DR. DAVID S. MURANSKY, individually and on behalf of all others similarly situated, Plaintiff - Appellee,
GODIVA CHOCOLATIER, INC., a New Jersey corporation, Defendant-Appellee. JAMES H. PRICE, ERIC ALAN ISAACSON, Interested Parties - Appellants,
Appeals from the United States District Court for the
Southern District of Florida D.C. Docket No.
MARTIN, JORDAN, and GINSBURG, [*] Circuit Judges.
MARTIN, CIRCUIT JUDGE.
appeal was brought to contest the approval of a class-action
settlement. Dr. David Muransky filed a class action against
Godiva Chocolatier, Inc. for violating the Fair and Accurate
Credit Transactions Act ("FACTA"). Appellants James
Price and Eric Isaacson ("the objectors") objected
to a class settlement reached by Dr. Muransky and Godiva.
Over their objections, the District Court approved the
settlement, class counsel's request for attorney's
fees, and an incentive award for Dr. Muransky. After careful
review and with the benefit of oral argument, we affirm.
April 2015, Dr. Muransky filed a class action against Godiva
for allegedly violating FACTA. FACTA prohibits merchants from
printing "more than the last 5 digits of the card number
or the expiration date upon any receipt provided to the
cardholder at the point of the sale or transaction." 15
U.S.C. § 1681c(g)(1). The operative complaint alleges
that after Dr. Muransky made a purchase at a Godiva store,
Godiva gave him a receipt that showed his credit card
number's first six and last four digits. Dr. Muransky
sought to represent a class of customers whose credit card
numbers Godiva printed on receipts in violation of FACTA.
These violations, the complaint says, exposed Dr. Muransky
and the class "to an elevated risk of identity
theft." According to the complaint, Godiva's
violation of FACTA was willful, so the class was entitled to
statutory and punitive damages, as well as attorney's
fees and costs. See id. § 1681n(a).
moved to dismiss the complaint on the ground that it did not
plausibly allege a willful violation of FACTA. The District
Court denied Godiva's motion. After that, the parties
engaged in discovery then mediated the case. In late November
2015, the parties notified the court of an agreement in
principle to settle the case on a class-wide basis. They
requested a stay, which the court granted.
months after that request, Dr. Muransky moved for preliminary
approval of the class-action settlement. He explained that
the parties agreed to a settlement fund of $6.3 million from
which all fees, costs, and class members would be paid. He
estimated that class members who submitted a timely claim
form would receive around $235 as their pro-rata share of the
settlement fund. None of the money would revert to Godiva.
Dr. Muransky indicated he intended to apply for an incentive
award of up to $10, 000 and that class counsel would move for
an award of attorney's fees of up to one-third of the
settlement fund, which would be $2.1 million.
motion, Dr. Muransky also argued that the amount class
members would recover by submitting a claim compared
favorably to their possible recovery had the case proceeded
to trial. FACTA provides for a combination of actual and
statutory damages. 15 U.S.C. § 1681n(a). For statutory
damages, FACTA provides for an award of $100 to $1, 000 for
each violation. Id. § 1681n(a)(1)(A). Given the
nature of the violation, Dr. Muransky acknowledged there was
"a good chance" each class member would recover the
$100 minimum statutory damage award if the case went to
trial. At the fairness hearing, the District Court agreed
with Dr. Muransky's assessment, saying it was reasonable
for class counsel to have estimated that class members
"could [receive] more than double what the class members
could get if they went to trial and won the case."
Muransky's motion also addressed some of the risks that
favored pre-trial settlement. Most notably, Dr. Muransky
pointed to two cases then pending before the Supreme Court:
Spokeo, Inc. v. Robins, 578 U.S. ___, 136 S.Ct. 1540
(2016), on Article III standing, and Tyson Foods, Inc. v.
