Fifth Circuit: District court did not abuse broad discretion in denying class certification

By Kyla Asbury | Nov 25, 2014

NEW ORLEANS (Legal Newsline) - The U.S. Court of Appeals for the Fifth Circuit has ruled that a lower court did not err when it denied class certification in a lawsuit against a grocery store chain for alleged Fair and Accurate Credit Transactions Act violations.

"Three plaintiffs filed a motion to certify a class action against a grocery store chain for alleged violations of the Fair and Accurate Credit Transactions Act," the Nov. 18 opinion states. "The district court denied certification on predominance and superiority grounds. We conclude the district court did not abuse its broad discretion, and therefore we affirm."

Circuit judges Thomas Morrow Reavley, Jennifer Walker Elrod and Leslie H. Southwick voted in the majority and issued a per curiam decision.

"We have held that class issues do not predominate when 'transaction-by-transaction' determinations are required," the opinion states. "In Mims [v. Stewart Title Guar. Co.], an inquiry into each transaction’s reasonableness would have been required."

The individualized inquiries in this case might not need to be as detailed, but the general principle of Mims applies, according to the opinion.

Robert Ticknor, Matthew Russell and Daniel Cutler filed their class action lawsuit against Rouse's on May 7, 2012. The district court granted a motion for summary judgment in favor of the defendants on May 30, and the plaintiffs appealed on June 11.

The plaintiffs claimed under FACTA, a receipt when making a payment with a credit card should not include the expiration date of the card.

Each of the plaintiffs purchased groceries at Rouse's and used their credit cards. Each receipt showed the expiration date of their credit cards

"The plaintiffs contend that post-trial mechanisms, such as claims forms requiring plaintiffs to attach their credit card statements and store receipts, would eliminate the burdens of a transaction-by-transaction analysis," the opinion states.

"Credit card statements, though, would not demonstrate that the cardholder made the purchase. Additionally, determining whether a purchase was for consumer or business purposes would often not be possible from the card statements, because personal credit cards may be used to make business purchases."

Because these elements must be proven to recover on a FACTA claim, and because Rouse’s Enterprises LLC demonstrated that these elements differed as to the plaintiffs, the district court did not abuse its discretion in determining that these issues created predominance and manageability problems, according to the opinion.

The panel stated that the broad discretion enjoyed by district courts regarding certification is critically important.

"That discretion may lead to disparate results," the opinion states. "In fact, the parties' briefs make clear that district courts have both allowed and refused certification of classes in the FACTA context. Nevertheless, we concur with the Tenth Circuit’s conclusion that 'inconsistent results' regarding certification are 'no insurmountable objection' and must be permitted 'until, if ever, some more acceptable and general solution by amendments to the rules or clarification by statute emerges.'"

The plaintiffs are represented by Russ M. Herman, Stephen J. Herman and Soren E. Gisleson of Herman, Herman & Katz LLP in New Orleans; Andrew D. Bizer of Bzer Law Firm LLC in New Orleans; and Brian T. Ku and M. Ryan Casey of Ku & Mussman PA.

Rouse's is represented by Loretta G. Mince and Jason W. Burge of Fishman Haygood Phelps Walmsley Willis & Swanson LLP in New Orleans.

U.S. Court of Appeals for the Fifth Circuit case number: 14-30550

From Legal Newsline: Kyla Asbury can be reached at classactions@legalnewsline.com.

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