In Bateman v. American Multi-Cinema, Inc., the 9th Circuit last week reversed the district court's denial of class certification in a case alleging violation of the Fair and Accurate Credit Transactions Act (FACTA), 15 U.S.C. 1681c(g)(1), a statute intended to combat identity theft by prohibiting credit and debit card receipts issued to consumers from reflecting the expiration date or more than the last five digits of the card number.
Plaintiff Bateman alleged that defendant had violated FACTA by issuing credit and debit card receipts from automatic ticket machines that included both the first four and last four digits of the card number. Plaintiff filed a putative class action seeking to recover statutory damages for each class member.
The district court denied plaintiff's motion for class certification without prejudice, concluding that plaintiff had failed to demonstrate that a class action would be superior to other available methods of adjudicating his claim, as required under Rule 23(b)(3) where class treatment could result in enormous liability completely out of proportion to any harm suffered by the plaintiff. The district court also held that class certification was not appropriate because defendant demonstrated good faith by complying with FACTA within a few weeks of the filing of plaintiff’s complaint. Plaintiff appealed.
On appeal, the Ninth Circuit reversed and remanded, holding that none of the three grounds cited by the district court—the disproportionality between the potential liability and the actual harm suffered, the enormity of the potential damages, or defendant’s good faith compliance—justified the denial of class certification on superiority grounds, and that the district court abused its discretion in relying on them.