Bouaphakeo, 577 U.S. ___, 136 S.Ct. 1036 (2016), on
class certification under Federal Rule of Civil Procedure
23(b)(3). The outcomes of those two cases, which at the time
were uncertain, posed serious risks to the class members'
ability to pursue FACTA claims against Godiva. Dr. Muransky
also acknowledged the difficulty of proving the
"willfulness" of Godiva's FACTA violation,
which the District Court also discussed at the fairness
hearing. Without proving "willfulness," the class
would not be entitled to statutory damages. See 15
U.S.C. § 1681n(a).
motion for preliminary approval also contained a proposed
class notice and a proposed schedule of notice, opt-out, and
motion deadlines. The proposed notice said Dr. Muransky would
seek an incentive award of up to $10, 000 "for his work
in representing the class" and that class counsel would
seek up to $2.1 million in attorney's fees. The District
Court granted the motion for preliminary approval, certified
the class under Rule 23(b)(3), and approved the form of
notice. Under the preliminary approval order, class members
who wanted to be excluded from the settlement were required
to give written notice of exclusion to the claims
administrator. Those who failed to submit an opt-out
certification would be included in the settlement class and
bound by its terms. Then to get money from the settlement
fund, class members had to file a claim form with the claims
administrator. Class members could also file objections,
which the court would consider as part of its determination
of whether the settlement was fair. After extensions by the
District Court, the final deadline for class members to
submit claims, object, or opt-out was August 23, and the
deadline for Dr. Muransky to move for final settlement
approval was September 9.
of the settlement was sent to 318, 000 class members and over
47, 000 submitted claim forms. Only fifteen class members
opted out. Five class members, including Mr. Price and Mr.
Isaacson, objected to the settlement. In their objections,
Mr. Price and Mr. Isaacson said they are members of the
settlement class and that they timely submitted claim forms.
Among other arguments, they said notice of Dr. Muransky's
attorney's fee motion was inadequate under Rule 23(h);
the court should subject any attorney's fee award to a
lodestar analysis; and a $10, 000 incentive award was not
September 7, Dr. Muransky moved for final approval of the
class settlement and requested an award of $2.1 million in
attorney's fees as well as $10, 000 as an incentive
award. At the court's direction, Dr. Muransky filed a
separate motion for attorney's fees and expenses. The
Magistrate Judge issued a report and recommendation
("R&R") on the attorney's fee motion just
four days later, before the objectors filed opposition
briefs. The R&R recommended that the District Court grant
the motion and award the full amount of $2.1 million.
Although the R&R was issued before the objectors filed
opposition briefs, the Magistrate Judge considered Mr.
Price's and Mr. Isaacson's previously filed
objections to the settlement. In addition, soon after the
R&R was issued, the objectors filed briefs in opposition
to the motion for attorney's fees. They later filed
objections to the R&R as well.
September 21, the District Court held a fairness hearing,
during which objectors' counsel made their case. During
the hearing, Mr. Isaacson's counsel raised standing as a
new objection, saying that the court needed to decide whether
Dr. Muransky had Article III standing. Soon after the
hearing, the District Court approved the settlement and
awarded the incentive award and attorney's fees to Dr.
Muransky and class counsel respectively. In response to the
objectors' argument that notice was not adequate, the
District Court noted it had "permitted objections to be
filed both before and after" the motion for
attorney's fees was filed and that "meaningful
objections were in fact filed both before and after the
filing" of that motion. The court said it had reviewed
the class members' objections to the R&R de
novo, "taken them into full consideration,"
and "carefully analyzed" them. The court then found
that the requested attorney's fees were reasonable and
awarded $2.1 million, one-third of the settlement fund, in
fees. The Court also granted the $10, 000 incentive award for
Dr. Muransky's "efforts in this case."
objectors appealed. They say the District Court abused its
discretion by finding that the notice satisfied Rule 23(h),
by awarding $2.1 million in attorney's fees, and by
awarding $10, 000 as an incentive to Dr. Muransky. Mr.
Isaacson raises a fourth issue: he challenges Dr.
Muransky's Article III standing to pursue a FACTA claim
against Godiva. Before addressing those arguments, we
consider the objectors' ability to make them on appeal.
