Court of Appeal (Cal.) Remands Class Certification in Credit Card Case because Personal Use is Intensely Fact-Driven Inquiry

In Archer v. United Rentals, Inc. — Cal.Rptr.3d —-, 2011 WL 1888199 (2011), the California Court of Appeal reversed a class certification under the Song-Beverly Credit Card Act on the basis that meeting the consumer-use requirement was an intensely fact driven inquiry.   The decision is too lengthy to reproduce here, even in part, but the Court of Appeal’s summary is set forth below. 

This is a putative class action, along with individual claims, arising from the alleged requesting and recording by United Rentals, Inc., and United Rentals Northwest, Inc. (collectively defendants), of plaintiffs’ personal identification information “as a condition to accepting the credit card as payment in full or in part for goods or services,” in violation of section 1747.08 of the Song– Beverly Credit Card Act of 1971 (SBCCA) (Civ.Code, § 1747 et seq.). . .  As for the third issue, we find that whether the personal card is used “occasionally” or “primarily” for business purposes is a distinction without a difference. The purpose for which the personal credit card is used is of no import. The key factor is that the card was issued for personal use. Section 1747.02 unequivocally and without qualification defines a “ ‘[c]ardholder’ ” as “a natural person to whom a credit card is issued for consumer credit purposes [.]” (Id., subd. (d).) The legislative history of the SBCCA confirms the Legislature intended section 1747.08 to protect the personal identification information of the natural person without regard to his or her use of the credit card.  ¶  Finally, as to the fourth issue, in light of our resolution of the third issue, we reverse the order denying class certification and remand for clarification on the final and determinative issue. In denying class certification, the trial court concluded that ascertaining the class would be unreasonable because determining the class membership would be “intensively fact-driven” in view of the court’s determination that the privacy protection of section 1747.08 does not cover the use of business credit cards and consumer credit cards used “primarily” for business purposes. The record is unclear whether the court’s unascertainability determination would remain unchanged if no need exists for sorting personal credit cards used for consumer purposes from such cards used “primarily” for business purposes.

Archer suggests affirmation of California state law decisions that the ‘consumer’ use requirement in various statutory schemes should be determined based on the parties’ intent at the time of issuance, not based on ultimate use. Compare, e.g. Martin v Wells Fargo Bank, 91 Cal.App.4th 489, 499, (2001) (“[t]he uncertainty caused by the potentially shifting status of the goods is not desirable in the commercial world;” parties’ intent at the time of contracting controls); accord  Miller v McCalla, Raymer, Padrick, Cobb, Nichols & Clark, LLC 214 F.3d. 872 (7th Cir. 2000); with the recent Kimmell decision from the eastern district of Pennsylvania and Slenk v Transworld Sys. Inc., 236 F.3d. 1072 (9^th Cir. 2001) (transaction as a whole must be examined; business sole proprietor’s later personal use of purchased backhoe possibly triggered FDCPA’s personal use criteria) accord Bush v Loanstar Mortgagee Servs., LLC 286 F Supp 2d 1210 (N.D.Cal 2003)  (prior characterization of loan as business obligation does not judicially estop plaintiff from arguing consumer purpose of debt).