Paris Baguette Dodges Class Action Over Customer Receipts

East Coast bakery chain Paris Baguette dodged a class action lawsuit last Thursday brought against the company involving their customers’ credit cards.  The class action alleged that the company had been printing personal credit card information on the receipts of their customers, making them vulnerable to identity theft.

U.S. District Judge Jed S. Rakoff dismissed the Paris Baguette class action lawsuit on Jan. 15 after determining there was not sufficient evidence to charge the company with violating the Fair and Accurate Credit Transactions Act.

The plaintiff accused the company of violating FACTA by printing credit and debit card expiration dates on her receipts, making her a possible target of identity theft.  FACTA was passed in 2003 as an amendment to the Fair Credit Reporting Act.  FACTA contains various provisions to help protect against identity theft, such as giving individuals the ability to place alerts on their credit histories if they suspect possible activity of identity fraud. Furthermore, FACTA requires companies and restaurants across the country to shorten — or truncate — the credit or debit account information printed on electronic receipts. Companies are not allowed to include more than the last five digits of a customer’s card number, and must delete the card’s expiration date.

The plaintiff in the Paris Baguette FACTA lawsuit, Devorah Crupar-Weinmann, sued Paris Baguette in October 2013, after discovering that the expiration dates of her credit cards had been made available on her receipt.  She sued the company for not properly disposing of this information, stating that this information had made her vulnerable to identity thieves.

In her class action lawsuit, Cruper-Weinmann argued that identity thieves often collect lost or discarded credit card receipts, and use the information on them to gain access to the victim’s finances, abusing them for unauthorized transactions.

However, Paris Baguette countered that the plaintiff’s argument had failed to show that the violations had been intentional. While minor at first glance, this distinction is vital for most businesses involved in FACTA allegations, because it determines whether or not the defendant committed noncompliance negligence against the Act.  Under FACTA, accidental noncompliance negligence is limited to reimbursement for actual injuries, such as compensation for fraudulent charges.  Willful violation can cause the company to be fined up to $1,000 per each improper receipt.

This point had been the deciding factor for Judge Rakoff’s decision after finding that Crupar-Weinmann had not suffered any actual consequences from the receipts, and no mishaps of identity theft.  According to the defendant’s motion, the plaintiff stated that Paris Baguette had willfully violated FACTA, and should pay “massive fines” for these violations. These fines would have generated millions.

The company argued the case should be dismissed because the expiration date was “accidentally” left on the receipt, which does not imply a willful violation of FACTA. Furthermore, the company argued that they had still followed partial compliance with FACTA by removing the credit card numbers.

Crupar-Weinmann is represented by Marvin L. Frank and Bridget V. Hamill of Frank & Bianco LLP and Khaled El Nabli, Joseph H. Lilly, Alan J. Harris and Peter Y. Lee of Nabli & Associates PC.  Paris Baguette is represented by Joshua A. Berman, Eric L. Unis and Mary Jane Yoon of Troutman Sanders LLP.

The Paris Baguette FACTA Class Action Lawsuit is Devorah Crupar-Weinmann v. Paris Baguette USA Inc. d/b/a Paris Baguette, Case No. 1:13-cv-07013, in the United States District Court of Southern New York.