Court Opinion

ID: 149907
Source: CourtListenerOpinion
Date Created: 2010-07-01 18:25:54+00
Date Added: 2024-06-11T09:02:34.939432
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                              No. 09-1632

PATRICK STILLMOCK; JEANNE STILLMOCK; JENNY BARNSTEIN; LEONID
OPACIC, individually and on behalf of a class of all those
similarly situated,

                Plaintiffs - Appellants,

           v.

WEIS MARKETS, INCORPORATED,

                Defendant - Appellee.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.     Marvin J. Garbis, Senior District
Judge. (1:07-cv-01342-MJG)

Argued:   March 23, 2010                        Decided:   July 1, 2010

Before TRAXLER, Chief Judge,       WILKINSON,    Circuit   Judge,   and
HAMILTON, Senior Circuit Judge.

Vacated and remanded by unpublished opinion.        Senior Judge
Hamilton wrote the opinion, in which Chief Judge Traxler joined.
Judge Wilkinson wrote a separate opinion concurring specially.

ARGUED: Martin Eugene Wolf, QUINN, GORDON & WOLF, CHTD, Towson,
Maryland, for Appellants.   Charles Mikell Hart, DUANE MORRIS,
LLP, Cherry Hill, New Jersey, for Appellee.   ON BRIEF: Richard
S. Gordon, Benjamin H. Carney, QUINN, GORDON & WOLF, CHTD,
Towson, Maryland; Cory L. Zajdel, Z LAW, LLC, Towson, Maryland;
Katherine B. Bornstein, BARROWAY, TOPAZ, KESSLER, MELTZER &
CHECK, Radnor, Pennsylvania; David A. Searles, DONOVAN SEARLES,
LLC, Philadelphia, Pennsylvania, for Appellants.     Dana B.
Klinges, Robert M. Palumbos, DUANE MORRIS, LLP, Philadelphia,
Pennsylvania, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

                              - 2 -
HAMILTON, Senior Circuit Judge:

       In an effort to curb identity theft, Congress enacted the

Fair       and   Accurate     Credit     Transactions    Act   of    2003   (FACTA),

thereby amending the Fair Credit Reporting Act (FCRA), 15 U.S.C.

§§ 1681 - 1681x, to provide that “no person that accepts credit

cards      or    debit   cards     for   the   transaction     of   business   shall

[electronically] print more than the last 5 digits of the card

number . . . upon any receipt provided to the cardholder at the

point of the sale or transaction.”                     15 U.S.C. § 1681c(g)(1).

This statutory provision is commonly known as FACTA’s truncation

requirement.           “Any person who willfully fails to comply with”

FACTA’s truncation requirement “with respect to any consumer is

liable to that consumer in an amount equal to the sum of . . .

any actual damages sustained by the consumer as a result of the

failure or [statutory] damages of not less than $100 and not

more than $1,000,” id. § 1681n(a)(1)(A), plus “such amount of

punitive damages as the court may allow,” id. § 1681n(a)(2),

and,       “in   the   case   of   any    successful    action      to   enforce   any

liability under this section, the costs of the action together

with reasonable attorney’s fees as determined by the court,” id.

§ 1681n(a)(3). 1

       1
       FCRA also imposes liability for negligent violations of
FACTA’s truncation requirement, 15 U.S.C. § 1681o(a), but such
provision is not at issue in the present appeal.

                                          - 3 -
      In this interlocutory appeal, plaintiff-appellants Patrick

Stillmock, Jeanne Stillmock, Jenny Barnstein, and Leonid Opacic

(collectively Plaintiffs) challenge the district court’s denial

of   their    motion   for    class   action   certification     on    behalf    of

themselves and all other customers of retail stores owned and

operated by Weis Markets, Inc. (Weis Markets), which customers

received      credit   card     and   debit    card   receipts        printed    in

violation of FACTA’s truncation requirement. 2           The putative class

expressly      excluded      customers   of    Weis   Markets’        stores    who

suffered actual damages due to identity theft and any persons

who had ever been executives of Weis Markets.              For reasons that

follow, we vacate the district court’s denial of Plaintiffs’

motion       for   class     certification     and    remand     for      further

proceedings. 3

      2
       Originally, Patrick Stillmock and Jeanne Stillmock filed
their own separate action seeking class action certification,
Jenny Barnstein filed her own seeking the same, as well did
Leonid Opacic.    The district court subsequently dismissed the
actions filed by Jenny Barnstein and Leonid Opacic and added
them as plaintiffs in the action filed by the Stillmocks.
Stillmock v. Weis Markets, Inc., 2009 WL 595642 *1 (D. Md. March
5, 2009).
      3
       On June 3, 2009, we granted Plaintiffs’                   petition       for
permission to file this interlocutory appeal.

                                      - 4 -
                                   I.

    Federal Rule of Civil Procedure 23 “states that ‘[a] class

action may be maintained’ if two conditions are met:            The suit

must satisfy the criteria set forth in subdivision (a) (i.e.,

numerousity,     commonality,     typicality,     and      adequacy      of

representation), and it also must fit into one of the three

categories     described   in   subdivision     (b).”       Shady     Grove

Orthopedic Assocs., P.A. v. Allstate Ins. Co., 130 S. Ct. 1431,

1437 (2010) (quoting Fed. R. Civ. P. 23).           The only category

described in subdivision (b) at issue in the present appeal is

subdivision (b)(3), which is satisfied if “the court finds that

the questions of law or fact common to class members predominate

over any questions affecting only individual members, and that a

class action is superior to other available methods for fairly

and efficiently adjudicating the controversy.”           Fed. R. Civ. P.

23(b)(3).    The same subdivision further provides:

    The matters pertinent to these findings include:

    (A) the class members’ interests in                 individually
    controlling the prosecution or defense              of separate
    actions;

    (B) the    extent  and   nature   of   any  litigation
    concerning the controversy already begun by or against
    class members;

    (C) the     desirability   or   undesirability                of
    concentrating the litigation of the claims in                the
    particular forum; and

    (D) the      likely    difficulties   in   managing    a   class
    action.
                                 - 5 -
Id.      Notably,         “‘[c]ertification            is   only     concerned      with     the

commonality         (not    the    apparent       merit)      of     the   claims    and     the

existence of a sufficiently numerous group of persons who may

assert those claims.’”               Brown v. Nucor Corp., 576 F.3d 149, 152

(4th Cir. 2009) (quoting Lilly v. Harris-Teeter Supermarket, 720

F.2d 326, 332-33 (4th Cir. 1983)), cert. denied, Nucor Corp. v.

Brown, 130 S. Ct. 1720 (2010).

