*1 STILLMOCK; Jeanne Still Patrick Barnstein; Opa
mock; Jenny Leonid individually
cic, behalf of a similarly situated, all those
class of Appellants,
Plaintiffs - MARKETS, INCORPORATED,
WEIS Appellee.
Defendant -
No. 09-1632. Appeals, States Court of
United
Fourth Circuit.
Argued: March 2010. July 2010.
Decided: *2 1681-1681x, (FCRA), §§
ing Act
U.S.C.
accepts
provide
person
that “no
cards or debit cards for the transac
credit
[electronically] print
shall
tion of business
digits of the card
more than the last 5
Wolf, Quinn,
Eugene
Martin
ARGUED:
receipt provided
...
upon any
number
Wolf, Chtd, Towson, Maryland,
Gordon &
point
at the
of the sale or
the cardholder
Hart,
Mikell
Appellants.
for
Charles
§ 1681c(g)(l).
15 U.S.C.
transaction.”
Morris, LLP,
Hill,
Cherry
Duane
New
commonly
is
statutory provision
This
BRIEF: Rich-
Jersey,
Appellee.
for
ON
require
known as
truncation
FACTA’s
Gordon, Benjamin
Carney,
ard
H.
S.
willfully
“Any person
ment.
who
fails to
Wolf, Chtd, Towson,
Quinn,
Ma-
Gordon &
comply
require
with” FACTA’s truncation
Law, LLC,
Zajdel,
L.
ryland; Cory
Z.
respect
any
“with
consumer is
ment
Towson,
B.
Maryland; Katherine
Born-
in an
equal
liable to that consumer
amount
stein,
Kessler,
Barroway,
Meltzer
Topaz,
any
damages
to the sum of ...
actual
Check, Radnor, Pennsylvania;
A.
&
David
by
sustained
the consumer as a result of
LLC,
Searles,
Searles,
Donovan
Philadel-
[statutory] damages
failure
of not
or
Pennsylvania,
Dana
phia,
Appellants.
for
$1,000,”
than
and not more than
less
Palumbos,
Klinges,
B.
Robert M.
Duane
1681n(a)(l)(A),
§
plus
id.
“such amount of
Morris, LLP,
Pennsylvania,
Philadelphia,
allow,”
the court
punitive
as
Appellee.
for
1681n(a)(2), and,
§
id.
“in the case of
any liability
successful action to enforce
TRAXLER,
Judge,
Before
Chief
section,
under this
the costs of the action
WILKINSON,
Judge,
Circuit
and
together
attorney’s
fees as
reasonable
HAMILTON,
Judge.
Senior Circuit
court,”
determined
id.
1681n(a)(3).1
§
by unpublished
Vacated and remanded
opinion.
Judge
wrote
Senior
HAMILTON
interlocutory appeal, plaintiff-ap-
In this
in which
opinion,
Judge
Chief
Stillmock,
pellants Patrick
Jeanne Still-
joined. Judge
TRAXLER
WILKINSON
mock,
Barnstein,
Jenny
Opacic
and Leonid
separate opinion concurring
wrote a
Plaintiffs)
(collectively
challenge the dis-
specially.
trict court’s denial of their motion for class
action certification on
behalf
themselves
Unpublished opinions
binding
are not
and all other customers of retail stores
precedent in this circuit.
Markets,
operated by
Inc.
owned
Weis
HAMILTON,
Judge:
Senior Circuit
(Weis Markets), which customers received
theft,
In
receipts printed
an effort to curb
Con
credit card and debit card
gress enacted the Fair and Accurate Cred
in violation of FACTA’s truncation re-
(FACTA), quirement.2
putative
expressly
it Transactions Act of 2003
thereby amending
Report
the Fair Credit
excluded customers of Weis Markets’
same,
imposes liability
negligent
seeking
1. FCRA
filed her own
as well
also
stein
requirement,
violations of FACTA’struncation
Opacic.
did Leonid
The district court subse-
1681o(a),
provision
but such
quently
by Jenny
dismissed the actions filed
present appeal.
in the
issue
Opacic
and added them
Barnstein
Leonid
plaintiffs
in the action filed
the Still-
Originally,
2.
