Sinibaldi v. Redbox

When a zip code, in connection with a self-serve kiosk, is asked of a customer the information does not violate the California’s Song-Beverly Credit Card Act of 1971 because it falls under an exemption in Cal. Civ. Code § 1747.08(c)(1) where a “card is being used as a deposit to secure payment in the event of default, loss, damage, or other similar occurrence.”

Redbox Automated Retail, LLC (“Redbox”) is a self-service kiosk renting movies and videogames to customers for $1 a night, an additional dollar for each night that it was not returned, and a maximum fee if the disc was never returned or damaged. In order to rent, a customer needs to provide a debit or credit card for payment. During this process, the customers are asked to provide the service with their zip code. Plaintiffs, John Sinibaldi and Nicolle DiSimone argue that asking for customers’ zip code is personal identification information, and therefore violates California’s Song-Beverly Credit Card Act of 1971. The District Court ruled that the Act did not apply here because of the potential for fraud in transactions at a Redbox kiosk. The plaintiff’s appealed, contending the transaction is in-person and therefore presents less risk of fraud. On appeal, the Ninth Circuit did not answer the question of whether this is an in-person transaction or an online-like transaction, and instead held that asking a customer for their zip code in this situation did not violate the Act because Cal. Civ. Code § 1747.08(c)(1) provides an exception for those transactions in which a “card is being used as a deposit to secure payment in the event of default, loss, damage, or other similar occurrence.” Due to the fact that the Supreme Court of California has never addressed this question, the panel was left to determine based on statutory interpretation that Redbox falls within this exception. The panel found the exception applied and that Rebox was not in violation of the Act, resulting in the panel affirming the ruling of the district court to dismiss the case under a Fed. R. Civ. P. 12(b)(6) motion. AFFIRMED.