       “When deciding a motion for class certification, a district

court     does      not     accept       the    plaintiff’s          allegations     in      the

complaint as true; rather, an evidentiary hearing is typically

held     on     the       certification         issue.”             Monroe    v.    City      of

Charlottesville, Va., 579 F.3d 380, 384 (4th Cir. 2009), cert.

denied,       130   S.     Ct.    1740    (2010).           Here,    the     district     court

accepted       materials         submitted       by     the    parties       in    regard     to

Plaintiffs’ motion for class action certification and held an

evidentiary         hearing      thereon.        Unless       otherwise       specified,      we

rely upon the factual findings made by the district court in

ruling    on     Plaintiffs’        motion      for     class      certification        in   our

analysis of the issues on appeal.

       Patrick and Jeanne Stillmock, husband and wife, and Jenny

Barnstein all reside in Maryland, while Leonid Opacic resides in

Pennsylvania.         Weis Markets is a Pennsylvania corporation, which

owns     and        operates       grocery        stores           throughout       Maryland,

Pennsylvania, New Jersey, West Virginia, and New York.

                                               - 6 -
       Despite        being    enacted     on   December       3,     2003,   FACTA     gave

merchants who accept credit cards and/or debit cards either one

or three years to comply, depending upon when the “cash register

or other machine or device that electronically prints receipts

for credit card or debit card transactions” was first put to

use.       15       U.S.C.   § 1681c(g)(3).         For    purposes      of   considering

Plaintiffs’ motion for class certification, the district court

assumed January 1, 2005 constituted FACTA’s effective date with

respect        to    Weis    Markets.      Based     upon      that    assumption,       the

district court found that, starting no later than January 1,

2005,      and       continuing    until    about       June    2007,     Weis      Markets

provided        to    its    customers,    paying    either     by     credit      or   debit

card, receipts that had printed thereon a total of ten digits of

their respective card numbers (the first six and the last four).

The district court next found that “[w]hile the record does not

permit     a     more    precise   estimate,       it     appears     that    at   least   a

million of such receipts were provided to a hundred thousand or

more individual customers.” 4               Stillmock, 2009 WL 595642 at *1.

Notably, FCRA defines the term “consumer” as “an individual.”

15 U.S.C. § 1681a(c).

       4
       Weis Markets estimates that it printed 14,578,600 FACTA
violative receipts between December 4, 2006 and June 7, 2007
(the date on which Weis Markets adjusted all of its point-of-
sale electronic receipt systems to print no more than the last
four digits of a customer’s credit or debit card number).

                                           - 7 -
      Plaintiffs’      motion    for    class       certification      proposed    that

the district court certify a class consisting of the following

individuals:

      “All persons in the United States to whom, or after
      the   effective  and   applicable   dates  for   FACTA
      compliance and continuing through resolution of this
      case, received from Defendant at any of its retail
      locations, an electronically printed receipt at the
      point of sale or transaction which contained more than
      the last five digits of the person’s credit or debit
      card number.”

Stillmock, 2009 WL 595642 at *1.                    In addition to persons who

have ever been executives of Weis Markets, “[e]xcluded from the

[putative] Class are those individuals who have suffered actual

damages    due    to   identity       theft      caused     by   Defendant’s      FACTA

violations.”      Id. at *2.

      The district court first held that Plaintiffs’ purported

class    action   satisfied      each       of     Rule    23(a)’s    four    criteria.

Notably, Weis Markets does not argue on appeal that the district

court    erred    in   so    holding.         However,      because     the    district

court’s   findings     with     respect       to    Rule    23(a)’s    four    criteria

provide context for our discussion of the Rule 23(b)(3) issues

on appeal, we take time to set forth such findings at this

point.

      The first criterion is satisfied if the putative class is

“so   numerous    that      joinder    of    all     members     is   impracticable.”

                                        - 8 -
Fed. R. Civ. P. 23(a)(1).   With respect to the first criterion,

the district court found:

          All the members of the proposed class--consisting
     of a substantial percentage of those persons who made
     at least one credit or debit card purchase at a Weis
     store during a period alleged to be almost 18 months--
     could not practicably be joined as party Plaintiffs
     herein.

Stillmock, 2009 WL 595642 at *2.

     The second criterion is satisfied if there are “questions

of law or fact common to the class.”   Fed. R. Civ. P. 23(a)(2).

With respect to the second criterion, the district court found:

          There is no doubt that the claims of all the
     putative class members present common questions of
     fact and law regarding Weis’ liability. At the heart
     of each class members’ claims are the undisputed fact
     that Weis failed to comply with Section 1681c(g) and
     the highly disputed question of whether Weis’ failure
     to comply was willful. While there may be some issues
     not common to all putative class members, for example
     whether a particular claimant was a “consumer” under
     the statute, there is no doubt that there are
     questions of law and fact pertinent to liability that
     are common to . . . all members of the proposed class.

Stillmock, 2009 WL 595642 at *2 (footnotes omitted).     Notably,

the Supreme Court has interpreted the phrase “willfully fails to

comply,” in the preamble sentence of 15 U.S.C. § 1681n(a), as

reaching not only knowing violations of FCRA, but reckless ones

as well, Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57 (2007),

and has defined a reckless violation for purposes of § 1681n(a)

as one “entailing an unjustifiably high risk of harm that is

                              - 9 -
either known or so obvious that it should be known,” id. at 68

(internal quotation marks omitted).

       The third criterion is satisfied if “the claims or defenses

of   the     representative     parties      are       typical    of   the     claims    or

defenses of the class . . . .”                    Fed. R. Civ. P. 23(a)(3).             In

finding this criterion satisfied, the district court credited

Plaintiffs’      claims    that    each      is    a    typical    customer      of   Weis

Markets and relied upon the fact that Weis Markets agreed that

its pertinent intent was the same with respect to all receipts

that    it     had    issued      in    violation         of     FACTA’s       truncation

requirement.

       The fourth criterion is satisfied if “the representative

parties will fairly and adequately protect the interests of the

class.”      Fed. R. Civ. P. 23(a)(4).                 With respect to this fourth

criterion, the district court found Plaintiffs and their counsel

would      fairly    and   adequately        protect       the    interests      of     the

putative class members, which members all have the same interest

in establishing willfulness on the part of Weis Markets.

       Turning to the district court’s Rule 23(b)(3) analysis, the

district court first determined that although there would be an

individualized       question      as   to    each       putative      class    member’s

status as a consumer, in view of the simplicity of the consumer

status questions, it would assume the common question of Weis

Markets’       willfulness      predominated            over     the    individualized

                                        - 10 -
questions of consumer status.             15 U.S.C. § 1681n(a)(1)(A).              The

district    court      next     assumed   “that      Plaintiffs     could      propose

methods satisfactorily to solve with the myriad of practical

problems    created      by     certifying     the     class    that    they    seek.”

