Opinion
Case No. 20-cv-80506-KAM
2021-04-23
Brian KEIM, individually, and on behalf of other similarly situated individuals, Plaintiff, v. SOUTH FLORIDA FAIR AND PALM BEACH COUNTY EXPOSITIONS, INC., and Wade Shows of Florida, Inc., as Successor by Merger to Wade Shows Incorporated, Defendants.
Scott David Owens, Hollywood, FL, for Plaintiff. Christopher Stephen Carver, Akerman LLP, Miami, FL, Erica Gomer, Akerman LLP, Fort Lauderdale, FL, for Defendants.
Scott David Owens, Hollywood, FL, for Plaintiff.
Christopher Stephen Carver, Akerman LLP, Miami, FL, Erica Gomer, Akerman LLP, Fort Lauderdale, FL, for Defendants.
ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS FIRST AMENDED CLASS ACTION COMPLAINT
KENNETH A. MARRA, United States District Judge
This cause is before the Court upon Defendants’ Motion to Dismiss First Amended Class Action Complaint for Lack of Subject-Matter Jurisdiction and Failure to State a Claim or, in the Alternative, to Stay Pending Resolution of First-Filed State Court Action (DE 21). The Motion is fully briefed and ripe for review. The Court has carefully considered the Motion and is otherwise fully advised in the premises.
I. Background
On February 16, 2021, Plaintiff Brian Keim ("Plaintiff") filed his First Amended Class Action Complaint ("FAC") (DE 17) against Defendants South Florida Fair and Palm Beach County Expositions, Inc. ("SF Fair") and Wade Shows of Florida, Inc. ("Wade Shows") (collectively, "Defendants"). Plaintiff has asserted claims for a violation of the Fair and Accurate Credit Transactions Act ("FACTA") amendment to the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681(c)(g) (count I) and Breach of Implied in Fact Contract (count II).
According to the FAC, Defendants knowingly and recklessly failed to comply with FACTA by printing out the first digit of their customers’ credit card and/or debit card accounts on tens of thousands of receipts and by revealing the full credit or debit card expiration date on those same receipts. (FAC ¶ 2.)
On or about January 28, 2020, Plaintiff purchased a ticket at the SF Fair located in West Palm Beach, Florida, for which he incurred a charge which was paid for using his personal debit card. (FAC ¶ 48.) Upon making the payment, Plaintiff was provided an electronically printed receipt, which displayed the first digit of his debit card account number, the last four digits of his debit card account number, and the full expiration date of his debit card. (FAC ¶ 49.) Defendants paid the various credit card processing companies an agreed-upon fee for each credit transaction, a portion of which is budgeted toward expenditures related to the protection of patrons’ personal financial information, which Plaintiff claims was misappropriated in this case, resulting in part of Defendants’ alleged FACTA violations. (FAC ¶ 52.)
The electronically printed receipts provided to Plaintiff by Defendants at the point-of-sale also contained a coupon on their reverse side for the fast-food restaurant Popeyes©, which Plaintiff asserts encouraged others to search for discarded or dropped receipts thereby increasing exposure to an elevated risk of access to private financial data and identity theft. (FAC ¶ 59.) When Plaintiff discovered Defendants unlawfully printed his personal debit card information, he became so concerned that his debit card numbers and expiration date had been viewed on one of the many security cameras in use at the SF Fair, by a "shoulder surfer," or by an unscrupulous employee of Defendants, that he later expended the time and effort to cancel his debit card and requested that his bank issue a new card. (FAC ¶ 60.) Because of Defendants’ alleged FACTA violation that exposed Plaintiff to a higher risk of identity theft, Plaintiff lost the use of his debit card during the time the bank issued a new replacement card. This process caused Plaintiff to waste his time taking adequate precautions against identity theft, including contacting his bank to cancel the debit card which had been partially exposed by Defendants, and requesting a new one. (FAC ¶ 61.)
