Baskin v. P.C. Richard & Son, LLC

• Decision Date: 02 March 2020
• Docket Number: DOCKET NO. A-2662-18T1
• Citation: 228 A.3d 860,462 N.J.Super. 594
• Parties: Ellen BASKIN, Kathleen O'Shea, and Sandeep Trisal, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. P.C. RICHARD & SON, LLC, d/b/a P.C. Richard & Son, and P.C. Richard & Son, INC., d/b/a P.C. Richard & Son, Defendants-Respondents.
• Court: New Jersey Superior Court — Appellate Division

462 N.J.Super. 594

228 A.3d 860

Ellen BASKIN, Kathleen O'Shea, and Sandeep Trisal, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants,

v.P.C. RICHARD & SON, LLC, d/b/a P.C. Richard & Son, and P.C. Richard & Son, INC., d/b/a P.C. Richard & Son, Defendants-Respondents.

DOCKET NO. A-2662-18T1

Superior Court of New Jersey, Appellate Division.

Argued January 22, 2020

Decided March 2, 2020

Chant Yedalian (Chant & Company) of the California Bar, admitted pro hac vice, argued the cause for appellants (Lite De Palma Greenberg LLC, and Chant Yedalian, attorneys; Bruce Daniel Greenberg, Newark, and Chant Yedalian, on the briefs).

William Stephen Gyves argued the cause for respondents (Kelley Drye & Warren LLP, attorneys; William Stephen Gyves, New York, Glenn T. Graham, Parsippany, and Robert Nicholas Ward, on the brief).

Before Judges Yannotti, Hoffman and Firko.

The opinion of the court was delivered by

FIRKO, J.A.D.

Plaintiffs Ellen Baskin, Kathleen O'Shea, and Sandeep Trisal commenced this putative class action matter, asserting claims against defendants, P.C. Richard & Son, LLC and P.C. Richard & Son, Inc.,¹ under the Fair and Accurate Credit Transactions Act (FACTA) of 2003, 15 U.S.C. §§ 1681 to 1681x, which prohibits retailers who accept credit or debit cards from printing more than the last five digits of the card number or expiration date upon any receipt. We affirm the trial court's order finding that plaintiffs failed to establish that a class action was the superior means to resolve the claims, as required by Rule 4:32-1(b)(3).

We also affirm the trial court's order insofar as it dismissed the claims advanced by O'Shea and Trisal because they are New York residents and their claims arise out of sales transactions that occurred in New York. However, we reverse and remand the dismissal of the complaint as to Baskin because she is a New Jersey resident and her individual claim arises out of a transaction that occurred in this State.

I.

We discern the following facts from the motion record. O'Shea and Trisal initially filed their complaint as a class action lawsuit in the Southern District of New York in 2015.² The New York complaint alleged O'Shea and Trisal received receipts from one of defendants' New York stores around November 17, 2013 and on May 2, 2016 respectively, which included their credit or debit card's expiration dates and the last four digits³ of their card numbers in violation of FACTA. O'Shea and Trisal claimed defendants' FACTA violations were willful because defendants:

1) knew of and were well informed about the law;

2) were informed by other entities of FACTA's truncation requirements and the prohibition on expiration dates;

3) knew their electric receipt printing equipment was outdated, but [decided to forgo] proper updates to avoid spending the money, time, and other resources required; and

4) were put on notice of their FACTA violations by [p]laintiff O'Shea's letter and [c]omplaint.^[4]

O'Shea and Trisal further alleged that printing their card expiration dates subjected them to "an increased risk of identity theft and credit [and/or] debit card fraud," even though neither one of them suffered identity theft or fraud. Defendants filed a motion to dismiss the federal action, which was granted. The federal court found O'Shea and Trisal could not prove a material risk of harm and therefore, they lacked standing to assert FACTA claims against defendants.

O'Shea and Trisal joined Baskin in filing the complaint under review in the Law Division on April 27, 2018. Baskin alleged in her complaint that she received two credit/debit card receipts from defendants "on May 24, 2016[,] each of which contained, among other things, [her] card's expiration date, the last four digits of her card number, the brand of her card, her full name, her full physical address, and her telephone number[,]" from one of defendants' retail stores located in Brick.⁵ Additionally, Baskin alleged she was exposed to an increased risk of identity theft and credit/debit card fraud, although she did not sustain any such damages.

