2013-00151790-CU-PO

Susan Williams vs. Aerogroup Retail Holdings Inc

Nature of Proceeding: Hearing on Demurrer to First Amended Complaint

Filed By: Pierce, Amy L.

Defendant’s demurrer to the first amended complaint (“1AC”) is OVERRULED, as
follows.

Both moving and opposing counsel are admonished for failing to comply with CRC
Rule 3.1110(b)(3)-(4).

Although the notice of demurrer provided notice of the Court’s tentative ruling system
as required by Local Rule 1.06(D), the notice does not comply with that rule. Moving
counsel is directed to review the Local Rules, effective 1/1/2013.

This action arises out of a consumer transaction by plaintiff at defendant’s retail store
from which plaintiff used a credit card to purchase a pair of shoes. The 1AC alleges
that in this and other credit card transactions occurring since 9/20/2012 defendant
violated Civil Code §1747.08(a)(3) by “utiliz[ing] a credit card form with preprinted
spaces specifically designated for the address and/or telephone number of the
cardholder in violation of…[§]1747.08(a)(3)” and that it is “Defendant’s routine
business practice to intentionally engage in the conduct described…” (1AC, ¶¶26-27.)
More specifically, the 1AC alleges in pertinent part:

“After providing her credit card as tender, Plaintiff was presented with a form for
Plaintiff’s signature, which Plaintiff signed and then handed back to Defendant’s
employee. Defendant’s employee then provided Plaintiff with a credit card form
that contained preprinted spaces for the cardholder’s personal identification
information to be printed on, and Plaintiff’s address and telephone number were
printed in said spaces on said credit card form. See Exhibit ‘A’ (Plaintiff’s
personal identification information and portions of credit card number have been
redacted).” (1AC, ¶13.)

Defendant demurs to the 1AC on the grounds that (1) the “receipt” which was provided
to plaintiff after the sales transaction was completed is not a “credit card form” within
the meaning of Civil Code §1747.08(a)(3); (2) the “receipt” does not contain any
“preprinted spaces” for any personal information relating to the purchaser; (3) the
“receipt” does not contain any preprinted spaces “specifically designated for filling in
any personal identification information of the cardholder;” and (4) the Song-Beverly
Credit Card Act (the “Act”) does not regulate “receipts” such as the one at issue in the
1AC.

The opposition maintains that plaintiff’s “receipt” is a “credit card form” regulated by
Civil Code §1747.08(a)(3) and that the legislative history of §1747.08 even says so.
Plaintiff adds that defendant’s assertions run counter to the “robust” protections sought
to be provided under California law and would render meaningless the provisions of
§1747.08(a)(1) [prohibiting requesting or requiring the cardholder to write any personal
identification information “upon the credit card transaction form or otherwise”].

Plaintiff’s request for judicial notice of the legislative history of AB1477 (1991) and
defendant’s request for judicial notice of the legislative history of AB2920 (1990) are
granted. However, although the Court can take judicial notice of the existence of the
documents submitted by the parties, judicial notice does not necessarily extend to
everything contained in the documents. (See, e.g., North Beverly Park Homeowners
Assn. v. Bisno (2007) 147 Cal.App.4th 762, 778; Bach v. McNelis (1989) 207
Cal.App.3d 852, 865 [“There exists a mistaken notion that this means taking judicial
notice of the existence of facts asserted in every document of a court file, including
pleadings and affidavits. … A court may take judicial notice of the existence of each
document in a court file, but can only take judicial notice of the truth of facts asserted
in documents such as orders, findings of fact and conclusions of law, and judgments.”
(Emphasis added).])

