(CN) - Redbox did not violate California law by requiring customers to provide a ZIP code to rent DVDs, a divided panel of the 9th Circuit ruled.
With some 30,000 self-service kiosks around the country, movie- and game-renting service Redbox is owned by Outerwall, which also controls Coinstar and ecoATM device-recycling stations. Redbox brought the company $515.7 million last quarter, up 1.5 percent from 2013.
Hoping to represent a class in federal court, John Sinibaldi and Nicolle DiSimone claimed that Redbox Automated Retail violated California's Song-Beverly Credit Card Act by collecting its customers' personal information.
U.S. District Judge Jacqueline Nguyen dismissed the case in Los Angeles and the Pasadena-based federal appeals court affirmed, 2-1, on Friday.
Transactions in which a credit card is being used as a deposit against loss or damage are exempt from the law, the majority found.
"The Redbox transaction fits within that exception," Judge Richard Clifton wrote for the majority.
Judge Stephen Reinhardt dissented based on his view that "the credit card is being used, as pleaded in the complaint, to secure the charges that constitute the primary agreement between the customer and Redbox, charges that are therefore unrelated to 'default, loss, damage, or similar occurrence.'"
Redbox escaped a somewhat similar class action in 2012 when the 7th Circuit dismissed
claims that the company illegally stored and distributed customers' personal information.
Though Redbox profits jumped 11.7 percent last quarter, with its kiosks generating about 200 million rentals, up 1.2 percent from its first-quarter performance in 2013, Outerwall cut 251 jobs in December and slashed three of emerging kiosk outfits, GeekWire reported.