On October 28, 2020, the Eleventh Circuit Court of Appeals held, en banc, that the plaintiff claiming a statutory violation of the Fair and Accurate Credit Transactions Act (FACTA), lacked standing and refused approval of a negotiated class-wide settlement.
The named plaintiff brought suit after realizing that a printed receipt he received at a store included more credit card digits than is legally acceptable under FACTA. The lawsuit began prior to the Supreme Court’s decision in Spokeo, Inc. v. Robins (which was previously covered by WBK), which ultimately held that a plaintiff’s injury must be both concrete and particularized.
The named plaintiff alleged statutory violations of FACTA, which limits how many credit card digits can be printed on a receipt. Following FACTA, Congress passed the Credit and Debit Card Receipt Clarification Act of 2007 (Clarification Act) which noted that there are some violations of FACTA that do not cause any actual harm to consumers. The parties in this dispute had settled prior to the Spokeo decision, knowing that the decision would alter bargaining positions.
Based upon the objections of putative class members to the settlement, the case made its way to the Eleventh Circuit. The court considered whether the named plaintiff had alleged a concrete injury per Spokeo. The Eleventh Circuit used the following framework to determine whether the plaintiff suffered a concrete harm stemming from the alleged statutory violation: did the plaintiff suffer a harm (tangible or intangible), and if not, did the statutory violation “pose a material risk of harm” to the plaintiff. The court’s analysis found that the plaintiff did not suffer any direct harm, noting in part that “[n]othing in FACTA suggests some kind of intrinsic worth in a compliant receipt, nor can we see any.” The court found that it must evaluate whether the plaintiff could show that the statutory violation led to the “risk of real harm.” Under Spokeo, the risk must be “material,” which is a high standard. The court noted Congress, using the Clarification Act, “made clear that not every FACTA violation carries with it a risk of harm.” Ultimately, the court held that the named plaintiff did not plead that the statutory violation led to a material risk of harm.
The Eleventh Circuit held that the named plaintiff lacked standing, stripping the court of jurisdiction and negating the agreed-upon settlement.