September 27, 2022

Volume XII, Number 270

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September 27, 2022

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September 26, 2022

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California Federal Court Grants Plaintiff’s Motion to Remand FACTA Class Action to State Court

Last week, a California federal court held that a plaintiff lacked Article III standing to bring a putative class action in federal court for violations of the Fair and Accurate Credit Transactions Act (“FACTA”) amendments to the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et. seq. As a result, the case was remanded back to the California state court where the plaintiff chose to file his complaint.

In Kamel v. Hibbett, Inc.No. 8:22-cv-01096-RGK-E, 2022 U.S. Dist. LEXIS 130753 (C.D. Cal. July 22, 2022), the plaintiff alleged that he made a purchase with his credit card at one of the defendants’ stores and received a receipt which contained ten digits of his credit card number. 

This is an alleged procedural violation of FACTA, which prohibits retailers from printing more than the last five digits of an account number. 15 U.S.C. § 1681c(g). Plaintiff filed a putative class action in the Superior Court of the State of California for the County of Orange on behalf of people who shopped at one of the defendants’ stores and received a ten-digit receipt. The complaint alleged that class members suffered a “heightened risk of identity theft” and an invasion of a privacy interest.

Defendants then removed the case to the United States District Court for the Central District of California on the basis of federal question jurisdiction, 28 U.S.C. § 1331, and the Class Action Fairness Act, 28 U.S.C. § 1332(d). Plaintiff moved to remand his case back to state court, arguing that his allegations did not meet the standing requirements to satisfy the “case or controversy” limitation of Article III.  

Rejecting the defendants’ objections, the District Court granted the plaintiff’s motion and remanded the case to state court. The Court reasoned that “[t]he law is clear that certain FACTA or FCRA violations alone are insufficient to confer standing” and that the possibility of hypothetical bad actors finding the ten-digit receipts and committing identity theft is too “conjectural” to rise to the level of a concrete injury. The Court concluded that the defendants thus failed to carry their burden upon removal to show an injury-in-fact necessary for Article III standing.  

In granting the plaintiff’s motion to remand, the Court noted that “no district court that has considered FACTA violations similar to this one has denied a motion to remand.  See, e.g.Garcia v. Kahala Brands, LTD., No. 2:19-cv-10062-GW-(JEMx), 2020 U.S. Dist. LEXIS 8816, 2020 WL 256518 (C.D. Cal. Jan. 16, 2020); Keim v. Trader Joe’s Co., No. 2:19-cv-10156-PSG-(MRWx), 2020 U.S. Dist. LEXIS 20325, 2020 WL 564120 (C.D. Cal. Feb. 5, 2020).” As noted several times here at CPW, it has become increasingly common for class action plaintiffs, particularly in BIPA cases, to file suit in plaintiff-friendly state courts and defeat defendants’ removal attempts by arguing that their own complaints do not satisfy Article III requirements. As the principal dissent in last year’s TransUnion v. Ramirez decision remarked, the strengthening of Article III standing requirements could leave state courts as the “exclusive” forum for many FCRA class actions, with defendants “unable to seek removal to federal court.” 141 S. Ct. 2190, 2224 n.9.

As the recent Kamel decision highlights, plaintiffs have tools to defeat removal attempts in privacy litigation and stay in their state forum of choice. 

© Copyright 2022 Squire Patton Boggs (US) LLPNational Law Review, Volume XII, Number 209
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About this Author

James M. Brennan Litigation Lawyer Squire Patton Boggs
Associate

James (Jim) Brennan is an associate in the Litigation Practice Group, where he represents clients in complex commercial litigation matters in state and federal courts. Prior to joining the firm, Jim clerked for Chief Judge D. Brooks Smith of the US Court of Appeals for the Third Circuit. Before that, he was an associate at an AmLaw 100 law firm in New York City.

216-479-8041
Kristin L. Bryan Litigation Attorney Squire Patton Boggs Cleveland, OH & New York, NY
Senior Associate

Kristin Bryan is a litigator experienced in the efficient resolution of contract, commercial and complex business disputes, including multidistrict litigation and putative class actions, in courts nationwide.

She has successfully represented Fortune 15 clients in high-stakes cases involving a wide range of subject matters.

As a natural extension of her experience litigating data privacy disputes, Kristin is also experienced in providing business-oriented privacy advice to a wide range of clients, with a particular focus on companies handling customers’ personal data. In this...

216-479-8070
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