Ikea Opposes Request to Move ZIP Code Lawsuit Back to State Court

Ikea filed a motion opposing a consumer’s bid to move her lawsuit from the Ninth Circuit to state court following the U.S. Supreme Court’s decision in the Spokeo case, saying the lawsuit was appropriately placed.

The lawsuit in question is one that originated in 2011 and was filed by plaintiff Rita Medellin alleging that the home furnishings store illegally collected ZIP codes from consumers, violating the Song-Beverly Credit Card Act.

In its opposition to Medellin’s request to dismiss the appeal in which she cited a lack of subject matter jurisdiction and asked to have the case remanded to state court, Ikea argued that the plaintiff did allege concrete harm and that her appeal should continue in federal court.

The recent U.S. Supreme Court decision in the Spokeo case involving allegations of Fair Credit Reporting Act violations ruled that consumers need to show more than a statutory violation and must show an injury-in-fact that is particularized and concrete in order to have Article III standing.

Ikea argued that Medellin continuously alleged in her lawsuit, and in her expert testimony, that Ikea’s alleged unlawful collection of ZIP codes caused consumers to suffer concrete harm such as invasion of privacy, identity theft, and fraud, and easily met the Article III standard.

“Nothing in the Spokeo decision negates plaintiff’s allegation of injury” in fact, Ikea argues. The company goes on to say that the federal court has had jurisdiction the whole duration of the litigation. “Plaintiff is judicially estopped from taking a contrary position in this unabashed attempt for a second change to litigate failed class claims,” Ikea states.

Ikea also claims that the situation is different from that of the Spokeo claims of FCRA violation. “The statute here protects against the risk of identity theft and data-based fraud and other invasions of privacy. Thus, unlike the Fair Credit Reporting Act at issue in Spokeo, the Song-Beverly Credit Card Act contemplates an injury from its violation, even if it is one that is difficult to quantify.”

Ikea was unsuccessful at having the motion dismissed in 2012, but the judge did trim claims in the class action lawsuit the following year

In December 2014, the Class of California consumers was decertified, with the judge ruling that the plaintiffs failed to support their claim that Ikea violated the rights of the Class Members.

The class decertification prompted Medellin’s appeal to the Ninth Circuit. In November, she said that the lower court was in error by choosing to decertify the Class, then changed her approach to ask the Ninth Circuit court to vacate the decision to decertify the Class and remand the case back to state court following the Spokeo decision.

“Here, plaintiffs alleged injury-in-fact sufficient to confer Article III standing and subject matter jurisdiction and received the benefits of that allegation — the full litigation of their claim through judgment in federal court,” Ikea’s opposition states. “Now, unhappy with the result in the district court, plaintiff-appellant takes a directly contrary position for the unabashed purpose of seeking a ‘do over’ in state court. Allowing her to do so would prejudice IKEA by forcing it to relitigate her individual and class claims. Judicial estoppel bars such gamesmanship.”

Medellin is represented by Timothy G. Blood and Paula M. Roach of Blood Hurst & O’Reardon LLP and Gene J. Stonebarger and Richard D. Lambert of Stonebarger Law.

The Ikea ZIP Code Class Action Lawsuit is Rita Medellin v. Ikea U.S. West Inc., Case No. 15-55174, in the U.S. Court of Appeals for the Ninth Circuit.