Stillmock, 2009 WL 595642 at *4.                In this regard, the district

court “assume[d] that the requested class would include only

‘consumers’ who received violative receipts and would not have,

or at least would agree not to claim, more than $100 in actual

damages.”      Id.

      Interpreting       FCRA’s      provision       concerning    a     defendant’s

civil liability, in general, for willful noncompliance with a

FCRA requirement, 5 see 15 U.S.C. § 1681n(a)(1)(A), the district

court next rejected Plaintiffs’ contention that a jury could

decide that every class member should receive the same amount of

statutory damages by considering only matters pertaining to Weis

Markets and common to each and every class member.                      According to

the district court, “a jury could properly consider, in deciding

the   discretionary      amount      between    $100    and    $1,000   to     award   a

given class member, the number of times that [a] class member

was   issued    a    non-compliant      slip,”    reasoning      that    a     one-time

customer    who      received    a    single    noncompliant       receipt      should

      5
       Remember that FACTA’s truncation requirement is one of
FCRA’s requirements.

                                       - 11 -
receive a lesser amount of statutory damages than a repetitive

customer who received dozens of noncompliant receipts over an

extended period of time.              Stillmock, 2009 WL 595642 at *4.                 The

district court applied the same reasoning in concluding that

individualized factors could come into play in the jury’s award

of punitive damages per class member.

     The district court next held that “there would be a slight

predominance        of      common         questions”       of      liability        over

individualized       questions        of     liability,      given     the     relative

complexity of the willfulness issue and the relative simplicity

of the consumer status issue with respect to each putative class

member. 6   Stillmock, 2009 WL 595642 at *5.

     Nonetheless, the district court denied class certification

on   two    grounds.        First,       the   district      court     denied        class

certification      on     the   ground      that    determining      the    quantum    of

damages     with    respect      to    each        class   member     would     be    too

individualized      for     class-wide       treatment     under     Rule     23(b)(3).

Second, the district court denied class certification on the

ground that a class action as requested by Plaintiffs “would not

be   superior      and,    indeed,     would       be   inferior     to    having     the

     6
       In order to invoke consumer status under FCRA, each
putative class member would merely need to show that he or she
was an “individual,” 15 U.S.C. § 1681a(c), as opposed to a
partnership, corporation, etc., id., § 1681a(b).

                                         - 12 -
Plaintiffs herein proceed on their individual claims and, if

they prevail, having them obtain whatever statutory and punitive

damages might be awarded together with their costs, including

reasonable legal fees.”           Stillmock, 2009 WL 595642 at *6.                  In

this regard, the district court continued:

       Should these Plaintiffs prevail on their willfulness
       claim, other similarly situated Weis customers would
       have the opportunity to file their own actions -- for
       many, if not most, in a court that may be more
       convenient for them than the District of Maryland.
       Moreover, it appears likely that Weis would be
       collaterally estopped from denying willfulness.   See
       Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322
       (1979).

Id.    This appeal followed.

                                        II.

       On appeal, Plaintiffs challenge the district court’s denial

of their motion for class action certification.                          We review a

district court’s denial of class action certification for abuse

of    discretion,    “recognizing,      of    course,      that   this     discretion

must be exercised within the framework of Rule 23.”                      Gunnells v.

Healthplan    Servs.,    Inc.,    348    F.3d      417,    424    (4th    Cir.   2003)

(internal quotation marks omitted).

       A.   Rule 23(b)(3)’s Commonality-Predominance Requirement.

       Plaintiffs first contend that a consumer is entitled to

statutory damages pursuant to 15 U.S.C. § 1681n(a)(1)(A) on a

per   violation     basis,   as   opposed     to    a     per   consumer    basis   as

                                     - 13 -
implicitly       held    by    the    district       court,      and    therefore,         the

district court’s concern that the quantum of statutory damages

to be awarded with respect to each class member would be too

individualized for class-wide treatment was unfounded.                              While we

agree with the district court’s implicit holding that statutory

damages       under    § 1681n(a)(1)(A)        are    to    be      awarded     on     a    per

consumer basis, we also agree with Plaintiffs that the district

court    erred    in    concluding      that    individual          issues     of     damages

would predominate over issues common to the class.

       Critically,      Rule    23(b)(3)’s         commonality-predominance                test

is qualitative rather than quantitative.                      Gunnells, 348 F.3d at

429.          Thus,     while     courts       have      properly           denied        class

certification         where    individual      damages      issues       are    especially

complex or burdensome,               see, e.g., Pastor v. State Farm Mut.

Auto. Ins. Co., 487 F.3d 1042, 1047 (7th Cir. 2007), where, as

here,     the    qualitatively        overarching          issue       by     far    is    the

liability       issue     of    the    defendant’s          willfulness,            and     the

purported class members were exposed to the same risk of harm

every time the defendant violated the statute in the identical

manner, the individual statutory damages issues are insufficient

to defeat class certification under Rule 23(b)(3).                              See Murray

v.     GMAC    Mortg.    Corp.,      434    F.3d     948,     953      (7th    Cir.       2006)

(“Refusing to certify a class because the plaintiff decides not

to make the sort of person-specific arguments that render class

                                           - 14 -
treatment       infeasible        would      throw     away     the     benefits           of

consolidated         treatment.        Unless   a    district     court      finds       that

personal injuries are large in relation to statutory damages, a

representative plaintiff must be allowed to forego claims for

compensatory damages in order to achieve class certification.”);

Smilow v. Southwestern Bell Mobile Systems, Inc., 323 F.3d 32,

40 (1st Cir. 2003) (“The individuation of damages in consumer

class     actions      is     rarely     determinative      under     Rule    23(b)(3).

Where . . .          common    questions    predominate       regarding      liability,

then courts generally find the predominance requirement to be

satisfied even if individual damages issues remain.”).                               Here,

the putative class members were exposed to the identical risk of

identity theft in the identical manner by the repeated identical

conduct of the same defendant, and none suffered actual damages

from     identity      theft.      Under    these     circumstances,         it    strains

credulity       to     conclude     that     the     individual       damages      issues

presented       by    the     purported     class    which    Plaintiffs          seek    to

certify would be anything other than simple and straightforward.

