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Civil Procedure – Class actions – approval

By: WISCONSIN LAW JOURNAL STAFF//September 23, 2014//

Civil Procedure – Class actions – approval

By: WISCONSIN LAW JOURNAL STAFF//September 23, 2014//

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Civil Procedure – Class actions – approval

Where a defendant willfully violated FACTA by disclosing the expiration of buyers’ credit cards on their receipts, a class action settlement that provided individual class members nothing of value should not have been approved.

“That RadioShack’s violation probably was willful underscores the meagerness of the settlement value to the class members. Class counsel—a handful of lawyers—divide up a million dollars, under the settlement that the district court approved, while a relative handful of class members (83,000 out of 16 million potential class members) receive only 10 cents on the dollar, since the coupon is only $10 even though the minimum statutory damages for a willful violation is $100. And 10 cents on the dollar is actually an exaggeration of the benefit of the settlement to the class, because the coupons are worth less in the aggregate than their face value. Yet as we also said, given RadioShack’s parlous financial state it would be a mistake to increase the aggregate size of the settlement beyond its current $4.1 million ceiling. Our only concern therefore is the division of spoils between class counsel and class members. It seems apparent that each class member has a valid claim to a good deal more than one $10 coupon, and it would seem therefore that the equities favor a reallocation of some of what we are calling the spoils from class counsel to the class members who have submitted claims for the coupons. We are mindful that recipients of statutory damages are not being compensated for actual injury, but in effect are being paid bounties to assist in efforts to reduce identity theft. But identity theft is a serious problem, and FACTA is a serious congressional effort to combat it.”

Reversed and Remanded in part, and Affirmed in part.

14-1470, 14-1471, 14-1658 & 14-1320 Redman v. RadioShack Corp.

Appeal from the United States District Court for the Northern District of Illinois, Durkin, J., Posner, J.

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