Jacobson v. Peter Piper Incorporated et al

MOTION to Dismiss Case

D. Ariz.November 11, 2016

DLA P IPER LLP (US) PHOENI X 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Mark A. Nadeau (Bar No. 011280) mark.nadeau@dlapiper.com Aaron T. Goodman (Bar No. 024401) aaron.goodman@dlapiper.com DLA PIPER LLP (US) 2525 East Camelback Road, Suite 1000 Phoenix, AZ 85016-4232 Tel.: 480.606.5100 Fax: 480.606.5101 dlaphx@dlapiper.com Keara Gordon (pro hac vice pending) keara.gordon@dlapiper.com DLA PIPER LLP (US) 1251 Avenue of the Americas, 45th Floor New York, NY 10020-1104 Tel.: 212.335.4500 Fax: 212.335.4501 Steven R. Marino (pro hac vice pending) steven.marino@dlapiper.com DLA PIPER LLP (US) 51 John F. Kennedy Parkway, Suite 120 Short Hills, New Jersey 07078-2704 Tel.: 973.520.2550 Fax: 973.520.2551 Attorneys for Defendant Peter Piper, Inc. UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Diane Jacobson, on behalf of herself and all others similarly situated, Plaintiff, v. Peter Piper, Inc. (d/b/a Peter Piper Pizza); and Does 1 through 100, inclusive, Defendants. NO. 4:16-CV-00596-JAS LCK (TUC) DEFENDANT PETER PIPER, INC.’S MOTION TO DISMISS Defendant Peter Piper, Inc. (d/b/a Peter Piper Pizza) (“Peter Piper”), by and through undersigned counsel, hereby files its Motion o Dismiss. Plaintiff Diane Jacobson lacks standing to sue Peter Piper because she has not suffered a concrete “injury-in-fact” Case 4:16-cv-00596-JAS-LCK Document 14 Filed 11/11/16 Page 1 of 5 DLA P IPER LLP (US) PHOENI X 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 necessary to confer standing under Article III of the United States Constitution. Ms. Jacobson alleges that Peter Piper gave her a receipt that contained the first four digits and the last four digits of her credit card number, along with her name. Ms. Jacobson further alleges that this constitutes a technical violation of the Fair and Accurate Credit Transaction Act (“FACTA”), which prohibits merchants from printing “more than the last 5 digits of the [credit or debit] card number . . . upon any receipt provided to the cardholder.” 15 U.S.C. § 1681c(g)(1). Ms. Jacobson d es not, however, allege anything more than a mere technical violation of FACTA. As a result, absent from the Complaint are any alleg tions that Ms. Jacobson suffered actual harm. For example, Ms. Jacobson does n t allege that she lost the receipt or that it was stolen. Indeed, she does not allege that anyone besides her (or her attorneys) has ever seen the receipt. Because the receipt has not been lost, stolen, or misappropriated, Ms. Jacobson does not allege – becaus she cannot – that the extraneous information has been used to compromise her identity or to commit fraud. Instead, Ms. Jacobson alleges in a conclusory manner that she is “exposed” to an “increased risk” of identity theft or fraud. But, Ms. Jacobson’s risk level is belied by the fact that her situation today is no different than if she took her receipt, placed it in her drawer, locked the drawer, and threw away the key. Without any injury, Ms. Jacobson lacks standing to sue based on recent Supreme Court precedent and decisions by other federal district courts applying that precedent to FACTA complaints similar to the one here. In Spokeo v. Robins, the Supreme Court held that in order for a plaintiff to have constitutional standing to sue, he or she must have suffered a “concrete” injury-in-fact, meaning an injury that is “real” and not abstract” – “it must actually exist.” __ U.S. __, 136 S. Ct. 1540, 1548 (2016) (internal citations omitted). Thus, even if a “statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right,” a plaintiff must still plead a “concrete” injury in fact to have standing to sue. Id In other words, a plaintiff cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” Id. Case 4:16-cv-00596-JAS-LCK Document 14 Filed 11/11/16 Page 2 of 5 DLA P IPER LLP (US) PHOENI X 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 In response to Spokeo, federal district courts around the country (including in this federal circuit) have dismissed putative FACTA class ctions similar to this one where a plaintiff – like Ms. Jacobson – alleged only a statu ory violation without an accompanying “concrete” injury. A sister court of this district, he District of Nevada, dismissed a putative FACTA class action (also brought by Ms. Jacobson’s counsel) because the plaintiffs did “not separately allege any actual harm, i.e., they have not alleged any resulting credit card fraud.” Noble v. Nevada Checker CAB Corp., No. 2:15-cv-02322, 2016 WL 4432685, at *3 (D. Nev. Aug. 19, 2016). Other district courts have followed Noble’s lead and dismissed putative FACTA class actions for the same reasons. See Kamal v. J. Crew Group, Inc., et al., No 2:15-0190, 2016 WL 6133827 (D.N.J. Oct. 20, 2016); Thompson v. Rally House of Kansas City, Inc., No. 15-00886 (W.D. Mo. Oct. 6, 2016). This attempt by Ms. Jacobson’s counsel to bring an identical lawsuit in a new forum, after being unsuccessful in the District of Nevada in Noble, does not warrant a different result; without a concrete injury-in-fact, Ms. Jacobson does not have standing to bring suit in a federal district court. Dismissal is also appropriate as it aligns with Congressional intent. Congress has explicitly noted that its intent was to “ensure that consumers suffering from any actual harm to their credit or identity are protected while simultaneously limiting abusive lawsuits that do not protect consumers but only result in increased cost to business and potentially increased prices to consumers.” Pub. L. No. 110-241, § 2(b). This is clearly not a situation in which a consumer is “suffering from any actual harm.” Id. Instead, it is a situation in which Peter Piper is being forced to efend itself against an abusive lawsuit, brought by counsel that is a serial filer of FACTA class action cases in hopes of collecting statutory attorneys’ fees and costs. The Complaint should be dismissed for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). Case 4:16-cv-00596-JAS-LCK Document 14 Filed 11/11/16 Page 3 of 5 DLA P IPER LLP (US) PHOENI X 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 Dated: November 11, 2016 DLA PIPER LLP (US) By s/ Aaron T. Goodman MARK A. NADEAU AARON T. GOODMAN 2525 East Camelback Road, Suite 1000 Phoenix, AZ 85016 KEARA GORDON (pro hac vice pending) keara.gordon@dlapiper.com 1251 Avenue of the Americas, 45th Floor New York, NY 10020-1104 STEVEN R. MARINO (pro hac vice pending) steven.marino@dlapiper.com 51 John F. Kennedy Parkway, Suite 120 Short Hills, New Jersey 07078-2704 Attorneys for Defendant Peter Piper, Inc. Case 4:16-cv-00596-JAS-LCK Document 14 Filed 11/11/16 Page 4 of 5 DLA P IPER LLP (US) PHOENI X 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 CERTIFICATE OF SERVICE I hereby certify that on November 11, 2016, I caused the attached document to be electronically transmitted to the Clerk's Office using the CM/ECF System for filing and transmitted a Notice of Electronic Filing to the following CM/ECF registrants: David W. Williams, Esq. dwilliams@davismiles.com DAVIS MILES MCGUIRE GARDNER 40 E. Rio Salado Parkway, Suite 425 Tempe, AZ 85281 Phone: 480.344.4047 Fax: 480.733.3748 Chant Yedalian, Esq. chant@chant.mobi CHANT & COMPANY A Professional Law Corporation 1010 N. Central Ave. Glendale, CA 91202 Phone: 877.574.7100 Fax: 877.574.9411 Attorneys for Plaintiff s/ Joanne Conti Case 4:16-cv-00596-JAS-LCK Document 14 Filed 11/11/16 Page 5 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Mark A. Nadeau (Bar No. 011280) mark.nadeau@dlapiper.com Aaron T. Goodman (AZ Bar No. 024401) aaron.goodman@dlapiper.com DLA PIPER LLP (US) 2525 East Camelback Road, Suite 1000 Phoenix, AZ 85016 Tel: 480.606.5100 Fax: 480.606.5101 dlaphx@dlapiper.com Keara Gordon (pro hac vice pending) keara.gordon@dlapiper.com DLA PIPER LLP (US) 1251 Avenue of the Americas, 45th Floor New York, NY 10020-1104 Tel.: 212.335.4500 Fax: 212.335.4501 Steven R. Marino (pro hac vice pending) steven.marino@dlapiper.com DLA PIPER LLP (US) 51 John F. Kennedy Parkway, Suite 120 Short Hills, New Jersey 07078-2704 Tel.: 973.520.2550 Fax: 973.520.2551 Attorneys for Defendant Peter Piper, Inc. UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Diane Jacobson, on behalf of herself and all others similarly situated, Plaintiff, v. Peter Piper, Inc. (d/b/a Peter Piper Pizza); and Does 1 through 100, inclusive, Defendants. NO. 4:16-CV-00596-JAS LCK (TUC) DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 1 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page i PRELIMINARY STATEMENT .............................................................................. 