Kelley Drye & Warren has notched a victory on behalf of appliance retailer P.C. Richard & Son in a class action lawsuit over sales receipts that conveyed too much information about customers.
The ruling in Baskin v. P.C. Richard & Son could halt the spread of litigation for technical violations of the Fair and Accurate Credit Transaction Act of 2003 in state courts. FACTA provides statutory damages of up to $1,000 for each technical violation, a standard met when a retailer prints more than 5 digits of a customer’s credit card number on a store receipt.
FACTA class actions have found federal courts less friendly since the U.S. Supreme Court’s 2016 ruling in Spokeo v. Robins. Now, the P.C. Richard decision suggests that New Jersey courts aren’t rolling out the red carpet either.
Judge James Den Uyl of Ocean County Superior Court granted the defense motion to dismiss the P.C. Richard case Jan. 17 on finding that individual treatment in small claims court, not a class action, is the optimal setting for FACTA claims. Den Uyl’s decision relied on a 2011 Appellate Division ruling involving the Telephone Consumer Protection Act, Local Baking Products v. Kosher Bagel Munch. P.C. Richard’s lawyer, William Gyves of Kelley Drye in Parsippany, argued that pursuing a FACTA class action in a New Jersey court is contrary to the Appellate Division’s analysis of the superiority requirement of R. 4:32-1(b)(3) in Local Baking.
The Baskin case was brought on behalf of two New York residents and one New Jersey resident who claimed their sales receipts from purchases at P.C. Richard revealed too much of their credit card numbers. An earlier case filed on behalf of the New York plaintiffs in a New York federal court was dismissed in 2017 for lack of standing. Because state courts in New York are prohibited by statute from hearing FACTA cases, the New York plaintiffs partnered with a New Jersey resident to bring a case in New Jersey Superior Court.
None of the three plaintiffs suffered any actual harm from the allegedly noncomplying register receipts. P.C. Richard claimed that technical violations of FACTA are not appropriately adjudicated as class actions under New Jersey law.
The plaintiffs maintained that Local Baking should not apply because the TCPA is not analogous to FACTA. The TCPA has no requirement that violations be willful in order to seek recovery, and FACTA provides for fee-shifting, indicating the Legislature did not intend for such claims to be brought in small claims court by individuals representing themselves.
But there is no controlling authority in New Jersey concerning FACTA class action claims, Den Uyl said. Therefore, the reasoning behind the Appellate Division’s decision in Local Baking is perfectly applicable to the instant motion.
He cited the Local Baking decision’s statement that “by imposing a statutory award of $500, a sum considerably in excess of any real or sustained damages, Congress has presented an aggrieved party with an incentive to act in his or her own interest without the necessity of class action relief. Thus, it follows that the prevailing law in New Jersey is that adjudication of claims on an individual basis in small claims court is ‘a far superior method to vindication of any rights and protection of the public than any certification or class action’ in situations where a statutory damage award incentivizes a party to act in his or her own interest.”
Consequently, plaintiffs failed to satisfy their burden under 4:32-1 that a class action is superior to other methods of pursuing the claims at issue, Den Uyl said.
Den Uyl notes that New Jersey’s judiciary provides help with the small claims process on its website and through an ombudsman in each county courthouse.
Gyves of Kelly Drye declined to comment about the ruling. He represented P.C. Richard along with Glenn Graham of the same firm. Lawrence Friscia of Friscia & Associates in Newark and Glendale, California, attorney Chant Yedalian, who represented the plaintiff and class members, did not respond to requests for comment.