The crucial fact
The pro-business/tort-reform axis likes to push two memes, that 1) the current judicial system of America is a “lottery” that pays out disproportionately huge settlements, and 2) that any kind of restrictions on corporations push them to the brink of bankruptcy/collapse. Combine those with a smattering of “trial lawyer” vilification and you have the basic argument for every tort reform effort. In formula form: lots of money + imminent bankruptcy + lawyers making money = EVIL!
So the recent surge of FACTA related litigation is sure to anger them greatly. In a nut shell, the cases have to do with the policy of certain major corporations, printing the expiration date of a customer’s credit card on receipts. This is patently disallowed by FACTA, and there are mandated penalties for each infraction. Clearly, there are going to be avalanches of infractions, think how many credit card transactions one big box realtor does in a day, not to mention the number they do nationwide.
So here comes the uproar. Plaintiff’s lawyers are being accused of “legal extortion,” and defense lawyers are arguing the “annihilation defense,” that if class actions based on these violations are certified, then the business in question will be “annihilated.” Moreover, defense lawyers and their compatriots like to point out that no one is really harmed by this policy.
But the uproar is ignoring something important; the law was broken. That is the alpha and omega of this situation. Whether or not a plaintiff has been harmed is completely irrelevant, the decision was made by our duly-elected representatives that this kind of behavior represents a risk of identity theft. Businesses were informed of this fact, and they chose to ignore the law. All they had to do was institute a policy that was in accord with the law, it would have cost them almost nothing, and it would have protected them completely.
But the businesses in question did not obey the law and now they complain about how application of the penalties will “annihilate” them. Could the average person argue they same? Could they say that the punishment attached to a crime would annihilate them, and dodge the punishment?
Oh, one more thing. Every single company that has been sued has immediately changed their policies. Perhaps other companies will, in fear of the penalties attached to violation of the law, actually brings themselves into line with it pre-lawsuit.
Links
- Costco, Kinko’s Battle Trial Lawyers over Credit Card Receipts (Bloomberg)
- Landslide of Suits over Data on Receipts (Law.com)
- via The WSJ Law Blog