1 STATEMENT OF FACTS................................. .................................................... 3 THE RELEVANT PROVISIONS OF FACTA ............................................................ 4 SUMMARY OF THE SUPREME COURT’S SPOKEO DECISION ..... ...................... 5 ARGUMENT.............................................................................................................. 8 I. THE COMPLAINT SHOULD BE DISMISSED FOR LACK OF SUBJECT MATTER JURISDICTION BECAUSE THE PLAINTIFF DOES NOT HAVE STANDING TO SUE ................................................. 8 A. Jacobson Does Not Allege A “Concrete” Injury-In-Fact. ................. 9 i. The Complaint Does Not Allege Any Tangible Harm. .... ... 10 ii. The Complaint’s Allegations Of Intangible Harm Are Implausible And Should Be Rejected. ........................... 10 II. CONGRESS ENACTED FACTA TO PROTECT AGAINST ACTUAL THREATS OF IDENTITY THEFT, AND DISMISSAL WILL NOT OFFEND CONGRESSIONAL INTENT .............................. 14 CONCLUSION.................................................................................................... 17 Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 2 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page ii CASES Advocates for American Disabled Individuals LLC v. Price Co., No. 16-02141, 2016 WL 5939467 (D. Ariz. Oct. 13, 2016) ........................................ 9 Altman v. White House Black Mkt., Inc., No. 15-2451, 2016 WL 3946780 (N.D. Ga. July 13, 2016) ....................................... 13 Arizona Contractors Ass’n, Inc. v. Napolitano, 526 F. Supp. 2d 968 (D. Ariz. 2007) ................................................................ 8 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ................................................................................ 11, 12 Bateman v. Am. Multi-Cinema, Inc., 623 F.3d 708 (9th Cir. 2010)............................................................................ 6 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ...................................................................................... 11 Braitberg v. Charter Comm’s, __ F.3d __, 2016 WL 4698283 (8th Cir. Sept. 8, 2016)............................................. 14 Broderick v. 119TCbay, LLC, 670 F. Supp. 2d 612 (W.D. Mich. 2009) .......................................................... 15 Cetacean Cmty. v. Bush, 386 F.3d 1169 (9th Cir. 2004) .......................................................................... 8 Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138 (2013) ................................................................................... 12 Croomes v. Stream Global Services-AZ, Inc., No. 11-0141, 2012 WL 1067915 (D. Ariz. March 29, 201 ) ....................................... 5 DeBusk v. Wachovia Bank, No. 06-0324, 2006 WL 3735963 (D. Ariz. Nov. 17, 2006) ......................................... 5 Freemyer v. Kyrene Village II, LLC, No. 10-1506, 2011 WL 42681 (D. Ariz. Jan. 6, 2011) ................................................ 8 FW/PBS, Inc. v. Dallas, 493 U.S. 215 (1990) ........................................................................................ 8 Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 3 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page iii Gaston v. Malone, No. 13-00103, 2013 WL 1748346 (D. Ariz. April 23, 2013) ....................................... 9 Guarisma v. Microsoft Corp., __ F. Supp. 3d __, 2016 WL 4017196 (S.D. Fla. July 26, 2016) ............................... 13 Hammer v. Sam’s East, Inc., 754 F.3d 492 (8th Cir. 2014).......................................................................... 14 Hancock v. Urban Outfitters, Inc., 830 F.3d 511 (D.C. Cir. 2016) ..................... ............................................. 11, 17 Harris v. Wal-Mart Stores Inc., No. 07-02561, 2008 WL 5085132 (N.D. Ill. Nov. 25, 2008) ..................................... 15 Hosszu v. Barrett, __ F. Supp. 3d __, 2016 WL 4259799 (D. Ariz. Aug. 12, 2016) ............................... 11 Kamal v. J. Crew Group, Inc., No 2:15-0190, 2016 WL 6133827 (D.N.J. Oct. 20, 2016) .................................. passim Kinlichee v. U.S., 929 F. Supp. 2d 951 (D. Ariz. 2013) ................................................................ 9 Landrum v. BlackBird Enters., LLC, No. 16-0374, 2016 WL 6075446 (S.D. Tex. Oct. 3, 2016) ........................................ 10 Lee v. Verizon Comm’ns Inc., __ F.3d.__, 2016 WL 4926159 (5th Cir. Sept. 15, 2016) ........................................... 10 Lopez v. KB Toys Retail, Inc., No. 07-144, 2007 U.S. Dist. LEXIS 82025 (C.D. Cal. July 17, 2007) ....................... 16 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ............................................................................ 7, 8, 9, 11 Maloney v. Blair, No. 12-01955, 2012 WL 6101998 (D. Ariz. Dec. 7, 201) ........................................ 11 Nicklaw v. Citimortgage, Inc., __ F.3d __, 2016 WL 5845682 **2-4(11th Cir. Oct. 6, 2016) ................................... 12 Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 4 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page iv Noble v. Nevada Checker CAB Corp., No. 2:15-cv-02322, 2016 WL 4432685 (D. Nev. Aug. 19, 2016) ....................... passim Owner-Operator Indep. Drivers Assoc., Inc. v. U.S. Dep’t of Trans., __ F. Supp. 3d __, 2016 WL 5674626 (11th Cir. Sept. 30, 2016) ........................ 10, 17 Pacific Scientific Energetic Materials Co. (Arizona) LLC v. Ensign-Bickford Aerospace & Defense Co., No. 10-02252, 2011 WL 4434039 (D. Ariz. Sept. 23, 2011) ..................................... 12 Perez v. Nidek Co., Ltd., 711 F.3d 1109 (9th Cir. 2013) ........................................................................ 11 Perkins v. LinkedIn Corp., 53 F. Supp. 3d 1190 (N.D. Cal. 2014) .................................................................... 5 Planned Parenthood Ariz., Inc. v. Brnovich, 172 F. Supp. 3d 1075 (D. Ariz. 2016) .............................................................. 8 Renne v. Geary, 501 U.S. 312 (1991) ........................................................................................ 8 Robins v. Spokeo, Inc., 742 F.3d 409 (9th Cir. 2014)............................................................................ 7 Robins v. Spokeo, Inc., No. 10-05306, 2011 WL 597867 (C.D. Cal. Jan. 27, 2011) ......................................... 6 Spokeo v. Robins, __ U.S. __, 136 S. Ct. 1540 (2016) ................ ............................................ passim Steel Co. v. Citizens for Better Env’t, 523 U.S. 83 (1988) .......................................................................................... 