Tyler v. Michaels Stores, Inc.

• Decision Date: 11 March 2013
• Docket Number: SJC–11145.
• Citation: 464 Mass. 492,984 N.E.2d 737
• Parties: Melissa TYLER v. MICHAELS STORES, INC.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

464 Mass. 492

984 N.E.2d 737

Melissa TYLER

v.MICHAELS STORES, INC.

SJC–11145.

Supreme Judicial Court of Massachusetts,

Suffolk.

Submitted Nov. 6, 2012.

Decided March 11, 2013.

Jeffrey I. Carton, of New York (Douglas Gregory Blankinship with him) for the plaintiff.

Eric R. McDonough, of California (Jonathan W. Lent, Boston, with him) for the defendant.

Joseph J. Lazzarotti, of New Jersey, & David J. Kerman, Boston, & Brian C. Childs, for Retail Litigation Center, amicus curiae, submitted a brief.

Present: IRELAND, C.J., SPINA, CORDY, BOTSFORD, GANTS, DUFFLY, & LENK, JJ.

BOTSFORD, J.

In 2011, Melissa Tyler, a customer of Michaels Stores, Inc. (Michaels), filed an action on behalf of herself and a putative class of Michaels customers in the United States District Court for the District of Massachusetts. Tyler's complaint alleged that Michaels unlawfully writes customers' personal identification information on credit card transaction forms in violation of G.L. c. 93, § 105 ( a ) (§ 105 [ a ] ), when Michaels's employees request and record customers' zip codes in processing credit card transactions.¹ A judge of the United States District Court for the District of Massachusetts certified the following questions to this court pursuant to S.J.C. Rule 1:03, as appearing in 382 Mass. 700 (1981):

“1. Under [G.L. c.] 93, [§] 105 ( a ), may a [zip code] be ‘personal identification information’ because a [zip code] could be necessary to the credit card issuer to identify the card holder in order to complete the transaction?” “2. Under [G.L. c.] 93, [§] 105 ( a ), may a plaintiff bring an action for this privacy right violation absent identity fraud?”

“3. Under [G.L. c.] 93, [§] 105 ( a ), may the words ‘credit card transaction form’ refer equally to an electronic or a paper transaction form?”

We answer “Yes” to the first question, but for different reasons than the judge set forth in the question itself. We also answer “Yes” to the second and third questions.

Background. Tyler's complaint alleges the following facts that we accept as true for the purposes of answering the certified questions. On several occasions during the past year, Tyler made purchases with a credit card at a Michaels retail store in Everett. During these transactions, a Michaels employee asked Tyler to provide her zip code. Tyler disclosed the number under the mistaken impression that she was required to do so in order to complete the credit card transaction, but in fact, the credit card issuer did not require Michaels to request zip codes. Michaels maintains a policy of writing customers' names, credit card numbers, and zip codes on electronic credit card transaction forms in connection with credit card purchases. Michaels used Tyler's name and zip code in conjunction with other commerciallyavailable databases to find her address and telephone number. Tyler subsequently received unsolicited and unwanted marketing material from Michaels.

Tyler filed her class action complaint against Michaels on May 23, 2011, claiming that Michaels's electronic recording of customer zip codes amounts to writing personal identification information on a credit card transaction form in violation of § 105 ( a ) and therefore constitutes an unfair or deceptive act or practice as defined in G.L. c. 93A, § 2. The complaint also contains a claim for unjust enrichment and seeks a declaratory judgment that Michaels's collection of zip codes violates § 105 ( a ). Michaels filed a motion to dismiss the complaint on July 22, 2011. On January 6, 2012, the District Court judge granted the motion. The judge concluded that (1) Tyler sufficiently alleged a violation of § 105 ( a ) because zip codes constitute personal identification information,² and Michaels's electronic credit card terminal may contain “credit card transaction form[s]” within the meaning of § 105 ( a ); but (2) the complaint failed to allege that Michaels's collection of zip codes caused Tyler an injury cognizable under G.L. c. 93A. The judge also concluded that the complaint failed to state a claim for unjust enrichment and that Tyler was not entitled to the declaratory relief she sought. At the invitation of the judge, on January 13, 2012, Tyler filed a motion to certify certain questions concerning the proper interpretation of § 105 ( a ) to this court. The judge certified the three questions set forth supra.

Discussion. All three questions turn on the meaning and purpose of § 105 ( a ), and G.L. c. 93, § 105 (§ 105), more generally. It is therefore useful to identify the purpose or purposes of these statutory provisions at the outset.

