John Sinibaldi v. Redbox Automated Retail

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOHN SINIBALDI and NICOLLE No. 12-55234
DISIMONE, individually and on
behalf of all others similarly D.C. No.
situated, 2:11-cv-02936-
Plaintiffs-Appellants, JHN-E
v.
OPINION
REDBOX AUTOMATED RETAIL, LLC,
a Delaware limited liability
company,
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
Jacqueline H. Nguyen, District Judge, Presiding
Argued and Submitted
January 8, 2014—Pasadena, California
Filed June 6, 2014
Before: Alex Kozinski, Chief Judge, and Stephen Reinhardt
and Richard R. Clifton, Circuit Judges.
Opinion by Judge Clifton;
Dissent by Judge Reinhardt
2 SINIBALDI V. REDBOX
SUMMARY*
California’s Song-Beverly Credit Card Act
The panel affirmed the district court’s Fed. R. Civ. P.
12(b)(6) dismissal of a putative class action alleging that
Redbox Automated Retail, LLC, violated California’s Song-
Beverly Credit Card Act of 1971.
The Song-Beverly Credit Card Act prohibits retailers
from collecting personal identification information in
connection with credit card transactions. Redbox operates
self-service kiosks, and it requires customers who obtain
movie or video game discs from the kiosks to provide their
ZIP codes.
The panel held that Redbox’s alleged conduct did not
violate the Act. The panel concluded that Redbox’s
collection of personal information in connection with the
kiosk rental transaction fell outside the reach of § 1747.08(a)
of the Act, because it fell within the exception of Cal. Civ.
Code § 1747.08(c)(1) where the customer’s credit card was
used as a deposit to secure payment in the event of loss or late
return.
Judge Reinhardt dissented because he did not believe that
the Redbox credit card transactions fit within the exception at
issue in Cal. Civ. Code § 1747.08(c)(1).
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
SINIBALDI V. REDBOX 3
COUNSEL
Christopher P. Ridout, Devon M. Lyon, and Caleb LH
Marker, Ridout Lyon + Ottoson, LLP, Long Beach,
California, for Plaintiff-Appellant Nicolle DiSimone, and
Daniel H. Qualls, Robin G. Workman (argued), and Aviva N.
Roller, Qualls & Workman, LLP, San Francisco, California,
for Plaintiff-Appellant John Sinibaldi.
Donald J. Kula, Perkins Coie, LLP, Los Angeles, California,
and Thomas L. Boeder, Amanda J. Beane, Eric D. Miller
(argued), and Ryan T. Mrazik, Perkins Coie, LLP, Seattle,
Washington, for Defendant-Appellee.
OPINION
CLIFTON, Circuit Judge:
Plaintiffs John Sinibaldi and Nicolle DiSimone appeal the
dismissal of a putative class action alleging violations of
California’s Song-Beverly Credit Card Act of 1971, which
prohibits retailers from collecting personal identification
information in connection with credit card transactions. See
Cal. Civ. Code § 1747.08. Defendant Redbox Automated
Retail, LLC operates self-service kiosks throughout
California and elsewhere in the United States. Customers use
the kiosks to rent movies and video games, using credit and
debit cards to pay the charges. As part of the process,
Redbox requires customers who obtain discs from the kiosks
to provide their ZIP codes. Plaintiffs allege that, by imposing
that requirement on customers using credit cards in
California, Redbox has violated the Act.
4 SINIBALDI V. REDBOX
We conclude that Redbox’s alleged conduct does not
violate the Act. The statute exempts certain transactions,
including those where “the credit card is being used as a
deposit to secure payment in the event of default, loss,
damage, or similar occurrence.” Cal. Civ. Code
§ 1747.08(c)(1). The Redbox transaction fits within that
exception. We affirm the dismissal of the action.
I. Background
Redbox owns and operates more than 30,000 kiosks
nationwide. The kiosks are usually located outside retail
locations, including grocery stores, drug stores, and fast-food
restaurants. Living up to the name, each Redbox kiosk is
bright red. It can hold approximately 630 discs representing
200 unique movie titles or video games. No employee is
present to tend to the kiosk on an ongoing basis. The
transaction with the customer is fully automated.