Patrick Stillmock and Jeanne
Markets, Inc.,
mocks. Stillmock v. Weis
separate
Stillmock filed their own
action
(D.Md.
2009).
WL 595642 *1
March
certification,
seeking
Jenny
class action
Barn-
(C)
desirability
undesirability
due to
suffered actual
stores who
concentrating
litigation
the claims
any persons
who had
identity theft
forum;
particular
in the
Markets.
ever been executives Weis
*3
follow,
the
we vacate
For reasons
(D)
likely
in managing
the
difficulties
of Plaintiffs’ motion
district court’s denial
class action.
for fur-
for class certification and remand
“ ‘[cjertification
Notably,
only
Id.
is
con
proceedings.3
ther
(not
commonality
ap
cerned with the
the
merit)
parent
of the claims and the exis
I.
sufficiently
tence of a
group
numerous
”
persons
may
who
assert
those claims.’
Rule of
Procedure 23
Federal
Civil
149,
Corp.,
Brown v. Nucor
576 F.3d
main
“states that
class action
‘[a]
(4th Cir.2009)
Lilly v.
(quoting
Harris-
tained’ if two conditions are met: The suit
326,
Supermarket,
Teeter
332-33
satisfy
in
must
the criteria set forth
subdi
(4th
denied,
Cir.1983)),
Corp.
cert.
Nucor
(a) (ie., numerousity, commonality,
vision
—
Brown,
-,
v.
U.S.
130 S.Ct.
adequacy of
typicality,
representation),
and
(2010).
questions Here, of law or fact common to class the district L.Ed.2d any questions predominate by members over accepted materials submitted members, affecting only parties regard individual and to Plaintiffs’ motion for superior that a class action is to other class action certification held evi- dentiary hearing thereon. Unless other fairly efficiently methods for available rely specified, wise we the factual adjudicating controversy.” Fed. in rul 23(b)(3). findings made the district court R.Civ.P. The same subdivision ing on Plaintiffs’ motion class certifica provides: further analysis appeal. tion in our of the issues on pertinent findings The matters to these Stillmock, Patrick and husband Jeanne include: wife, Jenny all Barnstein reside (A) the class members’ interests in indi- Maryland, Opacic resides in while Leonid vidually controlling prosecution or Pennsyl- Pennsylvania. Weis Markets is a actions; separate defense oper- vania which owns and corporation, (B) any litiga- nature Maryland, the extent and grocery throughout ates stores concerning controversy already Jersey, Virginia, Pennsylvania, tion New West members; and New York. begun by against or 3, 2009, granted peti- appeal. we Plaintiffs' 3. On June permission interlocutory tion for to file this credit digits person’s last five on December
Despite being enacted
card number.”
accept
who
or debit
gave
FACTA
merchants
debit cards either one
credit cards and/or
Stillmock,
*1. In
Should these Plaintiffs on their claim, damages predominate would over issues similarly other situated willfulness common to the class. opportu- Weis customers would have the "individual,” 1681a(c), op- § as 6. In order to invoke consumer status under etc., id., FCRA, corporation, putative posed partnership, each class member would to a 1681a(b). merely need to show that he or she was 23(b)(3)’s Critically, commonality- Rule seek certify tiffs would be anything predominance qualitative test rather other than simple straightforward. Gunnells, quantitative. than F.3d Pragmatically, only substantive differ- Thus, 429. while courts have properly de- putative ence between class members nied class certification where individual purposes affixing especially complex issues are figure within the statutory damages range burdensome, see, e.g., v. Pastor State $1,000 or in awarding punitive Co., Farm Mut. Auto. Ins. 487 F.3d damages is the number of receipts re- (7th Cir.2007), where, here, by single ceived during class member qualitatively overarching issue far is approximately eighteen months at issue. issue of the defendant’s willful- indeed, And this difference does not com- ness, purported and the class members plicate very matters much at all given exposed were to the same risk of harm the class can be broken down into subcate- every time the defendant violated the stat- gories based the number of violating manner, ute the identical the individual receipts received per putative class mem- statutory damages issues are insufficient sum, ber. In we hold that common ques- to defeat class certification under Rule tions of law fact predominate over the 23(b)(3). Murray See v. Mortg. GMAC individual presented by issues Plaintiffs’ (7th Cir.2006) Corp., 434 F.3d purported action, thus satisfying (“Refusing certify a class because the 23(b)(3)’s Rule commonality-predominance plaintiff decides not to make the sort of Humana, Inc., test. Klay See person-specific arguments render (11th Cir.2004) (“Common 1241, 1255 is- class treatment infeasible would throw sues of fact and predominate law if they away the benefits of consolidated treat- impact have a direct every class mem- ment. Unless a district court finds that ber’s effort to establish liability and on personal injuries large in relation to every class member’s entitlement to in- statutory damages, a representative plain- relief.”) (internal junctive monetary tiff must be forego allowed to claims for quotation marks and alteration marks *7 compensatory damages order to achieve omitted). certification.”); class Smilow v. Southwest- Inc., ern Bell Mobile Systems, 23(b)(3)’s B. Superiority Require- Rule (1st Cir.2003) (“The individuation of ment. damages consumer class actions is rare- turn We now to consider the dis
ly
23(b)(3).