Pragmatically, the only substantive difference between putative

class members for purposes of affixing the statutory damages

figure within the statutory damages range of $100 to $1,000 or

in awarding punitive damages is the number of receipts received

by   a   single       class     member    during     the    approximately         eighteen

months     at    issue.          And     indeed,     this    difference       does       not

                                          - 15 -
complicate matters very much at all given that the class can be

broken     down    into     subcategories          based    upon   the     number    of

violating receipts received per putative class member.                        In sum,

we hold that common questions of law and fact predominate over

the individual issues presented by Plaintiffs’ purported class

action, thus satisfying Rule 23(b)(3)’s commonality-predominance

test.     See Klay v. Humana, Inc., 382 F.3d 1241, 1255 (11th Cir.

2004) (“Common issues of fact and law predominate if they have a

direct    impact     on     every       class   member’s    effort    to    establish

liability and on every class member’s entitlement to injunctive

and monetary relief.”) (internal quotation marks and alteration

marks omitted).

     B.    Rule 23(b)(3)’s Superiority Requirement.

     We now turn to consider the district court’s ruling that

Plaintiffs’ purported class action failed Rule 23(b)(3)’s second

requirement, i.e., that the purported class action be superior

to   other     available          methods       for   the   fair     and    efficient

adjudication       of     the    controversy.         Plaintiffs     challenge      the

district     court’s       superiority       ruling    on   the    basis    that    the

district court impermissibly looked outside of Rule 23 to find

the test-case method more to its liking, though not actually

superior to the class action.                   Under the test-case method, if

Plaintiffs win their individual claims against Weis Markets in a

non-class     action,           other     similarly     situated     Weis     Markets

                                          - 16 -
customers    would     have    the     opportunity     to    file       their    own

individual   actions    against      Weis    Markets   and   assert      offensive

collateral estoppel on the issues of liability and willfulness.

     We agree with Plaintiffs that the district court erred in

its superiority-of-method determination.               As the well-respected

treatise Federal Practice and Procedure explains the relevant

considerations:

     Although a determination of superiority necessarily
     depends greatly on the circumstances surrounding each
     case, some generalizations can be made about the kinds
     of factors the courts will consider in evaluating this
     portion of Rule 23(b)(3).

          The rule requires the court to find that the
     objectives of the class-action procedure really will
     be achieved in the particular case.     In determining
     whether   the  answer  to  this   inquiry  is   to  be
     affirmative, the court initially must consider what
     other procedures, if any, exist for disposing of the
     dispute before it.      The court must compare the
     possible alternatives to determine whether Rule 23 is
     sufficiently effective to justify the expenditure of
     the judicial time and energy that is necessary to
     adjudicate a class action and to assume the risk of
     prejudice to the rights of those who are not directly
     before the court.

7AA Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane,

Federal Practice and Procedure § 1779 (3d ed. 2005).

     Here,   the     district      court     held   that     a   test     case    by

Plaintiffs   and     then     future    plaintiffs      asserting        offensive

collateral   estoppel       with   respect    to    liability    issues     was   a

superior litigation method to the class action method proposed

                                     - 17 -
by Plaintiffs.      The totality of the district court’s analysis on

this issue is as follows:

           [T]he Court concludes that [a class action as
      requested by Plaintiffs] would not be superior and,
      indeed, would be inferior to having the Plaintiffs
      herein proceed on their individual claims and, if they
      prevail, having them obtain whatever statutory and
      punitive damages might be awarded together with their
      costs, including reasonable legal fees.   Should these
      Plaintiffs prevail on their willfulness claim, other
      similarly situated Weis customers would have the
      opportunity to file their own actions -- for many, if
      not most, in a court that may be more convenient for
      them than the District of Maryland.       Moreover, it
      appears   likely  that   Weis  would  be   collaterally
      estopped from denying willfulness.

Stillmock, 2009 WL 595642 at *6.

      Other than the inconvenience of the forum consideration,

the district court’s analysis fails to explain why it believes

the       class     action       method       is        inferior         to     the

test-case-with-future-individual-actions            method.           Apparently

sensing the shallowness of the district court’s analysis, Weis

Markets    argues   that   the   availability      of    attorney’s      fees   and

punitive damages under FCRA makes individual lawsuits feasible.

      Weis Markets’ argument is without merit.                First, the low

amount    of   statutory   damages    available     means    no    big    punitive

damages award on the horizon, thus making an individual action

unattractive from a plaintiff’s perspective.                Second, there is

no reasoned basis to conclude that the fact that an individual

plaintiff can recover attorney’s fees in addition to statutory

                                     - 18 -
damages of up to $1,000 will result in enforcement of FCRA by

individual       actions      of    a    scale       comparable      to   the     potential

enforcement by way of class action.                     See Bertulli v. Independent

Ass’n of Continental Pilots, 242 F.3d 290, 299 (5th Cir. 2001)

(Rule 23(b)(3)’s superiority requirement was met by class of

pilots       bringing    action      under       Labor-Management         Reporting        and

Disclosure      Act     (LMRDA)     and       Railway    Labor      Act   alleging       they

suffered loss of seniority as result of restoration of seniority

of 11 strike participants; any relief received by vast majority

of class members would be primarily injunctive, feasibility of

individual actions due to availability of attorney’s fees under

LMRDA     did    not     undercut       conclusion        that      class       device    was

superior,       and,    although        some    damages       calculations        might    be

burdensome,      economies         weighed      in    favor    of    class      treatment);

Tchoboian v. Parking Concepts, Inc., 2009 WL 2169883 at *9 (C.D.

Cal. July 16, 2009) (“The Court is not convinced that the fact

that    an    individual      plaintiff        can    recover       attorney’s     fees     in

addition to statutory damages of up to $1,000 will result in

enforcement       of    the    FCRA      by    individual       actions      of    a     scale

comparable       to     the    potential        enforcement         by    way     of     class

action.”).

        Other factors also cut definitively in favor of concluding

that the class action which Plaintiffs propose is superior to

individual cases.             First, there is no indication in this case

                                          - 19 -
that class members would have a strong interest in individual

litigation.     Second, class certification promotes consistency of

results, giving Weis Markets the benefit of finality and repose.

Gunnells,     348    F.3d    at   429    (in    contrast    to     class   action

proceeding, individual actions make a defendant vulnerable to

the asymmetry of collateral estoppel, thus, class certification

promotes    consistency      of   results,     giving   defendant    benefit    of

finality and repose).

                                        III.

