Entrepreneurial lawyers have launched a thriving industry of class actions demanding statutory damages of $100-$1000 per violation (times the number of customers) from businesses that continue printing too much credit card information on receipts despite a federal law requiring them to stop that practice, the Fair and Accurate Credit Transaction Act (FACTA). Kings Family Restaurants, a Western Pennsylvania chain, has agreed to distribute coupons, as well as very non-couponic attorney’s fees, in one such case (WSJ law blog, Apr. 25). “Coffee Bean Tea & Leaf, a Los Angeles-based coffee-shop chain, agreed to give customers free drinks and pay customer lawyers $110,000.” On the other hand, judges have not always gone along with demands for class certification: “Costco, the largest U.S. warehouse-club chain, might have to pay as much as $17 billion without having harmed anyone, U.S. District Judge A. Howard Matz said in January, refusing to certify a class action. That’s 15 times the Issaquah, Washington-based company’s 2007 profit.” (Cynthia Cotts, “Costco, Kinko’s Battle Trial Lawyers Over Credit-Card Receipts”, Bloomberg, Apr. 5). One tactic, used in suits against U-Haul and In-N-Out Burger, is to limit the scope of the class action to a few stores or locations, on the theory that a court that might not let a class action with “annihilating” damages go forward might yet approve one inflicting a nonfatal though large shark-bite. (Matthew Hirsch, “Plaintiffs Attorneys Think Globally, Act Locally in Financial Privacy Cases”, The Recorder, Aug. 27, 2007). Among the 300+ defendants in receipt suits is 1-800-FLOWERS, whose attorney David E. Block expresses outrage:
“In 22 years, I have never had a plaintiff sit across the table from me and say, ‘I have no damages. My identity hasn’t been stolen. I’m just bringing this lawsuit because I can,’” said Block of the Miami office of Jackson Lewis. “There’s something inherently wrong with a lawsuit where the plaintiff has no injury.”
(Tresa Baldas, “Landslide of Suits Over Data on Receipts”, National Law Journal, Apr. 7). “Receipts” needn’t actually be printed out in a shop or public place to trigger the act; those that flash on a customer’s home computer screen count too. (WSJ law blog, Apr. 8). Our earlier coverage: May 10 and Oct. 31, 2007, and Apr. 4 of this year.