George v. Guitar Ctr., Inc., B275956
| Decision Date | 02 January 2018 |
| Docket Number | B275956 |
| Court | California Court of Appeals Court of Appeals |
| Parties | JASON GEORGE et al., Plaintiffs and Appellants, v. GUITAR CENTER, INC. et al., Defendants and Respondents. |
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC462143)
APPEAL from an order of the Superior Court of Los Angeles County, John Shepard Wiley Jr., Judge. Affirmed.
Robbins Geller Rudman & Dowd, Frank J. Janecek, Jr., Christopher Collins, Susannah R. Conn, Andrew S. Love, Christopher M. Wood; Capstone Law, Jordan L. Lurie, Robert K. Friedl and Cody R. Padgett for Plaintiffs and Appellants.
Stroock & Stroock & Lavan, Steven D. Atlee and Christine E. Ellice for Defendants and Respondents.
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Jason George and Justin Hupalo, on behalf of themselves and others similarly situated (collectively plaintiffs), filed a class action complaint against Guitar Center, Inc., Guitar Center Stores, Inc., and Guitar Center Holdings, Inc. (collectively Guitar Center) alleging violations of the Song-Beverly Credit Card Act of 1971 (Act; Civ. Code, § 1747 et seq.).1 Plaintiffs challenge Guitar Center's practice of requesting and recording personal identification information when customers in its California stores pay using a credit card. Plaintiffs appeal from the denial of their class certification motion contending the trial court improperly denied the motion based on its erroneous interpretation of the statute.
Section 1747.08, subdivision (a)(2), states that merchants accepting credit cards may not "[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, 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."2 Plaintiffs allege that Guitar Center violated the statute by requesting and recording customers' personal identification information before completing their credit card transactions. Plaintiffs moved to certify a class of persons who made credit card purchases at Guitar Center stores and from whom Guitar Center requested personal identification information, or required such information as a condition to accepting a credit card payment, and recorded such information.
The trial court concluded that section 1747.08, subdivision (a)(2), prohibits merchants from requesting personal identification information if the customer would reasonably perceive the request as a condition to accepting a credit card payment. The court found that establishing liability would require individualized proof and common issues of fact or law would therefore not predominate. The court denied class certification.
Because the trial court properly construed the statute and acted within its discretion to deny class certification, we affirm the order.
Guitar Center operates retail stores selling musical instruments and equipment. George purchased merchandise from a Guitar Center store in April and May 2011 using a credit card. During the transactions the sales clerk requested and George provided his telephone number. Hupalo purchased merchandise from a Guitar Center store in April 2011 using a credit card. During the transaction the sales clerk requested and Hupalo provided his telephone number.
Guitar Center collected customers' personal identification information for marketing purposes. Guitar Center's point-of-sale computer system, known as the green screen, prompted sales clerks to enter the customer's name, zip code, and email address. Guitar Center's written policies emphasized the importance of collecting this information.
On December 9, 2011, plaintiffs filed a first amended class action complaint against Guitar Center.3 Plaintiffs allege that Guitar Center stores have a policy and practice of requesting and recording personal identification information at the cash register during credit card transactions before the transaction is completed, in violation of section 1747.08. Plaintiffs allege a single cause of action for violation of the statute, seeking civil penalties (id., subd. (e)), declaratory and injunctive relief, disgorgement, and attorney fees.
On November 30, 2012, Guitar Center filed a motion for summary adjudication.4 Guitar Center presented evidence that it had modified its point-of-sale computer system and its practices to ensure that its sales clerks requested personal identification information only after the customer had presented a credit card payment and the payment had been authorized.
On November 21, 2014, the trial court denied the motion. The court stated that section 1747.08 prohibits a retailer from collecting personal identification information only if the customer would perceive that providing the information was a condition for the retailer's acceptance of the credit card payment. Plaintiffs submitted declarations by former Guitar Center sales clerks stating that Guitar Center had instructed them to collect personal identification information from every consumer and they could bypass the order of the green screen prompts and collect the personal identification information during the course of the transaction. The court concluded, "this evidence raises a triable issue of fact about whether a typical customer would perceive Guitar Center's request for personal information as a condition for use of a credit card."
On May 29, 2015, plaintiffs filed a motion seeking the certification of a class of all persons in California who purchased merchandise at a Guitar Center retail store using a credit card from May 24, 2010 until December 6, 2011, and from whom Guitar Center requested, or required as a condition to accepting a credit card payment, the cardholder's personal identification information and caused such information to be recorded. Plaintiffs filed declarations by their counsel, George, and Hupalo, declarations by former Guitar Center associates and a former department manager, and other evidence in support of their motion.
Plaintiffs argued that a retailer violates section 1747.08 by requesting personal identification information during a credit card purchase before the customer is given a receipt at the conclusion of the transaction. Given this contention, plaintiffs argued class certification was appropriate for two alternative reasons. First, the court need not decide the specific circumstances of each transaction because the Act precludes a retailer from requesting personal identification information from a customer during the transaction. Accordingly, whether a customer perceives the request to be a condition to accepting the credit card is not relevant to whether a defendant violated the Act. Alternatively, even if customer perception were relevant, plaintiffs argued common issues of fact would predominate because the court could objectively determine whether the "request for personal identification information would have been perceived as required in order to complete a credit card transaction." Plaintiffs argued there were common issues of law and fact with respect to whether Guitar Center had violated the statute in collecting personal identification information and that class certification was appropriate.
Guitar Center argued in opposition to the motion that the proposed class was not ascertainable, common issues of law or fact did not predominate, and the named plaintiffs' claims were not typical of the class. Guitar Center argued it complied with section 1747.08 by having its sales clerks request personal identification information only after a credit card payment was authorized, and its sales clerks explained to customers the purpose of the request was to enable them to receive store news and deals, making it clear that the store's acceptance of a credit card payment was not conditioned on the customer's providing personal identification information. Because the violation of the Act "hinges on customer perception," Guitar Center argued common issues of fact did not predominate.
On January 27, 2016, the trial court conducted a hearing on the class certification motion. The court stated its tentative view that Guitar Center's liability under the statute depended on whether the customer understood that he or she need not provide an email address in order to pay by credit card. The court stated this depended on the phrasing of the sales clerk's statements made to the customer, and there was no consistency in the statements made, and on whether the credit card transaction was concluded before or after the request for an email address. The court stated that plaintiffs needed to present statistical evidence to establish liability. The court continued the hearing to allow counsel to file supplemental briefs. The court conducted another hearing on May 3, 2016, followed by an order ruling on the motion.
On May 3, 2016, the trial court filed an order denying the class certification motion. The order incorporated and adopted the court's oral tentative ruling. The order stated the merits of plaintiffs' claim depended on the proper construction of section 1747.08, subdivision (a)(2), and were enmeshed with the class action requirements. The court disagreed with plaintiffs' contention that violation of the statute was independent of the customer's perception. This "erroneous premise" "do...
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