15-Jun-2007 [Press Release]
Los Angeles, CA:
In a key set of decisions this week, a federal judge in Los Angeles has denied class certification for three Fair and Accurate Credit Transactions Act (FACTA) lawsuits, including Taline Soualian v. International Coffee and Tea LLC (CV 07-502-RGK) in which Pillsbury Winthrop Shaw Pittman successfully represented the defendant. Pillsbury currently represents more than a dozen clients in FACTA-related matters.
Taken together, along with a May 25th decision on Spikings v. Cost Plus, Inc. (CV 06-8125-JFW) also denying class certification, the cases establish a precedent that could impact more than 200 lawsuits that have been filed in recent months alleging that retailers and restaurants provided too much information on customers’ credit card receipts in violation of the law.
Effective December 4, 2006, FACTA requires that retailers provide no more than the last five digits of the card number or the expiration date on any receipt provided to the cardholder at the point of the sale or transaction. Since that time, the plaintiffs’ bar has filed hundreds of suits seeking class status. If any retailer is found in willful violation of that rule, each class member would be eligible to receive between $100 and $1000 in statutory damages, which for larger retailers found to be in violation could cost tens of millions or even billions of dollars.
“The decisions this week are highly significant in that the court recognized that certifying class actions in these FACTA cases could result in serious financial hardship for the retailers, and makes no sense given that no harm has been done to the plaintiffs in terms of identity theft or any other damage,” says Robert Wallan, a partner with Pillsbury Winthrop Shaw Pittman in Los Angeles, who lead the defense team representing International Coffee and Tea. “These decisions reach a common sense result.”
In the Soualian suit, during a credit card transaction with one of the Defendant’s Coffee Bean stores, the Plaintiff received an electronically-printed receipt that contained the card’s expiration date. Plaintiff sought to certify the class of individuals who made purchases at the Defendant’s stores between December 24, 2006 and January 24, 2007, who also received receipts containing expiration dates.
U.S. District Judge R. Gary Klausner of the Central District of California found that due to the enormous damages requested and the lack of harm suffered by the plaintiffs, the plaintiffs failed to pass the superiority test which is required for class certification. In addition, the defendants investigated and removed expiration dates on credit card receipts as soon as they were made aware of the alleged technical violation.
“There is no evidence that any customer making a purchase from the Defendant’s stores…suffered any actual harm due to the inclusion of the expiration date on credit card and debit card receipts,” Judge Klausner wrote in his decision. “Furthermore, it appears virtually impossible for the inclusion of the expiration date on a credit card or debit card receipt to result in identity theft or any other actual harm…. Given the disproportionate consequences to Defendant’s business (if class was certified, statutory damages could be as high as $48 million), and the lack of any actual harm suffered by members of the potential class, the Court finds that Plaintiff fails to meet the superiority requirement.”
The judge also noted that he denied class because upon learning it was in technical violation of FACTA, International Coffee and Tea immediately investigated and rectified the situation, demonstrating good faith and no willful intent.
The other two FACTA cases in which Judge Klauser denied certification this week targeted Avis Rent A Car and clothing retailer Charlotte Russe.
View this article online at: http://www.pillsburylaw.com/bv/bvisapi.dll/portal/ep/newsReleaseDetail.do/pub/2007615142951625/ruleType/PUB_FIRMNEWS_RELEASES/channelId/-8593/tabId/5/pageTypeId/9208
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