Checkout Challenged: Navigating the New Wave of Email Address Lawsuits in Massachusetts
The digital marketplace is facing a new legal challenge that could reshape the online checkout experience.
Class-action lawsuits targeting the near-universal practice of asking for an email address during checkout online are on the rise. As we previously reported, the summer started with a wave of class actions alleging violations of California’s Song-Beverly Credit Card Act for use of pixel tracking technology during checkout. Now, Massachusetts attorneys are getting into the game with a series of new lawsuits under Mass. Gen. Laws ch. 93, § 105 (“Section 105”), sometimes referred to as the Consumer Privacy in Commercial Transactions Act (or CPICTA).
Under Section 105, businesses that accept credit cards cannot write or require customers to enter personal identification information (“PII”) on the credit card transaction form, unless required by the card issuer. A new round of lawsuits alleges that online retailers violate Section 105 by asking for email addresses during checkout.
What is Section 105?
Enacted in 1991, Massachusetts’ Section 105, like California’s Song-Beverly Credit Card Act, governs merchants’ collection of PII at the point of sale. In a 2013 case interpreting the statute, the Massachusetts Supreme Judicial Court concluded that the Legislature’s “purpose was to safeguard consumer privacy and more particularly to protect consumers using credit cards from becoming the recipients of unwanted commercial solicitations from merchants with access to their identifying information.”
Section 105 provides, in relevant part:
No person, firm, partnership, corporation or other business entity that accepts a credit card for a business transaction shall write, cause to be written or require that a credit card holder write personal identification information, not required by the credit card issuer, on the credit card transaction form.
A violation of the statute is considered an unfair and deceptive trade practice. An aggrieved individual may bring a civil action for the greater of actual damages or $25 (or treble damages for willful or knowing violations), injunctive relief, attorney’s fees, and costs.
When aggregated in a class action, these penalties can grow quickly.
What Do the New Complaints Allege?
Two law firms working in tandem recently filed at least four complaints against online retailers alleging violations of Section 105. The plaintiffs in each of the complaints allege that during checkout they're required to provide their email addresses in order to place an order. The plaintiffs allege that after they completed the checkout, they received unwanted email marketing, sometimes even if they didn't click an optional box to receive offers during the checkout. Each of the plaintiffs seeks to represent a class of all Massachusetts consumers who made a purchase on the websites using a credit card, and seeks statutory damages, injunctive relief, and attorney’s fees and costs.
What Are the Implications for Retailers?
In these cases, the plaintiffs naively allege that “there is no reason why a customer must provide their email address for a credit card transaction [because a] customer furnishes their shipping address for delivery, and they must also provide their phone number (presumably for communications).” Yet, email is often the fastest, least expensive, and most effective method to reach a customer about an order. Moreover, other forms of communication, like telephone, are strictly regulated. Therefore, if the plaintiffs’ arguments are accepted, the complaints could have a big impact on how online checkout looks and functions today.
Of course, it remains to be seen if these cases will be successful. For one thing, Section 105 includes as examples of PII addresses and telephone numbers, but not email addresses. This is because the statute was enacted in 1991, before email became ubiquitous, and there's nothing in the legislative record which suggests that the Massachusetts Legislature was concerned with email spam when it passed the law. It's also worth noting that in more than 30 years since the statute was enacted, the Legislature hasn't updated Section 105 to specifically include email addresses.
Likely, this issue will be resolved in the courts, not in the Legislature. Until then, what can online retailers do?
- Ensure that users who have created accounts agree to email marketing during the account creation process. Don't wait until the checkout page to obtain permission to send a commercial email.
- If a retailer uses a guest checkout, include an optional box for the user to click to receive email offers. If the user doesn't click the box, use the customer’s email for communications about the order only and refrain from sending email marketing.
- If a retailer wishes to arbitrate, ensure that consumers are required to click a box to agree to the retailer’s terms and conditions, both during account creation and at checkout. Review arbitration provisions in the terms and conditions to make sure that such disputes are within the scope of arbitrable issues.
- Consider conspicuously displaying privacy policies and capturing customer consent at multiple points in the website experience, including from the first page viewed by a customer via a pop-up banner or other notification and again at checkout.
Conclusion
As the legal landscape evolves, retailers should stay vigilant and consult with legal counsel to develop strategies and defenses. The outcome of these lawsuits could herald significant changes in online retail practices, making it crucial for businesses to adapt and protect themselves against potential legal challenges.
Harrison Brown is a partner, business litigation, at Blank Rome, an Am Law 100 firm with 16 offices and more than 700 attorneys and principals who provide a full range of legal and advocacy services to clients operating in the United States and around the world.
Ana Tagvoryan is a partner, business litigation, at Blank Rome.
