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A 16-month-old federal law designed to keep private information off customer receipts has triggered an onslaught of class actions against businesses. Since the law went into effect, defense counsel say more than 300 class actions have been filed against a number of companies, including Toys “R” Us Inc., Inter IKEA Systems B.V. and AMC Entertainment Holdings Inc. They are accused of printing on receipts too much credit card information, thus increasing the likelihood of identify theft. Several of the class actions have been certified. Online retailers are also getting hit. A federal judge in Florida recently held that the law covers both Internet and store receipts. G rabein v. 1-800-Flowers.com Inc., No. 07-22235-CIV (S.D. Fla.). Under the law, known as the Fair and Accurate Credit Transaction Act (FACTA), it is illegal to print on a receipt more than the last five digits of a credit card number or the card’s expiration date. Lawyers warn that one technical mistake could be disastrous because plaintiffs need only prove a willful, technical violation � not actual harm � to be entitled to statutory damages between $100 and $1,000 per violation. Add up every noncompliant receipt, and a company could be facing huge penalties. The ‘annihilation defense’ Class certification is the biggest obstacle currently facing FACTA plaintiffs, said J. Mark Moore of Los Angeles-based Spiro Moss Barness, a class action firm with 20 pending FACTA lawsuits. At issue is the “annihilation defense”: Companies are trying to convince courts to deny class certification by arguing that potential damages could annihilate the business. The issue is before the 9th U.S. Circuit Court of Appeals in a case in which a judge denied certification, partly because it could have disastrous consequences. Soualian v. International Coffee & Teas, No. 07-56377 (9th Cir.). Plaintiffs’ attorneys note that many FACTA lawsuits seeking certification are currently on hold in the 9th Circuit pending the outcome of Soualian. But the 7th Circuit has struck down the annihilation argument, leading to several FACTA class action certifications. Murray v. GMAC Mortgage Corp., 434 F.3d 948. Most recently, plaintiffs won class certification on March 31 in a FACTA suit against Illinois grocery chain Jewell Food Stores Inc. Cicilline v. Jewell Food Stores, No. 07CV2333 (N.D. Ill). “For plaintiffs, this is a gotcha-type statute,” said Peter Cummins, an attorney in Frost Brown Todd’s Louisville, Ky., office who is defending a national restaurant chain in a FACTA lawsuit in Pennsylvania. “For the companies defending these, it’s a very big problem to be concerned with.” Just think about the defendants involved, Cummins said: “You have airport newsstands, parking garages, national restaurant chains, national retailers � think about the number of debit card and credit card transactions . . . .That can be astronomical.” What’s driving the litigation, Cummins believes, is its simplicity. All plaintiffs need is a receipt, without the need to prove harm. That’s what bothers David E. Block, who is defending 1-800-Flowers.com in the Florida litigation. “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. Im 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.” In Block’s case, a man sued 1-800-Flowers after he found his receipt contained both his truncated credit card number and the expiration date. Block said the class action could cost his client up to $4.4 billion. Block moved to dismiss the case, arguing the statute applies only to “printed” receipts in stores, not those on computer screens, and that the law is unconstitutionally vague. The judge disagreed. Block, who has appealed to the 11th Circuit, believes that FACTA litigation will eventually die down with compliance. “I’m cautiously optimistic that these cases will be a blip on the radar screen.” Not if companies keep flouting the law, said plaintiffs’ attorney Jay Levy, one of several lawyers who is representing the plaintiff in the Florida case. “All these people had to do to avoid all these actions that they’re complaining about was to comply with the statute,” said Levy, a solo practitioner in Miami. “From what I know, there appeared to be ample notice given to commercial businesses. This wasn’t just thrust upon them in an unknowing way.” As for complaints that plaintiffs haven’t suffered any real harm from FACTA violations, Levy said there is an increased risk of identity theft when prohibited information appears on receipts.

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