determinative under Rule
ruling
trict court’s
purport
that Plaintiffs’
Where ...
questions
common
predominate
23(b)(3)’s
ed class action failed Rule
second
regarding liability,
generally
then courts
i.e.,
requirement,
that
purported
the
class
predominance
find
requirement
the
to be
superior
action be
to other available meth
satisfied even if
individual
issues
remain.”).
adjudication
ods for the fair
Here,
and efficient
putative
the
class mem-
controversy.
of the
exposed
challenge
bers were
Plaintiffs
to the identical risk of
the district court’s
identity
superiority ruling
theft in the
on
identical manner
repeated
the
the basis that
impermis
identical conduct
the district court
of the same
defendant,
sibly
and none suffered actual
looked outside of Rule 23 to find
dam-
the
ages
from
theft.
test-case method more
liking, though
Under these cir-
to its
cumstances,
credulity
it strains
actually superior
to conclude not
to the class action.
the
method,
individual
issues pre- Under the test-case
if Plaintiffs
sented
the purported class which Plain-
their
against
win
individual claims
Weis
class
action,
[a
concludes
Court
[T]he
other simi-
in a non-class
Markets
would
requested by Plaintiffs]
action as
Markets customers
larly
Weis
situated
indeed,
and,
would be
superior
not be
their
to file
opportunity
have the
would
Plaintiffs herein
having
to
the
inferior
Mar-
against
actions
Weis
individual
own
and, if
claims
individual
on their
proceed
estop-
collateral
assert offensive
kets and
having them obtain whatev-
they prevail,
liability and willfulness.
the issues of
pel on
damages might
punitive
er
Plaintiffs that the district
agree with
We
costs,
with their
together
awarded
be
de-
superiority-of-method
erred
its
legal fees. Should
including reasonable
trea-
well-respected
the
termination. As
on their willful-
prevail
Plaintiffs
these
ex-
and Procedure
Federal Practice
tise
claim,
situated
similarly
other
Weis
ness
relevant considerations:
plains opportunity
would have
customers
superiority
a determination
Although
many, if not
own actions—for
file their
on the cir-
necessarily depends greatly
most,
may more con-
in a court that
case,
surrounding each
some
cumstances
than the District of
for them
venient
about the
can be made
generalizations
Moreover,
likely
Maryland.
appears
it
the courts will consider
kinds of factors
collaterally estopped
would be
Weis
of Rule
evaluating
portion
this
denying willfulness.
from
23(b)(3).
Stillmock,
at *6.
as result of restoration of
of 11
by
strike participants;
relief received
sum,
In
we
grounds upon
hold the
which
majority
vast
of class members would be
deny
the district court relied to
class ac-
injunctive,
primarily
feasibility of individu
untenable,
tion certification in this case are
availability
al actions due to
of attorney’s
therefore,
the district court abused its
fees under LMRDA did not undercut con
in denying
discretion
class certification on
and,
clusion that
superior,
class device was
grounds.