To rent a movie or game at a Redbox kiosk, the customer
uses a touch screen to select from the titles displayed. After
selecting one or more titles and proceeding to the check-out
screen, the customer is prompted to swipe a credit or debit
card through a built-in card reader. The kiosk screen then
displays the following statement: “For security reasons,
please enter the ZIP code associated with your card’s billing
address, and press ‘ENTER.’” After the customer enters a 5-
digit number and the transaction representing one day’s worth
of charges clears, the kiosk vends the selected titles.1
1
According to the complaint, it is not necessary to enter the ZIP code
associated with the card’s billing address for the transaction to clear. If
the customer enters a random string of 5 digits, the kiosk will still accept
the card and vend the disc. Plaintiffs therefore allege that the collection
SINIBALDI V. REDBOX 5
Most DVD rentals cost $1 per day. At the time of the
rental, the customer’s card is charged the fee for one day. A
customer may keep a rented disc longer at the same daily rate.
When the customer returns the disc, the customer’s credit
card is charged for any additional days beyond the initial one-
day rental period, up to a maximum of $25 for DVDs, $34.50
for Blu-ray discs, and $60 for video games. If the disc is not
returned before the maximum fee is reached, the customer’s
credit card is charged that maximum fee. These additional
charges are processed automatically from the credit card
information on file. The customer is not required to swipe a
credit card or enter a ZIP code upon returning rentals.
Based on these facts, Plaintiffs allege that Redbox
violated § 1747.08 of the Act by requesting personal
identification information in connection with a credit card
transaction. Section 1747.08(a) provides that “no . . .
corporation 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.”2 The California Supreme Court
of personal information in the form of a ZIP code is not for security
purposes but rather for market research: specifically, to determine where
to locate future Redbox kiosks. We accept this allegation as true but do
not discuss its implications because our holding does not depend on what
Redbox does with the information it collects.
2
The full text reads:
(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:
6 SINIBALDI V. REDBOX
has held that a ZIP code is personal identification information
within the meaning of § 1747.08. Pineda v. Williams-
Sonoma Stores, Inc., 246 P.3d 612 (Cal. 2011). Redbox’s
request for a ZIP code prior to the completion of the rental
transaction is thus a request for personal identification
information within the meaning of the Act.
The district court held that the Act does not apply to
Redbox’s unmanned kiosk transactions because, in light of
the potential for fraud in such transactions, the legislature
could not have meant for them to fall within the statutory
privacy protection scheme. Mehrens v. Redbox Automated
Retail LLC, 2012 WL 77220 at *3–4 (C.D. Cal. Jan. 6, 2012)
(citing Saulic v. Symantec Corp., 596 F. Supp. 2d 1323,
1333–34 (C.D. Cal. 2009)). See also Apple, Inc. v. Superior
(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 . . .
corporation accepting the credit card writes, causes
to be written, or otherwise records upon the credit
card transaction form or otherwise.
(3) Utilize, in any credit card transaction, a credit
card form which contains preprinted spaces
specifically designated for filling in any personal
identification information of the cardholder.
Cal. Civ. Code § 1747.08(a). We take no position as to whether Redbox’s
alleged conduct falls under any or all subsections of § 1747.08(a).
SINIBALDI V. REDBOX 7
Court, 292 P.3d 883, 884 (Cal. 2013) (holding that § 1747.08
does not apply to online purchases of electronically
downloadable products).
On appeal, Plaintiffs challenge the district court’s
holding, contending that § 1747.08 applies to Redbox kiosk
transactions because they are in-person, card-present
transactions that present less risk of fraud than online
purchases. We decline to decide that question. Instead, we
affirm on an alternative ground: the statute’s rental deposit
exception.
II. Discussion
We review dismissal under Rule 12(b)(6) de novo.
Metzler Inv. GMBH v. Corinthian Colleges, Inc., 540 F.3d
1049, 1061 (9th Cir. 2008). For this purpose, we accept
factual allegations in the complaint as true. Tellabs, Inc. v.
Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). If
support exists in the record, a dismissal may be affirmed on
any proper ground. Johnson v. Riverside Healthcare Sys.,
LP, 534 F.3d 1116, 1121 (9th Cir. 2008).
The Act, in Section § 1747.08(a) of the California Civil
Code, prohibits the collection of personal information in
connection with a credit card transaction, “[e]xcept as
provided in subdivision (c).” Section 1747.08(c), in turn,
specifies that the prohibition in subdivision (a) does not apply
in certain instances.3 One of those instances is “[i]f the credit
3
The full text of the subdivision reads:
(c) Subdivision (a) does not apply in the following
instances:
8 SINIBALDI V. REDBOX
card is being used as a deposit to secure payment in the event
of default, loss, damage, or other similar occurrence.” Cal.
