Hogan Lovells wins en banc 11th Circuit decision securing dismissal of US$6.3 million class action settlement in a key decision addressing standing

Washington, D.C., 29 October 2020 – Global law firm Hogan Lovells won an en banc victory before the U.S. Court of Appeals for the Eleventh Circuit, securing dismissal of a US$6.3 million class settlement on the ground that the plaintiff lacked Article III standing. The 11th Circuit held in Muransky v. Godiva Chocolatier that violations of the Fair and Accurate Credit Transactions Act (FACTA) alone, without a showing of actual harm or a material risk of harm caused by those violations, are not enough to establish standing.


Hogan Lovells represented appellant Eric Alan Isaacson, who objected to a settlement reached by the parties in Muransky. The case produced four opinions totaling 148 pages, and sets a major precedent on the limits of standing to bring statutory claims under the U.S. Supreme Court’s 2016 decision in Spokeo, Inc. v. Robins. The appeal was argued before the en banc Court by Mitchell Reich, a senior associate in the firm’s Washington, D.C. office.

In Godiva, Dr. David S. Muransky brought suit against Godiva Chocolatier, Inc. in federal district court in Florida, alleging violations of FACTA, a federal statute that forbids merchants from printing more than the last five digits of a credit card number on receipts offered to customers. Muransky alleged that Godiva violated this statute when it printed 10 out of 16 digits of his credit card number on a receipt—a few more digits than the statute allows. Muransky did not claim that he suffered any harm from this violation of the statute, nor did he identify any meaningful risk that this technically noncompliant receipt could be used to steal his identity. Nonetheless, Muransky brought a class action suit seeking up to US$342 million in damages against Godiva.

The two sides reached a settlement agreement in which Godiva would pay $6.3 million, of which almost one third would go to the class attorneys. Before the settlement was approved by the court, the U.S. Supreme Court issued its decision in Spokeo, holding that a statutory violation is not enough to establish standing if the plaintiff suffered no injury from the alleged violation. The district court nonetheless ratified the settlement.

On appeal, an Eleventh Circuit panel approved the settlement, holding that “if Congress adopts procedures designed to minimize the risk of harm to a concrete interest, then a violation of that procedure that causes even a marginal increase in the risk of harm to the interest is sufficient to constitute a concrete injury.”

Sitting en banc, the Eleventh Circuit disagreed. “[E]ven if the parties wish to bargain around Spokeo, we cannot indulge them,” the court stated. “Federal courts retain our constitutional duty to evaluate whether a plaintiff has pleaded a concrete injury—even where Congress has said that a party may sue over a statutory violation.” The Court concluded that Muransky failed to allege a concrete injury because he did not identify any actual harm or material risk of harm stemming from Godiva’s statutory violation.

The decision limits plaintiffs’ ability to bring no-injury class actions for technical violations of FACTA, which have become a source of costly class action litigation in the Eleventh Circuit, as the Chamber of Commerce noted in an amicus brief filed in support of our client’s position. The decision is here.

In addition to Reich, the Hogan Lovells team included partner Neal Katyal (Washington, D.C.) and appellate specialist Heather Briggs (D.C.).



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