Paul Tassin  |  June 24, 2016

Category: Consumer News

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Walmart Store SignWalmart 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.

The retail giant told a California federal judge that under the Supreme Court’s recent decision in Spokeo Inc. v. Robins, plaintiffs do not have standing to sue for allegedly improper collection of ZIP codes.

Walmart argues that under Spokeo, a defendant’s mere technical violation of a statutory requirement doesn’t give a plaintiff standing to bring a claim. The plaintiff must also allege some sort of actual, concrete harm resulted from the defendant’s actions, the retailer says.

“Plaintiffs do not allege they suffered any harm as a result of the collection of their ZIP codes,” Walmart argues. “Instead, based on a bare procedural violation of the Act, plaintiffs seek the only available remedy, a civil penalty of up to $1000 per violation.”

Since the plaintiffs are only claiming that Walmart collected their ZIP codes without causing any actual harm, the retailer says they don’t have standing to sue and their class action lawsuit should be dismissed.

The motion for dismissal comes after several months’ worth of mediated settlement negotiations came to a deadlock. During that time, the court has been postponing a decision on another motion by Walmart seeking decertification of the plaintiff Class, to allow the parties a chance to negotiate a settlement.

Plaintiffs Amy Fraser and Paula Haug filed this Walmart class action lawsuit in 2014. The two allege that for customers paying with certain credit cards, Walmart required them to disclose their ZIP code as a condition of completing the purchase.

Haug claims when she made her Walmart purchase, she offered to verify her identity by showing her driver’s license instead of giving up her ZIP code. But the store manager insisted on taking her ZIP code and refused to look at her license, she says.

The plaintiffs allege Walmart’s acts violate California’s Song-Beverly Credit Card Act. They say the act forbids retailers from asking for and keeping a record of customers’ personal information in credit card transactions.

The Walmart class action lawsuit alleges the retailer applied the policy to purchases of $50 or more for customers paying with American Express; $200 or more for customers paying with Discover, and an unspecified amount for Visa-paying customers.

The plaintiffs won class certification in January 2015. U.S. District Judge Troy L. Nunley found that due to the sheer number of credit card transactions processed by Walmart, the plaintiff Class could number at least 100,000 individuals.

Judge Nunley was not persuaded by Walmart’s  argument that its contractual arrangements with Discover and American Express required it to collect customers’ ZIP codes.

Walmart has since urged the court to de-certify the Class, arguing that evidence revealed during the discovery phase undercut some of the plaintiffs’ allegations regarding Visa and Discover transactions.

Plaintiffs Fraser, Haug and the plaintiff Class are represented by James M. Lindsay of Lindsay Law Corp.

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

UPDATE: 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.

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One thought on Walmart Says Spokeo Decision Kills ZIP Code Class Action

  1. Top Class Actions says:

    UPDATE: 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.

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