FACTA Lawsuits Revived by Second Circuit

Two previously dismissed FACTA lawsuits will get a second chance following a recent Supreme Court decision.

The U.S. Court of Appeals for the Second Circuit revived the two FACTA lawsuits against Paris Baguette and Donna Karan and sent them back to the trial court for reconsideration in light of the Supreme Court’s recent decision in Spokeo Inc. v. Robins.

Both FACTA lawsuits had been previously dismissed over whether the plaintiffs had adequately alleged willful violations or reckless disregard under FACTA, the Fair and Accurate Credit Transactions Act.

Spokeo involved a claim under the Fair Credit Reporting Act, alleging that the search engine company had failed to follow “reasonable procedures to assure maximum possible accuracy” of consumer reports.

The Supreme Court said that in order to have standing to sue, a plaintiff must allege an injury that is concrete. Alleging a “bare procedural violation” may not establish a plaintiff’s standing to bring a particular claim.

FACTA Lawsuits After Spokeo

The decision in Spokeo addresses a statutory provision similar to the one at issue in the two FACTA lawsuits.

FACTA prohibits business from electronically printing credit card receipts that show the card’s expiration date or more than the last five digits of the card number.

The law allows customers who receive such a receipt to sue the business. FACTA violations that are “willful” can result in liability for statutory damages of $100 to $1,000 per violation.

Under Spokeo, it’s still possible for a plaintiff to establish standing based on a violation of a statutory right, but it may be a little trickier.

The Court said it’s possible for adequate concrete injuries to be intangible, and the violation of a statutory procedural right may be the sort of intangible injury that is adequate to establish standing.

In those cases a plaintiff need not allege any further injury in addition to the one identified by Congress.

In the first of the two current FACTA lawsuits, plaintiff Devorah C. alleged that Paris Baguette had violated the statute by printing credit card receipts that showed the card’s expiration date.

She filed her FACTA claim in October 2013, alleging that the exposed expiration date put her and other consumers at risk for identity theft.

U.S. District Judge Jed Rakoff dismissed her claim, saying she had failed to allege Paris Baguette had acted with “reckless disregard” for FACTA.

The second of the FACTA lawsuits was brought against Donna Karan and its related companies. Plaintiff Yehuda K. alleged that after making a purchase at a DKNY store in New York, he was presented with a receipt that showed the first six and last four digits of his card number.

U.S. District Judge Paul A. Crotty dismissed Yehuda’s claim in January 2015, citing the reasoning in Judge Rakoff’s prior decision. Judge Crotty said that merely alleging Donna Karan was aware of FACTA was not enough to establish that any FACTA violations were willful and reckless.

The Second Circuit sent both cases back to their respective trial court judges, giving the plaintiffs the opportunity to re-plead their claims in accordance with Spokeo and to let the trial courts address any new standing questions that may arise.

Free FACTA Class Action Lawsuit Investigation

If you made one or more purchases and the retailer provided you with a receipt that contained more than the last five digits of your credit or debit card number or the expiration date, you may be eligible for a free class action lawsuit investigation and to pursue compensation for these FACTA violations.

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