Insurance Litigation Law Blog | Regulatory Law | Bad Faith | California | Lawyer | Attorney | Barger & Wolen

by Misty A. Murray and Larry M. Golub

In Pineda v. Williams-Sonoma Stores Inc., 2011 Cal. LEXIS 1355 (February 10, 2011), the California Supreme Court addressed the issue of whether a person’s zip code constitutes “personal identification information” under the Song-Beverly Credit Card Act of 1971, Cal. Civ. Code §§ 1747 et seq. (Credit Card Act). 

The Court held that it did, and that its holding operated retrospectively, triggering numerous lawsuits since the Court’s decision a week ago.

The Credit Card Act was enacted to protect consumers from unfair business practices during credit card transactions. Relevant to the Court’s decision is section 1747.08 of the Credit Card Act, which prohibits businesses from requiring consumers to provide "personal identification information" during credit card transactions and then recording that information. Cal. Civ. Code, § 1747.08(a)(2).

Pineda brought an action against Williams-Sonoma, asserting violations of the Credit Card Act, unfair competition laws and invasion of privacy, based on the fact that the retailer asked Pineda for her zip code during a credit card transaction, recorded that information, and then used that information to obtain her undisclosed address from a database in order to market its products and sell her private information to other businesses. 

Williams-Sonoma argued that a zip code does not constitute "personal identification information" under section 1747.08. 

The trial court agreed and the Court of Appeal affirmed, relying on Party City Corp. v. Superior Court (2008) 169 Cal.App.4th 497, which held that a zip code, without more, is not “personal identification information” as defined in the Credit Card Act.

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Barger & Wolen insurance litigation and regulatory law partner Marina Karvelas will be a guest blogger for the DRI’s blog, DRI Today for the next two weeks.

Her first post, Has California Gone Too Far in Responding to Underinsurance Problems in Homeowners Insurance? is live.

California’s Office of Administrative Law recently approved new regulations promulgated by the California Insurance Commissioner for homeowners insurance. 

The regulations create new duties, impose additional standards and establish a new "unfair trade practice" violation on insurance companies and insurance producers selling homeowners insurance policies in California.

Months in the making, the new regulations profess to respond to underinsurance problems experienced by California homeowners who in the wake of wildfire disasters throughout the state in the past decade discovered they did not have enough insurance to rebuild their homes. 

The new regulations, as well as a newly revised California Residential Property Disclosure Form and California Residential Property Insurance Bill of Rights, mark a key shift in California’s public policy. 

The new California homeowner insurance regulations and disclosure requirements take effect on June 27, 2011, and July 1, 2011, respectively.

Click here to read more.

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On February 4, 2011, California Insurance Commissioner Dave Jones released draft guidelines for implementing SB 1163 (“Guidance 1163:2”).

SB 1163, signed by former Governor Schwarzenegger on September 30, 2010, responds to the federal Patient Protection and Affordable Care Act (“PPACA”), which requires the United States Secretary of Health and Human Services to establish a process for the annual review of “unreasonable” increases in premiums for health insurance coverage.

Under the federal act, health insurers must submit to the secretary, and the relevant state, a justification for an “unreasonable” premium increase prior to implementation of the increase.

SB 1163, effective January 1, 2011, requires health insurers to file with the California Department of Managed Health Care or the California Department of Insurance detailed rate information regarding proposed premium increases and requires that the rate information be certified by an independent actuary. 

The bill authorizes the departments to review these filings and issue guidance regarding compliance. It also requires the departments to consult with each other regarding specified actions as well as post certain findings on their Internet Web sites.

In his draft guidelines (“Guidance 1163:2”), Commissioner Jones lists several factors that will be used by the Department to determine if a rate is “unreasonable.”

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