9 Thompson v. Rally House of Kansas City, Inc., No. 15-00886 (W.D. Mo. Oct. 6, 2016) ............................................................. passim Tosco Corp. v. Communities for a Better Env’t, 236 F.3d 495 (9th Cir. 2001)............................................................................ 9 Toys “R” Us – Delaware, Inc. Fair and Accurate Credit Transaction Act (FACTA) Lit., MDL No. 08-01980, 2010 WL 5071073 (C.D. Cal. Aug. 17, 2010) ............ 16, 17 Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 5 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page v Waletzko v. Corelogic Credco, LLC, No. 15-317, 2016 WL 5879597 (W.D. Wis. Oct. 7, 2016) ........................................ 18 Warth v. Seldin, 422 U.S. 490 (1975) .................................................................................. 8, 14 Wood v. J Choo USA, Inc., __ F. Supp. 3d __, 2016 WL 4249953 (S.D. Fla. Aug. 11, 2016) .............................. 13 Zappos.com, Inc., Customer Data Security Breach Litig., MDL No. 2357, 2016 WL 4521681 (D. Nev. Aug. 29, 2016) ................................... 12 STATUTES 15 U.S.C. § 1681 ........................................................................................ 5, 6, 15 15 U.S.C. § 1681a(b) ............................................................................................ 4 15 U.S.C. § 1681c(g)(1) .................................................................................... 1, 4 15 U.S.C. § 1681n ....................................................................................... 4, 6, 15 15 U.S.C. § 1681n(a)(1)(A) ........................................................................................ 4 15 U.S.C. § 1681n(a)(3) ........................................................................................ 5 15 U.S.C. § 1681n(c) ............................................................................................ 5 15 U.S.C. § 1681o(a)(1) ........................................................................................ 4 15 U.S.C. § 1681o(a)(2) ........................................................................................ 5 15 U.S.C. § 1681o(b) ............................................................................................ 5 Credit and Debit Card Receipt Clarification Act of 2007, Pub. L. No. 110-241, 122 Stat. 1565, § 2(b) ................................................................................. 3, 15, 16 Fed. R. Civ. P. 12(b)(1) ........................................................................................... 3, 9 Fed. R. Evid. 201 ........................................................................................................ 5 Pub. L. No. 108-159 Stat. 1952 (2003) ........................................................................ 5 Pub. L. No. 110-241 .................................................................................................. 15 Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 6 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page vi Pub. L. No. 110-241, § 2(a)(1) ............................................................................ 15 Pub. L. No. 110-241, § 2(b) ....................... ......................................................... 15 U.S. Const., Art. III, sec. 2 ............................................................................ passim OTHER AUTHORITIES Black’s Law Dictionary 479 (9th ed. 2009) ............................................................ 9 Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 7 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PRELIMINARY STATEMENT Plaintiff Diane Jacobson alleges that, on an unspecified date at an unspecified location, she entered into an unspecified transaction with Defendant Peter Piper, Inc. (d/b/a Peter Piper Pizza) (“Peter Piper”). During this transaction, Ms. Jacobson alleges that Peter Piper gave her a receipt that contained “th first 4 digits and the last 4 digits” of her credit card number, along with her name. Complaint (“Compl.”), ¶ 3. Ms. Jacobson does not allege that she suffered any actual harm as a result: • She does not allege that the receipt was lost or stolen. Indeed, she does not allege that anyone besides her (or her attorneys) has ever seen the receipt. • She does not allege that the extraneous information has been used to compromise her identity or to commit fraud. • She cannot allege that the inclusion of the first four digits of her credit card caused her actual harm, because they do not convey any personal information about her; they simply identify the issuing bank. All that Ms. Jacobson can muster is a conclusory alleg tion that she is “exposed” to some unspecified “increased risk” of identity theft or fraud. Id. at ¶ 48. But despite making this allegation, Ms. Jacobson does not attempt to articula e specifically how she is subject to this “increased risk” when her receipt has not been lost, stolen, or misappropriated and the first four digits of her credit card number do not c nvey any personal information. In sum, Ms. Jacobson does not allege that she suffered any injury at all. Nevertheless, Ms. Jacobson attempts to bring a nationwide putative class action under the Fair and Accurate Credit Transaction Act (“FACTA”), which prohibits merchants from printing “more than the last 5 digits of the [credit or debit] card number . . . upon any receipt provided to the cardholder.” 15 U.S.C. § 1681c(g)(1). She alleges a technical FACTA violation – that Peter Piper allegedly printed the first four digits of her credit card number – and on this sole basis, she seeks to recover, on behalf of a putative class, statutory damages ranging between $100 and $1,000 per violation, and her counsel seeks to recover attorneys’ fees and costs. Because she has not suffered any injury, however, Ms. Jacobson lacks standing to sue based on recent Supreme Court precedent and decisions by other federal district courts applying that precedent to FACTA Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 8 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- complaints similar to the one here. In Spokeo v. Robins, the Supreme Court held that in order for a plaintiff to have constitutional standing to sue, he or she must have suffered a “concrete” injury-in-fact, meaning an injury that is “real” and not abstract” – “it must actually exist.” __ U.S. __, 136 S. Ct. 1540, 1548 (2016) (internal citations omitted). The Court held that a concrete injury is required “even in the context of a statutory violation.” Id. at 1549. Even if a “statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right,” a plaintiff must still plead a “concrete” injury in fact to have standing to sue. Id. A plaintiff cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” Id. Following Spokeo, federal district courts around the country (including in this circuit) have dismissed putative FACTA class actions similar to this one where a plaintiff – like Ms. Jacobson – alleged only a statutory violation without an accompanying “concrete” injury. See Kamal v. J. Crew Group, Inc., No 2:15-0190, 2016 WL 6133827 (D.N.J. Oct. 20, 2016); Thompson v. Rally House of Kansas City, Inc., No. 15-00886 (W.D. Mo. Oct. 6, 2016) (Exhibit A to the concurrently filed Declaration ofAaron Goodman); Noble v. Nevada Checker CAB Corp., No. 2:15-cv-02322, 2016 WL 4432685 (D. Nev. Aug. 19, 2016). For example, the District of Nevada dismissed a puttive FACTA class action (also brought by Ms. Jacobson’s counsel) because the plaintiffs did “not separately allege any actual harm, i.e., they have not alleged any resulting credit card fraud.” Noble, 2016 WL 4432685, at *3. The Western District of Missouri reached the same