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These Days’ Legal Update


This morning we discuss recent cases involving Zip Code information in credit card transactions; gay marriage standing and the religious employer exemption from Federal employment discrimination law.

This morning we discuss recent cases involving Zip Code information in credit card transactions; gay marriage standing and the religious employer exemption from Federal employment discrimination law.


These Days legal analyst and San Diego attorney Dan Eaton

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This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

CAVANAUGH: I'm Maureen Cavanaugh and you're listening to These Days on KPBS. The state Supreme Court issues a ruling that should result from fewer annoying questions at the checkout counter. And the California Supreme Court says it will decide in the people defending prop eight, the ban on same sex marriage, have the legal standing to do so. Mus a multilevel appeals court ruling about the rights of religious employers. Joining us with the latest in the legal world is San Diego attorney These Days legal analyst, Dan Eaton. Hi, Dan.

EATON: Good morning Maureen.

CAVANAUGH: Now, the first one comes from I case that originated in San Diego. The California Supreme Court ruled unanimously that state law prohibits retailers from asking consumers to give them their Zip Code when making a credit card purchase. Now, I know that's happened to me a number of times am tell us about the factual background of this case.

EATON: What happened, Maureen, was that a woman went to a well known national specialty retailer to make a purchase with her credit card. When she reached the cashier, the cashier asked for her Zip Code, without telling her what the consequences would be if the woman declined to give her Zip Code. The woman ended up giving her Zip Code, then the store, using some reverse engineering software was able to figure out the woman's exact address, and ended up sending her various marketing materials and potentially even selling it to other retailers who might like this kind of information. The question was whether the asking of the Zip Code constituted a request for personal identifying information. As a condition of a [CHECK AUDIO] Beverly credit card act, which California has to protect the privacy of consumers who are making credit card transactions.

CAVANAUGH: What exactly does the credit card act say considering the correction of personal information in a credit card transaction?

EATON: Now, Maureen, the language actually ends up being very important here. What is prohibits is that a business or other person, the law always trying to be all inclusive, may not request or require as a condition to accepting the credit card as payment in full or in part for goods or services the good holder, you gotta love the law, the card holder to provide personal identification information which the business right or otherwise recordings upon the credit card transaction form or otherwise, close quote. The law defines personal identification information as, and I'm quoting now, information concerning the card holder, other than information set forth on the credit card, such as the name, including but not limited to the card holder's address and telephone number, close quote. There are two important things about that, Maureen, Russell, it takes personal identifying information, [CHECK AUDIO] and have finally it talks about them conditioning the transaction to providing that personal identification information. Those concepts end up being important as our conversation continues on this one.

CAVANAUGH: I have been asked on occasion to show my license when making a credit card purchase. But nobody writes that information down.

EATON: Exactly.

CAVANAUGH: So that's one of the fundamental things that the credit card act says merchants cannot do.

EATON: Well, that's right. I mean, if you show your license, what they're trying to do is to make sure that your identity is the same person as the other. This writing it down is a problem.

CAVANAUGH: So why did the California Supreme Court reverse the San Diego appeals court ruling?

EATON: Well, the California Supreme Court, Maureen, focused on the goal of the law, first of all, which is to protect consumer privacy, ultimately, and what justice Moreno said is, look, this personal identification information extends to more than just the specific person's address. It also includes, which is contrary to what the San Diego lower courts held, it also includes identification information that groups a person with other residents such as their Zip Code. And what justice Moreno said is if it didn't include Zip Codes, otherwise [CHECK AUDIO] accident could ask not just for the card holder's Zip Code, but also for the card holder's street and city initial to the Zip Code, as long as it did not also ask for the house number, close quote. That, the Supreme Court said would render the protections of the song Beverly act hollow.

CAVANAUGH: Especially since you mention they have should software now that can apparently trace somebody's back from their Zip Code to their credit card number.

DEFENDANT: Well, understand if you have the Zip Code and you have the name, and you have the credit card number, so there are software applications out there that can reverse engineer to the exact address, once you have that, hello catalog.

CAVANAUGH: Exactly. [CHECK AUDIO] gas stations, [CHECK AUDIO] would this ruling in any way make that practice illegal.

