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ZIP-ity doo dah

Anyone who keeps tabs on the Massachusetts Superior Court’s Business Litigation Session in Boston has likely noticed an influx of lawsuits over the past year accusing businesses of improperly collecting ZIP codes from customers paying with credit cards.

If that weren’t enough to give retailers heartburn, a recent U.S. District Court decision from the Eastern District of Pennsylvania should do the trick.

The coverage dispute between Urban Outfitters Inc. and The Hanover Insurance Group and OneBeacon America Insurance Co. involved three class action lawsuits filed in Massachusetts, California and Washington, D.C. Judge Stewart R. Dalzell granted summary judgment to the insurers, finding that the suits were not covered under the “personal and advertising injury” sections of multiple liability policies, leaving the hipster-focused clothing chain personally liable.

In the Massachusetts class action, Lauren Miller accused Urban Outfitters of violating G.L.c. 93, §105(a) by recording her ZIP code and using it for marketing purposes, including the sending of junk mail to her residence.

The Supreme Judicial Court ruled last year in Tyler v. Michaels Stores Inc. that a ZIP code counts as “personal identification information” under the statute.

Dalzell ruled that, to the extent the insurance policies cover violations of “privacy,” the term pertains to “interests in secrecy” rather than “intrusions upon seclusion” as alleged by Miller.

Boston’s Preston W. Leonard — plaintiffs’ counsel for many of the cases being filed in the BLS, including the Massachusetts one involved in the Pennsylvania coverage dispute — wouldn’t say much while other cases are pending, but it doesn’t sound like he would mind targeting retailers’ pockets instead of their insurers.

“I will say that these ZIP code cases are important cases and we’re going to continue to pursue them,” he says.

It’s also not clear how broadly the decision will be applied. One of Hanover’s lawyers, Mark A. Aronsson of Boyle, Shaughnessy & Campo in Boston, notes that Dalzell’s reasons for siding with the insurance carriers were slightly different as he addressed each of the three underlying class actions.

“There’s not a lot of law on point. I’m only aware of one other published decision involving these ZIP code class actions,” Aronsson says. “The judge essentially determined it wasn’t in the expectation of the parties that these particular cases would be covered by insurance. … I think this just reinforced the notion that every coverage case is different and it’s going to depend on the issue and policy language.”

Lawyers for Urban Outfitters did not return messages seeking comment.

Writing about the case on her blog, Katharine Goodloe of Covington & Burling in Washington, D.C., says that any ruling addressing the privacy implications of ZIP code collections “is likely to be closely watched” as plaintiffs seek to build on decisions — such as the SJC’s — that hold ZIP codes are personal identification information.

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