The U.S. Court of Appeals for the Ninth Circuit on Tuesday asked the California Supreme Court to resolve a longstanding dispute over the interpretation of a retail privacy statute.  If the state court rules on the issue, its decision could affect the ability of California retailers to collect information from consumers who make in-store payments using credit cards.

California’s Song-Beverly Credit Card Act states that no business that accepts credit cards for the transaction of business shall “[r]equest, or require as a condition to accepting the credit card as payment in full or in part for goods or services, the cardholder to provide personal identification information[.]”

In 2011, the California Supreme Court ruled that ZIP codes are “personal identification information” under the statute (in a different case, the California Supreme Court held that the Act is not applicable to online transactions for downloadable content).  Since then, plaintiffs have filed hundreds of complaints alleging that California retailers violated the law by requesting ZIP codes.

In the recent case in the Ninth Circuit, Davis v. Devanlay Retail Group, a consumer claims that a retailer violated the Song-Beverly Act when its employee allegedly requested the consumer’s ZIP code when the consumer made an in-store payment using a credit card.  The U.S. District Court for the Eastern District of California granted summary judgment for the retailer, interpreting the statute’s prohibition to apply only in cases in which it would be objectively reasonable for the consumer to perceive that providing the personal information is a condition of completing the credit card transaction.  Other federal district courts have reached similar conclusions.  But the California Supreme Court, which issues binding interpretations of California law, has never ruled on the issue.

On appeal, the plaintiff argued that the statute prohibits requests for personal identification information when a consumer pays with a credit card, regardless of whether the consumer reasonably perceives the request to be a condition of the credit card payment.

The Ninth Circuit concluded that “[t]he ambiguous language of the statute itself offers little guidance about whether courts should apply an objective consumer perception test.”  The Court noted that the Song Beverly Act’s “punctuation makes it ambiguous whether the clause ‘as a condition to accepting the credit card as payment’ modifies ‘request’ in addition to modifying ‘require.” Accordingly, the Ninth Circuit, in a per curiam order, asked the California Supreme Court to resolve the dispute.