Lewis v. Jinon Corp. , 182 Cal. Rptr. 3d 354 ( 2015 )

Filed 1/13/15
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
MARK LEWIS, B257389
Plaintiff and Appellant, (Los Angeles County Super. Ct.
No. BC521035)
v.
JINON CORPORATION,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los Angeles County, William
Highberger, Judge. Affirmed.
Mehrban Law Corporation, Julie Mehrban; Law Offices of Morse Mehrban,
Morse Mehrban, for Plaintiff and Appellant.
Willenken Wilson Loh & Delgado, William A. Delgado, Aarti K. Wilson, for
Defendant and Respondent.
_______________________
The issue presented is whether a business violates the Song-Beverly Credit Card
Act of 1971 (the Credit Card Act) (Civ. Code, § 1747 et seq.)1 by recording the birth
date of a customer who purchases alcohol with a credit card. We conclude the
prohibition against recordation of personal identifying information (a date of birth) in
connection with a credit card transaction does not apply to the purchase of an alcoholic
beverage under the plain language of section 1747.08, subdivisions (a) and (c)(4). We
therefore affirm the judgment of dismissal entered after an order sustaining a demurrer
without leave to amend.
ALLEGATIONS OF THE COMPLAINT
Plaintiff and appellant Mark Lewis filed a putative class action complaint for
damages for violation of the Credit Card Act. Lewis alleged that he purchased an
alcoholic beverage from defendant and respondent Jinon Corporation’s store in
September 2013, using a credit card for the purchase. Jinon’s clerk requested personal
identification information in the form of Lewis’s birth date. Lewis believed he was
required to provide the information to complete the sale and provided his birth date. The
clerk entered Lewis’s birth date into the computerized cash register.
Although Jinon was required by Business and Professions Code section 25660 to
verify that a purchaser of alcohol is not under the age of 21, there is no legal requirement
that the information be recorded under either state or federal law. Most retailers selling
alcoholic beverages do not record date of birth information. Jinon was not contractually
obligated to provide personal identifying information in order to complete a credit card
transaction.
1 All citations are to the Civil Code, unless otherwise indicated.
2
DEMURRER, RESPONSE, REPLY, AND RULING
Demurrer by Jinon
Jinon’s demurrer acknowledged that the Credit Card Act prohibits (1) requesting
or requiring a purchaser to write any personal identifying information on the credit card
transaction form “or otherwise,” and (2) requesting or requiring a purchaser to provide
personal identifying information which is recorded upon the credit card transaction form
“or otherwise.” (§1747.08, subd. (a).) Jinon argued that subdivision (a) of section
1747.08 specifically exempts from its reach transactions described in subdivision (c) of
the statute. Thus, the prohibitions in subdivision (a) do not apply where personal
information is required for a special purpose incidental but related to the credit card
transaction. (Id. at subd. (c)(4).) Jinon asserted that a special purpose existed in this
transaction because Business and Professions Code section 25660 required it to verify
that Lewis was not under the age of 21. For this reason, Jinon contended that Lewis’s
credit card transaction was exempt from the restrictions against recording personal
identifying information in subdivision (a) of section 1747.08.
Response by Lewis
Lewis responded that section 1747.08 is a remedial statute that should be liberally
construed. A person’s birth date is personal identifying information covered by the
Credit Card Act. Lewis argued that an exception to section 1747.08, subdivision (a),
applies when the retailer is obligated by state or federal law to collect and record person
identification information. (§ 1747.08, subd. (c)(3)(C).) While Lewis conceded that
Jinon was required to verify age, it was not required to record a purchaser’s birth date.
Lewis further argued that the exception relied upon by Jinon—found in section 1747.08,
subdivision (c)(4)—must be read in conjunction with subdivision (d) of the statute, which
allows a business to require a cardholder to provide reasonable forms of identification,
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provided that the personal identifying information is not written or recorded. Lewis
reasoned that Jinon could have verified his date of birth without recording it on the cash
register. Finally, Lewis argued that his birth date could have been recorded had he paid
in cash, but once it became clear that he was going to pay by credit card, no personal
identifying information could be recorded under section 1747.08, subdivision (a)(2).
Reply by Jinon
Jinon replied that Lewis’s date of birth was obtained for a special purpose under
the exception found in section 1747.08, subdivision (c)(4). The prohibition against
recording personal identifying information in subdivision (a) of section 1747.08 is
expressly exempted when a special purpose exists as defined in subdivision (c)(4).
Lewis’s reliance on subdivision (d) of the statute is misplaced, as it merely protects a
business from fraud by allowing it to verify identity in a credit card transaction, but it
does not purport to define the scope of the statutory exemptions.
Ruling of the Trial Court
The trial court sustained the demurrer without leave to amend. The court rejected
Lewis’s reliance on subdivision (d) of section 1747.08, as Jinon was relying on the
“special purpose” exemption in subdivision (c)(4). The special purpose exemption
applies to the alleged transaction due to the risk of tort liability and license suspension or
revocation for sale to an underage person. Jinon was entitled to protect itself from these
risks by recording birth dates of credit card purchasers as incidental to the sale of alcohol.