EATON: Maureen, this was a question that you raised, actually, as we were preparing for the segment, and I was astounded at the level of chatter on the Internet that [CHECK AUDIO] my conclusion is probably not. But the issue is not free from doubt why. Because the gas station, when they're asking for your credit card, is only passing it on to the bank or the credit card company to determine you are who you are. They obviously can't ask for your license at the pump. They haven't to then that level of sophistication. But so the question is whether, given that they are -- the gas stations they arguably not be recording this information, whether that offends the song Beverly act, my thinking is it probably does not, because the key is -- not the gas station's motive in asking for the information, they're not asking it for marketing purposes, but it doesn't appear that they're actually recording the Zip Code information. But again, I could be wrong. And ultimately that question will have to await California -- a definitive ruling by California courts. I will tell us this, the California Supreme Court ruling in this case has unleashed quite a bit of litigation on this very question.

CAVANAUGH: Interesting. And within of the reasons that the lower courts basically said no to this woman who was bringing this lawsuit, one of the reasons that was argued, at least, by the credit card companies was that the law authorizes the Court to penalize retailers $250 for a first violation, up to a thousand dollars for each subsequent violation. So the retailers claim the penalties would unconstitutionally result in confiscating an entire business of a retailer who deals with thousands of customers.

EATON: Right. Exactly. And that was one of the arguments that this national retailer made. And what the Supreme Court, the California Supreme Court said, yes, it authorizes that level of payment and fine, as it were. But it doesn't require it. In fact, a court could argue as much as a fraction -- as little as a fraction of a penny, or the [CHECK AUDIO] Arizona a punishment for a store's violation. Of so yeah, these are theoretically punishments but they are not mandatory punishments, and therefore that argument did not carry any weight at least with the California Supreme Court.

CAVANAUGH: And so no more asking of the Zip Code when you're trying to make a credit card purchase.

EATON: At least not -- Maureen, it's important to realize [CHECK AUDIO] what if a store asked for it, but makes it clear to the consumer that if they don't, there's no problem, there's no harm, no foul. The law appears to require it to be made as a condition of the were approximate. So if it's voluntarily given without being a condition of the credit card purchase, maybe there's no violation. But again, a prudent store is probably not going to ask at all. Because who wants to be in litigation whether there was actually condition on the purchase or not.

CAVANAUGH: Exactly. Let's move on to the California Supreme Court unanimously agreed to consider whether those who have appealed the federal court ruling striking down prop eight, if they -- if those people have a legal standing to make that claim. The matter is pending before the ninth circuit court of appeals, how does the California Supreme Court get into all of this?

EATON: Right. And we talked about this little law. So let's try to explain this. What is not before the California Supreme Court, Maureen, is the constitutionality of proposition eight. Of course they decided that in a state action on unrelated issues, they said, no, it didn't offend the rules concerning propositions and so forth. People will remember in a six on to one ruling some years ago. What happened was this. Of the ninth circuit heard oral argument on the constitutionality of prop A, a challenge to judge walker's appeal. Judge walker's ruling, rather, striking down proposition eight. And what the ninth circuit said, we're not sure whether the people who are defending proposition eight have standing, have the right to pursue this appeal to defend proposition eight. And that's really a question of state law. But where do you go to get definitive guidance on questions of state law? The state's highest court. In this case, the California Supreme Court. So what the ninth circuit U.S. court of appeals kid, was it asked the California Supreme Court, would you help us out and determine whether as a matter of state law the people who are before us defending proposition eight have the standing or ability to argue this case? Now, the California Supreme Court could have said no, we're not going to, take your best guess as to what California state law is, but the California Supreme Court unanimously said, yes, we will consider whether these people have the standing or ability to defend proposition eight and challenge judge walker's ruling.

CAVANAUGH: Now, the people who were supporting the ban on same sex marriage, the supporters of proposition eight, the question about whether they had legal standing to do so actually came up as an issue in their arguments before the California Supreme Court, before the Supreme Court made its decision about the unconstitutionality of proposition eight. So what do we mean when we talk about legal standing? Why is that even an issue here?

EATON: The issue is this: The fact is that when the people who challenge proposition eight in federal court did so, they correctly sued the state officials involve, then governor Schwarzenegger, and then attorney general Jerry Brown. Well, neither governor Schwarzenegger nor attorney general brown wanted to defend the [CHECK AUDIO] so the people who backed proposition eight to stand to argue that they needed to be there to defend proposition eight, the question therefore before the California Supreme Court at the Ninth Circuit's request, is whether these -- what you might think of as replacement players for the state have the right to pursue this appeal.

CAVANAUGH: So in other words, if you had an NFL team and the players were on strike, and they didn't want to play the game, the replacement players were called in to play the game, but people couldn't necessarily just jump down from the stands and play the game. They'd have to be designated plea replacement players and that's what the California Supreme Court is trying to figure out, whether or not the people who are supporting the ban on same sex marriage and pursuing this legal challenge through the federal courts actually have the legal standing, the legal right to do so.

