Facts

From July 2004 to August 2005, three Dillard's department stores in California were retaining the telephone numbers of customers who made purchases with a credit card. The three stores were located in Stockton, Palmdale and El Centro. One customer, plaintiff and class representative April Castaneda, was uncomfortable with the fact that she had given out her phone number and contacted an attorney.

CONTENTIONS:
Plaintiff sued Dillard's, alleging it violated the Song-Beverly Credit Card Act by engaging in an unfair business practice with its customers. She sued on behalf of herself and every other customer who made a third-party credit card purchase at the three Dillard's locations.

She contended that Dillard's was in violation of California Civil Code Section 1747.08 for a full year before she filed her lawsuit and for one month after her filing. She asserted the law prohibited Dillard's to utilize a preprinted form to request personal information from customers. Also, the fact that Dillard's used the information for cross marketing effort supported the claim that the violation was for purposes directly in conflict with the Song-Beverly Act.

Damages

Dillard's collected about 247,000 telephone numbers during the 13 months of data collection. The class suffered exposure to marketing materials that it did not knowingly request. Dillard's did not dispute it collected the telephone numbers, but disputed the degree of harm the class incurred.

Result

After discovery, the parties agreed to settle. Dillard's agreed to issue $20 gift cards to any member of the class who presented it with an address for mailing purposes. Following the scheduled period of award, Dillard's agreed to purge the portion of its database that was generated during the specified time period. The estimated value of the award was $5 million, if the entire class claim its award. For assuming the burden of the action, plaintiff Castaneda received $5,000.