Seventh Circuit Applies Spokeo and Requires Actual Injury to Establish Article III Standing in FACTA Case

On December 13, 2016, the Seventh Circuit Court of Appeals became the first post-Spokeo circuit court to address the issue of Article III standing in a putative class action brought for an alleged violation of the Fair and Accurate Credit Transactions Act (“FACTA” or “the Act”), 15 U.S.C. § 1681c(g), which is itself an amendment to the Fair Credit Reporting Act (“FCRA”). Generally, FACTA prohibits a vendor or retailer who accepts a credit or debit card as a means of payment from printing more than the last five (5) digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction. 15 U.S.C. § 1681c(g)(1). Willful violations of the Act could subject a defendant to any actual damages sustained by the consumer, or statutory damages of not less than $100.00 and not more than $1,000.00. 15 U.S.C. § 1681n(a). The Act also provides for the potential recovery of punitive damages along with reasonable attorney’s fees and costs. Id. Thus, per the plain language of the statute, actual damages are not necessarily a precondition for a FACTA suit. Aggregated statutory damages in a class claim, as one might imagine, could prove ruinous for a defendant.

In Spokeo v. Robbins, the United States Supreme Court held that a plaintiff could not establish Article III standing by relying solely on a “bare procedural violation” divorced from any real-world harm, because “Article III standing requires a concrete injury even in the context of a statutory violation.” In the five months since Spokeo was decided however, district court decisions as to whether a plaintiff may enjoy standing to bring actions premised upon statutory violations alone have been far from consistent.

In Meyers v. Nicolet Restaurant of De Pere, the Seventh Circuit dismissed a plaintiff’s putative class claim for lack of Article III standing, as he sought only those damages that are statutorily provided-for under FACTA. More specifically, Mr. Meyers alleged that, after dining at Nicolet Restaurant of De Pere, he was given a receipt that did not truncate the expiration date of his credit card. He subsequently filed suit on behalf of all customers who had similarly been provided with receipts that were not compliant with FACTA’s requirements. While Mr. Meyers admitted seeking only statutory damages, he argued that standing was conferred upon him because, in enacting FACTA, Congress granted him the legal right to receive a receipt that truncated his credit card’s expiration date. The Seventh Circuit disagreed, finding it significant that Mr. Meyers discovered the violation immediately, and that no one ever saw the violative receipt. The Seventh Circuit found it difficult to imagine how the presence of the expiration date could have increased the risk that Mr. Meyer’s identity would be compromised, and accordingly held that, without a showing of injury apart from the failure to truncate a credit card’s expiration date, the injury-in-fact requirement under Article III could not be satisfied.

While district courts continue to interpret Spokeo in cases implicating various “no-injury” consumer and privacy statutes, this decision provides defendants with additional grounds to potentially move for dismissal. Conversely, plaintiffs are sure to use it is a roadmap to creatively tailor pleadings to establish an injury in fact.

The Seventh Circuit’s opinion in Meyers v. Nicolet Restaurant of De Pere can be found here.