Murray,
such
See
434 F.3d at
although
might
some
calculations
954 (reversing denial of class certification
burdensome,
weighed
economies
fa
in action
statutory damages
under
treatment);
vor of class
Tchoboian v. FCRA). Accordingly, we vacate and re-
Inc.,
Parking Concepts,
the court that the district court on other that bear should consider factors nothing in Certainly U.S.C. Spe issue of class certification. the 1681n(a)(l) us to that would lead believe court cifically, neither this nor the modest of Congress range intended the yet possibility court addressed the real has statutory to be transformed into bankrupt that class could suggested the corporate by a thousand cuts death supermarkets, and the dis entire chain through “A claim this sort Rule 23. trict wide in decid court retains discretion the creates a tension between certify provisions a for minimum and the ing light whether to class in Rule 23 for class actions that provisions that problem. contemplation the probably was not within exponential expansion I that the worry of those either the stat- promulgated who damages through aggres- the Parker v. ute the rule.” Time Warner action a real sive use of the class device is (2d Co., F.3d Entertainment jobs Congress killer that has not sanc- Cir.2003) (Newman, J., concurring). Sim- certify in plain- tioned. To cases where no put, perfect is a ply present the case storm tiff from has suffered actual harm provisions independent which two com- where identity employ- theft and innocent to far wreckage bine create commercial ees fallout catastrophic suffer greater could alone. Judge than either As Congress’s could not have been intent. in a similar explained Newman situation Indeed, relatively involving statutory damages for range modest cable sub- scribers, that specify- “I do not believe statutory damages by Congress chosen $1,000 minimum ... ing payment for suggests bankrupting that busi- entire violations, intended Congress expose to over somewhat technical violations nesses liability for billions of dol- [violators] Congress’s objectives. was among not lars.” at 27. The same Id. statement It that Congress passed is undeniable applies equal with force to FACTA’s $100 protect FACTA to consumers from $1,000 range. statutory damages real theft. threat of It is clear as
well not Congress did intend willful A.
repeat emerge violators of FACTA to from The statute itself affords reason to be- litigation more nothing than a wrist lieve Congress did insist on slap. It is understandable too that this adopting the class mechanism all costs. many struggled court and others have with Regardless liability of whether common is- of FACTA interaction and Federal predominate sues this case over individ- nothing Rule Procedure 23. I of Civil see determinations, ualized damage it remains statute, however, in the that mandates provide true did Congress for individ- claims or action treatment FACTA damage ualized determinations FACTA. precludes considering a district from argument against This fact cuts of annihilative in the prospect Congress compel wished to consolidated through certification calculus. suits class certification. dreds, thousands, purchases, adopt per-receipt approach, were we to if not hoard receipts, transformed their into FACTAwould be from shield stream federal court statutory damages protecting privacy for consumer a sword collect on each one. The into potential dismembering Opportunistic against counsels businesses. for such abuse *10 plaintiffs' preferred per-receipt interpretation. intentionally could make hun- cardholders There are several indications FACTA It is not difficult why to discern Con- First, damages gress individualized. would allow consumers to select stat- fixed; statutory damages instead, utory are not damages rather than damages actual Congress provided they may range as a measure of compensation. While anywhere $1,000. from to 15 U.S.C. some $100 violations FACTA will lead to 1681n(a)(l)(A). § The statute easily quantifiable harms, does not other violations specify jury what factors a ones, should consider may tangible lead to less such as a selecting when range. number within this privacy, heightened loss of risk and anxi- But statutory damages theft, because are intend- ety identity over or increased time ed to address harms that are small or spent monitoring one’s financial security. difficult quantify, partic- to evidence about In order help jury place to a value on ular highly class members is harms, relevant to a intangible these provides FACTA jury charged with this task. Had Con- statutory damages for between gress adopted a set figure statutory $1,000. for however, It is up jury, still to a than range dependent rather on select a figure range, within this and the evidence, variable the case for class certifi- individualized nature of this determination cation would have been fortified. strong is evidence that class treatment may not required be the course under Second, compensatory nature of FACTA. statutory damages FACTA suggests class certification is not congressionally mandat B. powerful ed. The most indication that Congress statutory intended damages to That the court (correctly, my