The class plaintiffs sought to represent was described as: "All consumers to whom [d]efendants, after November 17, 2013, provided an electronically printed receipt at the point of a sale or transaction at any of [d]efendants' physical store locations, on which receipt [d]efendants printed the expiration date of the consumer's credit card or debit card." The complaint alleged:

Defendants have willfully violated [FACTA] and failed to protect [p]laintiffs and others similarly situated against identity theft and debit card fraud by printing the expiration date of the card and the last four digits of the card number on receipts provided to credit card and debit card cardholders transacting business with [d]efendants. This conduct is in direct violation of FACTA.

Defendants filed a motion to dismiss on September 5, 2018, claiming plaintiffs could not satisfy the requirements for class action certification, and that New Jersey courts lacked personal jurisdiction over them in this matter. In support of their motion to dismiss, defendants also argued plaintiffs' New Jersey action was an attempt at "a second bite [of] the FACTA class action apple." Specifically, defendants contend that the federal court dismissed O'Shea and Trisal's complaint because the alleged FACTA violations were technical in nature and did not result in actual injury.

Similarly, in this case, defendants contend that plaintiffs did not sustain any harm, such as identity theft, credit or debit card fraud, or that any third party ever came into possession of the sales receipts or credit card information. Defendants argued that under New Jersey law, technical violations of FACTA should not be adjudicated as a class action. They therefore sought to have plaintiffs' complaint dismissed.

Plaintiffs opposed the motion. On November 30, 2018, the trial court conducted oral argument on defendants' motion to dismiss.

The court addressed the motions in a written opinion dated January 17, 2019. The court determined, "certifying a class for these [p]laintiffs—persons who have alleged no concrete harm and yet are seeking a robust remedy in the form of a class action suit for technical violations of a federal statute—would be contrary to relevant New Jersey law."

Accordingly, the trial court concluded that plaintiffs failed to satisfy the numerosity requirement under Rule 4:32-1(a) because they did not assert a potential class number "except to contend that there could be ‘thousands of people whose credit card information was exposed on improper receipts.’ " Additionally, the court stated "[p]laintiffs have also not provided sufficient evidence to support a claim that the class is so numerous that joinder of all members is impracticable ...."

In finding plaintiff failed to establish any harm, the trial court stated:

Plaintiffs allege that it is the violation of FACTA itself that has caused damage to the consumer, but [p]laintiffs fail to allege that they were victims of identity theft, credit or debit card fraud, or that any third party ever came into possession of the sales receipts or the credit card information contained on the receipts, which puts [p]laintiffs' claims at odds with the legislative purpose of FACTA and points to an overall lack of demonstrable damages in the case of these particular [p]laintiffs. As a result, the alleged liability of [d]efendants would need to be determined on the facts on an individual basis, especially if other consumers who received the allegedly violative receipts actually were victims of identity theft or other instances of fraud.

In addition, the trial court found New Jersey lacked personal jurisdiction over O'Shea and Trisal's claims because they are New York residents, P.C. Richard & Son, LLC, is a New York limited liability company, and P.C. Richard & Son, Inc., is a Delaware corporation, having a principal place of business in New York. The court further reasoned that since defendants maintained their principal place of business in New York, the court had no basis to exercise personal jurisdiction over defendants with regard to the claims asserted in the complaint. On January 17, 2019, the court entered a memorializing order granting defendants' motion to dismiss as to all three plaintiffs.

On appeal, plaintiffs argue that: (1) the trial court erred in finding that plaintiffs could not meet the requirements of class certification under Rule 4:32-1 ; (2) the trial court erred in finding that plaintiffs could not satisfy the predominance or superiority requirements of Rule 4:32-1(b)(3) and the numerosity requirement of Rule 4:32-1(a) ; (3) the trial court erred in dismissing the action in its entirety; and (4) the trial court erred in finding it lacked personal jurisdiction over defendants.

II.

We begin by addressing plaintiffs' contention that the trial court erred by finding that class certification is not the superior means of adjudicating the technical violations of FACTA alleged in the complaint, an issue that the New Jersey courts have not yet addressed. In reviewing the grant or denial of a class action certification, an appellate court must ascertain whether the trial court followed the applicable standards set forth in Rule 4:32-1 and whether it abused its discretion in doing so. Lee v. Carter-Reed Co., 203 N.J. 496, 505, 4 A.3d 561 (2010).

An abuse of discretion "arises when a decision is ‘made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.’ " Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571, 796 A.2d 182 (2002) (quoting Achacoso-Sanchez v. Immigration and Naturalization Serv., 779 F.2d 1260, 1265 (7th Cir. 1985) ). In determining whether the trial court has abused its discretion, we " ‘must ascertain whether the trial court has followed’ the class action standard set forth in Rule 4:32-1." Dugan v. TGI Fridays, Inc., 231...