DISCUSSION
Lewis argues that an exception to section 1747.08, subdivision (a)(2) is triggered
when the retailer is obligated to collect and record personal identifying information by
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state or federal law, citing subdivision (c)(3)(C). Lewis reasons that while Jinon is
required to obtain proof of age in connection with sales of alcoholic beverages, there is
no requirement in state or federal law that Jinon record the purchaser’s date of birth.
Lewis further argues that it cannot be determined at the demurrer stage whether recording
the purchaser’s date of birth is a special purpose incidental but related to the credit card
transaction for the sale of alcohol. Finally, Lewis contends that Jinon was free to
examine Lewis’s identification information for purposes of the sale, but was not entitled
to record it under subdivision (d) of section 1747.08. We disagree with these
contentions.
Standard of Review
“Because we are reviewing the sustaining of a demurrer, we assume as true all fact
alleged in the complaint. (Sheehan v. San Francisco 49ers, Ltd. (2009) 45 Cal. 4th 992,
996.)” (Pineda v. Williams-Sonoma Stores, Inc. (2011) 51 Cal. 4th 524, 528 (Pineda).)
The issues presented on appeal involve interpretation of the Credit Card Act. “We
independently review questions of statutory construction. (Imperial Merchant Services,
Inc. v. Hunt (2009) 47 Cal. 4th 381, 387.) In doing so, we look first to the words of a
statute, ‘because they generally provide the most reliable indicator of legislative intent.’
(Hsu v. Abbara (1995) 9 Cal. 4th 863, 871.) We give the words their usual and ordinary
meaning (Lungren v. Deukmejian (1988) 45 Cal. 3d 727, 735), while construing them in
light of the statute as a whole and the statute’s purpose (Walker v. Superior Court (1988)
47 Cal. 3d 112, 124).” (Pineda, supra, 51 Cal.4th at pp. 529-530.)
The Credit Card Act
The Credit Card Act is “‘designed to promote consumer protection.’ (Florez v.
Linens ‘N Things, Inc. (2003) 108 Cal. App. 4th 447, 450 [].) One of its provisions,
section 1747.08, prohibits businesses from requesting that cardholders provide ‘personal
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identification information’ during credit card transactions, and then recording that
information. (Civ. Code, § 1747.08, subd. (a)(2).)”2 (Pineda, supra, 51 Cal.4th at p.
527, fn. omitted.)
“Subdivision (b) defines personal identification information as ‘information
concerning the cardholder . . . including, but not limited to, the cardholder’s address and
telephone number.’ (§ 1747.08, subd. (b), italics added.) ‘Concerning’ is a broad term
meaning ‘pertaining to; regarding; having relation to; [or] respecting . . . .’ (Webster’s
New Internat. Dict. (2d ed.1941) p. 552.)” (Pineda, supra, 51 Cal.4th at p. 531.) Pineda
held that a cardholder's ZIP code “is certainly information that pertains to or regards the
cardholder.” (Ibid.)
Transactions identified in subdivision (c) of section 1747.08 are expressly exempt
from the prohibitions of the Credit Card Act. (§ 1747.08, subd. (a) [the stature applies
“Except as provided in subdivision (c)”].) As relevant here, subdivision (c) provides that
“Subdivision (a) does not apply in the following instances : . . . . [¶] (4) If personal
identification information is required for a special purpose incidental but related to the
individual credit card transaction, including, but not limited to, information relating to
shipping, delivery, servicing, or installation of the purchased merchandise, or for special
orders.”
2 Section 1747.08 provides in pertinent part as follows: “(a) Except as provided in
subdivision (c), no person, firm, partnership, association, or corporation that accepts
credit cards for the transaction of business shall do any of the following:
“(1) Request, or require as a condition to accepting the credit card as payment in
full or in part for goods or services, the cardholder to write any personal identification
information upon the credit card transaction form or otherwise.
“(2) Request, 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, which the person, firm, partnership, association, or corporation accepting the
credit card writes, causes to be written, or otherwise records upon the credit card
transaction form or otherwise.”
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Application of Civil Code Section 1747.08 to Credit Card Transactions for the
Purchase of Alcohol
The statutory basis identified by Lewis as prohibiting recording personal
identifying information during a credit card transaction is subdivision (a) of section
1747.08. The prohibitions in subdivision (a) expressly do not apply to the situations set
forth in subdivision (c). Thus, subdivision (a) does not prohibit the recording of personal
identifying information where subdivision (c) is applicable.
Lewis focuses on subdivision (c)(3)(C),3 arguing that the exemption to subdivision
(a) does not apply because Jinon was not “obligated to collect and record the personal
identification information by federal or state law or regulation.” Lewis reads subdivision
(c) too narrowly and in a manner inconsistent with the plain language of the statute.
