Overlawyered » FACTA

March 19 roundup

Walter Olson — Fri, 19 Mar 2010 13:16:07 +0000

Plaintiff in case alleging defective clown shoes “does not want any additional publicity” [N.Y. Post via Lowering the Bar]
Santa Fe’s anti-wireless activists [The New Mexican, earlier]
Law vs. vaccines, cont’d: “Judge Declines to Upset $22.5 Million Jury Award in Polio Case” [NYLJ]
Arizona high court launches probe of Maricopa County prosecutor Andrew Thomas [Coyote, earlier]
“Innumerable histronics” but no conspiracy: litigation over 1996 Filegate scandal fizzles out [Althouse]
More boosts in regulators’ budgets [Roger Clegg, NRO, OFCCP employment regulation at federal contractors; Koehler, FCPA Professor] Obama’s putting in regulatory hardliners at many agencies; a clue to his politics? [Bainbridge, Judis/TNR]
If only they’d confine themselves to suing the actual bad actors in FACTA (credit-card-slip) and junk-fax litigation [Bart T. Murphy, Chicago Business Ledger; my '06 take]
So may bullies ever fare: sanctions set against company that sued BoingBoing for libel ["MagicJack" case and more]

Tags: Arizona, Bill Clinton, FACTA, libel slander and defamation, New Mexico, sanctions, vaccines

Welcome Orlando Sentinel readers

Walter Olson — Tue, 19 May 2009 19:10:10 +0000

I’m quoted in Sandra Pedicini’s report on the settlement (with $9 appetizer vouchers) of a lawsuit charging the Olive Garden restaurant chain with “printing the last six digits of customers’ credit-card numbers on receipts. The limit under the Fair and Accurate Credit Transactions Act is five.” Under FACTA, lawyers need not show that class members suffered actual damages from the violation; instead, they can claim statutorily prescribed damages, multiplied by the (usually large) number of customers involved. In most such cases, there are no reports of any identity theft because of the breaches: “It’s like reckless driving in which no one had an accident and except for the lawyers, no one even noticed the car speeding,” I’m quoted as saying. ["Olive Garden diners may be eligible for $9 voucher", May 19]

Tags: FACTA, harmless lawsuits, restaurants

Grimes v. Raves Motion Pictures FACTA decision reversed

Ted Frank — Mon, 13 Apr 2009 13:00:54 +0000

Last year, Overlawyered was the first to report that Judge William Acker in the Northern District of Alabama had held the Fair and Accurate Credit Transactions Act (FACTA), which provides unlimited damages of $100-$1000 per violation for trivial technical violations of printing too many numbers on a credit card receipt, unconstitutional. Other judges have refused to follow his lead, and last week the Eleventh Circuit reversed the decision, rejecting the facial challenge to the statute, but leaving open the possibility that the statute would be unconstitutional as applied in a particular case. (Harris v. Mexican Specialty Foods, No. 08-13510; h/t R.M.)

Tags: class actions, FACTA, punitive damages

October 15 roundup

Walter Olson — Wed, 15 Oct 2008 13:10:53 +0000

Litigants’ “not about the money” assertions: Mark Obbie has further thoughts on reporters’ uncritical deployment of this cliche, and kind words for our archive of posts on the subject [LawBeat]
Lawyer on the other side of that much-circulated “I’m sorry” deposition-dispute letter has his say [Markland and Hanley via Turkewitz and Above the Law]
Local authority in England tells gardener to remove barbed wire from wall surrounding his allotment, thieves might get hurt on it and sue [Never Yet Melted, Steyn/NRO Corner]
Same-sex marriage in Connecticut through judicial fiat? Jonathan Rauch says no thanks [IGF]
Lawyers are back suing despite reform of FACTA, the credit-card-receipt “gotcha” law, but insurance might just dry up [Randy Maniloff at Point of Law]
“Racing to the trough” — auto lenders latest to ask bailout though original TARP rationale of liquidity fix seems remote [Naked Capitalism]
“To be a green-certified property (pretty important in crunchy Portland) there must be an absolute prohibition on smoking, including outdoor spaces.” [Katherine Mangu-Ward, Reason "Hit and Run"]
(Failed) claim in trademark case: “the term ‘electric’ is not commonly used by the general public to describe a source of power for watches” [TTAB via Ron Coleman]

Tags: accolades, assumption of risk, Connecticut, criminals who sue, FACTA, not about the money, premises liability, same-sex marriage, smoking bans, trademarks, United Kingdom

The exception to “all publicity is good publicity”

Ted Frank — Sat, 31 May 2008 12:23:16 +0000

This “Ted Franklin” fellow at the American Enterprise Institute who spoke to the Birmingham News about the recent Judge Acker decision and FACTA amendments sounds like an interesting fellow who has thought about some of the same issues I have, even if he holds opinions diametrically opposed to mine about the need to cap damages in FACTA class actions.