278 theft, surely trary punishments on a tortfeasor.” State identity it in-
ages due Campbell, Farm Mut. Auto. Ins. Co. v. 538 experienced varying members cludes who 1513, 408, 416, 123 155 L.Ed.2d U.S. S.Ct. quantifiable less harms. Assess- levels of (2003). 585 clearly these harms “does lend ing ... a itself to mechanical calculation.” considering than Rather annihilative Brands, Inc., v. Am. Windham they process, as on due damages bear banc). (4th Cir.1977) (en 59, All 68 of however, preferable it is for a district suggest Congress facts did not these to address them in the context of court contemplate a as the exclusive class action 23(b)(3)’s requirement. superiority Rule FACTA route for suits. gives the court Doing so district discretion problem a serious
to avoid constitutional II. best tradition of the Brandéis concur- the Valley rence in v. Tennessee Ashwander acts, course, against Congress of the 288, 466, Authority, 297 56 S.Ct. 80 U.S. Rules, backdrop of the Federal and we (1936), a permits L.Ed. 688 district it Rule only must assume knows not of 23’s superi- to declare a is not court device utility, but also that the Rule is not end plaintiff whose or when class members management It is unto itself. a case de- any no of sort still identity suffered theft vice, a flexible one at that. Rule wipe company threatens an entire off expression flexibility, is the ultimate map. the providing non-exclusive list of broad fac- tors for courts to consider. See Fed. primary It is fair to observe that a focus 23(b)(3)(A)-(D). Notably, R.Civ.P. its flex- efficiencies, upon procedural of Rule 23 is ible nature indicates that district courts not its A but that is sole concern. to consider have broad discretion factors has other discretion to consider fac may desirability pro- bear the ... tors as well. “Within that discretion is the ceeding down road of class treatment. attaching weight determinative reality that if class action treatment Certifying a action that would im- applied were this case where com pose damages annihilative where there has any contains no plaint indication of actual been no actual harm from theft provable substantial or concerns, could raise serious constitutional amount, aggregated this relief would be plaintiffs Reply themselves admit. See oppressive consequence and difficult to 2 n. 2. Br. at Other courts have noted that justify.” Bank Wilcox v. Commerce large potential devastatingly “the (10th City, Kansas Cir. F.2d award, pro- out of all reasonable 1973). also See London Wal-Mart portion to the actual harm suffered (11th Stores, Inc., 1255 n. 5 F.3d class, plaintiff may members of the raise Cir.2003) (class superior action not be Parker, process due issues.” 331 F.3d at “the potential where defendants’ Plus, Inc., Spikings 22. See also v. Cost completely out would enormous and (AJWx), 2007 No. CV 06-8125-JFW U.S. proportion to harm suffered (C.D.Cal. *9, Dist. LEXIS Coldwell, Kline v. Banker & plaintiff.”); 2007) (same). Indeed, May princi- this (9th Cir.1974) Co., F.2d ple punitive has some in the dam- salience (same). context, ages Supreme Court where Finally, flexibility has noted Due Process Clause of Rule 23 also “[t]he prohibits generous Fourteenth in the Amendment reflected abuse discre- standard which district court imposition grossly excessive arbi- tion under
279 decisions are reviewed. As cated account numbers between time certification 4, district FACTA became effective on December repeatedly explained, we have “[a] 2006 and time the company brought its deciding broad discretion in has 7, Thorn, systems compliance into 2007. June certify a 445 whether to class.” Because FACTA establishes Dryvit (quoting F.3d at Lienhart v. $1,000, damages between and under (4th Inc., 138, $100
Sys.,
255 F.3d
Cir.
plaintiffs’ per-receipt approach,
Mar-
2001)).
Weis
decisions “will be re
Certification
subject
kets
thus be
would
to a massive
only upon
showing
versed
a
of
abuse
payout of between
and
billion.
$1.4
Brown,
$14
Boley
v.
10 F.3d
discretion.”
(4th
Cir.1993);
South
McClain v.
calculation,
per-consumer
The court’s
Bank,
Nat'l
Carolina
astronomical,
while less
is no
annihi-
less
Cir.1997)
(4th
(same). We afford this dis
lating to
plaintiffs
Weis Markets. Both
courts
reason.
good
cretion to district
and
Markets have
Weis
estimated that
is “a practical problem,
Class certification
“there
potentially
are
over one million
a factual
a
primarily
and
one with which
Class
Multiplying
members.”
that esti-
generally
fa
greater
district court
has a
mate
damages range
re-
expertise
miliarity and
than does a court of
mil-
sults
total
between $100
(cita
Windham,
appeals.”
