Disclosure of Additional Digits on a Credit Card Receipt Sufficient to Confer Article III Standing to Bring a FACTA Claim (Opinion Vacated, and Petition for Rehearing En Banc Granted, October 4, 2019)

On October 5, 2018, a panel of the Eleventh Circuit held that a plaintiff has standing to pursue a claim under the Fair and Accurate Credit Transactions Act (“FACTA”) if a merchant discloses too many digits of a credit card number on a receipt, even without subsequent misuse of the plaintiff’s identity or credit card.  Muransky v. Godiva Chocolatier, Inc., 2018 WL 4762434 (11th Cir. Oct. 3, 2018). On October 4, 2019, the court vacated the panel opinion and ordered that the case be reheard en banc. What follows is our post about the now-vacated panel opinion.


Muransky filed a putative class action against Godiva, alleging that Godiva had willfully violated FACTA by including on customers’ receipts more than the last five digits of their credit card numbers.  The inclusion of additional digits, he claimed, exposed class members “to an elevated risk of identity theft.”

The parties ultimately agreed to settle the action on a classwide basis and moved for preliminary approval of the proposed settlement.  The settlement featured a $6.3 million settlement fund, from which attorneys’ fees, costs, and class members would be paid.  The motion for preliminary approval indicated that Muransky would seek an incentive award of up to $10,000 and that class counsel would seek an attorneys’ fee award of up to one-third of the settlement fund, that is, $2.1 million.  Following notice to class members, five class members objected to the settlement.  Two of the objectors, Price and Isaacson, said that they were class members who had submitted claim forms; that notice of Muransky’s attorneys’ fees motion had been insufficient under Fed. R. Civ. P. 23(h); that attorneys’ fees should be awarded on a lodestar basis; and that a $10,000 incentive award to Muransky was unwarranted.

At the fairness hearing, the objectors raised a new objection:  that Muransky lacked Article III standing.  The district court overruled the objections and approved the settlement, including the $10,000 incentive award and $2.1 million in attorneys’ fees.  The objectors appealed.

The Eleventh Circuit, in an opinion written by Judge Martin and joined by Judge Jordan and Judge Douglas Ginsburg visiting from the D.C. Circuit, affirmed.  First, the court concluded, in agreement with the First, Sixth, Ninth, and Tenth Circuits, that “class members who object to Rule 23(b)(3) class settlements but do not opt out are ‘parties’ for purposes of appeal.”

The court next addressed the objectors’ claim that Muransky had not alleged a concrete injury in fact sufficient to confer Article III standing.  “To determine whether a statutory violation results in a concrete injury . . . we look to whether the intangible harm that results from the statutory violation bears a ‘close relationship’ to harms that have ‘traditionally been regarded as providing a basis for a lawsuit in English or American courts.’”  (2018 WL 4762434, at *4 (quoting Spokeo, 136 S. Ct. at 1549).)  FACTA, the court observed, imposes a duty on merchants accepting credit cards to print no more than the last five digits of a card number on a receipt, and the law’s purpose is to prevent identity theft.  The alleged disclosure of too much of Muransky’s credit card number, the court determined, was “similar to the common law tort of breach of confidence.”  A breach of confidence, unlike torts based on the right of privacy, causes harm “when the plaintiff’s trust in the breaching party is violated,” whether or not the information in question is further published or misused.  And the alleged violation of FACTA “also resembles a modern version of a claim for breach of an implied bailment agreement,” in that Godiva was entrusted with Muransky’s credit card number and failed to return it to him in the manner required by the statute.  “These common law torts,” the court found, “bear a ‘close relationship’ to the statutory cause of action authorized by Congress. . . . We therefore conclude printing more than five digits of a credit card number in willful violation of FACTA causes the person whose account number is disclosed to suffer a concrete injury.”  Thus Muransky had standing to bring the FACTA claim, even apart from the small but additional harm he suffered by having to safely dispose of a written receipt that disclosed too much of his credit card number.

The court noted that its decision on the standing question was consistent with decisions from the Second, Seventh, and Ninth Circuits which found no standing where the plaintiffs claimed only that the expiration date of the credit card had been disclosed.  And the court distinguished the Second Circuit’s decision in Katz v. Donna Karan Co., 872 F.3d 114 (2d Cir. 2017), which held that the plaintiff lacked standing to bring a FACTA claim based on the disclosure of the first six digits of his credit card number.  Katz, the court noted, did not consider the alleged violation’s relationship to a breach of confidence or of an implied bailment agreement.  And Katz involved a factual challenge to the plaintiff’s standing, rather than a facial challenge like the one presented here by the objectors to the settlement.  In Katz, the defendant presented evidence that revealing the first six digits of a credit card number identified only the card’s issuer, and caused no harm to the consumer.  The Eleventh Circuit would not import that finding of fact into another case—and noted that the soundness of the finding might be subject to question, anyway, given changes in technology since the expert testimony offered in Katz was developed.

The court also affirmed the attorneys’ fee award.  There was a violation of Rule 23(h), in that Muransky’s motion for attorneys’ fees had not been filed until after the deadline to object to the settlement had passed.  But “that error does not warrant reversal under the particular facts of this case.”  Four class members had objected after receiving notice of the proposed settlement, and Price and Isaacson had filed opposition briefs after Muransky filed his attorneys’ fees motion.  The court found no reason to think others would have made additional arguments but for the error in filing the attorneys’ fees motion after the objection deadline, and thus no prejudice to class members.  The court also affirmed the 33% fee award, which was higher than the 20%-30% range previously identified by the Eleventh Circuit as the range for the “majority” of common-fund fee awards, as within the district judge’s discretion, and rejected the objectors’ argument that a lodestar approach, which would have been appropriate for an award under FACTA’s fee-shifting provisions, applied to the common-fund settlement.

Finally, the court affirmed the $10,000 incentive award to Muransky.  The court rejected the objectors’ argument that incentive awards should not be awarded in common-fund cases, and determined that the amount awarded to Muransky was supported by the record.

Judge Jordan, concurring, wrote separately to question whether one of the objectors, Isaacson, had standing to challenge Muransky’s standing.  Isaacson, an attorney, had filed a claim in the settlement and stood to benefit from it, and would not benefit from a determination that Muransky lacked standing; “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.”

Posted by Valerie Sanders.

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