     In sum, we hold the grounds upon which the district court

relied   to   deny   class    action     certification     in    this   case   are

untenable,     and    therefore,        the    district    court    abused     its

discretion in denying class certification on such grounds.                     See

Murray, 434 F.3d at 954 (reversing denial of class certification

in action for statutory damages under FCRA).                     Accordingly, we

vacate and remand for further proceedings.                 Finally, while we

express no opinion regarding Weis Markets’ additional arguments

against class certification which the district court expressly

did not address below, see Stillmock, 2009 WL 595642 at *6, we

instruct the district court to consider them on remand in the

                                     - 20 -
first instance. 7   Singleton v. Wulff, 428 U.S. 106, 120 (1976)

(“It is the general rule, of course, that a federal appellate

court does not consider an issue not passed upon below.”).

                                             VACATED AND REMANDED

     7
       We also leave it to the district court’s discretion
whether to revisit Weis Markets’ argument that class treatment
would not be manageable because Plaintiffs cannot send adequate
notice to the purported class members.      The district court
appeared to assume without deciding that Plaintiffs could send
adequate notice to purported class members.      We express no
opinion on this issue.

                              - 21 -
WILKINSON, Circuit Judge, concurring specially:

      There is much in the court’s opinion with which I agree.             I

am pleased that the court adopts a per-consumer rather than a

per-receipt     interpretation     of      15   U.S.C.   §        1681n(a). *

Additionally, I agree with the court that the district court on

remand should consider other factors that bear upon the issue of

class certification.      Specifically, neither this court nor the

district court has yet addressed the real possibility that the

suggested class could bankrupt an entire chain of supermarkets,

and   the   district   court   retains   wide   discretion   in    deciding

whether to certify a class in light of that problem.

      I worry that the exponential expansion of statutory damages

through the aggressive use of the class action device is a real

      *
       Section 1681n provides that any person who willfully
violates the statute “with respect to any consumer is liable to
that consumer” for, among other things, actual or statutory
damages. 15 U.S.C. § 1681n(a) (emphasis added). The statute’s
emphasis on the consumer reflects a per-consumer rather than a
per-receipt approach to damages.       This interpretation draws
additional support from Safeco Insurance Company of America v.
Burr, 551 U.S. 47 (2007), where the Supreme Court read the
statute to provide that “the consumer may have actual damages,
or statutory damages . . ., and even punitive damages.” Id. at
53 (emphasis added).    Moreover, were we to adopt a per-receipt
approach, FACTA would be transformed from a shield for
protecting consumer privacy into a sword for dismembering
businesses.   Opportunistic cardholders could intentionally make
hundreds, if not thousands, of purchases, hoard their receipts,
and stream into federal court to collect statutory damages on
each one.    The potential for such abuse counsels against the
plaintiffs’ preferred per-receipt interpretation.

                                  - 22 -
jobs killer that Congress has not sanctioned.                           To certify in

cases   where      no   plaintiff       has    suffered      any     actual    harm    from

identity     theft      and    where    innocent         employees    may     suffer   the

catastrophic        fallout     could    not       have   been     Congress’s      intent.

Indeed, the relatively modest range of statutory damages chosen

by   Congress      suggests     that    bankrupting         entire    businesses       over

somewhat         technical      violations          was    not      among      Congress’s

objectives.

      It    is    undeniable     that    Congress         passed     FACTA    to   protect

consumers from the real threat of identity theft.                             It is clear

as well that Congress did not intend willful repeat violators of

FACTA to emerge from litigation with nothing more than a wrist

slap.      It is understandable too that this court and many others

have struggled with the interaction of FACTA and Federal Rule of

Civil Procedure 23.            I see nothing in the statute, however, that

mandates class action treatment of FACTA claims or precludes a

district     court      from   considering         the    prospect    of     annihilative

liability in the certification calculus.

                                              I.

      Certainly nothing in 15 U.S.C. § 1681n(a)(1) would lead us

to believe that Congress intended the modest range of statutory

damages to be transformed into corporate death by a thousand

cuts through Rule 23.            “A claim of this sort creates a tension

                                         - 23 -
between the statutory provisions for minimum damages and the

Rule   23     provisions     for     class        actions     that   probably     was     not

within the contemplation of those who promulgated either the

statute or the rule.”             Parker v. Time Warner Entertainment Co.,

331 F.3d 13, 26 (2d Cir. 2003) (Newman, J., concurring).                              Simply

put,    the    present       case       is    a     perfect      storm    in    which     two

independent provisions combine to create commercial wreckage far

greater than either could alone.                    As Judge Newman explained in a

similar       situation      involving            statutory       damages       for     cable

subscribers,      “I   do    not     believe        that    in    specifying     a    $1,000

minimum     payment    for    .     .    .    violations,        Congress      intended    to

expose [violators] to liability for billions of dollars.”                                 Id.

at 27.      The same statement applies with equal force to FACTA’s

$100 to $1,000 statutory damages range.

                                               A.

       The statute itself affords reason to believe that Congress

did not insist on adopting the class mechanism at all costs.

Regardless      of   whether        common        liability      issues   in    this    case

predominate       over      individualized            damage       determinations,         it

remains true that Congress did provide for individualized damage

determinations in FACTA.                 This fact cuts against the argument

that Congress wished to compel consolidated suits through class

certification.

                                             - 24 -
      There are several indications in FACTA that damages are

individualized.                First,   statutory        damages       are     not    fixed;

instead, Congress provided that they may range anywhere from

$100 to $1,000.             15 U.S.C. § 1681n(a)(1)(A).                The statute does

not specify what factors a jury should consider when selecting a

number within this range.                 But because statutory damages are

intended     to       address     harms   that     are       small    or     difficult    to

quantify,        evidence       about   particular       class       members     is    highly

relevant to a jury charged with this task.                       Had Congress adopted

a set figure for statutory damages rather than a range dependent

on variable evidence, the case for class certification would

have been fortified.

        Second, the compensatory nature of FACTA statutory damages

suggests     class      certification      is    not     congressionally         mandated.

The most powerful indication that Congress intended statutory

damages to be compensatory comes from the structure of FACTA’s

remedial provisions.             Notably, Congress provided that a consumer

subject     to    a    willful     violation     of    the     statute     could      recover

either    actual       or   statutory     damages,       but    not    both.     15    U.S.C.

§ 1681n(a)(1)(A).            The fact that statutory damages are available

in   lieu   of        actual    damages   suggests       that    they      too    serve   to

compensate individual consumers for their injuries.                              See In re

Trans Union Corp. Privacy Litig., 211 F.R.D. 328, 342 (N.D. Ill.

2002)     (“[Section]           1681n(a)(1)(A)        clearly        and     unambiguously

                                          - 25 -
allows      for      actual    or    statutory          damages       as    the    measure      of

compensatory damages.”) (second emphasis added).                               Congress also

provided       for    punitive      damages        in    addition      to    any       actual   or

statutory damages.             15 U.S.C. § 1681n(a)(2).                    That Congress did

so     highlights        the       fact     that        statutory       damages         serve    a

compensatory, rather than punitive, function in FACTA’s remedial

scheme.

