California Supreme Court Rules in Favor of Lacoste in Data Collection Class Action

On August 26, California’s high court responded to a certification request from the US Court of Appeals for the Ninth Circuit by agreeing with arguments put forward by Arent Fox. The court pointed to a previous decision where it was found that a company did not violate the Song-Beverly Credit Card Act because the law does not prevent retailers from asking for personal information after a transaction has concluded.

Arent Fox Fashion Law leader Anthony V. Lupo and associate Katie Heilman represented Devanlay Retail Group Inc., the US licensing arm of Lacoste, in Davis v. Devanlay Retail Group, Inc., with Matthew R. Orr and Scott R. Hatch from California-based Call & Jensen serving as local counsel.

In its request, the Ninth Circuit viewed a key statute in the Song-Beverly Act as ambiguous and asked the California Supreme Court for guidance. By pointing to the Harrold v. Levi Strauss & Co. decision, the California Supreme Court determined that if personal information is requested after a transaction is finished, as was done in the Lacoste case, it would be unreasonable for a customer to conclude that the personal information was required in order to pay by credit card.

In Davis v. Devanlay, a class action was filed before the US District Court for the Eastern District of California against Devanlay, the worldwide licensee for the apparel brand that carries Lacoste’s iconic crocodile. The plaintiff alleged that a Lacoste cashier requested her zip code during a credit card transaction in violation of the Song-Beverly Act, which regulates how retailers can request personal information from consumers at the point of sale.

But in 2012, in granting summary judgment, the District Court extensively quoted Lacoste’s policy with approval. The court held that Lacoste’s policy of requesting personal identification information from consumers only after the retailer transaction is complete does not violate the Act. The court further ruled that if a Lacoste employee asked the plaintiff for personal information in violation of the Act, the employee would have been violating the policy and as a result, Lacoste would be shielded from liability based on the Act’s safe harbor provision. To read the summary judgment, click here.

Annually rated as a Leading Lawyer by Chambers USA, Mr. Lupo leads the firm’s Fashion Law: Luxury Goods, Designer Brands & Retail group and is widely recognized as the dean of US fashion law; Law360 recently named him of the top three Retail and e-Commerce lawyers in the United States.

Arent Fox routinely advises fashion and retail clients on advertising, promotions, and data protection. Mr. Lupo serves as general counsel for a number of high-end European fashion and luxury goods companies handling corporate, real estate, employment, class action, national and global distribution, fulfillment, and California-specific litigation (Prop 65, wage and hour, and false claims and unfair competition). The firm’s fashion and retail clients include Lacoste, Diane von Furstenberg, Diesel, Benetton, Marni, Louboutin, Fila, and Hugo Boss.