindsay Law Corp.

The Wal-Mart ZIP Code Collection Class Action Lawsuit is Amy Fraser, et al. v. Wal-Mart Stores Inc., Case No. 2:13-cv-00520, in the U.S. District Court for the Eastern District of California.

UPDATE: On June 21, 2016, Walmart says a recent Supreme Court decision should put an end to an ongoing class action lawsuit over the retailer’s collection of customers’ ZIP codes.

UPDATE 2: On Oct. 24, 2016, a federal court judge denied Walmart’s motion to decertify a class action lawsuit claiming the retail giant illegally collects ZIP codes from shoppers paying with credit cards, an alleged violation of the Song-Beverly Credit Card Act.