Civ. Code § 1747.08(c)(1).
(1) If the credit card is being used as a deposit to
secure payment in the event of default, loss,
damage, or other similar occurrence.
(2) Cash advance transactions.
(3) If any of the following applies:
(A) The person, firm, partnership, association,
or corporation accepting the credit card is
contractually obligated to provide personal
identification information in order to complete
the credit card transaction.
(B) The person, firm, partnership, association,
or corporation accepting the credit card in a
sales transaction at a retail motor fuel
dispenser or retail motor fuel payment island
automated cashier uses the Zip Code
information solely for prevention of fraud,
theft, or identity theft.
(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.
(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.
Cal. Civ. Code § 1747.08(c)(1).
SINIBALDI V. REDBOX 9
The California Supreme Court has not addressed the
scope of that exception. “When the state’s highest court has
not squarely addressed an issue, we must predict how [it]
would decide the issue using intermediate appellate court
decisions, decisions from other jurisdictions, statutes,
treatises and restatements for guidance.” Alliance for Prop.
Rights & Fiscal Responsibility v. City of Idaho Falls,
742 F.3d 1100, 1102 (9th Cir. 2013) (internal quotation marks
omitted). As we are aware of no intermediate appellate
decisions, decisions from other jurisdictions, treatises, or
restatements interpreting the rental deposit exception, we
focus on the language of the statute itself to predict how the
California Supreme Court would decide the issue, and
conclude that it would hold that the exception applies here.
When a customer swipes his credit card at a Redbox
kiosk, Redbox immediately charges the credit card for the
first day’s rental. Redbox also stores the credit card
information. The credit card information permits Redbox to
collect the additional amount owed should the customer
choose to keep the movie or game for additional days or if it
is never returned. In other words, the credit card is “being
used as a deposit to secure payment in the event of default,
loss, damage, or other similar occurrence.” We conclude that
the California Supreme Court would hold Redbox’s
collection of personal identification information in
connection with kiosk rental transactions exempt under
§ 1747.08(c)(1), if that court held such transactions were
covered under § 1747.08(a) in the first place.
Plaintiffs argue that the Redbox transaction does not
involve a “deposit” by defining the term “deposit” to mean “a
prospective, contingent payment of money or value to a seller
of goods or services to secure against some potential loss.”
10 SINIBALDI V. REDBOX
To fit within § 1747.08(c)(1), Plaintiffs contend, Redbox
would have to charge the credit card a certain amount as a
“deposit” in advance and then credit any excess funds back
when the customer returns the DVD. If Redbox did that,
plaintiffs acknowledge, “an actual deposit would have
‘secure[d] payment in the event of default, loss, damage.’”
Because that is not what Redbox does, according to Plaintiffs,
the credit card is not being used by Redbox as a deposit.
We reject Plaintiffs’ artificially narrow definition of using
a credit card as a deposit to secure payment. Vendors such as
rental car companies, hotels, or Redbox, may use a
customer’s credit card to secure payment in multiple ways.
One way would be in the manner acknowledged by Plaintiffs
to involve a deposit—charging the credit card a certain
amount in advance and refunding any excess when the
product is returned or the hotel room is vacated. But a credit
card can provide security whether or not money is drawn
from the credit card account in advance. A vendor can also
put a hold on part of the credit limit available under the credit
card, by “preauthorizing” a charge of that amount without
actually drawing those funds. A third variation, the one used
by Redbox, is simply to hold the credit card information on
file with the authorization to charge the card for any
additional amounts owing later. The different methods might
vary in their transaction costs, level of security, and the
amount of remaining credit balance available to the customer,
but in each instance the credit card is “being used as a deposit
to secure payment in the event of default, loss, damage, or
other similar occurrence.” All the methods fall within the
SINIBALDI V. REDBOX 11
language of the statutory exclusion, both logically and
literally.4
The dictionary definition of “deposit” also supports a
broader reading than that which Plaintiffs propose. That term
is defined in Webster’s Third New International Dictionary
(2002), for example, to include “something given as a pledge
or security.”5 The credit card of the Redbox customer is
given as a pledge or security, whether or not any funds are
actually drawn by Redbox from the customer’s account in
advance. Plaintiffs cite the online Merriam-Webster
Dictionary, defining “deposit” as “something placed for
safekeeping: as a) money deposited in a bank or b) money
given as a pledge or down payment.”6 Even under that
definition, though, the use of a credit card may qualify as
“something placed for safekeeping” or “given as a pledge.”