Accepting the allegation that Jinon was not required by state or federal law to
record Lewis’s date of birth, that circumstance establishes nothing more than the
exemption in subdivision (c)(3)(C) does not apply. Jinon has never contended that this
particular exemption is applicable. Lewis overlooks that the exemptions set forth in
subdivision (c) are independent of each other, because as the plain language of the state
indicates, “Subdivision (a) does not apply in the following instances. (Emphasis added.)”
Subdivision (c) sets forth the various exemptions in four separately numbered paragraphs,
each independent of the other exemptions.
We therefore turn to Lewis’s contention that the special purpose exemption set
forth in section 1747.08, subdivision (c)(4), cannot be applied at the demurrer stage
because of the absence of a factual record. Lewis reasons that a factual record, at least in
the form of a motion for summary judgment, is necessary to demonstrate application of
3 Section 1747.08, subdivision (c)(3)(C) provides that subdivision (a) does not
apply if: “(C) The person, firm, partnership, association, or corporation accepting the
credit card is obligated to collect and record the personal identification information by
federal or state law or regulation.”
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the special purpose exemption. (See Flores v. Chevron U.S.A., Inc. (2013) 217
Cal. App. 4th 337, 342-343 (Flores) [affirming grant of summary judgment where
defendant established that recording the zip code was required to prevent fraud in the
purchase of gasoline by credit card].) While it is correct that the procedural posture in
Flores was an appeal following summary judgment, the case does not discuss or stand for
the proposition that a special purpose as defined in subdivision (c)(4) cannot be
established at the demurrer stage.
We are satisfied, as a matter of law, that proof of age is a special purpose
incidental but related to the purchase of alcohol. The sale of alcoholic beverages is
heavily regulated by the state. It is a misdemeanor to sell any alcoholic beverage to any
person under 21 years of age. (Bus. & Prof. Code, § 25658, subd. (a).) A licensee may
refuse to sell or serve alcoholic beverages to any person unable to produce adequate
written evidence that he or she is over the age of 21 years. (Bus. & Prof. Code, § 25659.)
Proof that a licensee demanded, was shown, and acted in reliance upon bona fide
evidence of proof of age is a defense to a criminal prosecution or suspension or
revocation of any license based upon sale of alcoholic beverage to a minor. (Bus. & Prof.
Code, § 25660.)
The pervasive regulation of the sale of alcoholic beverages, and in particular the
prohibition against sale to a person under the age of 21, demonstrates that obtaining a
purchaser’s date of birth is a special purpose incidental but related to the credit card
transaction. The exact same information could be entered in the cash register in a cash
transaction for the same purpose. Jinon’s decision to record the date of birth in the cash
register created a record of the age of a purchaser of alcohol, which would constitute a
defense to a criminal or licensing action alleging sale to an underage person. (Bus. &
Prof. Code, § 25660.) The trial court correctly determined that the exemption in section
1747.08, subdivision (c)(4), applies in this case.
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We reject Lewis’s argument that 1747.08, subdivision (d),4 demonstrates that
Jinon was not entitled to record Lewis’s date of birth as part of the credit card transaction.
“[T]he Legislature in 1991 ‘added a provision (former § 1747.8, subd. (d)) . . .
substantially similar to the subdivision (d) now in section 1747.08, permitting businesses
to require cardholders to provide identification so long as none of the information
contained thereon was recorded.’ (Pineda, supra, 51 Cal.4th at p. 535, citing Stats. 1991,
ch. 1089, § 2, p. 5042.)” (Apple Inc. v. Superior Court (2013) 56 Cal. 4th 128, 140.) “As
previously noted, section 1747.08[, subdivision] (d) makes clear that nothing in the
statute prevents retailers from requiring customers to provide positive identification—
‘which may include a driver’s license or a California state identification card, or where
one of these is not available, another form of photo identification’—as a condition of
accepting a credit card as payment.” (Ibid.) Subdivision (d) is unrelated to the
exemptions permitted under subdivisions (a) and (c), because as our Supreme Court has
described it, subdivision (d) is an anti-fraud provision that operates “separate and apart”
from subdivision (c). (Id. at p. 141.) In other words, the exemptions permitted in
subdivision (c), including subdivision (c)(4) in this case, apply without regard to the anti-
fraud provision in subdivision (d).
4 Section 1747.08, subdivision (d), provides as follows: “(d) This section does not
prohibit any person, firm, partnership, association, or corporation from requiring the
cardholder, as a condition to accepting the credit card as payment in full or in part for
goods or services, to provide reasonable forms of positive identification, which may
include a driver’s license or a California state identification card, or where one of these is
not available, another form of photo identification, provided that none of the information
contained thereon is written or recorded on the credit card transaction form or otherwise.
If the cardholder pays for the transaction with a credit card number and does not make the
credit card available upon request to verify the number, the cardholder’s driver’s license
number or identification card number may be recorded on the credit card transaction form
or otherwise.”
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DISPOSTION
The judgment is affirmed. Jinon Corporation is awarded costs on appeal.
KRIEGLER, J.
We concur:
TURNER, P. J.
MOSK, J.
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