conclusion, finding that there was “no real risk of harm as the imprope receipt has only been in Plaintiff’s possession since receiving it from Defendants.” Thompson, at 9. Most recently, on October 20, 2016, the District of New Jersey, citing both Noble and Thompson, dismissed a FACTA complaint (with nearly identical allegations) because: There is no evidence that anyone accessed or attempted to access or will access Plaintiff’s credit card information. Nothing has been disclosed to third parties. Nor does the record indicate that anyone will actually obtain one of Plaintiff’s discarded J. Crew receipts and—through means left entirely to the Court’s imagination—identify the remaining . . . digits ofthe card number and then Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 9 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- proceed undetected to ransack Plaintiff’s Discover account. Kamal, 2016 WL 6133827, at *3 (internal citations and emphasis omitted). The Complaint in this case suffers from the same deficin ies that led to dismissals in Noble, Thompson, and Kamal, and the same result should follow here. Without a “concrete” injury, Ms. Jacobson cannot establish standing to sue, this Court lacks subject matter jurisdiction, and the Complaint should be dismissed. Fed. R. Civ. P. 12(b)(1). This result is consistent with Congressional intent. Congress has delineated between FACTA’s underlying purpose – “ensur[ing] that consumers suffering from any actual harm to their credit or identity are protected” – and “simultaneously limiting abusive lawsuits that do not protect consumers but only result in increased cost to business and potentially increased prices to consumers.” Credit and Debit Card Receipt Clarification Act of 2007, Pub. L. No. 110-241, 122 Stat. 1565, § 2(b) (emphasis added). This suit falls in the latter category and should be dismissed. STATEMENT OF FACTS Peter Piper is a family pizza and entertainment res aurant chain with corporate owned locations in Arizona, New Mexico, and Oklahoma. According to the Complaint, Ms. Jacobson, a citizen of Arizona, was a patron at one of Peter Piper’s locations in Santa Cruz County, Arizona on “one or more” occasions. Compl., ¶¶ 9, 34. Ms. Jacobson alleges that during those “one or more” occasions, Peter Piper provided her an electronically printed receipt that allegedly displayed “the first 4 digits and the last 4 digits of [her] card number, along with [her] name.” Id. at ¶¶ 3, 34.1 Jacobson does not specify the dates of the “one or more” occasions on which this allegedly occurred, only vaguely stating that it was “within two years from the date of filing this action.” Id. at ¶ 34. The Complaint was filed on September 8, 2016, meaning the “one or more” occasions occurred sometime in the 24 month period beginning on or after September 8, 2014. The Complaint attempts to state a single count for the violation of FACTA. Ms. 1 For this Motion only, Peter Piper accepts the Complaint’s allegations as true. Peter Piper expressly reserves its right to dispute any and all of the allegations in the Complaint. Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 10 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4- Jacobson alleges, without factual support, that Peter Piper willfully violated FACTA because it “knew of and [was] well informed about the law, including specifically FACTA’s requirements concerning the truncation of credit and debit card numbers and prohibition on the printing of expiration dates.” Id. at ¶ 37. Ms. Jacobson does not allege that she suffered any actual damages – identity theft or pecuniary harm – as a result of the appearance of the additional digits or her name on her receipt. Instead, she alleges that Peter Piper has “exposed” her and the putative class “to at least an increased risk of identity theft and credit and or debit card fraud.” Id. at ¶ 48; see also id. at ¶ 7). Ms. Jacobson seeks to recover, among other things, statutory damages of “‘not less than $100 and not more than $1,000’ for each violation.” Id. at ¶ 49 (quoting 15 U.S.C. § 1681n). THE RELEVANT PROVISIONS OF FACTA The operative provision of FACTA states: [N]o person2 that accepts credit cards or debit cards for the transaction of business shall print more than the last 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). Liability under FACTA is based on a two-tiered system depending on whether the alleged violation was neglig nt or willful. If the violation was negligent, only “actual damages sustained by the consumer as a result of the failure” are recoverable. 15 U.S.C. § 1681o(a)(1). If the conduct was instead willful, “actual damages sustained by the consumer as a result of the failure or [statutory] damages of not less than $100 and not more than $1,000” are recoverable.” 15 U.S.C. § 1681n(a)(1)(A) (emphasis added). Actual damages are recoverable irrespective of the nature of the violation, but statutory damages are recoverable only where the defen ant commits a willful violation. Here, Ms. Jacobson has not alleged any actual damages, so, to recover statutory damages, she must establish that Peter Piper’s alleged violation was willful.3 2 “Person,” as defined in FACTA, includes corporations. 15 U.S.C. § 1681a(b). 3 This Court does not have subject matter jurisdiction to reach the merits of the Complaint – whether or not the violation was “willfu ” – because Jacobson lacks standing Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 11 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5- FACTA provides for the recovery of attorney’s fees and costs upon a “successful action to enforce liability” under either a negligent or willful violation. 15 U.S.C. § 1681n(a)(3); 15 U.S.C. § 1681o(a)(2). FACTA provides, in the alternative, that if the pleading alleging a negligent or willful violation was “unsuccessful” and “filed in bad faith or for the purpose of harassment, the court shall award to the prevailing party attorney’s fees reasonable in relation to the work expended in responding to the pleading.” 15 U.S.C. §§ 1681n(c), 1681o(b).4 SUMMARY OF THE SUPREME COURT’S SPOKEO DECISION In Spokeo, the Supreme Court clarified the “concrete and particularized” requirements to establish an injury-in-fact as applied to a plaintiff seeking statutory damages under The Fair Credit Reporting Act of 1970 (“FCRA”), 15 U.S.C. § 1681, et seq.5 136 S. Ct. at 1548. Spokeo, Inc. (“Spokeo”) operates “‘people search engine’” that “conducts a computerized search in a wide variety of databases and provides information to sue. See Croomes v. Stream Global Services-AZ, Inc., No. 11-0141, 2012 WL 1067915, at *1 (D. Ariz. March 29, 2012) (“Before the Court can reach the merits of the parties’ arguments, the Court must first determine . . . whether it has subject matter jurisdiction”). As a result, Peter Pizza is not challenging those allegations at this time; it, of course, expressly reserves the right to do so later, if this case survives this Motion to Dismiss for lack of subject matter jurisdiction. 4 Peter Piper reserves its right to seek attorneys’ fees and costs if this Motion is granted. See, e.g., DeBusk v. Wachovia Bank, No. 06-0324, 2006 WL 3735963 (D. Ariz. Nov. 17, 2006) (awarding defendants fees and costs pursuant to 15 U.S.C. § 1681n(c)). Jacobson’s out-of-state counsel is a serial FACTA litigant. He has been counsel to plaintiffs in at least a dozen FACTA lawsuits and maintains the website “ReceiptLawsuits.com,” which solicits potential FACTA plaintiffs. A screen shot of counsel’s website is attached as Exhibit B to Goodman Decl.). This Court may take judicial notice that the website is maintained by Jacobson’s out-of-state counsel because the law firm address, phone number, fax number, and email domain listed at the bottom of the website matches the information in counsel’s signature block in the Complaint. See Fed. R. Evid. 201 (allowing a court to take judicial notice of a fact “not subject to reasonable dispute”); Perkins v. LinkedIn Corp., 53 F. Supp. 3d 1190, 1205 (N.D. Cal. 2014) (granting judicial notice of party webpage screenshot). At the outset, there is a question as to whether identification of the alleged FACTA violation at issue in this case was a calculated attempt to generate litigation. 