We then consider the merits of the arguments properly before
The objector's right to appeal
Supreme Court has held "only parties to a lawsuit, or
those that properly become parties, may appeal an adverse
judgment." Marino v. Ortiz, 484 U.S. 301, 304,
108 S.Ct. 586, 587 (1988) (per curiam). We start by deciding
whether objectors like Mr. Price and Mr. Isaacson are
"parties" with the ability to appeal from a
district court's judgment. We hold that they are.
Devlin v. Scardelletti, 536 U.S. 1, 122 S.Ct. 2005
(2002), the Supreme Court addressed whether a nonnamed class
member who timely objects to a settlement agreement but does
not opt out is a "party for the purposes of appealing
the approval of the settlement." Id. at 7, 122
S.Ct. at 2009 (quotation marks omitted). The Court held that
nonnamed class members who are bound by a judgment must
"be allowed to appeal the approval of a settlement when
they have objected at the fairness hearing."
Id. at 10, 122 S.Ct. at 2011. "To hold
otherwise," the Court explained, "would deprive
nonnamed class members of the power to preserve their own
interests in a settlement that will ultimately bind them,
despite their expressed objections before the trial
addressed a mandatory settlement class, but not whether
objectors to a Rule 23(b)(3) settlement who can opt out of a
settlement also are "parties" that can appeal.
See id. at 10-11, 122 S.Ct. at 2011 (noting that
appeal was the objectors' only option because they could
not opt out of the settlement). Since Devlin, the
only circuit courts of appeal to have decided this issue have
held that class members who object to a Rule 23(b)(3)
settlement but do not opt out are "parties" for
purposes of appeal. Generally, these courts reason that
Devlin "is about party status and one who could
cease to be a party is still a party until opting out."
Nat'l Ass'n of Chain Drug Stores, 582 F.3d
at 40. In AAL High Yield Bond Fund v. Deloitte &
Touche LLP, 361 F.3d 1305 (11th Cir. 2004), this Court
ruled that objectors who were not class members could not
appeal because they were not "parties who are actually
bound by a judgment." Id. at 1310. Yet at the
same time, we know that actual class members who object but
do not opt out of a Rule 23(b)(3) class settlement are still
bound by the judgment approving the class settlement. See
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614-15,
117 S.Ct. 2231, 2245 (1997). With all of this in mind, we
conclude that class members who object to Rule 23(b)(3) class
settlements but do not opt out are "parties" for
purposes of appeal. Mr. Price and Mr. Isaacson are therefore
Article III standing
review our subject matter jurisdiction de
novo." Day v. Persels & Assocs., LLC,
729 F.3d 1309, 1316 (11th Cir. 2013). Article III of the
Constitution limits our jurisdiction to "cases" or
"controversies." Standing is one of the essential
components of Article III's case or controversy
requirement. Lujan v. Defs. of Wildlife, 504 U.S.
555, 560, 112 S.Ct. 2130, 2136 (1992). Standing, in turn, has
"three elements: injury in fact, causation, and
redressability." Nicklaw v. Citimortgage, Inc.,
839 F.3d 998, 1001 (11th Cir. 2016). An injury in fact must
be concrete, particularized, and actual or imminent.
Lujan, 504 U.S. at 560, 112 S.Ct. at 2136. Mr.
Isaacson argues that Dr. Muransky has not alleged a concrete
injury in fact that confers Article III standing under the
Supreme Court's decision in Spokeo, 136 S.Ct. at
1548. We have concluded to the contrary.
determine whether a statutory violation results in a concrete
injury, we consider both "history and the judgment of
Congress." Id. at 1549. More specifically, we
look to whether the intangible harm that results from the
statutory violation bears a "close relationship" to
harms that have "traditionally been regarded as
providing a basis for a lawsuit in English or American
courts." Id. And we consider the judgment of
Congress because it "is well positioned to identify
intangible harms that meet minimum Article III
before we get ahead of ourselves, we stop to examine the
duties imposed and the rights conferred by FACTA. FACTA,
which is an amendment to the Fair Credit Reporting Act,
"is aimed at protecting consumers from identity
theft." Harris v. Mexican Specialty Foods,
Inc., 564 F.3d 1301, 1306 (11th Cir. 2009). To do that,
FACTA imposes a duty on merchants "that accept credit
cards or debit cards for the transaction of business"
not to "print more than the last 5 digits of the card
number or the expiration date upon any receipt provided to
the cardholder at the point of the sale or transaction."
