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California Retailers in Hot Water

Last week, the California Supreme Court ruled that it was illegal for retailers to request customers’ ZIP codes to “complete” the sales transaction. The major retailers who were named in the lawsuit included Bed, Bath & Beyond, Victoria’s Secret, Wal-Mart, and Crate and Barrel, to name a few. Williams-Sonoma was the defendant in the case up for appeal in the California Supreme Court. The penalties the companies are facing are $250 for the first offense and $1,000 for each additional offense, which could expose the companies to millions of dollars in liability.

It is interesting to see how the battle lines are being drawn. Plaintiffs’ attorneys are claiming this is the first step in a “slippery slope” that will lead to “Big Brother” knowing everything about you one day, while the retailers’ in-house counsel are claiming they were only asking for the information for “marketing reasons.” Furthermore, they are asking the court to only enforce this law moving forward and not allow it to be enforced retroactively. If the court rules that the law can be enforced retroactively, this will lead to several “class-action” lawsuits that may affect the bottom line for these companies and, in turn, may affect your wallet when the companies pass along the cost to its customers.

Do you agree with the court that this is an invasion of privacy? Or do you disagree and think that this will just lead to frivolous lawsuits being filed in California?

The Orange County law firm of Don Ho, LLP can assist you with any legal matter.

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