4
Indeed, if a transfer of money were required to constitute a “deposit,”
then it would arguably be the money drawn in advance that served as the
deposit, not the credit card. The Redbox method might fit the language of
the statutory exception more perfectly than the form of transaction
acknowledged by Plaintiffs to fit within the statutory exception because
Redbox is counting on the credit card to secure payment, not on money
that it has already debited from the customer’s credit card account.
5
Similarly, the Oxford American English Dictionary defines “deposit”
as “a sum payable as a first installment on the purchase of something or
as a pledge for a contract, the balance being payable later” (emphasis
added). See http://www.oxforddictionaries.com/us/definition/
american_english/deposit (last visited April 11, 2014).
6
The citation provided by Plaintiffs is to Merriam-Webster, “Deposit,”
available at http://www.merriamwebster.com/dictionary/deposit (last
visited June 28, 2013).
12 SINIBALDI V. REDBOX
Plaintiffs cite additional illustrations provided along with
that definition by online Merriam-Webster Dictionary and
argue that “[e]ach definition and example involved
movement, a transfer of some kind.” But that is not
necessarily the case. One of the illustrations cited by
Plaintiffs is: “The rental car company requires a deposit for
drivers under the age of 25.” When a rental car customer
rents a car, the customer pledges the credit limit on his or her
credit card as a deposit. That is true even if the rental car
company does not actually draw money from the credit card
account in advance. Even in instances where the company
places a hold on some portion of the customer’s credit limit
under the card, the hold does not entail an actual transfer of
funds. Moreover, the actual charges may be more than the
hold amount should, for example, the car be damaged or
never returned. As long as the company can draw upon the
customer’s credit line later if necessary, the associated credit
card is serving to provide security to the rental car company.
When a Redbox customer swipes a credit card at the time
of rental, the customer promises to be responsible for
additional charges that might be owed if the disc is returned
late or not at all. That promise is secured with the credit card.
Redbox will use the credit card information already provided
by the customer to charge the customer’s credit card account
for the balance owed. In both literal and practical terms, the
credit card serves as security.
Plaintiffs argue that Redbox might not always succeed in
drawing upon a customer’s credit card later. They posit, for
example, the case of a customer who uses a credit card with
only $1.00 in available credit remaining to rent a DVD,
noting that Redbox would be unable to charge anything
further to that card in the future. Even in that rare scenario,
SINIBALDI V. REDBOX 13
Redbox could charge something later if the customer made a
payment to bring down the outstanding credit card debt in the
meantime. More importantly, something deposited to secure
an obligation is pledged even if it turns out that it does not
have enough value to cover the obligation. A watch
presented to a pawn shop might be incorrectly valued and
turn out not to be worth the money paid out, or could turn out
to be stolen and be subsequently reclaimed by the rightful
owner, but that doesn’t mean that the watch was never
deposited at the pawn shop in the first place. The same is true
for Plaintiffs’ scenario: even if Redbox might not ultimately
be able to collect from the customer’s credit card in the
future, the credit card is being used as a deposit.
There is no reason to think that the legislature, in enacting
the statutory exception, limited it only to transactions where
money is actually drawn from the customer’s credit card
account in advance by the retailer, the form acknowledged by
Plaintiffs to fit within the definition. We see no reason to
differentiate between particular forms of credit card deposits,
whether they be a current transfer, a hold, or merely the
ability to run a charge in the future. Nothing indicates that
the legislature intended such a distinction, and Plaintiffs have
not provided a logical explanation for such a distinction. We
decline to read it into the statute.
The dissenting opinion presents an alternative theory for
why the rental deposit exception should not apply to the
Redbox transaction, but it is no more persuasive than the
argument offered by Plaintiffs. That theory is that, even if the
credit card is used as a deposit, none of the later charges by
Redbox to the customer’s credit card qualify under the
statutory exception because the various contingencies are all
part of the primary agreement between the customer and
14 SINIBALDI V. REDBOX
Redbox. But the statutory exception is not limited to a
deposit to secure payment “in the event of default.” By its
terms, it also applies “in the event of . . . loss, damage, or
similar occurrence.” No breach of the agreement between the
customer and Redbox is required for the exception to apply.