15 U.S.C. § 1681c(g)(1). FACTA authorizes customers to
bring private actions against merchants that willfully or
negligently violate this duty. 15 U.S.C. §§
1681n(a); 1681o(a). A merchant willfully violates
FACTA by acting in knowing violation of its statutory duties
or by acting in reckless disregard of those duties. See
Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57-58, 127
S.Ct. 2201, 2208-09 (2007). For willful violations, customers
may recover actual damages or statutory damages from $100 to
$1000, and punitive damages. 15 U.S.C. § 1681n(a)(1),
(a)(2); Safeco, 551 U.S. at 53, 127 S.Ct. at 2206.
Customers can recover statutory damages for willful
violations even if they cannot show their identity was stolen
or credit impacted, 15 U.S.C. § 1681n(a), and even if
they received and kept the defective receipt. Engel v.
Scully & Scully, Inc., 279 F.R.D. 117, 125-26
(S.D.N.Y. 2011). By contrast, when the violation is a result
of negligence, customers can only recover their actual
damages as well as attorney's fees. 15 U.S.C. §
1681o(a); Engel, 279 F.R.D. at 125-26.
Muransky alleged that Godiva willfully violated its duty not
to print more than five digits of his credit card number on a
receipt. See 15 U.S.C. §§ 1681c(g)(1),
1681n(a). We must therefore examine whether a merchant's
willful violation of FACTA's card-truncation duties and
any resulting harms bears a "close relationship" to
causes of action recognized at common law. See
Spokeo, 136 S.Ct. at 1549. This court has made similar
inquiries, analogizing to common law causes of actions in
three cases decided since Spokeo. In Perry v.
Cable News Network, Inc., 854 F.3d 1336 (11th Cir.
2017), we held that the violation of the Video Privacy
Protection Act conferred standing based in part on an analogy
between the private right of action created by the Act and
the common law tort of intrusion upon seclusion. Id.
at 1341. Likewise, Pedro v. Equifax, Inc., 868 F.3d
1275 (11th Cir. 2017) analogized the violation of the Fair
Credit Reporting Act based on reporting inaccurate credit
information to the tort of defamation. Id. at
1279-80. Conversely, in Nicklaw, this Court rejected
the plaintiff's attempt to analogize his statutory cause
of action for the failure to timely record a (since recorded)
satisfaction of mortgage to a common law quiet title action.
839 F.3d at 1002-03.
Godiva's disclosure of Dr. Muransky's credit card
number is similar to the common law tort of breach of
confidence. See Alicia Solow-Niederman, Beyond
the Privacy Torts: Reinvigorating a Common Law Approach for
Data Breaches, 127 Yale L.J. F. 614, 624-26 (2018)
(arguing that data breaches resemble the common law tort of
breach of confidence). Typical breach of confidence cases involve
a customer entrusting formulas, letters, or images to a
trusted person, including merchants, who would without
permission disclose these items to other people, or to the
public, or use them for personal gain. See Richards
& Solove, 96 Geo. L.J. at 135-38 (collecting cases);
cf. United States v. O'Hagan, 521 U.S. 642,
652-55, 117 S.Ct. 2199, 2207-08 (1997) (establishing the
misappropriation theory of insider trading based on similar
principles). An important difference between the breach of
confidence tort and privacy torts is the identification of
the harm. In privacy suits, the harm is usually construed in
terms of exposure, "with an emphasis on publication as
the cause of the harm." Solow-Niederman, 127 Yale L.J.
F. at 621; see, e.g., Peterson v. Idaho First
Nat. Bank, 367 P.2d 284, 286-88 (Idaho 1961) (rejecting
a tort claim because disclosure of a customer's bank
records to his employer did not amount to public disclosure
for purposes of the right to privacy). But in breach of
confidence cases, the harm happens when the ...