5 FCRA was amended in 2003 to include FACTA. See Pub. L. No. 108-159, 117 Stat. 1952 (2003). Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 12 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6- about the subject of the search.” Id. at 1544. A search of Thomas Robins (“Robins”) showed “some” information that allegedly was “incorrect.” Id. Robins learned of these alleged inaccuracies and filed a putative class action complaint. See Robins v. Spokeo, Case No. 2:10-5306, ECF No. 40 (C.D. Cal.) (attached as Exhibit C to Goodman Decl.). Robins alleged that Spokeo, which he alleged to be a consumer reporting agency under the FCRA, allegedly “maintains an inaccurate consumer report about [him] on its website.” Id. at ¶ 30. Robins alleged that he suffered the following harm as a result: • “Defendant’s inaccurate report is particularly harmful to Plaintiff in light of the fact that he is currently out of work and seeking employment. In fact, Mr. Robins has been actively seeking employment throught the time that Spokeo has displayed inaccurate consumer reporting information about him and he has yet to find employment.” (¶ 34). • “Defendant has caused Plaintiff actual and/or imminent harm by creating, displaying, and marketing inaccurate consumer reporting information about Plaintiff. Specifically, and in light of the fact that Plaintiff remains unemployed, Defendant has caused actual harm to Plaintiff’s employment prospects. This harm is also imminent and ongoing.” (¶ 35). • “Because Plaintiff is unemployed, he has lost and continues to lose money.” (¶ 36). • “Additionally, Plaintiff has suffered actual harm in the form of anxiety, stress, concern, and/or worry about his diminished employment prospects.” (¶ 37). Id. at ¶¶ 34-37. Robins alleged that Spokeo willfully violated the FCRA and, as a result, he sought “the maximum statutory damages available under 15 U.S.C. § 1681n.” Id. at ¶¶ 65, 71, 75; see also id. at “Prayer for Relief,” ¶(C) (“Award Plaintiff and the Class statutory damages to the maximum extent allowable.”). 6 The Central District of California dismissed the complaint for lack of standing. Robins v. Spokeo, Inc., No. 10-05306, 2011 WL 597867 (C.D. Cal. Jan. 27, 011). Specifically, the district court rejected Robins’ argument “that he has met the 6 Robins sought the same statutory damages that Ms. Jacobson seeks. Compare Compl. at ¶ 49 (seeking statutory damages of $100 to $1,000 under 15 U.S.C. § 1681n), with Robins v. Spokeo, Case No. 2:10-5306, ECF No. 40 at ¶¶ 65, 71, 75 (seeking “the maximum statutory damages available under 15 U.S.C. § 1681n”). A violation of FACTA is subject to standard FCRA remedies. See, e.g., Bateman v. Am. Multi-Cinema, Inc., 623 F.3d 708, 715 (9th Cir. 2010) (stating that “FACTA and other provisions of the FCRA share the same statutory damages provision, ee 15 U.S.C. § 1681n”). Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 13 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7- requirements of standing simply by alleging that [Spokeo] is in violation of a statute that grants individuals a private right of action,” because “even when asserting a statutory violation, the plaintiff must allege the Article III minima of injury-in-fact.” Id. at *1 (internal quotation marks omitted). The district court concluded that Robins’ “concern that he will be adversely affected by [Spokeo’s] website in the future, is an insufficient injury to confer standing.” Id. (emphasis in original). The Ninth Circuit reversed, finding that the injury-in-fact requirement of Article III was satisfied because: (i) “[the plaintiff] alleges that Spokeo violated his statutory rights, not just the statutory rights of other people, so he is ‘among the injured’”; and (ii) “Robins’s personal interests in the handling of his credit information are individualized rather than collective.” Robins v. Spokeo, Inc., 742 F.3d 409, 413-14 (9th Cir. 2014) (emphasis in original) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 578 (1992)). The Supreme Court vacated, holding that the Ninth Circuit “failed to fully appreciate the distinction between concreteness and p rticularization” in its injury-in-fact standing analysis. Spokeo, 136 S. Ct. at 1550. An injury-in-fact requires a howing by the plaintiff “that he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’” Id. at 1547-48 (quoting Lujan, 504 U.S. at 560). The Supreme Court found that the two reasons advanced by the Ninth Circuit in favor of standing both “concern particularization, not concreteness.” Id. at 1548. The Supreme Court reinforced that “an injury in fact must be both concrete and particularized,” and that concreteness “is quite different from particularization.” Id. (emphasis in original). The Supreme Court made clear that “Article III standing requires a concrete injury even in the context of a statutory violation.” Id. at 1549 (emphasis added). “Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Id. The Supreme Court then concluded that, Robins “could not, for example, Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 14 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -8- allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III .” Id. (emphasis added). The Supreme Court then added that “[a] violation of one of the FCRA’s procedural requirements may result in no harm.” Id. at 1549-50 (emphasis added). The Supreme Court remanded the case because the Ninth Circuit “did not address the question framed by our discussion, namely, whether the particular procedural violation alleged in this case entails a degree of risk sufficient to meet the concreteness requirement.” Id. at 1550. ARGUMENT I. THE COMPLAINT SHOULD BE DISMISSED FOR LACK OF SUBJE CT MATTER JURISDICTION BECAUSE THE PLAINTIFF DOES NOT HAVE STANDING TO SUE “Article III federal courts are limited to deciding ‘cases’ and ‘controversies.’” Planned Parenthood Ariz., Inc. v. Brnovich, 172 F. Supp. 3d 1075, 1084 (D. Ariz. 2016) (quoting U.S. Const., Art. III, sec. 2). “For a case or controversy to exist under Article III, a plaintiff must have standing to assert his legal cl ims . . . .” Arizona Contractors Ass’n, Inc. v. Napolitano, 526 F. Supp. 2d 968, 977 (D. Ariz. 2007) (citing Renne v. Geary, 501 U.S. 312, 320 (1991)). If a plaintiff without standi g brings suit, a case or controversy does not exist, and the “‘federal court therefore lacks subject matter jurisdiction over that suit.’” Freemyer v. Kyrene Village II, LLC, No. 10-1506, 2011 WL 42681, at *3 (D. Ariz. Jan. 6, 2011) (quoting Cetacean Cmty. v. Bush, 386 F.3d 1169, 1174 (9th Cir. 2004)). The “‘irreducible constitutional minimum’ of standi g consists of three elements. The plaintiff must have: (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 (quoting Lujan, 504 U.S. at 560). “The plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing these [three] elements.” Id. (citing FW/PBS, Inc. v. Dallas, 493 U.S. 215, 231 (1990)). “Where, as here, a case is at the pleading stage, the plaintiff must ‘clearly . . . allege facts demonstrating’ each element.” Id. (quoting Warth v. Seldin, 422 U.S. 490, 518 (1975)). Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 15 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -9- Ms. Jacobson has failed to meet her burden to establish the “[f]irst and foremost” requirement of standing, an i jury-in-fact.7 Steel Co. v. Citizens for Better Env’t, 523 U.S. 83, 103 (1988). Dismissal for lack of subject matter jurisdiction is therefore required. Kinlichee v. U.S., 929 F. Supp. 2d 951, 954 (D. Ariz. 2013) (“Rule 12(b)(1) ‘allows litigants to seek the dismissal of an action from federal court for lack of subject matter jurisdiction.’”) (quoting Tosco Corp. v. Communities for a Better Env’t, 236 F.3d 495, 499 (9th Cir. 2001)). A. Jacobson Does Not Allege A “Concrete” Injury-In-Fact. “To establish injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’” Spokeo, 136 S. Ct. at 1548 (quoting Lujan, 504 U.S. at 560); see also Gaston v. Malone, No. 13-00103, 2013 WL 1748346, at *4 (D. Ariz. April 23, 2013) (stating in the context of FACTA that “[i]n order to have standing to sue, a plaintiff must have suffered a concrete and particularized injury in fact”). “A ‘concrete injury must be ‘de facto’; that is, it must actually exist.” Spokeo, 136 S. Ct. at 1549 (quoting Black’s Law Dictionary 479 (9th ed. 2009)). A concrete injury is required ‘even in the context of a statutory violati n.’” Advocates for American Disabled Individuals LLC v. Price Co., No. 16-02141, 2016 WL 5939467, at *2 (D. Ariz. Oct. 13, 2016) (remanding matter to state court because plaintiffs had not suffered an i jury-in-fact under the Americans with Disabilities Act) (quoting Spokeo, 136 S. Ct. at 1544);8 see also 7 As a result, this Court need not address traceability and redressability. 8 The October 13, 2016, decision by Division 1 of the District of Arizona in Advocates for American Disabled Individuals is directly on point. As the Court is likely aware, that case was one of 1000+ cases filed by the same attorney alleging statutory violations of the Americans with Disabilities Act without demonstrating any injury in fact. The Arizona Attorney General has sought a mass dismissal of these cases, calling them a systemic abuse. See, e.g., Arizona Attorney General, Judge Grants AZAG Motion to Consolidate 1,106 Lawsuits Targeting AZ Businesses, https://www.azag.gov/press- release/judge-grants-azag-motion-consolidate-1106-lawsuits-targeting-az-businesses, (September 23, 2016). Plaintiff’s lead counsel in this matter has made a career of doing the very same thing in FACTA cases. Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 16 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -10- Owner-Operator Indep. Drivers Assoc., Inc. v. U.S. Dep’t of Trans., __ F. Supp. 3d __, 2016 WL 5674626, at *5 (11th Cir. Sept. 30, 2016) (stating that a “concrete injury requires showing more than an individual’s interest in not seeing a statute violated”). Moreover, a concrete injury may be tangible or intangible. Spokeo, 136 S. Ct. at 1549. (“Although tangible injuries are perhaps easier to ecognize, we have confirmed in many of our previous cases that intangible injuries can nevertheless be concrete.”). Ms. Jacobson fails to allege a concrete injury that is either tangible or intangible. i. The Complaint Does Not Allege Any Tangible Harm. The Complaint does not allege that Ms. Jacobson suffered any tangible injury between the date Peter Piper allegedly printed her receipt and the date she filed her Complaint. For example, she does not allege that anyone other than she saw or obtained the receipt, much less used the information to commit credit card fraud. See, e.g., Noble, 2016 WL 4432685, at *3 (finding no standing to sue because the “Plaintiffs have not separately alleged any actual harm, i.e., they have not alleged any resulting credit card fraud”). The lack of a tangible injury is confirmed by the fact that Ms. Jacobson does not plead any actual damages, but instead seeks solely tatutory damages. Compl., ¶ 49. ii. The Complaint’s Allegations Of Intangible Harm Are Implausible And Should Be Rejected. The Complaint also fails to allege an intangible injury—i.e., a “risk of real harm,” Spokeo, 136 S. Ct. at 1548. See Lee v. Verizon Comm’ns Inc., __ F.3d.__, 2016 WL 4926159, at *1 (5th Cir. Sept. 15, 2016) (“Spokeo recognizes that at a minimum, a ‘concrete’ intangible injury based on a statutory violation must constitute a ‘risk of real harm’ to the plaintiff”); Landrum v. BlackBird Enters., LLC, No. 16-0374, 2016 WL 6075446, at *3 (S.D. Tex. Oct. 3, 2016) (same). The Complaint contains only two allegations that attempt to establish that Ms. Jacobson (and the putative class) face a “risk of real harm”: • a conclusory allegation that Peter Piper has “placed th security of Plaintiff and similarly situated Class members at risk” (¶ 7); and Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 17 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -11- • a conclusory allegation that Peter Piper has “also harmed Plaintiff and the Class by exposing them to at least an increased risk of identity theft and credit and or debit card fraud” (¶ 48) (emphasis added). These allegations do not meet the plausibility standard in Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) and Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). See Perez v. Nidek Co., Ltd., 711 F.3d 1109, 1113 (9th Cir. 2013) (“The elements of standing ‘must be supported in the same way as any other matter on which t e plaintiff bears the burden of proof.’”) (quoting Lujan, 504 U.S. at 561); see also Hancock v. Urban Outfitters, Inc., 830 F.3d 511, 514-15 (D.C. Cir. 2016) (“[W]ithout any plausible allegation of Article III injury, the complaint fails to state a basis for federal court jurisdiction.”). First, the allegations in Paragraphs 7 and 48 are nothing more than “‘threadbare recitals of the elements of a cause of action, supported by mere conclusory statements.’” Maloney v. Blair, No. 12-01955, 2012 WL 6101998, at *3 (D. Ariz. Dec. 7, 2012) (quoting Iqbal, 556 U.S. at 662). Classification of those allegations as conclusory is mandated in light of the facts the Complaint does not allege: • The Complaint does not allege that Ms. Jacobson’s “one or more” receipts from her unspecified transactions were lost, misplaced, or stolen, or were ever in the possession of an unauthorized third party; • The Complaint does not allege that the credit card information displayed in the “one or more” receipts was ever disclosed to a third party; • The Complaint does not allege that anyone ever made any unauthorized purchases on Ms. Jacobson’s credit card; • The Complaint does not allege that Ms. Jacobson was required to close her credit card and obtain a new one; and • The Complaint does not allege that Ms. Jacobson’s ident ty was stolen or that she was otherwise the victim of identity theft. Essentially, Ms. Jacobson’s risk level today is no different than if she took her receipt, placed it in her drawer, locked the drawer, and threw away the key. See Hosszu v. Barrett, __ F. Supp. 3d __, 2016 WL 4259799, at *2 (D. Ariz. Aug. 12, 2016) (“‘Determining whether a complaint states a plausible claim for relief . . . requires the reviewing court to draw on its judicial experience and common sense.’”) (quoting Iqbal, 556 U.S. at 679). It Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 18 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -12- therefore defies logic to assert that she has pled facts sufficient to establish a “risk of real harm.” As such, the Court should reject the allegations in Paragraph 7 and 48 as inadequate. See Iqbal, 556 U.S. at 663 (“[T]he tenant that a court must accept a complaint’s allegations as true is inapplicable to . . . mere conclusory statements.”). Second, it is well-established that “for an intangible injury to