\ Court Certifies Class for FCRA Claims Related to a Creditor\’92s Failure to Truncate Credit Card Receipts\


Arms v. Shanta Enterprise, Inc., 2009 U.S. Dist. LEXIS 58385 (N.D. Ill.July 8, 2009)

Facts: Plaintiff brought claims against Defendant for violating § 1681c(g) of the FCRAby failing to properly truncate the credit card numbers and expiration dates on receipts given to its customers. Plaintiff then moved to certify a class of all persons who had received an electronically printed receipt which displayed more than the last five digits of the person’s credit and/or debit card number. The Defendant moved to deny class certification by arguing that Plaintiff could not satisfy the adequacy of representation requirement of Federal Rule of Civil Procedure 23(a), and hence Plaintiff could not satisfy either prong of Federal Rule of Civil Procedure 23(b)(3). The Court rejected these arguments and certified the class.

Class Certification Standard. To obtain class certification, a plaintiff must satisfy all four requirements of Federal Rule of Civil Procedure 23(a): 1) the class is so numerous that joinder of all members is impracticable (numerosity); 2) there are questions of law or fact common to the class (commonality); 3) the claims or defenses of the representative parties are typical of the claims or defenses of the claims (typicality); and 4) the representative parties will fairly and adequately protect the interests of the class (adequacy of representation).

Class Certification Standard. In determining adequacy of class representation, the court considers: 1) whether the named plaintiffs’ counsel will adequately protect the interest of the class, and 2) whether any conflicts of interest exist between the named plaintiffs and the class members. The Defendant did not dispute that Plaintiff’s counsel was adequate but challenged the adequacy of representation because of alleged conflicts between Plaintiff and the class.

Class Certification. In holding that the adequacy of representation requirement was met, the Court found that the attorneys’ past representation of Plaintiff did not by itself create a conflict of interest.

Class Certification. In holding that they adequacy of representation requirement was met, the Court held that Plaintiff’s prior involvement in multiple FCRA cases did not make him unsuitable to represent the class.

Class Certification. Regarding Defendant’s assertion that Plaintiff was not an adequate class representative because he had little knowledge of the case, the Court held that a representative need maintain only an understanding of the basic facts underlying the claims, some general knowledge, and a willingness and ability to participate in discovery.

Class Certification Standard. Rule 23(b)(3) requires that questions of law or fact common to members of the class predominate over questions affecting only individual members, and that a class action is superior to other methods of adjudicating the class claims.

Class Certification. In finding that the first prong of Rule 23(b)(3) was met, the Court rejected Defendant’s argument that individual issues would likely dominate because of varying alleged damage amounts, holding that individual questions regarding damages could not defeat certification for a determination of liability.

Class Certification. The Court did not agree with Defendant’s argument that the 23(b)(3) element of superiority was lacking due to a potential massive recovery by the class. The facts demonstrated that a class action would be the superior method of adjudicating the case because of the judicial economy realized from consolidation of separate claims, and because each class member’s damages would likely be too small to proceed individually.