Upon renting a DVD from Redbox, the customer agrees
to pay the fee for one day, and that is all that Redbox initially
charges the customer’s credit card. If the customer does not
return the DVD after the first day, for whatever reason, it is
effectively lost for each additional day because it is not
available to be rented to someone else. That the additional
charges, including the maximum cap, may be spelled out in
the Redbox agreement does not change that fact. It is not
beyond the contemplation of agreements between the parties
in other rental contexts—for a car, a hotel room, or
whatever—that a customer will be held responsible for loss
or damage or similar additional charges. Rental agreements
routinely provide that the renter is responsible for those
charges. The credit card provided by the customer
necessarily serves to secure any additional sum that might
become owing. To say that additional charges are not
covered because they might be contemplated in the agreement
between the parties is to read the exception so narrowly as to
make it disappear.
III. Conclusion
We hold that Redbox’s collection of personal information
in connection with a kiosk rental transaction falls outside the
reach of § 1747.08(a) of California’s Song-Beverly Credit
Card Act because the customer’s credit card is used as a
deposit to secure payment in the event of loss or late return.
SINIBALDI V. REDBOX 15
Because the transaction is exempted under § 1747.08(c)(1),
we affirm the dismissal of the action.
AFFIRMED.
REINHARDT, Circuit Judge, dissenting.
This case presents a question of statutory interpretation of
a section of California’s Song-Beverly Credit Card Act, a
consumer protection statute intended to prevent merchants
from demanding personal information from consumers as a
condition of their ability to pay by credit card. Florez v.
Linens ‘N Things, Inc., 108 Cal. App. 4th 447, 452 (2003).
The California Legislature deemed that unless such
information, which includes addresses, phone numbers, and
ZIP codes, was necessary to complete the transaction, there
was no legitimate purpose to its acquisition. Absher v.
AutoZone, Inc., 164 Cal. App. 4th 332, 345 (2008).
Accordingly, it enacted section 1747.08 of the California
Civil Code, which prohibits the collection of personal
information in connection with a credit card transaction, with
some limited exceptions, including the exception at issue
here: The prohibition does not apply “[i]f the credit card is
being used as a deposit to secure payment in the event of
default, loss, damage, or other similar occurrence.” Cal. Civ.
Code § 1747.08(c)(1).
As the majority states, we have no guidance from the
California Supreme Court, the California appellate courts,
courts in other jurisdictions, treatises, or restatements to help
us interpret this exception specifically. We are guided,
however, by the rule that “courts should liberally construe
16 SINIBALDI V. REDBOX
remedial statutes in favor of their protective purpose, which,
in the case of section 1747.08, includes addressing the misuse
of personal identification information for, inter alia,
marketing purposes.” Pineda v. Williams-Sonoma Stores,
Inc., 51 Cal. 4th 524, 532 (2011) (internal citations and
quotation marks omitted).
The statute before us is remedial because its “overriding
purpose” was to protect consumer privacy by preventing
retailers from acquiring and using “additional personal
information for their own business purposes—for example, to
build mailing and telephone lists which they can subsequently
use for their own in-house marketing efforts, or sell to direct-
mail or tele-marketing specialists, or to others.” Id. at 534–35
(internal citation and quotation marks omitted). A ZIP code
is protected personal information because it is “both
unnecessary to the transaction and can be used, together with
the cardholder’s name, to locate his or her full address,” id. at
532, for those very purposes. Plaintiffs have pleaded that
Redbox uses the ZIP codes it collects not for fraud
prevention, but for marketing purposes, precisely the type of
conduct the Act was intended to prevent.
To allow merchants to obtain the personal information
when essential to the transaction itself, the Legislature
provided several narrow exceptions including the exception
at issue here. Considering only the plain language of the
statute, I accept, for the sake of argument, the majority’s
claim that according to the dictionary definition of “deposit,”
the credit card in these transactions can be understood to be
“used as a deposit to secure payment.” Cal. Civ. Code
§ 1747.08(c)(1). I cannot agree, however, that even assuming
the credit card is used as a deposit, the deposit is being used
to secure that payment “in the event of default, loss, damage,
SINIBALDI V. REDBOX 17
or similar occurrence,” as required by the statutory exception.