EATON: They have to be suitable replacement players, exactly. What happens is the people who ought to be on the field, the regular players, as it were, the [CHECK AUDIO] kamala Harris have no interest in defending proposition eight either. These people have abandoned the field. The question then, Maureen, is whether the play -- the game goes on or whether you can have replacement players step in the playing of the field and allow the game to continue, and allow a resolution of the game on the merits to extend the NFL analogy, which is all in our minds because the looming March 4th deadline here coming up.


EATON: So the bottom line is are these people appropriate to allow the game to go on or the state officials having abandoned the field, should the game end without a resolution of the game on the merit.

CAVANAUGH: So when will California Supreme Court hear oral arguments on this question of legal standing?

EATON: Well, the order hastened a quickened briefing on this. [CHECK AUDIO] oral argument is not likely to take place until some time in September. Once the decision is issued, Maureen, then we're looking at -- they have 90 days to issue their ruling of probably they'll issue it more quickly because nay have asked for what's called expedited briefing. It's important to understand one thing, Maureen, that even if a California Supreme Court decides that these people do not have stand, it's not necessarily the end of the case. The ninth circuit could very well go ahead and resolve the question on the merits of the constitutionality of prop eight, and whether judge walker was right that prop eight is unconstitutional. But it certainly does complicate matters going forward, particularly with the U.S. Supreme Court ultimately taking this case, if the California Supreme Court decides as a matter of state law under California that the folks who were defending proposition eight do not have standing to pursue the appeal.

CAVANAUGH: Why would that make a difference to the U.S. Supreme Court.

EATON: Well, because, if the ninth circuit ultimately affirms or agrees with judge walker's ruling or dismisses the appeal -- dismisses the appeal on the grounds that the people pursuing the appeal do not have standing then what might happen, is, of course, what would happen is judge walker's ruling would remain in place. Why would that make ape difference in it because the ultimate reason for dismissing the appeal is state law. Well, the U.S. Supreme Court resolves questions of federal law. And so it may make it less likely to the U.S. Supreme Court ultimately resolves the question of the constitutionality of proposition eight, which most people expect them to do, the justices to do, if the matter is ultimately resolved on the merits.

CAVANAUGH: So they wouldn't necessarily even take this case if it's all bound up with technicalities of state law.

EATON: Of state law, now, of course they can do whatever they want, ultimately. But the bottom line is that it certainly complicates the path going forward. And of course the California Supreme Court could resolve the other way and decide that these folks do have standing. If they do decide that these folks have standing with the state officials having abandoned the field as it were, or for other reasons that they have shown particular sufficient entry to be able to ark cert the appeal, then of course the ninth circuit court has to decide the merits [CHECK AUDIO].

CAVANAUGH: Wow. We'll have to wait and see what happens with this.

EATON: We will, and we're probably looking then, the ninth circuit, of course, once the California Supreme Court acts then the [CHECK AUDIO] and they have no deadline, so you're looking probably early 2012 before this is ultimately resolved.

CAVANAUGH: Let's move on to a case where it seemed like a three judge panel in the ninth circuit had a hard time trying to figure out their [CHECK AUDIO] issued a ruling clarifying the boundaries of the exemption that religious employers have from the federal law prohibiting discrimination and employment, commonly called title seven. In other words, religious employers have a lot of examinations when it comes to discriminator hiring practices.

EATON: That's exactly right, specifically on the basis of religion. The case is called Spencer versus world vision, Maureen, and it concerns an organization that is focused on humanitarian -- according to the organization itself, it's a Christian humanitarian organization dedicated to working with children, families and their communities worldwide to reach their full potential by tackling the causes of poverty and injustice, close quote. What happened was there were three employees who handled various administrative tasks, one was IT, one dealt with scheduling and shipping. And another one dealt with shipping. Ultimately they did submit a statement when they were hired affirming their belief in certain Christian principles, including the divinity of the holy twin Trinity. [CHECK AUDIO] don't really believe that, and the employer found out about that and fired them. The question is whether, given the nature of the organization, it qualified for the exemption that title seven gives religious employers for an entity that is it a religious entity to discriminate against employees who do not have their faith.

CAVANAUGH: So what specifically does title seven say about how it's supposed to be -- its application to religious employers?

EATON: Now, again, the language of the law, as in the last situation where we dealt with song Beverly, ends up being important issue Maureen. What it says is that title seven does not apply, quote, to a religious corporation, association, educational institution or society, with respect to the employment of individuals of a particular religion connected with the carrying on by such entity of its activities, close quote. The question in this case was whether, given the range of humanitarian activities that world vision does, are whether that exemption applied to them.

