The Massachusetts Supreme Judicial Court recently ruled that zip codes constitute personal identification information within the meaning of Massachusetts General Laws, c. 93, § 105, such that retailers who request and record zip codes from consumers during credit card transactions may violate Massachusetts law. The ruling stems from a federal class action lawsuit filed against Michaels Stores, Inc., which alleged that Michaels violated § 105 when its employees requested and recorded customers’ zip codes while processing credit card transactions. Under § 105, retailers and other business entities cannot write or require a credit card holder to write personal identification information on a credit card transaction form unless that information is required by the credit card issuer. The statute explicitly defines personal identification information as including a customer’s address and telephone number.
In the complaint, the class plaintiff alleged that she provided her zip code to Michaels under the mistaken impression that she was required to do so to complete her purchase. Michaels then allegedly used the plaintiff’s name, credit card number, and zip code in conjunction with other commercially available databases to identify the plaintiff’s home address and telephone number. The plaintiff subsequently received unsolicited and unwanted marketing material from Michaels. The U.S. District Court for the District of Massachusetts originally dismissed the plaintiff’s complaint on the grounds that it did not allege a violation of § 105 and did not present a cognizable injury under the statute.
Following dismissal, the plaintiff moved to certify three questions to the Commonwealth’s Supreme Judicial Court: (1) Do zip codes constitute personal identification information under § 105? (2) Can a plaintiff bring a privacy right violation even in the absence of identity fraud? (3) Does the language “credit card transaction form,” as it appears in the statute, refer equally to electronic and paper forms? The Supreme Judicial Court answered each question in the affirmative, reasoning that a contrary ruling would render hollow the statute’s explicit prohibition on the collection of customer addresses and telephone numbers. As a result, the federal case against Michaels has been reopened and is set for a hearing at the end of March.
The highest court in at least one other state, California, has reached a similar conclusion, resulting in a flurry of class action lawsuits against California retailers who collected zip codes from consumers. The recent ruling in Massachusetts may likewise open the door for class plaintiffs to file similar suits against retailers in the Commonwealth.