Law360, New York (January 20, 2017, 10:46 PM EST) — Luxury shoe brand Jimmy Choo has agreed to fork over $2.5 million to settle a proposed class action accusing it of putting consumers at risk of identity theft by printing sensitive data on credit card receipts, according to documents filed in Florida federal court Friday.
Plaintiff Kerri C. Wood detailed the terms of the pact in an unopposed motion asking the court for preliminary approval of the proposed class action settlement, which comes fewer than six months after the district court found that Wood had Article III standing to continue to press her claims under the Fair and Accurate Credit Transactions Act.
The proposed settlement would require Jimmy Choo to establish a $2.5 million fund to compensate shoppers who received point-of-sale credit or debit card receipts from a Jimmy Choo store containing a card expiration date between Oct. 27, 2013, and Nov. 2, 2013.
The members of the opt-in settlement class — which the parties estimate includes 135,588 Jimmy Choo customers — will receive a pro rata share of the fund, with the parties anticipating that individuals who submit timely claims will receive between $75 and $175.
“The proposed settlement is a significant FACTA class action settlement,” Wood wrote in her preliminary approval motion. “The total recovery compares favorably to recent common fund FACTA settlements.”
In a footnote, Wood in support of her contention pointed to several other recent FACTA settlements that handed plaintiffs awards ranging from a $15 credit on their next purchase of $125 or more at Retail Concepts Inc., and to a choice between $9.60 in cash or a coupon for $15 off of future purchases at ABP Corp.
Jimmy Choo’s ability to survive a judgment in favor of the settlement class is also a relevant consideration that should factor into the court’s determination of whether the proposed settlement is fair and reasonable, according to the plaintiff’s motion.
“Absent a settlement, the final resolution of this action through the trial process may require several more months or years of protracted adversary litigation and appeals, which may delay relief or entirely eliminate any obtainable relief to settlement class members,” the plaintiff wrote. “The settlement imposes a significant financial burden on defendant for the benefit of settlement class members but does not annihilate defendant.”
Besides compensating proposed class members who submit a timely claim, the settlement fund will also be used to pay the costs of notice and settlement administration, any awards of attorneys’ fees and costs awarded by the court, and any incentive awards to the plaintiffs approved by the court, according to the motion. The settlement proposes an attorneys’ fee award of just over $833,000 and an incentive award of $5,000 to the plaintiff.
Any unclaimed funds will be paid to the Legal Aid Service of Broward County, Coast to Coast Legal Aid of South Florida and the National Consumer Law Center as cy pres awards and will not revert to Jimmy Choo, the plaintiff added.
Wood filed her complaint against Jimmy Choo in October 2015, alleging that the retailer had ran afoul of FACTA by printing credit and debit card expiration dates and other sensitive information such as home addresses, phone numbers and cashiers’ names on its store receipts.
The plaintiff claimed that the company had years to comply with the FACTA amendment to the Fair Credit Reporting Act but willfully or knowingly chose not to do so despite being hit with similar allegations in 2008.
Jimmy Choo then moved to dismiss the suit for lack of standing, but U.S. District Judge Beth Bloom ruled in August that the suit had met the standard set by the U.S. Supreme Court‘s May ruling in Spokeo Inc. v. Robins, which held that a consumer must assert a concrete and particularized injury in order to satisfy Article III standing.
“Spokeo recognized that ‘Congress may “elevate to the status of legally cognizable injuries,” concrete, de facto injuries that were previously inadequate in law,'” the judge wrote in her 12-page ruling at the time. “In some circumstances, therefore, ‘the violation of a procedural right granted by statute can be sufficient … to constitute injury in fact.’ This is one such case.”
Shortly after that ruling, the court referred the case to mediation, where the parties reached the settlement disclosed Friday. Despite their “significant differences,” the parties agreed to the resolution for several reasons, including the time and expense of resolving the “rigorously contested issue” of whether Jimmy Choo willfully violated FACTA, according to the plaintiff’s motion.
While Wood contended that the violation was intentional, Jimmy Choo countered that if there were any violation of the statute, it would have been negligent, not willful, because the retailer had previously complied with FACTA and had only allegedly fallen out of compliance after it implemented a new point-of-sale system.
“Although plaintiff was confident that there was a substantial basis to prove willfulness, there was a substantial risk that at trial a jury could find that defendant’s alleged violations were not willful,” the plaintiff wrote in her preliminary approval motion. “The proposed settlement agreement is the most realistic and the best current outcome as could be expected in the particular circumstances of this action.”
Wood is represented by Steven R. Jaffe, Seth M. Lehrman and Mark S. Fistos of Farmer Jaffe Weissing Edwards Fistos & Lehrman PL, Scott D. Owens of Scott D. Owens PA and Bret L. Lusskin Jr. of Bret Lusskin PA.
Jimmy Choo is represented by Mark R. Cheskin, Carol A. Licko and James L. VanLandingham of Hogan Lovells US LLP.
The case is Kerri C. Wood v. J Choo USA Inc., case number 9:15-cv-81487, in the U.S. District Court for the Southern District of Florida.