       It is not difficult to discern why Congress would allow

consumers to select statutory damages rather than actual damages

as a measure of compensation.                      While some violations of FACTA

will lead to easily quantifiable harms, other violations may

lead     to    less     tangible      ones,        such     as    a    loss       of    privacy,

heightened risk and anxiety over identity theft, or increased

time spent monitoring one’s financial security.                                   In order to

help    a     jury    place    a    value    on    these     intangible           harms,   FACTA

provides for statutory damages between $100 and $1,000.                                    It is

still up to a jury, however, to select a figure within this

range, and the individualized nature of this determination is

strong evidence that class treatment may not be the required

course under FACTA.

                                              B.

       That the court notes (correctly, in my view) that statutory

damages are available on a per-consumer rather than per-receipt

basis further underscores the point that Congress did not demand

                                            - 26 -
class    certification        in   FACTA.   The    per-consumer     perspective

places    the   focus    on    the   characteristics     of    individual   class

members, rather than on the defendant’s conduct that is common

to the entire class.           To protect “the right of the defendant to

present    facts    or    raise      defenses     that   are     particular     to

individual class members,” Thorn v. Jefferson-Pilot Life Ins.

Co., 445 F.3d 311, 318 (4th Cir. 2006), businesses deserve at

least the opportunity to argue that certain individuals should

receive statutory damages at the low end of the range.                        Weis

Markets, for example, might do so by putting on evidence that

some class members were issued very few noncompliant receipts,

rarely if ever checked their credit reports, or experienced no

heightened apprehension of identity theft.               While the class here

excludes    those   who       suffered   actual   damages     due   to   identity

theft, it surely includes members who experienced varying levels

of less quantifiable harms.            Assessing these harms clearly “does

not lend itself to . . . a mechanical calculation.”                  Windham v.

Am. Brands, Inc., 565 F.2d 59, 68 (4th Cir. 1977) (en banc).

All of these facts suggest that Congress did not contemplate a

class action as the exclusive route for FACTA suits.

                                      - 27 -
                                              II.

        Congress       acts,    of    course,       against    the    backdrop    of    the

Federal Rules, and we must assume it knows not only of Rule 23’s

utility, but also that the Rule is not an end unto itself.                                It

is a case management device, and a flexible one at that.                                 The

Rule is the ultimate expression of flexibility, providing a non-

exclusive list of broad factors for courts to consider.                                  See

Fed. R. Civ. P. 23(b)(3)(A)-(D).                      Notably, its flexible nature

indicates that district courts have broad discretion to consider

factors that may bear on the desirability of proceeding down the

road of class treatment.

        Certifying a class action that would impose annihilative

damages where there has been no actual harm from identity theft

could     raise    serious        constitutional         concerns,       as    plaintiffs

themselves admit.              See Reply Br. at 2 n.2.                Other courts have

noted    that     “the    potential       for    a    devastatingly      large    damages

award,    out     of    all     reasonable      proportion       to    the    actual    harm

suffered    by     members       of     the    plaintiff      class,    may    raise     due

process issues.”          Parker, 331 F.3d at 22.               See also Spikings v.

Cost    Plus,     Inc.,    No.    CV    06-8125-JFW         (AJWx),    2007    U.S.    Dist.

LEXIS 44214, at *9, 13 (C.D. Cal. May 25, 2007) (same).                           Indeed,

this     principle       has     some     salience      in     the    punitive    damages

context,    where        the    Supreme       Court   has     noted    that    “[t]he   Due

Process     Clause        of    the     Fourteenth       Amendment       prohibits      the

                                           - 28 -
imposition of grossly excessive or arbitrary punishments on a

tortfeasor.”       State Farm Mut. Auto. Ins. Co. v. Campbell, 538

U.S. 408, 416 (2003).

      Rather than considering annihilative damages as they bear

on due process, however, it is preferable for a district court

to address them in the context of Rule 23(b)(3)’s superiority

requirement.       Doing so gives the district court discretion to

avoid a serious constitutional problem in the best tradition of

the     Brandeis   concurrence          in   Ashwander     v.        Tennessee      Valley

Authority, 297 U.S. 288 (1936), and permits a district court to

declare that a device is not superior when a plaintiff class

whose    members   suffered       no    identity    theft       of    any    sort    still

threatens to wipe an entire company off the map.

      It is fair to observe that a primary focus of Rule 23 is

upon procedural efficiencies, but that is not its sole concern.

A district court has discretion to consider other factors as

well.      “Within    that   discretion        .   .   .   is    the       attaching   of

determinative      weight    to        the   reality     that        if    class    action

treatment were applied in this case where the complaint contains

no indication of any actual damages in substantial or provable

amount,     this     aggregated         relief     would        be        oppressive    in

consequence and difficult to justify.”                 Wilcox v. Commerce Bank

of Kansas City, 474 F.2d 336, 347 (10th Cir. 1973).                             See also

London v. Wal-Mart Stores, Inc., 340 F.3d 1246, 1255 n.5 (11th

                                         - 29 -
Cir.     2003)     (class      action      may     not     be    superior         where      “the

defendants’ potential liability would be enormous and completely

out    of    proportion       to    any   harm     suffered     by    the    plaintiff.”);

Kline v. Coldwell, Banker & Co., 508 F.2d 226, 235 (9th Cir.

1974) (same).

       Finally, the flexibility of Rule 23 is also reflected in

the generous abuse of discretion standard under which district

court       certification          decisions       are   reviewed.           As        we   have

repeatedly explained, “[a] district court has broad discretion

in deciding whether to certify a class.”                        Thorn, 445 F.3d at 317

(quoting Lienhart v. Dryvit Sys., Inc., 255 F.3d 138, 146 (4th

Cir. 2001)).           Certification decisions “will be reversed only

upon a showing of abuse of that discretion.”                          Boley v. Brown, 10

F.3d 218, 223 (4th Cir. 1993); McClain v. South Carolina Nat’l

Bank, 105 F.3d 898, 902 (4th Cir. 1997) (same).                             We afford this

discretion        to     district         courts     for    good       reason.              Class

certification is “a practical problem, and primarily a factual

one     with     which    a    district        court     generally        has      a     greater

familiarity       and     expertise        than     does    a     court      of        appeals.”

Windham, 565 F.2d at 65 (citation omitted).                          Given this, I would

urge caution in requiring district courts to adopt a procedural

device that cuts against the grain of practical justice as the

trial courts conceive it.

