Judge OKs Subway’s Record $31M FACTA Settlement

Judge OKs $1.2M Microsoft Consumer Receipt Settlement
March 1, 2017
Muransky v. Godiva Chocolatier, Inc.
May 10, 2017

Law360, New York (March 23, 2017, 2:43 PM EDT) — A Florida federal judge has signed off on the largest settlement in the history of the Fair and Accurate Credit Transactions Act, a nearly $31 million deal between Subway and a class of consumers alleging the sandwich chain unlawfully printed full credit card expiration dates on receipts.

U.S. District Judge Cecilia M. Altonaga stamped preliminary approval on the $30.9 million settlement with Doctor’s Associates Inc., which does business as Subway, submitted for approval on Tuesday by named plaintiff Shane Flaum on behalf of roughly 2.6 million people whose credit and debit card information was potentially compromised by the printed receipts showing the full expiration dates of their cards.

“The court finds that the settlement embodied in the settlement agreement is sufficiently within the range of reasonableness,” Judge Altonaga wrote. “In making this determination, the court has considered the current posture of the litigation and the risks and benefits to the parties involved in both settlement of these claims and continuation of the litigation.”

Judge Altonaga also granted Flaum’s request for leave to amend his complaint to include as an additional representative Jason Alan, the plaintiff in a parallel class action pending in Florida, and approved Scott Owens PA, Bret Lusskin PA and Keogh Law Ltd. as class counsel.

The judge also agreed to conditionally certify a class that includes all Subway patrons who received receipts upon purchase that showed their credit and debit cards’ full expiration dates between Jan. 1, 2016, and the date of preliminary approval.

Judge Altonaga also signed off on a class notice proposal that included a settlement website, publication notice and press release, and the judge also set out the rules for properly submitting a claim form.

Counsel for the parties didn’t immediately return a request for comment on Thursday.

Flaum filed his complaint in June 2016, alleging that Subway violated FACTA through its practice of printing customers’ cards’ full expiration dates even after it had been sued in the past for similar violations — namely twice in 2007, and again in 2008 and 2009, he said.

FACTA regulations require retailers to omit card expiration dates on receipts, as emphasized in the Credit and Debit Card Clarification Act.

Flaum sought to recover FACTA statutory damages of $100 to $1,000 per receipt for Flaum and the proposed class members. Only about half of U.S. Subway restaurants printed receipts that showed entire expiration dates, and they only did so during a “very limited window of time,” according to Tuesday’s approval motion.

Subway failed to get the suit tossed back in August, after a Florida federal judge, citing the U.S. Supreme Court’s 2016 Spokeo Inc. v. Robins decision, said that Flaum suffered a concrete harm to satisfy subject matter jurisdiction.

On Tuesday, the sides announced the $30.9 million deal, which Flaum said “sets a new record for FACTA class actions” and was believed to be the “largest FACTA settlement in the history of FACTA.”

Flaum is represented by Scott D. Owens of Scott D. Owens PA, Bret Leon Lusskin Jr. of Bret Lusskin PA, and Michael Hilicki of Keogh Law Ltd.

Doctor’s Associates Inc. is represented by John R. Hargrove of Hargrove Law Group and Peter Breslauer of Montgomery McCracken Walker & Rhoads LLP.

The suit is Flaum v. Doctor’s Associates Inc., case number 0:16-cv-61198, in the U.S. District Court for the Southern District of Florida.