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In suits against Costco, In-N-Out Burger and dozens of other chains, class action lawyers are trying to show that companies broke financial privacy laws by putting too much bank card information on sales receipts. The payoff could be huge. In an ongoing federal case against retailer Cost Plus, plaintiffs said overly detailed sales slips exposed 3.4 million shoppers nationwide to identity theft. But since a federal judge in Los Angeles refused to certify that class of Cost Plus customers in May, plaintiffs have met the same fate in several similar cases across the country. Now, some plaintiff attorneys are pulling a page from the tree-hugger’s playbook: Think globally, act locally. Instead of trying to represent a nationwide class, these lawyers are focusing on claims that arise from only a few stores. The allegations are virtually identical in many of these suits. In December, new rules under the federal Fair Credit Reporting Act barred retailers from printing more than the last five digits of a credit card or debit card account number, or the card’s expiration date, on customer sales receipts. Several big companies missed the deadline, and they got sued. If plaintiff lawyers can prove these were willful violations, they can seek as much as $1,000 for every payment card swipe. But first, they want to convince the courts that these cases should be handled as class actions. STRATEGIC CUTS Farris Ain, a plaintiff attorney at the Herbert Hafif Law Offices in Claremont, said his caseload includes about 30 of these financial privacy suits. He expects the courts to rule next month on class certification motions in cases against Adidas, MGM Grand, Costco and other companies. Ain said his firm has mostly been asking the courts to certify consumer classes throughout California, or nationwide. But in a recent case against U-Haul of California, he limited what started as a statewide class to customers who rented U-Haul vehicles in Oakland, Berkeley, Pomona and Ukiah. In the U-Haul case, Ain said it made sense to curtail the class because the name plaintiff had personally visited stores in each of those cities, and “we knew these four locations were violating the law.” There was also a strategic reason, he said, noting that some judges have ruled these financial privacy suits don’t meet one of the requirements for class certification because they present “annihilating damages” for the defendant companies. Fewer class members, he reasons, is better than no class at all. “Our goal is to protect as many people as possible,” Ain said. When U.S. District Judge John Walter of California’s Central District rejected (.pdf) certification for Spikings v. Cost Plus, 06-08125, he said a class action would not be a superior method for resolving the plaintiffs’ claims. One reason: With 3.4 million customers involved, even the minimum statutory damages of $340 million ($100 per violation) would exceed the entire company’s net worth ($316 million) and put Cost Plus out of business. This month, another group of plaintiff lawyers asked another Central District judge to whittle down a chain-wide class in a suit against In-N-Out Burger, to exclude all customers except those who visited restaurants in Woodland Hills and Studio City. Sheri Eisner, who’s defending In-N-Out Burger, said the motion caught her by surprise. “The complaint alleges a nationwide class. We didn’t know that they were switching to a class of only two stores until they filed their motion,” said Eisner, a Los Angeles partner at Pillsbury Winthrop Shaw Pittman. Eric Grover, one of the plaintiff attorneys suing In-N-Out Burger, referred questions to lead plaintiff attorney Douglas Linde, who did not return calls on Friday. But in Linde’s class certification motion, filed Aug. 6, he said his case was better suited for class certification than previous suits, including the Cost Plus case, that have sought a nationwide class and been rejected. Linde said in his motion that there’s been no indication (.pdf) that his suit would “annihilate” In-N-Out Burger: “Based upon information provided to date, plaintiffs estimate the class consists of approximately 12,000 cardholders. Accordingly, if liability is determined and damages are assessed, defendant would only be liable for between $1.2 million and $12 million in damages.” Eisner, who’s preparing to file an opposition to Linde’s brief today, said the overall amount of damages is not the biggest obstacle that plaintiffs must overcome. Even if the damages are relatively small, she said, they “are disproportionate to the harm [plaintiffs suffered], which is none.” So far, the courts still seem to be favoring the defense in this certification dispute. On Aug. 15, Walter, the U.S. district judge, concluded (.pdf) that even the limited class proposed by Ain, the Claremont plaintiff attorney, wouldn’t work in the U-Haul case. Restricting the class to four stores, Walter found, still leaves minimum damages of about $115 million that approach the company’s net worth, estimated at $118 million. While echoing his ongoing concern about annihilating damages, Walter raised a new concern. By shrinking the class to cover only a few stores, he said, the plaintiff lawyers in the U-Haul case defeated the class action’s purpose of “efficiency and economy.” That, Walter wrote, would leave defendants open to “piecemeal litigation” and cause the “disparate treatment of otherwise equal consumers” by seeking damages for some but not others.

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