The FAC also alleges that "Defendants incentivized dumpster-divers to look for receipts in order to take advantage of the coupon printed on the back." (FAC ¶ 7.)
Consumers, like Plaintiff, who noticed their cards’ information printed on Defendants’ receipts and accordingly decided not to retrieve the coupon at the third party restaurant for fear of the unlawful dissemination of their private financial information have suffered a direct economic loss in the amount of the discount provided in the coupon. (FAC ¶ 63.) Moreover, each coupon printed on Defendants’ receipts expressly states a fractionalized cash value which represents the economic loss of Plaintiff and the other putative class members who could not retrieve the coupon due to Defendants’ unlawful printing of their debit and credit card information. (FAC ¶ 64.) The conduct of Defendants, as well as that of their agents, servants, and/or employees, was a willful, knowing, and reckless disregard of federal law and the rights of Plaintiff and other members of the Classes. (FAC ¶ 66.)
In moving to dismiss, Defendants contend that the Court lacks subject matter jurisdiction because Plaintiff lacks an injury sufficient to establish Article III standing. In making this argument, Defendants state that the printing of the first digit and expiration date of Plaintiff's debit card, in addition to four of the permitted digits, does not create a concrete injury. Defendants also state that Plaintiff's concern that a third-party might have viewed his receipt, and his decision to cancel his debit card and not redeem the coupon, does not create standing.
Defendants also argue that they have sovereign immunity with respect to both counts of the FAC, and that Congress did not abrogate State sovereign immunity for claims brought pursuant to the FCRA. In addition, Defendants move to dismiss for failure to state a claim for failing to plead a willful violation of the FCRA, and because Plaintiff did not have an implied-in-fact contract with Defendants. Alternatively, Defendants request that the Court stay this action pending resolution of the related state court case.
Plaintiff responds that he has Article III standing and relies on the recent United States Supreme Court case Uzuegbunam v. Preczewski, ––– U.S. ––––, 141 S. Ct. 892, 208 L.Ed.2d 449 (2020). With respect to sovereign immunity, Plaintiff claims that the disclaimer on the ticket confirms the existence of an express contract. With respect to Plaintiff's claim for willfulness, Plaintiff relies upon cases with similar allegations to support a willful violation of FACTA. Lastly, with respect to Defendants’ request to stay the case during the pendency of the state court action, Plaintiff asserts that there are no extraordinary circumstances warranting abstention.
II. Discussion
Subject Matter Jurisdiction
Defendants make a facial attack on the complaint for lack of standing due to the absence of an injury, and the Court will therefore take the allegations of the complaint as true. Tsao v. Captiva MVP Rest. Partners, LLC, 986 F.3d 1332, 1337 (11th Cir. 2021). Under Article III of the Constitution, the jurisdiction of a federal court is limited to cases and controversies. Tsao, 986 F.3d at 1337 (internal quotation marks omitted).
As the Eleventh Circuit explained in Lawrence v. Dunbar, 919 F.2d 1525 (11th Cir. 1990) :
Attacks on subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1) come in two forms. "Facial attacks" on the complaint "require[ ] the court merely to look and see if [the] plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in his complaint are taken as true for the purposes of the motion." "Factual attacks," on the other hand, challenge "the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered."
These two forms of attack differ substantially. On a facial attack, a plaintiff is afforded safeguards similar to those provided in opposing a Rule 12(b)(6) motion-the court must consider the allegations of the complaint to be true. But when the attack is factual, the trial court may proceed as it never could under 12(b)(6) or Fed. R. Civ. P. 56. Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction-its very power to hear the case-there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. In short, no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.
Id. at 1528-29 (citations omitted).
