Zipping Out of Court: D.C. Circuit Tosses Privacy Suit

In a victory for the defendants in a zip code class action, the D.C. Circuit Court of Appeals dismissed a case against Urban Outfitters and Anthropologie based on the retailers’ request that consumers provide zip codes at the time of purchase.

Whitney Hancock and Jamie White made purchases using a credit card at retail stores Urban Outfitters and Anthropologie. In both transactions, the cashier first swiped the card and then asked for the customer’s zip code, which was entered into the store’s point of sale register.

Hancock and White alleged the transactions violated D.C.’s Use of Consumer Identification Information Act, which provides that no party may “request or record” the address or telephone number of a credit card holder as a condition of accepting a credit card as payment for a sale.

A federal court judge granted the retailers’ motion to dismiss and the plaintiffs appealed. The D.C. Circuit Court took a step back to consider the jurisdictional question of whether the plaintiffs had standing, ruling that they did not.

Although the plaintiffs told the court that a statutory violation was sufficient to satisfy the requirements of Article III standing, the court disagreed.

“The complaint here does not get out of the starting gate,” the three-judge panel wrote. “It fails to allege that Hancock or White suffered any cognizable injury as a result of the zip code disclosures. Indeed, at oral argument, Hancock’s and White’s counsel candidly admitted that ‘the only injury … that the named plaintiffs suffered was they were asked for a zip code when … [under] the law they should not have been.’ In other words, they assert only a bare violation of the requirements of D.C. law in the course of their purchases.”

In the U.S. Supreme Court’s recent decision on standing, Spokeo v. Robins, the Justices explained that an asserted injury even to a statutorily conferred right “must actually exist,” and must have “affect[ed] the plaintiff in a personal and individual way.” Some statutory violations could result in no harm, the Court said.

“The Supreme Court’s decision in Spokeo thus closes the door on Hancock and White’s claim that the [defendants’] mere request for a zip code, standing alone, amounted to an Article III injury,” the D.C. Circuit wrote. “[A] plaintiff cannot ‘allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.’ ”

Hancock and White did not allege any invasion of privacy, increased risk of fraud or identity theft, or pecuniary or emotional injury, the panel noted. “And without any plausible allegation of Article III injury, the complaint fails to state a basis for federal court jurisdiction.”

Vacating the district court’s dismissal motion, the federal appellate panel remanded the case with instructions to dismiss the complaint for lack of jurisdiction.

To read the opinion in Hancock v. Urban Outfitters, click here.

Why it matters: Class actions based on a retailer’s request for a zip code took off after the California Supreme Court’s decision in Pineda v. Williams-Sonoma in 2011, where the state’s highest court ruled that zip codes are considered “personal identification information” under a state statute and that retailers could not request and record the data. The cases spread to other jurisdictions including Massachusetts and the District of Columbia. With the Hancock decision, retailers in D.C. can breathe a sigh of relief as long as a plaintiff sticks simply to statutory violations and doesn’t allege additional injury such as invasion of privacy or emotional injury.



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