The Court notes not only that defendant has submitted in support of this demurrer a
declaration which purports to attach an (unredacted) “receipt” for a transaction by
plaintiff on 6/18/2013 but also that this document is, on its face, very different at least
in form from the (redacted) document attached to the 1AC as Exhibit A. Since a ruling
on a demurrer can only consider those matters found on the face of the complaint and
those that are properly subject to judicial notice, the Court cannot and does not
consider here the (unredacted) “receipt” offered by defendant. Consequently, rather
than filing and sealing the declaration (with the attachment) submitted by defendant,
the entire declaration will be returned unfiled to defendant’s counsel. (Counsel should
contact the clerk for Dept. 54 after oral argument, if requested, to coordinate its return.)

Turning to the merits, it is important to clarify that the 1AC does not currently allege
any violation of Civil Code §1747.08(a)(1) which prohibits a seller from requesting, or
requiring as a condition of accepting a credit card as payment in whole or in part, the
cardholder to write any personal identification information upon the credit card
transaction form or otherwise. Instead, the 1AC on its face asserts only a claim under
§1747.08(a)(3), which provides in its entirety:

“[No person, firm,…shall…] utilize, in any credit card transaction, a credit card
form which contains preprinted spaces specifically designated for filling in any
personal identification information of the cardholder.” (Emphasis added.)

As a result, the threshold issue to be resolved here is whether the document plaintiff
attached to the 1AC as Exhibit A, which defendant now characterizes as a “receipt,” is
a “credit card form” within the meaning of Civil Code §1747.08(a)(3). Defendant
maintains that the Act nowhere defines the term “credit card form” or otherwise
provides a sample of such a “credit card form.” (Mov. Memo. P&A, p.1:11-13.)
Plaintiff’s opposition does not seem to disagree with this particular assertion that the
term “credit card form” is undefined by the statute but instead, the opposition insists
the legislative history of Civil Code §1747.08 (submitted with her request for judicial
notice) makes clear the Act is intended to govern “receipts” as among the variety of
“credit card forms” subject to its provisions. In particular, plaintiff relies on the “Bill
Background for AB1477,” which apparently amended in 1991 the statute originally
enacted in 1990 as Civil Code §1747.8 and later renumbered in 2004 as §1747.08.
The “Bill Background for AB1477” states in pertinent part:

“AB2920 prevents merchants from writing telephone numbers and addresses
on credit card receipts” and “Additional language referring to AB2920 clarifies
that merchants can neither request or [sic] require cardholders to put personal
information on credit card receipts, nor can personal information be a condition
of acceptance of the card.” (Emphasis added.) Although this language may tend to support plaintiff’s position that “receipts” are
subject to the provisions of the Act, it does not resolve the threshold question
presented here for several reasons. First, the above-cited language does not itself
actually indicate that Exhibit A to the 1AC is, in fact, a “credit card form” within the
meaning of Civil Code §1747.08(a)(3). Second, as noted above, AB1477 (1991)
merely amended the original statute enacted in 1990 and consequently, neither
AB1477 nor the commentary in connection with it can be dispositive of the legislature’s
actual intent in passing AB2920 the year before. Third, as explained above, judicial
notice does not necessarily mean that the Court accepts as “undisputed truth”
everything contained in documents for which judicial notice is granted. In contrast,
under established law, California courts may accept as true only limited matters when
judicial notice is granted. (See, e.g., Bach v. McNelis (1989) 207 Cal.App.3d 852, 865
[“court… can only take judicial notice of the truth of facts asserted in documents such
as orders, findings of fact and conclusions of law, and judgments”].)

Still, defendant has failed to carry its burden as the moving party of affirmatively
demonstrating that Exhibit A to the 1AC is as a matter of law not a “credit card form”
within the meaning of Civil Code §1747.08(a)(3). Indeed, although defendant has
requested judicial notice of the legislative history of AB2920 (1990), its own reply
concedes that this legislative history of AB2920 provides “limited guidance regarding
the…use of the phrase ‘a credit card form…’” (Reply, p.2:27-p.3:2) and defendant may
well be correct that AB2920’s legislative history is “consistent with [the] interpretation
that…customers’ receipts are not “credit card forms” (Reply, p.3:9-10 (emphasis
added)) but mere “consistency” falls far short of establishing as a matter of law that
1AC’s Exhibit A’s is not a “credit card form” under §1747.08(a)(3).

