Nordstrom Evades Credit Account Disclosure Class Action Lawsuit

A federal judge has dismissed a class action lawsuit against retailer Nordstrom, finding that the plaintiff failed to allege a concrete injury that she can sue over.

U.S. District Judge Paul A. Engelmayer concluded that plaintiff Ester Kelen failed to show that she suffered a tangible injury that gives her standing to sue.

Kelen’s claims that defendant Nordstrom Inc. failed to properly disclose its credit account fees fail to link the retailer’s actions to any actual harm she may have suffered, the judge said.

The judge commented that Kelen’s second amended complaint is “barren of factual allegations that would support such a finding.”

Kelen does not allege that she was ever charged a late payment fee or a returned payment fee of any kind, let alone an improperly calculated one, the judge noted.

Kelen’s claims also do not allege she changed her behavior in any way due to the disclosures at issue. In fact, the judge said, Kelen does not even allege that she read the disclosures she is challenging.

“In light of these spartan pleadings, Kelen’s claim to have suffered a concrete, particularized injury falls short of the standards set by the case law, which requires alleging more than the mere fact of a violation of a disclosure statute for a plaintiff to plead a material risk of harm,” the judge said.

Because Kelen failed to allege concrete and particularized harm, she has no standing to bring these particular claims against Nordstrom. Therefore the court has no jurisdiction and must dismiss her claims, the judge concluded.

Kelen’s Nordstrom class action lawsuit alleges the retailer failed to properly disclose certain terms of its credit card accounts in compliance with the federal Truth in Lending Act, or TILA.

Nordstrom sent Kelen an account-opening disclosure statement after she opened an in-store credit account in March 2015. The disclosure statement included what’s known as the “Schumer Box,” a table that summarizes major account terms.

According to Kelen, the Schumer Box in Nordstrom’s disclosure statement listed the fee for late payments as “up to $35” and the fee for payments returned by the account holder’s financial institution as $25.

But both those fees could actually be lower than the Schumer Box says they are, Kelen claims. Under both the TILA and its implementing regulations, late fees and returned payment fees respectively cannot exceed the minimum periodic payment due immediately prior to the assessment of the late fee or the date on which the payment is returned to the card issuer.

Late fees are further limited where an account “has no history of late payments in the prior six billing cycles,” Kelen says.

Kelen argues that because both of those fees could be lower than stated in the Nordstrom disclosure, the disclosure inaccurately represents both those fees and therefore violates the TILA.

Nordstrom fails to disclose the calculation method for either of those fees and fails to reflect the limitations that the TILA places on the size of those fees, she claims.

Kelen is represented by attorneys Harley J. Schnall of the Law Office of Harley J. Schnall, and Brian L. Bromberg and Jonathan R. Miller of Bromberg Law Office PC.

The Nordstrom Credit Card Fee Disclosure Class Action Lawsuit is Ester Kelen v. Nordstrom Inc., et al., Case No. 1:16-cv-01617, in the U.S. District Court for the Southern District of New York.