In Spokeo, Inc. v. Robins, the United States Supreme Court addressed whether "pleading that a statutory requirement was violated is enough to establish standing, even if the plaintiff suffered no injury from the alleged violation." Muransky v. Godiva Chocolatier, Inc., 979 F.3d 917, 920 (11th Cir. 2020) (citing Spokeo, Inc. v. Robins, 578 U.S. 330, 136 S. Ct. 1540, 194 L.Ed.2d 635 (2016) ). Spokeo held that "a party does not have standing to sue when it pleads only the bare violation of a statute." Id. Instead, to have standing, a party must show that he "(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, 136 S. Ct. at 1547. An injury must be "concrete, particularized, and actual or imminent, rather than conjectural or hypothetical." Muransky, 979 F.3d at 925 (citing Spokeo, 136 S. Ct. at 1548.)
Plaintiff alleges the following injuries: (1) a financial loss in the amount of the discount of the coupon printed on his ticket; (2) the wasting of his time and loss of use of his debit card because he cancelled his card and requested a new card to avoid potential identify theft and (3) a breach of the covenant of good faith and fair dealings implied in the contract for the purchase of the admission ticket. (Pl. Resp. at 4-6.)
These alleged injuries are similar to the injuries alleged in Tsao and Muransky, recent Eleventh Circuit cases on standing in the context of data breaches and identity theft. In both cases, allegations of an "elevated risk of identity theft" or a "continuing increased risk" of identity theft were not enough to confer standing. Tsao, 986 F.3d at 1343 (discussing Muransky ). The Tsao Court also rejected a finding of standing based on mitigation efforts to lower the risk of identity theft. In Tsao, the plaintiff claimed, among other things, that his mitigation efforts resulted in a lost opportunity to accrue cash back or rewards points on his cancelled credit cards, and a loss of time and effort to cancel and replace his credit cards. Id. at 1344. Tsao rejected these types of injuries, stating that the plaintiff "cannot conjure standing here by inflicting injuries on himself to avoid an insubstantial, non-imminent risk of identity theft. To hold otherwise would allow an enterprising plaintiff to secure a lower standard for Article III standing simply by making an expenditure based on a nonparanoid fear." Id. at 1345 (internal quotation marks omitted); see also Muransky, 979 F.3d at 931 ("plaintiffs cannot manufacture standing merely by inflicting harm on themselves") (internal quotation marks omitted).
Based on the controlling precedent of Tsao, Plaintiff's alleged injury related to the loss of time and use of his debit card does not create standing. Id. at 1344-45. With respect to Plaintiff's alleged financial loss relating to the coupon, this type of injury can be analogized to the Tsao plaintiff's claim of injury for his lost opportunity to accrue reward points on his credit card. Id.
The Muransky case also presents problems for Plaintiff's standing argument. There, the Eleventh Circuit found no standing in a FACTA case where the first six digits of the plaintiff's card were printed on the receipt. Muransky, 979 F.3d at 934-35. Here, Plaintiff claims the first digit and the expiration date were improperly printed on the receipt. (Am. Compl. ¶¶ 49, 58.) However, "the first digit of a credit card number merely identifies the brand of the card, and Congress has not prohibited printing the identity of the credit card issuer along with the last five digits of the credit card number." Noble v. Nevada Checker Cab Corp., 726 F. App'x 582, 584 (9th Cir. 2018) ; see also Katz v. Donna Karan Co., L.L.C., 872 F.3d 114, 120 (2d Cir. 2017) ("the first six digits of a credit card number constitute the IIN for the card's issuer, digits which can be easily obtained for any given issuer"). Moreover, "it is difficult to see how issuing a receipt to only the card owner and with only the expiration date, without more, could work any concrete harm." Bassett v. ABM Parking Servs., Inc., 883 F.3d 776, 783 (9th Cir. 2018) (citing Spokeo, 136 S. Ct. at 1550 ) (emphasis in original) (internal quotation marks omitted). With respect to the expiration date, "receipts [ ] that truncate the credit card number but reveal the expiration date prevent a potential fraudster from perpetrating identity theft or credit card fraud." Id. at 783. (internal quotation marks and brackets omitted).
