One of the most interesting and important developments in retail privacy cases is a recent unpublished decision, Capp v. Nordstrom. The Court in Capp interprets the California Song-Beverly Act’s application to email addresses. Nordstrom requested an email address from its customer in order to send an electronic version of the customer’s receipt. The Court, in a matter of first impression, found the email address constituted “PII” [Personal Identification Information] as defined in the Credit Card Act at Cal. Civ. Code section 1747.08(b). The broader potential implication of Capp, is that the Court did not find the exception for “special purpose” applied. This exception allows the collection of PII, ” for a special purpose incidental but related to the individual credit card transaction, including, but not limited to, information related to shipping, delivery, servicing, or installation of the purchased merchandise, or for special orders.” The rational in the Nordstrom case was that even where retailors obtain and use PII for a special purpose, that does not then allow the retailor to use the information for all purposes. This issue is going to be hotly contested in California and other jurisdictions with similar exceptions and may implicate the use of loyalty programs. How courts determine this issue will likely turn on what the program agreements provide in terms of how the information will be used, an issue not previously dealt with in any of the current case authority.
There is some practical, if not limited, guidance provided in the opinion on the importance of when retailors ask for PII at the point of sale. While the Court rejects Nordstrom’s argument that the federal CAN-SPAM Act pre-empts the Song-Beverly Act from governing email, the court suggests that if the information [here the customer’s E-mail] is requested after the transaction is complete, it would comply with the Song-Beverly Act and could also comply with the federal CAN-SPAM objectives. This provides support for the position that the temporal aspect of the request is key. Thus, if the transaction is over and a retailor obtains a customer’s PII and an agreement from the customer about future uses, the retailor can comply with the Act.
This case adds to the issues for retailers regarding point of sale requests for information, the use email even for special purposes such as giving receipts. The case signifies a trend where courts are likely to expand the definition of PII to include any type of information that can link to a customer’s identify for use in marketing or other data mining.