                                            - 30 -
                                        III.

                                         A.

       In light of the broad flexibility embodied in Rule 23, I am

pleased that the court instructs the district court on remand to

consider alternative reasons that bear upon class certification.

See    Maj.   Op.    at   20-21.       Specifically,         the    district       court

previously      reserved     ruling      on    “the     contention          that        the

possibility     of   ‘annihilating      results’      disproportionate            to   any

harm renders class certification inappropriate.”                          Stillmock v.

Weis Markets, Inc., 2009 WL 595642, No. MJG-07-1342 at *6 (D.

Md. March 5, 2009).           The court rightly permits the district

court to undertake that inquiry.

       The    risk   of     financial     ruin     as    a     result       of     class

certification is far from illusory.              Weis Markets estimates that

it printed 14,578,600 receipts with improperly truncated account

numbers between the time FACTA became effective on December 4,

2006    and   the    time    the   company       brought      its     systems          into

compliance on June 7, 2007.            Because FACTA establishes statutory

damages between $100 and $1,000, under plaintiffs’ per-receipt

approach, Weis Markets would thus be subject to a massive payout

of between $1.4 and $14 billion.

       The    court’s       per-consumer         calculation,             while        less

astronomical, is no less annihilating to Weis Markets.                                 Both

plaintiffs     and   Weis    Markets    have     estimated         that    “there      are

                                      - 31 -
potentially over one million Class members.”                                 Multiplying that

estimate      by    the        statutory    damages          range      results          in    total

liability      of    between       $100     million          and   $1    billion            dollars,

without even accounting for the possibility of punitive damages,

attorney’s fees, and costs, 15 U.S.C. § 1681n(a)(2), (a)(3).

      It is no exaggeration to say that a judgment within this

range would devastate Weis Markets.                      As counsel for Weis Markets

put   it,    “a     hundred       million    dollars         sinks      my       client.”          The

company is traded on the New York Stock Exchange, and its market

capitalization        at       current     prices       is    just      over         $900     million

dollars.      In other words, this case is not just the proverbial

bet-the-company           suit;     a    class     action,         if    successful,               will

shatter the entire company into hundreds of thousands of $100 to

$1,000      bits.         The    plaintiffs        here       might     as       well       seek    to

distribute every one of Weis Markets’ 26.9 million shares a few

apiece to each receipt holder.

      Nor    is     the    destruction       of    Weis       Markets        a    loss      only    to

shareholders.             If    plaintiffs        are    successful,             a    substantial

number of people will be left unemployed in one of the toughest

job markets in generations.                   Weis Markets currently owns and

operates      one     hundred       sixty-four          retail        grocery          stores       in

Pennsylvania, Maryland, New York, New Jersey, and West Virginia

as well as twenty-five pet supply stores.                             Weis Markets, Inc.,

Annual Report (Form 10-K), at 1 (Mar. 11, 2010).                                     Approximately

                                            - 32 -
17,600 individuals work for the company in either a full- or

part-time capacity.          Id. at 2.        It is doubtful that Congress

intended to cause these thousands of innocent employees to lose

their jobs and paychecks by bankrupting their employer, in a

situation where no plaintiff suffered identity theft.

     None of this is to condone the actions of Weis Markets.

Without   prejudging     the     matter       of   willfulness,    there    are

preliminary     indications     that    the    company   acted    very   badly.

There is no dispute that Weis Markets printed over 14 million

receipts that violated FACTA; the outstanding liability issues

in this case hinge on whether it did so willfully or merely

negligently.       Moreover, compliance with FACTA did not involve

untangling     a   complex    regulatory      scheme,    but   merely    issuing

receipts to cardholders revealing no more than the last five

digits of their card number.           Still, it must count for something

that this class, by definition, consists of individuals who can

claim only statutory damages.               It staggers the imagination to

believe that Congress intended to impose annihilating damages on

an entire company and the people who work for it for lapses of a

somewhat technical nature and in a case where not a single class

member suffered actual harm due to identity theft.

                                       B.

     Nor is the problem of annihilating liability by any means

limited to the present case.           District courts across the country

                                   - 33 -
are    struggling        with   what    one        court    termed    a     “veritable

onslaught” of class action litigation under FACTA, subjecting

companies small and large to extraordinary claims.                         Palamara v.

Kings Family Restaurants, No. 07-317, 2008 WL 1818453, at *3

(W.D. Pa. Apr. 22, 2008).              Ordinarily, a company that violates

FACTA will do so not once or twice, but instead thousands or

even   millions     of    times,     owing    to    the    fact   that     it   has   not

properly updated its equipment.               And because FACTA provides for

statutory    damages       of   at    least    $100,       such   suits     almost    by

definition    expose       companies    to     liability      that    is    orders    of

magnitude beyond their income or net worth, regardless of the

size    of   the    corporation.             “FACTA       class   actions       threaten

businesses of every size with devastating classwide liability

for what may be harmless statutory violations.”                      1 McLaughlin on

Class Actions § 2:38 (6th ed.).

       On one end of the spectrum, such suits jeopardize “mom and

pop” stores, such as the local restaurant with a mere $40,000 in

net assets that last year faced a $4.6 to $46 million FACTA suit

in which none of the putative class members suffered any actual

injuries as a result of identity theft.                    Leysoto v. Mama Mia I,

Inc., 255 F.R.D. 693, 697-98 (S.D. Fla. 2009).                       A similar suit

went a step further, seeking FACTA statutory damages “between

$3.3 million and $33 million” from a company “whose consolidated

financial statements . . . show[ed] a net loss of $5.5 million

                                       - 34 -
and a total negative net worth of $8.1 million.”                 Price v. Lucky

Strike Entertainment, Inc., No. CV 07-960-ODW (MANx), 2007 WL

4812281 at *5 (C.D. Cal. Aug. 31, 2007) (emphasis added).

     And small or struggling companies are not the only ones

threatened by claims far out of proportion to their ability to

satisfy them.       One defendant with net income of just over $68

million recently faced a putative class action seeking between

$198 million and $1.98 billion.             Blanco v. CEC Entm’t Concepts

L.P., No. CV 07-0559 GPS (JWJx), 2008 WL 239658, at *2 (C.D.

Cal. Jan. 10, 2008).            Other corporations have faced similarly

astronomical claims relative to their size.              See, e.g., Spikings

v. Cost Plus, Inc., No. CV 06-8125-JFW (AJWx), 2007 U.S. Dist.