Weis As Mar- Markets. counsel for Weis it, “a put kets hundred million dollars III. my company sinks client.” The is traded on the York Stock its Exchange, New A. at capitalization prices market current In light flexibility of the broad embodied just million other over dollars. In I am pleased Rule the court words, just is not proverbial this case instructs the court on remand to suit; action, if bet-the-company consider alternative reasons that bear successful, company shatter will the entire Maj. Op. class certification. See into hundreds thousands of $100 previ- 275. Specifically, district court $1,000 plaintiffs might bits. The here as ously ruling on reserved “the contention every well seek to distribute of Weis one possibility ‘annihilating that the results’ apiece Markets’ million shares a 26.9 few disproportionate harm renders class to each holder. receipt inappropriate.” certification Stillmock destruction of Nor is the Weis Markets Markets, Inc., MJG-07-1342, Weis No. If only plaintiffs loss to shareholders. (D.Md. 2009 WL at *6 March successful, a substantial number 2009). court rightly permits the dis- people unemployed will left in one of inquiry. trict court to undertake that job toughest generations. markets currently of financial ruin operates The risk as a result Weis Markets owns and illusory. sixty-four grocery class certification is far from one retail hundred New Pennsylvania, Maryland, it stores in printed Weis Markets estimates 14,578,600 York, as receipts Jersey, Virginia trun- improperly New West FACTA will do so company that violates twenty-five pet supply stores.
well (Form twice, thousands or Markets, Inc., not once but instead Report Annual Weis *13 times, (Mar. 11, 2010). to the fact 10-K), owing millions of Approximate- at even 1 updated equip- has its 17,600 properly that it ly company work for the individuals for And FACTA provides ment. because part-time capacity. in either a full—or Id $100, statutory of at least such damages It that Congress at 2. is doubtful intended compa- by expose em- almost definition cause of innocent suits to these thousands magnitude to that is orders of jobs paychecks by their and nies ployees to lose worth, regard- or net employer, beyond in a situation their income bankrupting their corporation. “FAC- identity theft. less of the size of plaintiff where no suffered TA class actions threaten businesses to actions None of this is condone the lia- every devastating size classwide with prejudging Markets. Without Weis for bility what harmless willfulness, preliminary matter of there are McLaughlin Ac- violations.” 1 on Class very acted company indications (6th ed.). tions 2:38 badly. dispute Mar- There is no that Weis spectrum, one suits printed receipts 14 On end of the such kets over million FACTA; stores, pop” and such as outstanding liability jeopardize “mom violated $40,000 a in hinge it the local with mere issues this case on whether did restaurant year merely negligently. net assets that last faced a willfully $46 so More- $4.6 over, with did not in- million suit which none compliance FACTA FACTA regulatory putative any a members suffered actual untangling complex volve class scheme, merely injuries identity Ley issuing receipts to a result theft. but I, Inc., F.R.D. revealing more than the soto v. Mama Mia 255 cardholders no (S.D.Fla.2009). Still, A last five their 697-98 similar suit went digits of card number. class, further, step seeking it this a something must count for FACTA definition, and consists of individuals who “between million $3.3 $33 only statutory damages. company million” from consoli can claim It a “whose a staggers imagination to believe dated financial statements ... show[ed] Congress impose annihilating negative intended to net loss of million a total $5.5 Lucky million.” company an entire net worth of Price v. $8.1 Entertainment, Inc., it people lapses work for of a Strike No. CV 07- who (MANx), in a at somewhat technical nature and case 960-ODW WL 4812281 (C.D.Cal. 2007) single Aug.31, where class *5 add (emphasis not a member suffered ed). actual harm due to theft. struggling are companies And small or
