Walmart Loses Bid to Decertify ZIP Code Collection Class Action

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A federal court judge has 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.

U.S. District Judge Troy L. Nunley disagreed with Walmart’s argument that the Class is not ascertainable, stating that Walmart failed to follow a uniform policy of requesting and recording ZIP codes from all of its credit card customers in California retail stores.

Walmart contended that its Point of Sale (POS) system is not configured to prompt customers to provide their ZIP codes unless that information is necessary to complete the transaction.

Walmart also argued that its contracts with respective credit card companies requires them to collect customers’ ZIP code data.

The judge noted the plaintiffs’ standards for certification were met since plaintiff Paula Haug claims her ZIP code was verbally requested and manually entered into Walmart’s system by a cashier when she used her Visa card.

“As such, the programming of the POS prompts does not disprove this allegation,” the judge wrote in a 14-page order. “Thus, the common question of whether or not customers were requested and required to provide their ZIP code when using a credit card remains. Further, if such a common practice is proven, then a determination of the Act’s applicability to the alleged conduct will resolve all class claims.”

Judge Nunley also noted that Walmart had the means to identify the estimated Class of 100,000 California Walmart customers through credit card receipts and company records.

The Walmart ZIP code lawsuit was initially filed in Sacramento County Federal Court but was removed in March 2013 to federal court.

The plaintiffs allege that Walmart requires American Express credit card holders spending more than $50 to provide their ZIP codes in order to complete the transaction.

The plaintiffs also allege that Walmart’s policy similarly applies to other credit card users, including Discover card holders who spend over $200 and Visa card holder who spend an unspecified amount.

In December 2014, Judge Nunley granted certification to a class of Walmart shoppers who allege the retailer requested and recorded personal identification information in conjunction with credit card purchase transactions.

Walmart appealed the certification order but was denied by the Ninth Circuit last March, court documents show.

Earlier this month, Judge Nunley rejected Walmart’s argument that the Supreme Court’s Spokeo decision renders the consumers claims of improper ZIP code collection moot since they cannot show they suffered any harm as a result of the ZIP code collection.

The plaintiffs are represented by James M. Lindsay of Lindsay Law Corp.

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