Class-action status denied in credit card ID theft suits

Class-action status denied in credit card ID theft suits

LOS ANGELES —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

Although appeals are expected and the cases will continue nonetheless, the judges’ decision was welcomed by such operators as Coffee Bean & Tea Leaf, In-N-Out Burger [3], the Walt Disney Co., El Pollo Loco [4], California Pizza Kitchen [5] and Levy Restaurants [6], which were among the companies accused late last year of compromising their patrons privacy and financial security. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

Charging that the damages being sought—potentially in the hundreds of millions of dollars—far exceeded any harm done and would financially ruin the defendant companies, U.S. District Judges John F. Walter and R. Gary Klausner said the plaintiffs’ effort to be certified as a class that could then add scores of other claimants was unmerited. The lawsuits stem from a recently enacted identity theft prevention law requiring retailers to mask credit card numbers and expiration dates on receipts. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

The claimants, whose cases would have been consolidated to launch an expanded class action, were not harmed, the judges said in their opinion. But both said the plaintiffs could continue individual cases against the operators and retailers. Still, the jurists noted that the plaintiffs had failed to support claims of damage to a broad class of consumers who would have shared common harm. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

“It’s a setback, but it is certainly not the end of the road,” said Greg Karasik, a plaintiff attorney at Spiro Moss and Barness in Los Angeles, whose firm, along with others, was seeking class-action status in several lawsuits filed against the restaurant companies and such other big-name retailers as Rite-Aid and Blockbuster. Karasik said an application to appeal would be filed. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

The judges ruled that the insufficiency of fact did not meet the legal standard in which a class action is “superior to other available methods” to solve the controversy. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

Stressing he was not directly criticizing the plaintiffs’ lawyers, Judge Walter said that a class-action lawsuit had the potential to “cure an illness by killing the patient,” in that the economic harm to the businesses would be irreparable and would unleash unnecessary litigation that would benefit only a few trial lawyers. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

The rulings stem from four of what could be as many as 200 lawsuits filed nationwide in which restaurant chains and retailers allegedly failed to “truncate” credit card numbers as required under the Fair and Accurate Credit Transaction Act, or FACTA. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

FACTA is a comprehensive law intended to improve the accuracy of consumer credit reports, of which the identity-theft-prevention aspect is but one part. President Bush signed FACTA into law in 2003, with the amended provision that retailers could print no more than five digits of a credit card number or an expiration date on sales receipts. That stipulation went into effect last Dec. 4. Some of the lawsuits were filed against the restaurant companies and other retailers the next day. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

Estimates by defense attorneys of the punitive and compensatory damages being sought ranged from hundreds of millions of dollars to well over $1 billion. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

Robert Wallan, of Pillsbury, Winthrop, Shaw, Pittman LLP, in Los Angeles, representing Coffee Bean & Tea Leaf, the 520-unit quick-service chain based in Los Angeles and the only foodservice company named in the judges’ ruling, was the first lawyer to warn operators late last year that the industry was vulnerable to facing a number of class-action lawsuits stemming from FACTA violations. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

But Wallan expressed confidence that judges in other parts of the country would be guided by the opinions of Klausner and Walter in drafting similar rulings to derail class-action petitions in the case. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

Wallan said his adversaries have two courses of action: to continue to pursue the cases individually, where damage limits could range from $100 to $1,000, or file an appeal to contest the judges denial of class action. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

Karasik said that is exactly what his firm would do. He said that according to the law, the plaintiffs first apply with a request to appeal in the U.S. District Court of Appeals before an actual appeal is filed. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

Karasik added that although this is a “good day” for the defendants and a “disappointing one for us,” courts in other parts of the country might be more open to granting class-action status. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

“This suit should be certified for class action, and we have reason to believe that the appellate judges will not have the same view as Klausner [and Walter],” Karasik said. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

However, Wallan emphasized repeatedly that the plaintiffs’ filing statements did not include complaints from a single customer of Coffee Bean & Tea Leaf’s alleging injury when the chain printed five digits and an expiration date on sales receipts after the law kicked in. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

He noted, however, that his client could be liable for as much as $50 million in damages if the number of transactions were multiplied by the potential number of plaintiffs. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

Wallan’s argument was not lost on the judges who, in their ruling, stated that they found it unlikely that an expiration date on a credit card receipt was all a criminal needed to steal someone’s identity. Since there was no evidence of identity theft, the judges ruled that the damages being sought were so disproportionate to the violation that it would drive the companies out of business. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.

“Given the disastrous consequences to the defendants’ businesses and the thousands of defendants’ employees that would be left without jobs if a class is certified in this case and the lack of any actual harm suffered by members of the potential class, the court finds that certification of a class would be inappropriate in this case,” the judges wrote. —Two federal judges here have denied class-action status in four lawsuits arguing that restaurant companies exposed their customers to identity theft when they allegedly illegally printed credit card numbers or expiration dates on sales receipts.