Massachusetts has seen a small uptick in class actions in the last eighteen months, particularly ones that cite Mass Gen. Law Ch. 93A, Masschusetts’s consumer protection law. David G. Thomas, James P. Ponsetto, and Michael E. Pastore of Greenberg Traurig have an explanation. In their Law360 article Behind The Class Action Surge Against Mass. Retailers takes an in-depth look at a line of cases originated by the Supreme Judicial Court’s ruling in Tyler v. Michaels Stores Inc., 464 Mass. 492 (2013). These class actions challenge the practice of including ZIP codes in the information that retailers collect (much like the way the federal statute FACTA challenged the collection of similar information). As they describe it, in Tyler,
the SJC reiterated that the harm or injury must be caused by the alleged violation. As a result, the SJC arguably narrowed the scope of Chapter 93A injury in Tyler (a long-awaited narrowing).
Nonetheless, the SJC also gave the plaintiffs’ class bar a road map as to how to plead and potentially prove Chapter 93A injury and damages for violations of Chapter 93, Section 105(a). For example, in Tyler, the separate and distinct injury was receiving unwanted junk mail or having personal information sold to a third-party for a profit. Since the SJC’s decision, the plaintiff’s class action bar has targeted other retailers allegedly following similar policies and alleged these very same separate and distinct injuries to consumers in their complaints.”
In other words, the Supreme Judicial Court’ interpretation has resulted in the same surf of lawsuits that FACTA did under similar circumstances.
In addition to providing an analysis of the relevant Massachusetts cases, the authors also offer up several preventive measures defendants can take, as well as a few arguments against certification:
Tyler addressed the injury issue only in the context of a motion to dismiss filed in the district court. Neither the SJC nor the district court addressed whether the putative class should be certified (which since has settled). Accordingly, a putative class representative would have to prove that the common issue of “Chapter 93 injury” and causation is appropriate for class certification, e.g., that all class members gave their ZIP codes, the “giving” did not fall into one of the enumerated exceptions, and that those ZIP codes were used to send consumers unwanted junk mail or to sell their information to a third-party for a profit. Accordingly, there may very well be some strong defenses to class certification in these cases, which, of course, will be based on the facts of the underlying policy and a retailer’s actions.
So, like with FACTA class actions, defendants should look at the specific transactions, and the policies in place behind the data collection. It’s often the cases in these kinds of retailer class actions that the storefront experience is not as common as the plaintiffs suppose.