Wednesday Apr 27 2011
Local lawyer Stonebarger wins state Supreme Court case
By: Art Garcia Telegraph Correspondent
A unanimous decision by the California Supreme Court in a case argued by Folsom attorney Gene Stonebarger has triggered a flurry of new lawsuits against major merchants doing business in the state. In the case of plaintiff Jessica Pineda, represented by Stonebarger, vs. Williams-Sonoma Stores, Inc., the high court ruled it’s illegal for retailers to ask customers for their ZIP codes during credit card transactions, with limited exceptions. The court determined that ZIP codes are “personal identification information” that can’t be asked of customers under California’s Song-Beverly Credit Card Act of 1971, intended, the court said, to “promote consumer protection.” The decision, which reversed two lower court findings, has implications for all retailers doing business in California. Pineda alleged Williams-Sonoma, a national house wares chain based in San Francisco, had used customer ZIP codes to “mine” the home addresses of “hundreds of thousands, if not millions” of credit card consumers and used the information for marketing purposes or sold it to direct marketing businesses. “What a lot of people don’t understand, and frankly the lower courts didn’t have a grasp on, is that stores take the ZIP code and combine it with the name on the credit card and then they utilize reverse data search databases or third-party services,” he said. “There are many companies that do this and knowingly invade the customer’s privacy.” Stonebarger said that if a ZIP Code is not recorded by the retailer, it’s not a violation. “The ZIP code is not related to a credit card transaction. They’re just asking for it under a false pretense that it is and are using it only for marketing purposes,” he said. A retailer exception is gas stations, where customers often must enter their ZIP codes when fueling up as a protection against credit card fraud. Stonebarger followed his Supreme Court victory by slapping other large California retailers with 21 lawsuits filed in March in San Francisco County Superior Court. Among the targets: Wal-Mart Stores Inc., J.C. Penney Company, Inc., The Gap Inc., Big 5 Sporting Goods Corporation, Kohl’s Corporation, Office Depot Inc. and Bed, Bath & Beyond Inc. Stonebarger has met with Assemblyman Henry Perea, a conservative Democrat from Fresno, who is forwarding a bill in the legislature to “undo” some of what has been determined by the State Supreme Court. “I’m very active in that situation. Now we’re fighting battles in both the judicial system and also in the legislative branch,” Stonebarger declared. The Pineda decision brought Stonebarger and his firm national publicity, and a flow of prospective client inquiries. Companies violating the state law face fines of $250 for the first violation and as much as $1,000 for each subsequent violation. Plaintiffs in the cases are seeking those penalty fees. California consumers can join the action by contacting Stonebarger at email@example.com. His firm’s phone number is (916) 235-7140. Stonebarger, 35, lives in Folsom with his wife, Adrienne, two boys ages 5 and 4, and a 1-year-old daughter adopted in January in South Korea. The Stonebargers moved to Folsom nearly eight years ago from Ripon, where they lived while Stone-barger worked for a Modesto law firm. He grew up in Linden, a small farm community near Stockton, and earned a degree in international agriculture development from the University of California, Davis, and graduated from the University of San Diego School of Law in 2000. In 2004, he founded the Lindsay & Stonebarger law firm near the capitol in Sacramento and, tired of a daily two-hour round trip commute, closed that office and opened Stonebarger Law in Folsom in January last year. He specializes in class action and complex business litigation.