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Merchants received two pieces of good news on the ill-crafted Fair and Accurate Credit Transactions Act, or FACTA, last week.

Congress passed a bill protecting businesses from FACTA’s potentially devastating liability if they mistakenly issue credit card receipts with expiration dates on them. Also, a federal judge in Alabama found FACTA unconstitutional.

Passed in 2003, FACTA was aimed at protecting consumers from identity theft by barring merchants from issuing credit card receipts with any more than the last five digits of the credit card or the expiration date on them.

The law gave merchants three years, or until Dec. 4 2006 to comply. The law also included a private right of action, giving consumers the right to sue alleged FACTA violators.

The result was a cottage industry of class action lawsuits filed by lawyers whose clients who had been issued receipts with their credit card numbers and/or expiration dates on them. None of the plaintiffs claimed they had suffered any financial harm.

Moreover, no one has argued that identity theft can result from the printing of a receipt with a credit card’s expiration date on it.

Congress last week passed the Credit and Debit Card Receipt Clarification Act of 2007, or H.R. 4008, protecting merchants from liability under FACTA if they issued receipts with credit card expiration dates on them, but were compliant with the law otherwise.

Congress also made the bill retroactive to December 2004, eliminating all the lawsuits filed against merchants who had issued receipts with expiration dates on them.

The bill has been sent to the President Bush and is expected to get his signature.

Also last week, in ruling declaring FACTA unconstitutional, Judge William Acker in the U.S. District Court of Northern Alabama wrote that the law’s provision for damages—from $100 to $1,000 per violation—denies defendants due process because it allows for damages even if no harm has been done and can result in wildly differing award amounts depending on the jury.

“If the same customer returns to the same establishment five times in five hours and uses his credit card each time, there will be five FACTA violations, each of which will trigger liability recovery of not less than $100 and not more than $1,000,” Acker wrote. “The possibility for misuse of credit cards by customers reaches astronomical proportions more than the possibility of misuse of credit cards by thieves.”

Acker also ruled that “to impose punitive damages without the suffering of any harm is inherently disproportionate.”

The ruling is expected to be appealed.