Defendant also relies on Absher v. Autozone, Inc . (2008) 164 Cal.App.4th 332 to
support its claim that a “receipt” is not a “credit card form” implicated by Civil Code
§1747.08(a)(3) (Mov. Memo. P&A, p.6:8-p.7:3) but defendant’s reliance on this
decision is misplaced. First, it is well established that a decision is not authority for a
proposition not considered therein (see, e.g., McWilliams v. City of Long Beach (2013)
56 Cal.4th 613, 626) and in Absher , the Second District Court of Appeal considered
only the following question:

“The issue on appeal is whether the consumer protection statute that prohibits
merchants from obtaining personal identification information from credit card
users [Civ. Code §1747.08(a)] should be interpreted to apply to a refund for the
return of merchandise purchased by credit card.” (Absher , at 335 (emphasis
added).)

However, the case at bar presents no such question and therefore, Absher is
essentially irrelevant to the resolution of this demurrer. Second, to the extent Absher
discusses the term “credit card form” (excluding the mere quotation of the statutory
language), the decision is of little help as it concludes in pertinent part:

“Accordingly, the return voucher does not appear to be ‘a credit card form’ ‘[u]
tilize[d] in [a] credit card transaction’ as referred to in section 1747.08,
subdivision (a)(3). This is another reason why the statute does not, as plaintiff
argues, unambiguously apply to this transaction.” (Absher , at 341-342.)

For these reasons, the Court finds Absher does not advance defendant’s position that
plaintiff’s “receipt” falls outside the definition of a “credit card form” as this term is used in §1747.08(a)(3)

Finally, defendant cites Pineda v. Williams-Sonoma Stores, Inc. (2011) 51 Cal.4th 524
as justification for its claim that “Nothing in the legislative history of the Act in general,
or Section 1747.08 in particular, provides any basis for a cause of action under the Act
premised on a receipt provided to a cardholder after the credit card transaction has
been completed, even if the receipt reflects the customer’s personal information” but
again, defendant’s reliance on this authority is unavailing. In Pineda, the California
Supreme Court considered “whether [Civil Code §]1747.08 is violated when a business
requests and records a customer’s Zip Code during a credit card transaction” (Pineda,
at 527) and since the current action presents no such question, Pineda is essentially
irrelevant. To the extent Pineda discusses the history of §1747.08 in particular, there
appears to be no discussion of the specific provision at issue in the present case (i.e.,
§1747.08(a)(3)) and thus, Pineda does not aid in resolving the question of whether a
“receipt” is a “credit card form.”

Moreover, inasmuch as it discusses in a more general sense the history of the Act,
Pineda contains no language which compels a conclusion here that the Act was as a
matter of law never intended to encompass within its provisions the document which is
attached to the 1AC. The following passage from Pineda was cited by defendant in its
moving papers:

“[T]he legislative history of the Credit Card Act in general, and section 1747.08
in particular, demonstrates the Legislature intended to provide robust consumer
protections by prohibiting retailers from soliciting and recording information
about the cardholder that is unnecessary to the credit card transaction.” (Pineda
, at 535-536 (cited in Mov. Memo. P&A, p.3:2-5).)

Nothing in this language either clearly indicates or even suggests that “receipts” fall
outside the scope of the Act.

Based on the limited record now before it, this Court is unable to conclude that Exhibit
A to the 1AC is not a “credit card form” which is implicated by the provisions of Civil
Code §1747.08(a)(3). Therefore, defendant’s demurrer must be and hereby is
overruled.

Defendant may file and serve an answer to complaint no later than 4/11/2014.

This minute order is effective immediately. No formal order or other notice is required.
(Code Civ. Proc. §1019.5; CRC Rule 3.1312.)