[author: Katherine Szabo]

Last week, the New Jersey Supreme Court decided in favor of putative class members, taking a permissive approach to class certification at the early stages of litigation. Reversing the lower courts, the New Jersey Supreme Court emphasized that courts must review class action complaints liberally and give plaintiffs “the benefit of every reasonable inference of fact” at the early stages of litigation before discovery.

The case, Ellen Baskin v. P.C. Richard & Son, LLC, was brought on behalf of a potential class of plaintiffs who alleged that P.C. Richard & Son, LLC left customers vulnerable to identity theft and fraud by including the expiration dates of their credit and debit cards on electronically printed receipts. The trial court and New Jersey Appellate Division dismissed the complaint, which raised claims under Federal Fair and Accurate Credit Transactions Act of 2003 (FACTA), finding there was not a large enough group of potential plaintiffs to proceed as a class action.

The NJ Supreme Court disagreed and found that the lower courts had been too restrictive in their review of the class plaintiffs’ allegations. The Supreme Court stopped short of ordering the class certified, but returned the case to the trial court, finding that the class plaintiffs should be allowed to pursue discovery to prove that there are enough class members to justify proceeding as a class action. The Court determined that class plaintiffs do not need to specify a precise class size before conducting discovery. Businesses should be aware that this decision may make it more difficult to dismiss a class actions in New Jersey state court before discovery.