Law360 (October 3, 2018, 6:31 PM EDT) — The Eleventh Circuit on Wednesday affirmed a $6.3 million class settlement Godiva Chocolatier agreed to pay to consumers accusing it of printing too many payment card digits on receipts, finding that attorneys’ fees and lead plaintiff incentive were justified and that the lead plaintiff had standing to sue.
In February 2017, objectors James Price and Eric Isaacson pressed the appellate court to vacate the deal, saying that counsel for lead consumer David Muransky exerted “remarkably minimal effort” in litigating the Fair and Accurate Credit Transaction Act lawsuit against Godiva Chocolatier Inc., making a requested attorneys’ fee award of $2.1 million unreasonable.
In a unanimous, published decision, the panel found that the district court, which noted significant legal hurdles faced by Muransky’s counsel, did not abuse its discretion when it allowed an above-benchmark award.
“The court explained the difficulty of proving willfulness, and its own skepticism that the evidence would support a willfulness finding in this case,” the panel said. “The district court properly assessed the risks faced by the class and the compensation secured by class counsel.”
The panel also gave Muransky’s counsel credit for handling the suit despite the fact that the U.S. Supreme Court would hold, in a then-pending case, that risk of identity theft could not support standing.
Muransky launched his proposed class action against Godiva in April 2015, after visiting a store and allegedly receiving a receipt with both the last four digits of his credit card number and the first six digits of his account number. Under FACTA, a retailer can print no more than five digits of a credit or debit card, and may face a statutory penalty of between $100 to $1000 per violation if consumers can prove it was willfully negligent.
The two sides reached the $6.3 million deal — supposedly the third-largest in the history of FACTA, according to the motions for approval — in early 2016. It proposed to provide relief to a settlement class of roughly 318,000 consumers impacted by the alleged FACTA violation over a 12-week period in 2015. Some 65,000 consumers submitted claims, resulting in a $60 payment per claimant after $2.1 million in attorneys’ fees were subtracted. Muransky would also receive a $10,000 incentive award, court records show.
The district court said the award was “for his efforts in the case.”
“It is not clear what the district court meant by that,” the panel said Wednesday. “Even so, we find that the record supports the incentive award.”
The panel points to Muransky’s own arguments in favor of the award — that he was subject to inconveniences and time delays, even if those downsides didn’t materialize as much as they possibly could have — as giving meaning to the court’s award.
The objectors had also argued that Muransky failed to prove he had standing to sue Godiva under a May 2016 Supreme Court ruling, thus the case should actually be dismissed. The panel disagreed.
“The complaint alleges two concrete injuries: one based on the statutory violation and its relationship to common law causes of action and another based on Godiva giving Dr. Muransky an untruncated receipt,” the panel. “Mr. Isaacson has not challenged any other aspect of Dr. Muransky’s standing, and we conclude the other Article III standing requirements are satisfied.”
The class is represented by Michael S. Hilicki and Keith J. Keogh of Keogh Law Ltd., Bret Lusskin Jr. of Bret Lusskin PA and Scott D. Owens of Scott D. Owens PA.
Godiva is represented by Brian Melendez of Dykema Gossett PLLC, and Charles P. Flick and Shawn Y. Libman of Bowman and Brooke LLP.
Price is represented by W. Allen McDonald of Lacy Price & Wagner PC. Isaacson represented himself pro se.
The case is Price v. Godiva Chocolatier Inc. et al., case number 16-16486, in the U.S. Court of Appeals for the Eleventh Circuit.