CAVANAUGH: And whether they needed their IT employee to necessarily state that he believed in these -- Christian principles.

EATON: Well, Maureen, actually the nature of the duties distribute matter. If they are exempt, it doesn't matter what these people do, as a matter of fact. And everybody -- all three judges agreed with that proposition.

CAVANAUGH: Interesting. So how did the ninth circuit rule?

EATON: Well, the ninth circuit, in a very fragmented ruling, a three judge panel issuing no more than four opinions [CHECK AUDIO] could not proceed, because world vision did qualify as exempt from title seven.

CAVANAUGH: How do you get four opinions from a three judge panel?

EATON: This is really a head strapper. You add up the number of judges and see the number of opinions, and say whoa. This is why. Because the two judges in the [CHECK AUDIO] agreed only that an organization qualified for the exemption quote, at least if the organization is organized for a religious purpose, two, is engaged primarily in carrying out that religious purpose, three, holds itself out to the public as an entity for carrying out that religious purpose, and four, does not engage primarily or substantially in the exchange of goods and services for money, beyond nominal amounts. Because world vision was able to check all those boxes, it qualified for the exemption under the majority's reasons.

CAVANAUGH: And yet the two judges in the majority had a different opinion on at least one portion of this, right.

EATON: Well, that's right. [CHECK AUDIO] said this definition applies really broadly, and it applies to any nonprofit organization that is organized for a religious purpose, engaged in activity consistent with religious purpose, and holds itself out to the public as religious. Judge Andrew Klein felt, the other judge in the majority said, no, that's way too broad. In fact, I would add this fourth element, which is that the organization also has to engage in the marketplace by selling their goods and services for no more than a nominal amount, otherwise what you are talking about, for example, is allowing religiously can affiliated hospitals or other kinds of entities to go ahead and qualify for the exemption even though they charge market rates for their services. So under the majority reasoning as narrowed by judge Klein if he would's qualification, those that engage in religiously affiliated entities that engage and sell their services for market rate don't qualify for the exemptions.

CAVANAUGH: So you have this disagreement even among the two ascending judges.

EATON: Uh-huh. Majority judges.

CAVANAUGH: Majority judges. And then you have a completely opposite opinion from the third judge.

EATON: Right, Judge Marcia Burgin said, no, this isn't right. In fact, the exemption should only apply to those that are religiously affiliated that do things such as [CHECK AUDIO] with its broad humanitary purposes. This goes too broadly, and U.S. Supreme Court, Judge Brennan, she pointed to the opinion that says this exemption should be construed narrow lowly. You guys are making an opinion out of whole cloth, which is what judge Marcia Bershin said, and said that that goes beyond what the exemption is designed to provide.

CAVANAUGH: Does this have any implication for other very large religious organizations that also have merchandising and courses and things that they sell as part of their outreach.

EATON: Well, it really could. See, Maureen, what the critical factor is, when you look at the majority ruling, [CHECK AUDIO] or near market rates, and the answer is, if they are, they wouldn't qualify for this exemption under federal law, even if they are religiously affiliated. Interestingly, one of the points of the dissenting judge, mash why [CHECK AUDIO] world vision is not connected with any denomination, and doesn't ordain ministers and so forth. Well, all right, but the bottom line is, how broad are their activities, and do they charge a lot of money for them? And if they do charge a lot of money, market or near market rates, at least according to the ninth circuit of the organization doesn't qualify for the religious employer exemption.

CAVANAUGH: But this exemption, this exemption that allows religious organizations to discriminate.

EATON: On the basis of religion.

CAVANAUGH: On the basis of religion is attached to the organization itself. And has nothing to do with what you do for the organization.

EATON: No. You could do any number of different things. You could be their marketing person or that's probably a bad example, but you could actually do any kind of clerical work or anything. But it's the exemption, if you qualify for the exemption, you can have coreligionists, people who share a religion, work only -- work for you, and you can exclude everybody else.

THE COURT: That's fascinating. Well, thank you again, so many of these very complex legal issues, can, be explained really well.

EATON: Maybe next time the U.S. Supreme Court will cooperate and give us something meaty to talk about instead of the two cases they handed down today.

CAVANAUGH: Exactly. They should issue their rulings so we'll be [CHECK AUDIO] Dan Eaton is These Days legal analyst. If you would like to comment, please go on-line, Days. Coming up, a chat with comedian and activist Dick Gregory, that's as These Days continues here on KPBS.

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