In re Toys "R" Us-Delaware, Inc.—Fair & Accurate Credit Transactions Act (FACTA) Litigation
300 F.R.D. 347
C.D. Cal.2013Background
- Edwards and Schley filed a 2006 action against Toys R Us alleging FACTA violations for receipts displaying more than the last five digits.
- Ellis filed a similar 2008 action; it was consolidated with Edwards for pretrial proceedings in this MDL.
- Motions for class certification were filed March 2010; the court previously denied certification in August 2010.
- undisputed facts from Edwards summary judgment: Toys and NCR upgraded software; by mid-2005 receipts showed only last four digits; by 2006 internal and external displays were modified to mask digits; change extended to receipts after August 2006.
- In late 2007 Toys learned of Edwards; by January 2008 all registers were corrected to be FACTA-compliant.
- Bateman v. AMC guidance from Ninth Circuit (2010) influenced renewed consideration of class certification; court held FACTA’s purposes support class treatment despite potential large damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 23(b)(3) superiority is appropriate | Bateman controls; no proportionality bar to class relief. | Ruination risk and proportional damages threaten superiority and deterrent goals. | Class certification can proceed; superiority satisfied. |
| Ascertainability and class definition | Class members identifiable by objective criteria (receipt, digits shown, consumer status). | No explicit issue; concerns about ascertainability raised but manageable. | Classes are ascertainable with objective criteria. |
| Rule 23(a) factors — numerosity, commonality, typicality, adequacy | Numerous nationwide California class; common questions predominate; typical and adequate representatives. | Some concerns about relationships and conflicts; potential non-consumer transactions. | All Rule 23(a) prerequisites satisfied. |
| Predominance given consumer vs. corporate status | Core issues (willfulness, FACTA violation) common; consumer status distinctions do not defeat predominance. | Need to resolve consumer vs. business card usage for each member; defeats commonality. | Predominance satisfied; common issues predominate over individual inquiries. |
| Constitutional concerns about damages and ruinous liability | Damages are statutory/compensatory; excessiveness review reserved for post-certification. | Aggregate damages could be ruinous; may be unconstitutional. | Damages excessiveness not a proper basis to deny certification; review to occur later. |
Key Cases Cited
- Bateman v. AMC Entertainment Corp., 623 F.3d 708 (9th Cir. 2010) (FACTA class certification not impeded by potential damages; consideration of ruinous liability deferred)
- Kline v. Coldwell, Banker & Co., 508 F.2d 226 (9th Cir. 1974) (disproportionality between harm and damages considerations in superiority)
- Shady Grove Orthopedic Associates v. Allstate Insurance Co., 559 U.S. 393 (U.S. 2010) (aggregate liability and class action rights preserved across state boundaries)
- Murray v. GMAC Mortgage Corp., 434 F.3d 948 (7th Cir. 2006) (damages approach and class certification considerations in statutory frameworks)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (S. Ct. 1997) (class certification standards and the balance of predominance and manageability)