The FACTA does not permit the printing of more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder. 15 U.S.C. § 1681c(g)(1).
The Court also rejects Plaintiff's reliance on Uzuegbunam v. Preczewski, ––– U.S. ––––, 141 S. Ct. 792, 209 L.Ed.2d 94 (2021). That case addressed "whether an award of nominal damages by itself can redress a past injury." Id. at 796. The United States Supreme Court went on to say that it granted certiorari "to consider whether a plaintiff who sues over a completed injury and establishes the first two elements of standing (injury and traceability) can establish the third by requesting only nominal damages." Id. at 797. In other words, the Court in Uzuegbunam proceeded on the assumption that there was a completed injury. The question before this Court is whether an injury occurred and Uzuegbunam does not assist in that analysis.
Furthermore, many of Plaintiff's factual assertions in support of standing are purely speculative. Such speculative allegations include Plaintiff's claim that his credit card number could have been viewed on one of the security cameras in use at the Fair, or by a "shoulder surfer," or by an unscrupulous employee of Defendants (FAC ¶ 60), without any assertion that this actually occurred; or that the coupon could not be used without displaying his financial information when Plaintiff could have simply blacked out the offending digit and expiration date when using the coupon (FAC ¶ 64); or Plaintiff's need to request a new debit card from his bank (FAC ¶ 61), despite not having used the coupon and no allegations that the offending information was actually seen or used by anyone; and finally, claiming that Defendants incentivized dumpster-divers to look for receipts to take advantage of the coupon printed on the back, once again, without any allegations that this in fact took place (FAC ¶ 7.)
For these reasons, the Court finds the FAC fails to allege an injury to give Plaintiff standing, and therefore this Court lacks subject matter jurisdiction to entertain the FACTA claim. With respect to the Plaintiff's state law claim, the Court notes that the FAC does not plead diversity or supplemental jurisdiction. Assuming arguendo that facts supporting supplemental jurisdiction exist, the Court declines to assert it over this state law claim. Given that the case is dismissed for lack of Article III standing, the Court need not consider Defendants’ remaining arguments for dismissal.
For this reason, the Court rejects Plaintiff's argument that this state law claim can give rise to an injury that creates standing. (Resp. at 6.) Plaintiff's citation to Muransky for the position that losing the benefit of the bargain can constitute an injury is unavailing. (Resp. at 6.) Muransky cites to Debernardis v. IQ Formulations, LLC, 942 F.3d 1076 (11th Cir. 2019) which held that the plaintiffs had standing because they allegedly experienced an economic loss when they purchased a product that the FDCA banned from sale because it was presumptively unsafe. Id. at 1086. Nothing about those facts relate to the facts alleged in the FAC. Likewise, the Court rejects Plaintiff's reliance on In re Brinker Data Incident Litig., No. 3:18-CV-686-TJC-MCR, 2021 WL 1405508, at *2 (M.D. Fla. Apr. 14, 2021) to support his theory that a plaintiff can establish standing through a claim for breach of an implied contract arising from a defendant's data security practices. (DE 27.) Brinker excluded the plaintiffs who pled only future injuries and noted that other plaintiffs established standing by providing evidence of some misuse of their financial information. Id. at * 2,* 5.
III. Conclusion
Accordingly, it is hereby ORDERED AND ADJUDGED that Defendants’ Motion to Dismiss First Amended Class Action Complaint for Lack of Subject-Matter Jurisdiction (DE 21) is GRANTED and Defendants’ Failure to State a Claim or, in the Alternative, to Stay Pending Resolution of First-Filed State Court Action is DENIED AS MOOT .
The Clerk shall CLOSE this case and all pending motions are DENIED AS MOOT .
DONE AND ORDERED in Chambers at West Palm Beach, Palm Beach County, Florida, this 23rd day of April, 2021.