Harrison Brown represents companies and executives facing consumer class actions, mass arbitration, and other major civil litigation in various areas, including telemarketing and communications, consumer protection, unfair competition, and false and deceptive advertising. Harrison’s areas of experience include successfully defending class actions involving telemarketing under the federal Telephone Consumer Protection Act (“TCPA”) and Florida’s Telephone Solicitation Act (“FTSA”), the Federal Trade Commission Act and California’s Unfair Competition Law (“UCL”) and Consumer Legal Remedies Act (“CLRA”), Illinois’ Biometric Information Privacy Act (“BIPA”), California’s Song-Beverly Credit Card Act, chatbot and wiretapping litigation under California’s Invasion of Privacy Act (“CIPA”), and California’s Automatic Renewal Law (“ARL”). Harrison has secured early dismissal of multiple class action lawsuits prior to class certification, protecting sensitive customer lists from premature disclosure.
Harrison has assisted businesses in virtually every industry, including retailers, distributors, food products and agriculture, banks, investment firms, hotels, and car dealers. He is well versed in Title III of the Americans with Disabilities Act (“ADA”) and California’s Unruh Civil Rights Act and has obtained multiple judgments prior to discovery in favor of clients facing website and physical accessibility lawsuits. An experienced advocate, Harrison also counsels and helps companies navigate a wide range of business matters and challenges, including fraud, breach of contract, and partnership disputes.
Harrison has assisted clients in jurisdictions throughout the country, including federal and state trial courts, appellate courts, and in administrative proceedings before the Federal Communications Commission (“FCC”).
Harrison has been recognized as a Southern California Super Lawyers “Rising Star” in class actions by Super Lawyers every year since 2019. As part of his extensive background in consumer protection and privacy laws, he regularly advises clients in advertising, retail, e-commerce, and related risk mitigation strategies under federal and state laws and regulations.
Ana Tagvoryan is a high-stakes corporate litigator with almost two decades of experience advising, counseling, and defending business clients in consumer-facing litigation and enforcement actions in state and federal courts across the nation. Her complex corporate litigation and compliance-related practice focuses on current issues presented for clients with consumer-facing businesses in retail, media, hospitality, technology, banking, and food & beverage. Ana’s nationwide practice routinely involves solving issues and defending claims related to consumer fraud, advertising, labeling, data privacy, cybersecurity, online and mobile marketing, pricing, and related intra- and inter-state commerce and e-commerce issues.
Ana is also the chair of the Privacy Class Action Defense group, which handles privacy-related cases involving wiretapping, data breaches, biometrics, telemarketing, call recording, data handling and sharing, and other consumer privacy matters. In addition, Ana’s team routinely litigates the ever-changing wave of claims dealing with auto-renewing subscription offers, e-commerce business practices, and federal & state consumer protection laws.
Ana serves as a trusted adviser and business partner to many clients who operate consumer-facing businesses. With regard to both mitigation of risk and litigation of claims, Ana’s clients regard her as strategic and creative; they trust her commonsense approach to problem-solving and appreciate her professional dedication.
Litigation
Ana has a reputable track record for successfully defeating threatened and actual claims at every stage of litigation. She has succeeded in bringing early dispositive issues before the courts and saving costs associated with discovery, and is skilled in early and efficient dispute resolution, including mediation and class action settlements. Ana and her team have secured orders of affirmation or reversal from Courts of Appeals and the U.S. Supreme Court on key issues and defenses on behalf of various companies, making precedent and good law in jurisdictions across the nation.
Ana has extensive experience with state and federal consumer protection statutes, such as: California and related states’ Unfair Competition Law, False Advertising Act, Consumer Legal Remedies Act, Invasion of Privacy Act, Consumer Privacy Rights Act, and Automatic Renewal Law; and federal statutes including the Federal Wiretap Act, Telephone Consumer Protection Act (“TCPA”), the Fair Credit Reporting Act, Stored Communications Act, Fair and Accurate Credit Transactions Act, Video Privacy and Protection Act, Magnuson-Moss Warranty Act, and U.S. federal and state CAN-SPAM laws. In addition, Ana routinely handles claims under the Illinois Biometric Information Privacy Act, Michigan Privacy Protection Act, Florida Telephone Sales Act, Florida Security of Communications Act, Pennsylvania Wiretapping and Electronic Surveillance Act, and Federal Trade Commission and state agency investigations and claims.
Compliance
Ana’s team routinely advises clients with respect to e-commerce data handling and disclosure practices, data privacy and data breach, and compliance with federal and state consumer laws across various industries, including retail, media, and e-commerce. Her compliance practice includes insight into vendor and software provider licenses and agreements, product labeling, online marketing and advertising, and related issues.
Teaching and Professional Engagements
Ana has served on various legal and professional organizations and lectured extensively on current events facing in-house counsel and business executives. She also regularly writes in leading industry publications concerning consumer protection and litigation trends, compliance insights, and future legislation. (See Publications.) Ana is currently active with the Atlantic Legal Foundation and sits on its advisory board.
Outside the Firm
Ana is an ardent indoor cyclist and coffee enthusiast, always looking for the newest and best trends in the things that help her give her best to her three kids, husband, and clients.
