A federal court in California last week denied certification of  a proposed class of Nike store customers. Gormley v. Nike Inc., No. C-11-893-SI, (N.D. Cal., 1/28/13).  The issue, interestingly, was typicality.

Plaintiffs in these consolidated cases brought putative class actions on behalf of themselves
and a class of consumers, alleging that defendants violated the Song-Beverly Credit Card Act of 1971, by requesting and recording the ZIP codes of credit card customers through Nike’s “Information Capture Policy.”  Plaintiffs alleged that Nike implemented and maintained a policy whereby its cashiers were trained to follow the “EPOC manual” under which cashiers were prompted with a pop-up box on their screen to enter the customer’s ZIP code. The screen on the sales register that allowed the cashier to input a customer’s ZIP code did not appear until after the credit card was authorized and the receipt was printing. If a customer declined to provide a ZIP
code, Nike’s cashiers entered any alphanumeric combination.  In support of class certification, plaintiffs submitted evidence that, during the class period, Nike’s ZIP code request policy was allegedly implemented at every Nike retail store in California, and ZIP codes were requested and recorded during approximately 561,179 transactions.

The plaintiffs sought to represent a class of all those consumers who Nike requested a ZIP code from in conjunction with a credit card transaction in a retail store in California from February 24, 2010, to February 24, 2011.  Defendants raised a number of arguments against class certification, including noting that the proposed class definition appeared to be “fail-safe.”  But the issue that the court focused on was typicality. Rule 23(a)(3) requires the named plaintiffs to show that their claims are typical of those of the class. To satisfy this requirement, the named plaintiffs must be members of the class and must possess the same interest and suffer the same injury as the class members. Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 156 (1982). The typicality requirement may be satisfied when each class member’s claim arises from the same course of events, and each class member makes similar legal arguments to prove the defendant’s liability. Rodriguez v. Hayes, 591 F.3d 1105, 1124 (9th Cir. 2010).

Although in the past many courts have found the typicality requirement is not stringent, the court here followed the recent trend, and held that plaintiffs had not demonstrated that they were typical of the class they seek to represent. The consolidated complaint challenged Nike’s “Information Capture Policy,” and yet all of the named plaintiffs testified that their experiences were not fully consistent with that policy. For example, some testified that cashiers asked them for their ZIP codes before providing them with their receipts and merchandise. However, under the Nike policy that is the subject of this lawsuit, cashiers were prompted to request ZIP codes after giving customers their receipts and merchandise.   The court read the governing statute as prohibiting merchants from requesting personal identification information as a condition precedent to accepting payment by a credit card,  Thus, as the legality of Nike’s policy depends on whether a consumer would perceive the store’s request for a ZIP code as a condition of the use of a credit card, the timing of that request is clearly relevant.

Accordingly, the Court found that the named plaintiffs were not typical of the class they seek to
represent, and denied class certification on this ground.