Section 105 ( a ) provides:

“No person, firm, partnership, corporation or other business entity that accepts a credit card for a business transactionshall write, cause to be written or require that a credit card holder write personal identification information, not required by the credit card issuer, on the credit card transaction form. Personal identification information shall include, but shall not be limited to, a credit card holder's address or telephone number. The provisions of this section shall apply to all credit card transactions; provided, however, that the provisions of this section shall not be construed to prevent a person, firm, partnership, corporation or other business entity from requesting information ... necessary for shipping, delivery or installation of purchased merchandise or services or for a warranty when such information is provided voluntarily by a credit card holder.”

Section 105 ( d ) states that “[a]ny violation of the provisions of this chapter shall be deemed to be an unfair and deceptive trade practice, as defined in section 2 of chapter 93A.” Thus, a violation of § 105 ( a ) is unlawful under G.L. c. 93A, § 2,³ and may be the basis for a claim under c. 93A, § 9.⁴

The judge opined that the main purpose of § 105 ( a ) is to prevent identity fraud and not, as Tyler contends, to protect consumer privacy. Michaels advances the same interpretation of the statute as the judge. We disagree for three reasons.

First, keeping in mind the rule that the actual words chosen by the Legislature are critical to the task of statutory interpretation,⁵ there is nothing in the actual language of § 105 ( a ) to suggest that its purpose is confined to preventing identity fraud. Rather, by its inclusive terms § 105 ( a ) reflects concern about, and an intent to limit, disclosure of personal information leading to the identification of a particular consumer generally.

Thus, § 105 ( a ) expressly “applies to all credit card transactions” and delineates a general prohibition that “ [n]o person, firm, partnership, corporation or other business entity ... shall write, cause to be written or require that a credit card holder write personal identification information, not required by the credit card issuer, on the credit card transaction form” (emphases supplied). The statute also defines “[p]ersonal identification information” in a nonexclusive manner, stating that the term “shall include, but shall not be limited to, a credit card holder's address or telephone number.” Id. We discern nothing in these expansive and general terms that indicates or suggests that prevention of identity fraud was the single point of legislative focus.

Second, and contrary to the District Court judge, we find the title of § 105 to offer useful guidance. See, e.g., American Family Life Assur. Co. v. Commissioner of Ins. 388 Mass. 468, 474, 446 N.E.2d 1061, cert. denied, 464 U.S. 850, 104 S.Ct. 160, 78 L.Ed.2d 147 (1983), and cases cited (“although the title of an act cannot control the plain provisions of the act, it may aid construction of ambiguous clauses”). Section 105 was inserted in the General Laws by St. 1991, c. 414, § 1. The title of this act is “An Act relative to consumer privacy in commercial transactions.” The significance of this title gains strength from the fact that in the text itself, the Legislature inserted a caption into the General Laws for this new legislation. Thus, St. 1991, c. 414, § 1, begins: “Chapter 93 of the General Laws is hereby amended by adding under the caption ‘CONSUMER PRIVACY IN COMMERCIAL TRANSACTIONS,’ the following two sections: [§§ 104⁶ and 105].” Both title and caption thus expressly reference “consumer privacy in commercial transactions,” reinforcing the view that the Legislature indeed was concerned, as Tyler suggests, about privacy issues in the realm of commercial dealings and in any event was not necessarily focused solely on preventing identity fraud.

The third reason for our disagreement relates to the legislativehistory of § 105. See Commonwealth v. Welch, 444 Mass. 80, 85, 825 N.E.2d 1005 (2005), rev'd on other grounds, O'Brien v. Borowski, 461 Mass. 415, 425, 961 N.E.2d 547 (2012) (although “[o]ur starting point is ... the plain language of the statute, ... we also seek guidance from its legislative history”). As detailed in the following paragraph, this history strongly suggests that there were at least two privacy-related purposes underlying § 105: credit card identity fraud and consumer privacy.

The legislation that ultimately was enacted as § 105 in December of 1991 was introduced by Senator Lois Pines and then Representative Suzanne Bump. See 1991 Senate Doc. No. 89; 1991 Senate Doc. No. 1510; 1991 House Doc. No. 6112. The legislative record pertaining to this legislation includes a memorandum specifically prepared in March, 1990, for Senator Pines by the Boston University Legislative Services, entitled “A Bill regulating check cashing and credit card acceptance procedures” (Pines memorandum) and a report prepared in November, 1990, by the Massachusetts Public Interest Research Group (MASSPIRG), entitled “What They Know Can Hurt You: A Survey of Retail Merchant Check Cashing and Credit Card Policies” (MASSPIRG report). The Pines memorandum describes the need for, and contains a preliminary draft of, the text of what became ...