B. only far not the ones threatened claims satisfy annihilating proportion ability Nor is liabili- out of to their problem ty by present means to the them. One with net income limited defendant just puta- country recently case. District courts across the over million faced $68 seeking what class mil- struggling one court termed tive action between $198 onslaught” v. CEC of class action liti- lion billion. Blanco $1.98 “veritable L.P., FACTA, compa- 07-0559 gation subjecting Concepts under Entm’t No. CV (JWJx), *2 WL at large extraordinary nies small and GPS 2008). (C.D.Cal. Jan.10, corpora- Kings Family claims. Palamara v. Res- Other taurants, 07-317, similarly have No. tions faced astronomical 2008 WL (W.D.Pa. 2008). See, Ordinarily, e.g., to their size. Apr.22, *3 claims relative Inc., Plus, company v. No. proposition likely Cost CV 06- will Spikings settle (AJWx), 2007 U.S. Dist. LEX- rather than risk shareholder 8125-JFW reaction to (C.D.Cal. 29, 2007) May exposure at *12 theoretical IS billions even if the company with net worth million claim (company believes the lacks merit.” $316 Scheuerman, seeking FACTA million B. faced to Sheila Due Process For- billion); Retail, Lopez Toys KB gotten: Statutory The Problem Dam- $3.4 Inc., (CWx), Actions, ages No. CV 07-144-JFW and Class Mo. L.Rev. (C.D.Cal. (2009). 82025, at *14 U.S. Dist. LEXIS At the plaintiffs least *14 2007) (even 17, per July violation in Rhone-Poulenc alleged and Castaño sub- proposed FACTA class was 600% of defen- actual damages; stantial here we face the worth). net I it can risk of suppose forcing dant’s be a defendant to in settle of liability assumed shareholders creditors face billions in for actions that single identity litigation But employees? bear such risks. resulted in not a instance of liabilities will hardest These fall on those theft. laid off them.
who are because of Nor possibility appellate does the of re view eliminate of problem uneconomic
C.
settlement.
“The reason
an appeal
In addition to
of bankrupting
the risk
will come too
provide
late to
effective relief
companies
entire
for violations which no
these
is
for
defendants
the sheer magni
resulted,
theft
there is an addi-
action,
tude
risk to which the class
problem
combining statutory
tional
with
in contrast to the individual
pend
actions
Compa-
ing
likely,
and class certification.
exposes them.” Rhone-Pou
lenc,
may be
nies
forced to settle
the face
51
(emphasis
of
F.3d at 1297
in origi
nal).
annihilating liability,
they
such
even if
companies
Weis Markets and similar
event,
strong
hardly
have a
defense.
In such an
if they
could
be blamed
took a safe
the substantial costs
such
associated
settle-
route and settled in
circumstances.
will inevitably
they settle,
ment
on to
“If
passed
con-
the class certification —the
very
ruling
sumers —the
Congress
ones whom
that will have forced them to set
to
sought
protect.
tle—will never
be reviewed.” Id.
1298.
effectively
To
allow certification to deprive
explained,
As the Seventh Circuit
there
party
a
of a
cannot be
defense
what the
forcing
is a serious concern with
these
adversary process is about.
to
companies
“defendants
stake their
trial,
of a single jury
the outcome
or be
IV.
by fear of
bankruptcy
forced
the risk of
to
even if they
legal liability.”
gives
settle
have no
Is there a
solution—one
Inc.,
meaning
Matter
Rhone-Poulenc Rorer
its
proper
statute
effect with-
of
(7th Cir.1995).
1293,
Indeed,
visiting consequences
F.3d
out
far
excess of
facing
all-or-nothing
Congress
Judge Newman,
risk of
“[t]he
ver what
intended?
risk,
statute,
dict
too
presents
high
addressing
sug-
a
even when when
a similar
has
probability
judgment
gested
problem.
an adverse
two solutions to the
One
Co.,
low.” Castano v.
Tobacco
to
Am.
84 is
award class members
dam-
(5th
734,
Cir.1996);
F.3d
see
ages
also Coo
below the amount authorized
Con-
Parker,
Lybrand
463,
(Newman,
pers
Livesay,
gress.
&
v.