LEXIS 44214, at *12 (C.D. Cal. May 29, 2007) (company with net

worth of $316 million faced FACTA class seeking $340 million to

$3.4 billion); Lopez v. KB Toys Retail, Inc., No. CV 07-144-JFW

(CWx), 2007 U.S. Dist. LEXIS 82025, at *14 (C.D. Cal. July 17,

2007) (even $100 per violation in proposed FACTA class was 600%

of defendant’s net worth).           I suppose it can be assumed that

shareholders      and   creditors   bear    such    litigation    risks.        But

employees?     These liabilities will fall hardest on those who are

laid off because of them.

                                       C.

     In addition to the risk of bankrupting entire companies for

violations   in    which   no    identity   theft    resulted,    there    is   an

                                     - 35 -
additional problem with combining statutory damages and class

certification.              Companies may be forced to settle in the face of

such annihilating liability, even if they have a strong defense.

In    such       an    event,     the     substantial         costs    associated        with

settlement will inevitably be passed on to consumers -- the very

ones whom Congress sought to protect.

      As     the       Seventh    Circuit       explained,      there     is    a    serious

concern with forcing these “defendants to stake their companies

on the outcome of a single jury trial, or be forced by fear of

the risk of bankruptcy to settle even if they have no legal

liability.”           Matter of Rhone-Poulenc Rorer Inc., 51 F.3d 1293,

1299 (7th Cir. 1995).              Indeed, “[t]he risk of facing an all-or-

nothing      verdict          presents    too    high    a     risk,    even     when     the

probability of an adverse judgment is low.”                             Castano v. Am.

Tobacco Co., 84 F.3d 734, 746 (5th Cir. 1996); see also Coopers

& Lybrand v. Livesay, 437 U.S. 463, 476 (1978) (same).                                “[O]nce

a class is certified, a statutory damages defendant faces a bet-

the-company proposition and likely will settle rather than risk

shareholder reaction to theoretical billions in exposure even if

the     company        believes     the    claim    lacks       merit.”         Sheila    B.

Scheuerman,           Due    Process     Forgotten:     The    Problem     of       Statutory

Damages and Class Actions, 74 Mo. L. Rev. 103, 104 (2009).                                At

least      the     plaintiffs       in    Rhone-Poulenc         and    Castano        alleged

substantial actual damages; here we face the risk of forcing a

                                           - 36 -
defendant to settle in the face of billions in liability for

actions     that    resulted          in      not    a    single    instance        of   identity

theft.

       Nor does the possibility of appellate review eliminate the

problem of uneconomic settlement.                           “The reason that an appeal

will    come     too       late     to       provide       effective       relief      for    these

defendants is the sheer magnitude of the risk to which the class

action, in contrast to the individual actions pending or likely,

exposes     them.”          Rhone-Poulenc,            51    F.3d    at    1297    (emphasis      in

original).        Weis Markets and similar companies could hardly be

blamed      if    they       took        a    safe        route    and     settled       in    such

circumstances.             “If they settle, the class certification -- the

ruling that will have forced them to settle -- will never be

reviewed.”       Id. at 1298.                To effectively allow certification to

deprive     a    party      of    a      defense      cannot       be    what    the     adversary

process is about.

                                                  IV.

       Is   there      a    solution         --     one    that    gives    the     statute     its

proper meaning and effect without visiting consequences far in

excess of what Congress intended?                          Judge Newman, when addressing

a similar statute, has suggested two solutions to the problem.

One is to award class members statutory damages below the amount

authorized by Congress.                      Parker, 331 F.3d at 27 (Newman, J.

                                               - 37 -
concurring).        But as he acknowledges, that suggestion suffers a

prohibitive drawback because it “cannot be reconciled with the

terms of the statute.”          Id.     His second suggestion of allowing a

district judge to determine “that a class will be certified only

up to some reasonable aggregate amount of [statutory] damages,”

id. at 28, fares little better because unlike similar exercises

of judicial discretion, remittitur for example, the judiciary

here would simply be adding a capping provision to a federal

statute which Congress in its wisdom did not see fit to include.

Congress of course remains free to adopt such a cap, as it has

done for instance in limiting class action recoveries under the

Truth In Lending Act to the lesser of $500,000 or 1 percent of a

creditor’s net worth, 15 U.S.C. § 1640(a)(2)(B), but it has not

done so here.

     The question, then, is whether the denial of class action

treatment will allow proven violators of a statute to escape

largely untouched.         I do not believe that we are faced with a

choice    of    class     certification       and       its   potentially      lethal

consequences        or   the   denial    of      such    certification      and    the

prospect of impunity for the non-compliant.

There    is    no   shortage    of    incentives        for   consumers   to      bring

individual suits under FACTA.             The act provides plaintiffs with

both costs and reasonable attorney’s fees “in the case of any

successful action” establishing willful or negligent violations.

                                        - 38 -
15 U.S.C. §§ 1681n(a)(3), 1681o(a)(2) (emphasis added).                                  These

suits      are,    therefore,          “essentially        costless”          to        winning

plaintiffs.        Anderson v. Capital One Bank, 224 F.R.D. 444, 453

(W.D. Wis. 2004).             They are potentially quite rewarding as well.

For one thing, actual damages remain available in any case of

identity theft.          15 U.S.C. § 1681n(a)(1)(A).                      For another, the

possibility       of    punitive       damages   exists       in     cases    where      their

imposition is needed for appropriate punishment and deterrence.

15   U.S.C.   §    1681n(a)(2).            For   a     third,       the    possibility      of

offensive collateral estoppel with regard to liability exists

for prospective plaintiffs, of whom in this case there are many.

See Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979).

      Thus    I     am    not        convinced      that      the    denial        of    class

certification           with         its    possibilities             of      annihilative

consequences would allow companies who violate the statute to

emerge     laughing      and     unscathed.          FACTA      “provides       sufficient

motivation for adversely affected individuals to bring suit and

for attorneys to represent them.”                    Campos v. ChoicePoint, Inc.,

237 F.R.D. 478, 490 (N.D. Ga. 2006).                          This is especially so

since the costs of compliance with the statute remain minor in

comparison to the costs of dealing with litigation, in whatever

form it may assume.              For the above reasons, I believe it well

within a district court’s discretion to consider the magnitude

of   the   costs       upon    the    company    and    its     employees      that      class

                                           - 39 -
certification may impose.             Allowing such consideration will not

leave   the    statute       toothless,   nor       fly     in   the    face   of    any

congressional        mandate,   nor    court    the       constitutional       problems

associated with constraining district court discretion provided

by   Federal   Rule     of    Civil    Procedure      23.        Because   I    do   not

understand     the    court’s    judgment      to   preclude      the    exercise     of

discretion in this manner upon remand, I respectfully offer this

special concurrence.

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