Tags: class actions, FACTA

Breaking and exclusive: FACTA held unconstitutional

Ted Frank — Thu, 29 May 2008 18:29:32 +0000

We’ve previously written about the problems of the Fair and Accurate Credit Transactions Act (FACTA), which imposes astronomical statutory damages on vendors whose credit card receipts fail to comply with ambiguous technical requirements. Today’s Daily Business Review recounts the tale of a small-business owner whose restaurant was hit with one of these suits, and how Congress has unanimously passed legislation, over some trial-lawyer objections, to shut down previous suits, though the bill far from solves the litigation problem from popping up again, and trial lawyers vow to continue pressing the suits. “U.S. Sen. Charles Schumer, D-New York, who sponsored the Senate bill, said, ‘Congress never intended for the law to be used to drive companies out of business with expensive legal cases that don’t involve any harm to consumers.’”

Meanwhile, Judge William M. Acker, Jr., of the Northern District of Alabama, had a series of summary judgment motions in four FACTA cases before him. He rejected the idea that class certification was inherently improper when the resulting statutory damages would bankrupt the defendant (an issue I discussed in my Liability Outlook on the subject), but held that the $100-$1000 statutory damages, without a showing of harm, were necessarily punitive in nature, and thus constitutionally impermissible under State Farm v. Campbell:

FACTA makes no distinction between the possibility of awarding punitive damages after actual damages have been proven, and after no actual damage whatsoever has been sustained, much less proven. The imposition of punitive damages without any actual damages whatsoever, is a stranger to the Supreme Court which recently said in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 426, 123 S.Ct. 1513, 1524 (2003):

[C]ourts must ensure that the measure of punishment is both reasonable and proportionate to the amount of harm to the plaintiff and to the general damages recovered. (emphasis supplied).

To impose punitive damages without the suffering of any harm is inherently disproportionate. Nominal damages can, of course, represent or substitute for actual damages. Nominal damages may or may not open the door to an award of proportionate punitive damages, but an award of damages that are by statute expressly not compensatory in nature, cannot open that door.

A second ground for the decision, that the phrase “not less than $100 and not more than $1,000″ is unconstitutionally void for vagueness, seems a considerably weaker argument, though one sympathizes with Judge Acker’s concern that the results of such language before a jury will be arbitrary because different juries faced with the same facts will come to different and equally reasonable conclusions. Still “$100-$1000″ is considerably less arbitrary than, say, non-economic damages. The decision is Grimes v. Raves Motion Pictures Birmingham, LLC, __ F.Supp. 2d ___, No. 07-AR-1397-S (N.D. Ala. May 28, 2008). The decision, if upheld on inevitable appeal to the Eleventh Circuit, has implications for a number of consumer fraud statutes.

Tags: class actions, FACTA, punitive damages

FACTA receipts, restaurant coupons and “annihilating” damages

Walter Olson — Fri, 25 Apr 2008 23:00:17 +0000

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.

Tags: class actions, FACTA, Pennsylvania, privacy

FACTA: “I have no damages. I’m just bringing this lawsuit because I can.”

Ted Frank — Fri, 04 Apr 2008 09:13:14 +0000

The National Law Journal gets around to discussing the problem of FACTA lawsuits in the April 7 issue; Overlawyered readers are well ahead of the curve. See also my Liability Outlook on the subject.

Tags: class actions, FACTA, harmless lawsuits

FACTA’s billion-dollar problem

Ted Frank — Wed, 31 Oct 2007 11:10:18 +0000

My latest Liability Outlook looks at the abusive litigation created by a statutory drafting oversight: a bill designed to protect against identity theft has instead become a mechanism for the entrepreneurial plaintiffs’ bar to attempt to bankrupt innocent businesses that haven’t harmed anyone.

Tags: class actions, FACTA, harmless lawsuits, Liability Outlook, Ted Frank

September 2007 Class Action Watch

Ted Frank — Tue, 25 Sep 2007 07:46:37 +0000

In the latest issue of the Federalist Society’s Class Action Watch, Mark Behrens and Christopher Appel look at recent rulings from the New Jersey and Missouri Supreme Courts that reject lead paint public nuisance claims. James Beck looks at the American Law Institute’s “Principles” projects. Brian D. Boyle and Julia A. Berman look at fact-based scrutiny in securities and antitrust actions. Jessica D. Miller and Nina Ramos look at fluid recovery. Kenneth J. Reilly and Frank Cruz-Alvarez look at an Eleventh Circuit case that may have set a new standard for federal diversity jurisdiction. Last, but not least, there is a front-page article from me analyzing an omission in the Fair Credit Transactions Act (FACTA) that might provide a substantial windfall for the plaintiffs’ bar.

Tags: antitrust, class actions, FACTA, lead paint, Missouri, New Jersey

Overlawyered » FACTA

March 19 roundup

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