Id. Instead, in my view, the credit card is being used, as
pleaded in the complaint, to secure the charges that constitute
the primary agreement between the customer and Redbox,
charges that are therefore unrelated to “default, loss, damage,
or similar occurrence.”
In fact, under Redbox’s model as pleaded, there is no
apparent way for a customer to incur charges on his credit
card of record for default, loss, or damage.1 “Typically, the
per unit DVD rental price at a Redbox kiosk is a flat fee plus
tax for one night and, if the consumer chooses to keep the
DVD movie for additional nights, the consumer is charged for
each additional night at the same flat fee per night.” As
Redbox states in its brief, “some customers do not return the
DVD at all, whether because they lost it, damaged it, or
simply decided to retain it for an extended period of time. . . .
[T]he transaction functions as . . . a deposit for the continued
rental of the DVD until it is returned, or until the maximum
rental fee is reached.” On the Redbox model, a customer who
melts a DVD in his car pays the same amount as one who
chooses to rent the DVD for 25 nights, or one who chooses to
rent to own: all three customers are charged the maximum fee
of $25.00, and no customer is charged more. Because of this
model, a customer who destroys or loses a DVD causes no
1
The only way for a customer to default would be to pay the initial fee
with a credit card that expired or was cancelled before the final charges
were placed on it. In such cases, Redbox “reserve[s] the right to charge
. . . interest for overdue charges at the then-highest current rate allowable
on Illinois contracts” and the right to seek collection and attorney’s fees.
If the information from a second credit card were retained for this purpose,
it would likely fall within the deposit exception. However, so long as the
first credit card is valid, it will never be so used.
18 SINIBALDI V. REDBOX
loss or damage to Redbox, and every payment secured by the
credit card is part of the anticipated transaction.
The majority’s error stems from its mischaracterization of
the Redbox transaction as a one-day rental followed by a
series of penalties imposed if the customer fails to return the
DVD after a single day. Instead, the Redbox customer is
agreeing to rent the DVD at a fixed daily fee with a maximum
total charge of $25.00 for 25 days of rental. The maximum
charge also constitutes the purchase price, and when the
customer has paid that amount he has acquired ownership of
the DVD. The customer thus authorizes Redbox to use his
credit card for future payments that are wholly different from
“default, loss, [or] damage.” To say, as the majority does,
that after the initial charge to the credit card, every additional
charge, no matter its nature, is a charge for “default, loss,
damage, or similar occurrence” is to stretch the exception
well beyond its plain language and legislative intent.
Thus, even assuming that the majority is correct that the
credit card transaction fits the definition of a deposit and
meets that portion of the statutory requirement, affording the
statute the liberal construction that favors its consumer
protective purposes, it seems clear that Plaintiffs have met
their burden of pleading that this statutory exception does not
apply. G.H.I.I. v. MTS, Inc., 147 Cal. App. 3d 256, 273 (Ct.
App. 1983) (internal citation and quotation marks omitted)
(“Where a party relies on a statute which contains a limitation
in the clause creating and defining the liability, as here, such
limitation must be negatived in the complaint”). Plaintiffs
have pleaded facts that, if true, place the transaction outside
the exception’s plain terms and establish that Redbox uses the
ZIP codes for marketing purposes. I therefore disagree that
the district court’s decision can be affirmed on this basis.
SINIBALDI V. REDBOX 19
The majority does not rely for its holding on the basis on
which the district court dismissed the action, namely, that the
Song-Beverly Act does not apply to Redbox kiosk
transactions. The majority avoids this issue for good reason,
as I would reverse the dismissal of the action on that ground
as well. Redbox kiosk transactions are more similar to pay-
at-the-pump transactions, covered by the Act, than to online
transactions, which are not covered. See Apple, Inc. v.
Superior Court, 56 Cal. 4th 128, 144 (Cal. 2013). Nor does
the majority rely on another statutory exception, which allows
for the collection of personal information when that
information “is required for a special purpose incidental but
related to the individual credit card transaction.” Cal Civ.
Code § 1747.08 (b)(4). This exception cannot be the basis for
dismissing the action because Plaintiffs pleaded that
Redbox’s sole purpose in obtaining the ZIP code is
marketing, rendering the purpose unrelated to the credit card
transaction.
I would reverse. Accordingly I dissent.