Judge Adalberto Jordan of the U.S. Court of Appeals for the Eleventh Circuit. Photo: J. Albert Diaz/ALM

A judge used the word trifle to describe the damage done when Godiva Chocolatier Inc. let too many numbers show on receipts for truffles and other treats, but the resulting class action will still cost the candymaker $6.3 million.

In a ruling from the U.S. Court of Appeals for the Eleventh Circuit in Atlanta, objectors lost their challenge to the settlement of a South Florida class action lawsuit over the elevated risk of identity theft when retailers allow more than the last four digits of payment cards to be printed on receipts.

On the losing side are class members James Price and Eric Isaacson, who objected to the $2.1 million in legal fees and the $100,000 incentive award for the lead plaintiff, Dr. David Muransky. They argued  Muransky had no standing to collect the fee because he suffered no actual harm since his identity was not actually stolen.

Judge Beverly Martin wrote the 38-page opinion affirming the settlement approved by U.S. District Judge William Dimitrouleas under the “card truncation duties” of the federal Fair and Accurate Credit Transactions Act.

“In the context of FACTA, Dr. Muransky suffered a concrete injury when Godiva provided him with a receipt containing his untruncated credit card number, and he had to ‘shoulder the cost’ of protecting it,” Martin said. “Time spent safely disposing of or keeping the untruncated receipt is, of course, a small injury, but it is enough for standing purposes.”

“The Supreme Court has rejected the argument that an injury must be significant; a small injury, an identifiable trifle, is sufficient to confer standing,” Martin ruled. “Thus, when Godiva unlawfully gave an untruncated receipt to Dr. Muransky, he suffered the concrete injury of shouldering the cost of safely keeping or destroying the receipt.”

Martin was joined by Eleventh Circuit Judge Adalberto Jordan and Judge Douglas Ginsburg of the U.S. Court of Appeals for the D.C. Circuit, sitting by designation.

But Jordan also provided a five-page special concurrence to make a point that seemed academic but important. He said Isaacson may lack standing to challenge Muransky’s standing. In other words, if Isaacson had won, he would have lost by his own argument.

Isaacson argued Muransky lacked standing to collect the incentive award because he didn’t go to all that much trouble and didn’t have any real damages since his identity was never stolen.

“According to Mr. Isaacson — who happens to be a plaintiffs class-action attorney — Dr. Muransky did not suffer an injury that allows him to bring a claim under FACTA because he failed “to allege that his credit suffered when he was handed a receipt with a few extra digits, or that anyone else knew of the violation or was in a position to take advantage of it to his injury’,” Jordan said.

In addition to quoting Isaacson’s brief, the judge quoted a recent law review article Isaacson wrote, saying: “I was troubled by the notion that a class representative who suffered no injury should be able to evade the burden of demonstrating his own Article III standing.”

Jordan said he did not question Isaacson’s sincerity, just his standing under the same federal law.

“Stated differently, if Mr. Isaacson prevailed on his standing argument, I do not see how we could redress any injury he has suffered,” Jordan said. “Indeed, Mr. Isaacson will cause himself injury if he succeeds because his monetary recovery—along with that of every class member—will be wiped out.”

Isaacson said he believes the case could have been worth much more if it had gone to trial and the $100,000 incentive award created a conflict of interest for Muransky to favor settlement.

Commenting on Jordan’s opinion, Isaacson said, “It strikes me as strange.” He said members of the class who suffer identity theft and harm to their credit will incur far more in damages than they will collect from the settlement. He said he is considering asking for en banc rehearing.

Isaacson represented himself at oral arguments. Michael Hilicki of Keogh Law in Chicago spoke for Muransky. David Almeida of Benesch Friedlander Coplan & Aronoff in Chicago argued for Godiva. Hilicki and Almeida could not be reached immediately.

Martin concluded Muransky’s incentive award would not make much difference in what Isaacson and others collect from the class action.

“By our calculation, Dr. Muransky’s incentive award had little impact on the class members’ recovery,” Martin said in a final footnote. “Assuming 48,000 class members submitted valid claims (a high-end approximation) for the $4.2 million in the fund for distribution, Dr. Muransky’s incentive award of $10,000 resulted in a reduction of about 21 cents in the recovery of the class members who filed claims ($87.50 vs. $87.29).”

That would be enough to buy a 36-piece gift box of Godiva Signature Classic Truffles — $78 plus tax.