Meagher & Geer Partner Chuck Spevacek, one of the heads of the Firm’s Insurance Coverage practice group, is quoted in an article appearing in the July 12, 2011 edition of the Wall Street Journal, reporting on a battle in the California courts that pits retailers against their insurance companies over who will pay the costs of a new breed of consumer class-action litigation tied to merchants’ collection of customers’ ZIP codes in connection with credit-card purchases.

More than 100 consumer class action lawsuits have been commenced in California since February 2011, when the California Supreme Court ruled that ZIP codes qualify as personal-identification information under California’s Song-Beverly Credit Card Act, which bars merchants from recording the personal-identification information of customers who pay by credit card. Spevacek, who has over 30 years experience litigating complex commercial cases, with particular emphasis on the trial and appeal of insurance coverage disputes, explains in the article that insurers adjusted their policies in the early 2000s to exclude coverage for claims alleging violation of statutorily created privacy rights, in response to the decisions of some courts erroneously holding that insurance coverage was available for claimed violations of a Federal statute prohibiting the sending of unsolicited advertisements to fax machines.

Chuck has successfully represented his clients in courts across the country in coverage claims arising from that Federal statute, and, together with Meagher & Geer partner Bill Hart, head of the Firm’s Appellate practice group, obtained the first recorded decision in the country addressing insurance coverage for claims under the Fair and Accurate Credit Transaction Act, which prohibited merchants from providing customers with credit card receipts containing more than the last five digits of the customer’s credit card number, holding that insurance coverage was not available for such claims.

The WSJ reports in this article that lawyers following the credit card suits in California think the fight between insurers and merchants is likely to be bigger and costlier than previous spats over privacy-related claims, with potential exposures running into the hundreds of millions of dollars.