Court Allows FACTA Class Action To Proceed But Cautions That Even The Minimum Statutory Damages Award Would Likely Violate Defendant’s Due Process Rights

Aliano v. Joe Caputo & Sons – Algonquin, Inc., 2011 U.S. Dist. LEXIS 48323 (N.D. Ill. May 5, 2011)

Facts: On February 12, 2008, Plaintiff purchased groceries at Defendant's market by using her Discover credit card. Defendant provided her a receipt that showed every digit of her credit card in violation of the Fair and Accurate Credit Transactions Act ("FACTA"). As a result, Plaintiff filed a putative class action lawsuit against Defendant alleging willful violations of FACTA and seeking statutory damages of $100 to $1,000 per FACTA violation plus attorneys' fees and costs. On September 21, 2010, the Court certified the putative class. Defendant alleged that it did not know its software failed to comply with FACTA's truncation requirements until it received the lawsuit. The Court denied Defendant's motion for summary judgment because there was a genuine issue of material fact as to whether Defendant knew about FACTA's truncation requirements in September 2007.

• FACTA. Pursuant to FACTA, persons and entities that accept credit and debit card payments for the transaction of business may not print more than "the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction."
• Damages. FACTA statutory damages are limited to willful noncompliance under § 1681n(a), which includes both knowing and reckless behavior. The Court found that because Defendant admitted in its interrogatory answers (although Defendant later changed its response) that it first learned of credit and debit card truncation requirements in September 2007, there was a fact issue as to whether Defendant's behavior constituted a willful violation of FACTA.
• Damages. The Court put the parties on notice that given the minimum statutory damages award for willful FACTA violations coupled with the number of potential class members in this case, the damages could range between $29.4 million and $294 million. The Court noted that such a damage award where Plaintiff sought no actual damages would violate Defendant's due process rights and would be "shocking, grossly excessive, and punitive in nature."

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