437 U.S.
F.3d at 27
(1978)
98 S.Ct.
he
concurring).
acknowledges,
the terms of statute.” to for judge regard prospec- to with exists allowing a district suggestion in this case plaintiffs, a tive whom there “that class will be certified determine Hosiery aggregate many. See Parklane Co. v. to some only up reasonable Shore, id. at 439 U.S. 99 S.Ct. [statutory] damages,” amount (1979). L.Ed.2d 552 better unlike similar fares little because discretion, judicial remittitur exercises that the Thus I am convinced denial sim- judiciary here would example, for possibilities its of class certification with provision adding capping ply be would allow consequences annihilative in its Congress wis- federal statute which who violate the statute to companies Congress fit not see to include. dom did laughing emerge and unscathed. FACTA adopt cap, such of course remains free for sufficient motivation adverse- “provides limiting it has done instance bring suit ly affected individuals to and for Truth In action recoveries under attorneys represent Campos them.” *15 $500,000 or 1 Act to the Lending lesser ChoicePoint, Inc., F.R.D. worth, 15 net U.S.C. percent of creditor’s (N.D.Ga.2006). so especially This is since 1640(a)(2)(B), § but it has not done so compliance the costs with statute here. minor to the comparison remain costs then, the denial question, is whether litigation, in whatever form it dealing with proven will allow of class action treatment reasons, I assume. For the above escape largely of a statute to violators it well within a district court’s dis- believe I do that we are untouched. not believe magnitude cretion consider the of class certification faced with choice upon employees and its company costs consequences potentially and its lethal may impose. Al- that class certification of such the denial certification will not lowing such consideration leave non-compli- impunity for the prospect toothless, fly nor the face of the statute ant. mandate, nor court any congressional problems associated shortage There is no of incentives for constitutional bring constraining suits district court discretion pro- consumers individual under plaintiffs The act with vided Federal Rule of Civil Procedure provides FACTA. attorney’s I costs and fees 23. Because do not understand the both reasonable any action” judgment preclude “in the case of successful es- court’s exercise remand, tablishing negligent willful or violations. of discretion this manner (a)(2) (em- 1681n(a)(3), §§ respectfully special 1681o I offer this concur- added). are, therefore, phasis These suits rence. winning plaintiffs.
“essentially costless” to Bank, 224 Capital
Anderson v. One F.R.D. (W.D.Wis.2004). They poten-
tially quite rewarding as well. For one
thing, actual remain available in case theft. U.S.C. 1681n(a)(l)(A). another, possi-
§ For
bility exists punitive damages cases imposition ap-
where their is needed punishment and deterrence. 15
propriate 1681n(a)(2). third, For a
U.S.C.
notes
tions of consumer
status.
interpreted
phrase “willfully
Court has
1681n(a)(l)(A).
§
The district court next
comply,”
preamble
fails to
in the
sentence
propose
assumed “that Plaintiffs could
1681n(a),
§
reaching
of 15 U.S.C.
not
satisfactorily
methods
to solve with the
FCRA,
only knowing violations of
but
myriad
practical problems
of
created
well,
reckless ones as
Ins. Co.
Safeco
of
certifying
they
the class that
seek.” Still
Burr,
47, 57,
Am. v.
551
127
U.S.
S.Ct.
mock, 2009
at *4. In
WL 595642
this re
(2007),
Notes
notes view) be compensatory comes from the structure that statutory damages are available of FACTA’s remedial provisions. Notably, per-consumer on a per-receipt rather than Congress provided that a consumer sub basis further point underscores the ject to a willful Congress violation of the statute did not demand class certifica could recover either actual or tion in per-consumer per FACTA. The damages, but not spective places both. the focus on the character 1681n(a)(l)(A). § The fact that statutory members, istics of individual class rather damages are available in lieu of actual than on the defendant’s conduct that damages suggests they too serve to common to protect the entire class. To compensate individual consumers for their right present “the of the defendant to facts injuries. See In re Trans Corp. Union or raise defenses that are particular Privacy Litig., members,” 211 F.R.D. 342 individual class Thorn v. Jeffer (N.D.Ill.2002) (“[Section] 1681n(a)(l)(A) Co., son-Pilot Ins. Life (4th clearly unambiguously Cir.2006), allows for actu businesses deserve at least al statutory damages or opportunity argue the measure of that certain indi (second compensatory damages.”) empha viduals statutory damages should receive added). sis Congress provided also range. for at the low end of the Weis Mar punitive kets, addition to actual example, might do so putting or damages. 15 U.S.C. on evidence that some class members were 1681n(a)(2). Congress That high very noncompliant receipts, did so issued few lights the fact that statutory damages rarely if reports, ever checked their credit compensatory, serve a puni experienced rather than no heightened apprehen tive, function in FACTA’s remedial sion of theft. While class here scheme. excludes who those suffered actual dam-