In a decision filed September 27, 2010, the U.S. Court of Appeals for the Ninth Circuit reversed a California district court’s refusal to certify a class action alleging violations of the Fair and Accurate Credit Transactions Act (“FACTA”). The Ninth Circuit ruled that none of the three grounds advanced below – the disproportionality between the potential liability and the actual harm suffered, the enormity of the potential damages, or the defendant’s good faith compliance with FACTA after being sued – justified denying class certification on superiority grounds. The Ninth Circuit’s decision narrows, if not eliminates, the potential for disagreement among district courts on an issue that has for some time been a fly in the ointment for class action plaintiffs (and their attorneys) hoping for big paydays on account of harmless technical violations of FACTA.

On August 10, 2010, the U.S. Court of Appeals for the Seventh Circuit upheld an earlier ruling by the Northern District of Illinois Eastern Division that email order confirmations are not “electronically printed” receipts under the Fair and Accurate Credit Transactions Act (“FACTA”) amendments to the Fair Credit Reporting Act. Shlahtichman v.1-800 Contacts Inc., Case No. 09-4073 (7th Cir.; Aug. 10, 2010). The court affirmed the dismissal of Shlahtichman’s complaint against 1-800 Contacts Inc. that involved an electronic order confirmation containing Shlahtichman’s credit card expiration date.

On February 3, 2010, the U.S. District Court for the Western District of Pennsylvania preliminarily approved a class action settlement between Aramark Sports, LLC and a class of approximately 5,000 customers who made credit or debit card purchases from stores at PNC Park in Pittsburgh, Pennsylvania. If approved, the proposed settlement would resolve allegations made by the plaintiffs that Aramark violated the Fair and Accurate Credit Transactions Act’s (“FACTA”) truncation requirements by electronically printing receipts that contained (a) more than the last 5 digits of the plaintiffs’ credit or debit card numbers and/or (b) the expiration date of such cards.

The Fair and Accurate Credit Transactions Act (“FACTA”) amendments to the Fair Credit Reporting Act prohibit, among other things, the printing of expiration dates on receipts presented to credit or debit card holders.  Two recent cases from the U.S. District Court for the Southern District of Florida, Smith v. Zazzle.com

On December 8, 2008, in Smith v. Zazzle.com Inc., No. 08-22371-CIV-KING, 2008 U.S. Dist. LEXIS 101050 (S.D. Fla. Dec. 9, 2008) Judge James Lawrence King of the Southern District of Florida held FACTA’s credit card number truncation requirement inapplicable to receipts displayed on-screen or printed by online customers.  Judge King dismissed the case on this basis.  The order contradicts one last year in the same district, Grabein v. 1-800 Flowers Inc., No. 0722235 (S.D. Fla. Jan. 29, 2008) (reported here), but is consistent with three other Southern District of Florida cases: Grabein v. Jupiterimages Corp., No. 07-22288 (S.D. Fla. July 7, 2008), Haslam v. Federated Dep’t Stores Inc., No. 07-61871 (S.D. Fla. May 16, 2008) and Edwin King v. Movietickets.com, No. 07-22119 (S.D. Fla. Feb. 13, 2008).

Since December 4, 2006, consumers have filed dozens of class actions against retailers and other businesses across the country alleging “willful” violations of the Fair and Accurate Credit Transactions Act (“FACTA”) amendments to the Fair Credit Reporting Act (“FCRA”), prohibiting the printing of more than five digits, or the expiration date, of a credit card on receipts provided to the customer. Defendants in those cases have been waiting anxiously for the Supreme Court to rule in Safeco Insurance Co. of America, et al. v. Burr, et al., 551 U.S. _____ (2007), a factually inapposite matter in which the Court granted certiorari to determine whether “reckless disregard” suffices for willfulness under the statute. In a decision that raises as many questions as it answers, the Supreme Court held on June 4, 2007 that “reckless” failure to comply with FCRA can be considered willful. The Court’s opinion begs the question whether it was objectively reasonable for retailers to continue the printing of expiration dates on customer receipts after FACTA took full effect.