present a risk of real harm, the harm must still be ‘certainly impending’ and allegations ‘of possible future harm are not sufficient.’” In re Zappos.com, Inc., Customer Data Security Breach Litig., MDL No. 2357, 2016 WL 4521681, at *3 (D. Nev. Aug. 29, 2016) (emphasis omitted) (quoting Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138, 1147 (2013)); see also Pacific Scientific Energetic Materials Co. (Arizona) LLC v.Ensign-Bickford Aerospace & Defense Co., No. 10-02252, 2011 WL 4434039, at *11 (D. Ariz. Sept. 23, 2011) (stating that plausibility requires a claim to be more than “merely possible”) (citing Iqbal, 556 U.S. at 678). Here, the Complaint is devoid of factu l allegations establishing any harm, as outlined above. As a result, there is no factual basis to find that a “risk of real harm” is “certainly impending.” In re Zappos.com, 2016 WL 4521681, at *3 (emphasis omitted); see also Nicklaw v. Citimortgage, Inc., __ F.3d __, 2016 WL 5845682, at **2-4 (11th Cir. Oct. 6, 2016) (affirming dismissal of complaint based on lack of standing because the plaintiff “failed to establish that he suffered or could suffer any harm that could constitute a concrete injury”) (emphasis added). Third, dismissal here is consistent with other federal district courts that have dismissed similar FACTA cases in response to Spokeo motions to dismiss. See Kamal, 2016 WL 6133827; Thompson, No. 15-00886; Noble, 2016 WL 4432685. For example, in Thompson, the plaintiff alleged that the defendant violated FACTA because it “published the first six and the last four digits of Plaintiff’s credit card number.” (Ex. A, Thompson slip op., at 2). Similar to the allegations (or lack thereof) in this case, the plaintiff in Thompson did not: allege he suffered any actual harm as a result of the improper receipt received from Defendants. He does not allege the receipt was ever seen by anyone besides Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 19 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -13- himself and Defendants’ employee handling the transaction. The receipt was not lost or otherwise missing from Plaintiff’s possession at any time. Id. at 3. On these “facts,” the Western District of Missouri rejected the plaintiff’s claims that his privacy interest were violated and that he suffered a “risk of identity theft”: . . . Plaintiff has not sufficiently pled either alleged harms are concrete in light of Spokeo . . . . Divorced from the statutory violation, Plaintiff has not and cannot allege his personal credit card information has been xposed generally or that he faces an imminent risk of identity theft. . . . There is no real risk of harm as the improper receipt has only been in Plaintiff’s possession since receiving it from Defendants. In other words, Plaintiff alleges only a mere violation of FACTA without any actual or imminent, concrete harm. Id. at 8-9 (internal citations omitted). As a result, “Plaintiff has alleged a violation of FACTA without any concrete, actual harm. In light of Spokeo . . ., Plaintiff does not meet the injury in fact requirement for Article III standing.” Id. at 10. The court therefore dismissed the complaint. Similarly, in Kamal, the plaintiff alleged that the defendant violated FACTA because it printed a receipt “featuring the last four digits and the first six digits of his credit card number.” 2016 WL 6133827, at *2. The plaintiff alleged that, as a result, he “became more susceptible to fraud.” Id. at *4. Citing Thompson, the District of New Jersey rejected the plaintiff’s argument: The Court finds that Plaintiff’s allegations do not entail a degree of risk sufficient to meet the concreteness requirement. . . . There is no evidence that anyone accessed or attempted to access or will access Plaintiff’s credit card information. Nothing has been disclosed to third parties. Nor does the record indicate that anyone will actually obtain one of Plaintiff’s discarded J. Crew receipts and—through means left entirely to the Court’s imagination—identify the remaining . . . digits ofthe card number and then proceed undetected to ransack Plaintiff’s Discover account. Id. at *4-5 (internal citations and emphasis omitted). The Court then found that, “[w]ithout an ‘injury in fact,’ Plaintiff lacks standing to sue under Article III.” Id. at *4. The court thus dismissed the complaint. The same result is requir d here.9 Here, as in Thompson and 9 There are three district court cases from within e Eleventh Circuit finding that a plaintiff has post-Spokeo standing to bring FACTA class actions. See Wood v. J Choo USA, Inc., __ F. Supp. 3d __, 2016 WL 4249953 (S.D. Fla. Aug. 11, 2016); Guarisma v. Microsoft Corp., __ F. Supp. 3d __, 2016 WL 4017196 (S.D. Fla. July 26, 2016); Altman v. White House Black Mkt., Inc., No. 15-2451, 2016 WL 3946780, at *4 (N.D. Ga. July Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 20 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -14- Kamal, Ms. Jacobson has alleged only a “bare procedural violation, divorced from any concrete harm,” which is insufficient to confer standing. Spokeo, 136 S. Ct. at 1549. II. CONGRESS ENACTED FACTA TO PROTECT AGAINST ACTUAL THREATS OF IDENTITY THEFT, AND DISMISSAL WILL NOT O FFEND CONGRESSIONAL INTENT “Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Spokeo, 136 S. Ct. at 1549. Nevertheless, Congressional intent can inform the standing analysis. See Spokeo, 136 S. Ct. 1549 (“[B]ecause Congress is well positioned to identify intangible harms that meet minimum Article III requirements, its judgement is also instructive and important”). The Congressional i tent behind FACTA confirms that a finding that the Plaintiff, here, lacks standing to sue is consistent with FACTA’s underlying purpose: protection against actual harm. FACTA amended the FCRA in order to “prevent criminals from obtaining access to consumers’ private financial and credit information in order to reduce identity theft and 13, 2016). Those decisions are not persuasive authority. Prior to Spokeo, the Eighth Circuit held that “‘the actual or threat ned injury required by Art. III may exist solely by virtue of statutes creating legal rights, the invasion of which creates standing.’” Hammer v. Sam’s East, Inc., 754 F.3d 492, 498 (8th Cir. 2014) (quoting Warth, 422 U.S. at 500). Altman, Guarisma, and Wood each relied upon Hammer in reaching their conclusions. See Altman, 2016 WL 3946780, at *4 (“This Court reached its conclusion after reviewing persuasive authority, specifically the Eighth Circuit’s decision in Hammer . . . .”); see also Wood, 2016 WL 4249953 at *4; Guarisma, 2016 WL 4017196, at *4. The Eight Circuit subsequently recognized, however, that Spokeo “rejected this absolute view and superseded our precedent in Hammer . . . . ‘Article III,’ the Court explained, ‘requires a concrete injury even in the context of a statutory violation.’” Braitberg v. Charter Comm’s, __ F.3d __, 2016 WL 4698283 (8th Cir. Sept. 8, 2016) (quoting Spokeo, 136 S. Ct. at 1548). The Thompson Court acknowledged that its decision was “not in line with” Altman, Guarisma, and Wood. (Ex. A, Thompson slip op., at 9-10). It reasoned that those cases “relied in part on Hammer” and that the “Eighth Circuit has stated that Spokeo superseded Hammer.” Id. at 10. The Kamal Court acknowledged the Altman, Guarisma, and Wood decisions, but did not afford them any weight. See Kamal, 2016 WL 6133827, at *3. This Court should follow Thompson and Kamal and reject any attempts by Jacobson to rely upon Altman, Guarisma, and Wood as persuasive authority. Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 21 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -15- credit card fraud.” Pub. L. No. 110-241, § 2(a)(1). FACTA addresses all aspects of the identity theft problem by, inter alia, establishing procedures to alert consumers about fra d and identify theft issues, providing greater access to consumer credit reports, and establishing certain rights for identify theft victims. Truncation of credit card numbers is but one of the many FACTA provisions designed to address these issues. R ading the statute as a whole, the importance of protecting consumers from exposure to actual, legitimate risks of identity theft becomes even more pronounced. . . . Congress is not interested in specifying the content of a credit card receipt as part of some abstract, academic exercise. Rather, Congress is interested in preventing the actual harm of real identity theft. Broderick v. 119TCbay, LLC, 670 F. Supp. 2d 612, 619 (W.D. Mich. 2009) (emphasis added).10 The goal of prevention of actual harm to the consumer was reinforced by Congress when it amended FACTA pursuant to the Credit and Debit Card Receipt Clarification Act of 2007 (the “Clarification Act”), to make “technical corrections to the definition of willful noncompliance.”11 Pub. L. No. 110-241. Congress differentiated between claims of actual harm versus abusive lawsuits where no harm is apparent; it explicitly noted its intent to “ensure that consumers suffering from any actual harm to their credit or identity are protected while simultaneously limiting abusive lawsuits that do not protect consumers but only result in increased cost to business and potentially increased prices to consumers.” Pub. L. No. 110-241, § 2(b) (emphasis added). As the Kamal Court observed, “‘Congress made clear that its purpose in enacting the Clarification Act and amending § 1681n was to allow claims as a result of actual harm to one’s credit or identity and to dispense with claims where no actual harm is sustained.’”) 2016 WL 6133827, at *4 (emphasis added) (quoting Harris v. Wal-Mart Stores Inc., No. 07-02561, 2008 WL 5085132, at *2 (N.D. Ill. Nov. 25, 2008)). Likewise, the Broderick Court found that the Clarification Act “is strong evidence of a Congressional intent to protect consumers from actual threats of identity theft , and not to create potentially crippling costs and liabil ty for merchants whose conduct does not in any way increase the actual risk of credit fraud or identity 10 The District of Nevada in Noble recently cited Broderick as persuasive authority. Noble, 2016 WL 4432685, at *2. 11 The nature of those “technical corrections” is not material to this Motion. Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 22 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -16- theft.” 670 F. Supp. 2d at 620 (emphasis added). Here, Ms. Jacobson’s complaint does not allege any actual harm, as established above. Nor could the alleged inclusion of the first four digits of her card number result in any actual harm because the first six digits of a credit card number reveal the identity of only the issuing bank. See Toys “R” Us – Delaware, Inc. Fair and Accurate Credit Transaction Act (FACTA) Lit., MDL No. 08-01980, 2010 WL 5071073, at *11 (C.D. Cal. Aug. 17, 2010);12 Lopez v. KB Toys Retail, Inc., No. 07-144, 2007 U.S. Dist. LEXIS 82025 (C.D. Cal. July 17, 2007) (attached as Exhibit D to Goodman Decl.);. In Lopez, for example, the court denied class certification of a FACTA complaint case. The court found that, “there is no evidence that any customer making a purchase from any of Defendant’s stores [during the class period] suffered any actual harm due to the inclusion of the first four digits of the credit card number on sales receipts.” (Ex. C, Lopez slip op. at 6). Moreover, “it appears unlikely, if not impossible, for the inclusion of the first four digits of a credit card number to result in identity theft or any other actual harm, as the first 4-6 digits merely identify the issuing bank . . . .” (Id.). (emphasis added). As the Toys “R” Us Court later explained: [T]he printing of the first six digits of the credit card number, in addition to the permissible last four, could not possibly cause actual harm to consumers. This is because the first six digits of any credit or debit card number identify the issuing bank or other entity, not an account number unique to the consumer. The seventh through sixteenth digits of a credit or debit card number contain unique identifiers. . . . The first six digits that were incorrectly printed on the receipt, therefore, provided only information about the issuing bank, not information unique to an individual consumer.” Toys “R” Us at 11 (emphasis added).13 So too here, where the Plaintiff alleges that Peter Piper printed the first four digits of her credit card number on her receipt. 12 Notably, lead counsel for Plaintiff in this case was also counsel of record inToys “R” Us and is well aware of this holding (and that the very disclosure complained of here does not pose a risk to Plaintiff) but nonetheless filed the instant litigation. This fact is suggestive of bad faith and may weigh in favor of afee award to Defendant in this case. 13 The District of Nevada in Noble also cited Toys “R” Us as persuasive authority. Noble, 2016 WL 4432685, at *2-3. Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 23 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -17- The Spokeo Court explicitly recognized that violations of a statute “may result in no harm.” Spokeo, 136 S. Ct. at 1550); see also Owner-Operator, 2016 WL 5674626, at *5 (stating that technical violations “could result in no harm”) (internal quotation marks omitted); Hancock, 830 F.3d at 514 (“[T]he Supreme Court cautioned in Spokeo that some statutory violations could ‘result in no harm’ even if they involved producing information in a way that violated the law.”) (quoting Spokeo, 136 S. Ct. at 1550). Indeed, “[n]ot all violations of FACTA ‘cause harm or present any materi l risk of harm.’” Kamal, 2016 WL 6133827, at *4 (quoting Spokeo, 136 S. Ct. at 1550). “Plaintiffs have no standing to complain of the putative technical violations of the statute alleged here, because the putative violations created no ‘concrete’ harm of the type sought to be prevented by Congress.” Noble, 2016 WL 4432685, at *3. Here, even if the Defendant printed the first four digits on Ms. Jacobson’s receipt, that would be merely a technical violation that caused her no concrete harm, and could not cause actual injury. CONCLUSION Ms. Jacobson pleads no actual, concrete harm flowing from the Defendant allegedly providing her with a receipt that identified her banking institution as well as the last four digits of her credit card. She has not alleged that anyone has seen her receipt, much less obtained it, or used it improperly, causing her harm. She has not alleged that she was the victim of identity theft. At best, Ms. Jacobson alleges a technical infraction of FACTA that caused her no injury. Although FACTA makes available statutory damages for willful violations, “the ‘case or controversy’ requirement in Article III, Section 2 of the Constitution still requires the plaintiff to prove she suffered an ‘actual’ or ‘concrete’ injury for that claim to proceed.” Waletzko v. Corelogic Credco, LLC, No. 15-317, 2016 WL 5879597 (W.D. Wis. Oct. 7, 2016) (emphasis added) (quoting Spokeo, 136 S. Ct. at 1549). Because she has not suffered a concrete injury, Ms. Jacobson lacks standing and the Complaint should be dismissed for lack of subject matter jurisdiction. Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 24 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -18- Dated: November 11, 2016 DLA PIPER LLP By s/ Aaron T. Goodman MARK A. NADEAU AARON T. GOODMAN 2525 East Camelback Road, Suite 1000 Phoenix, AZ 85016 KEARA M. GORDON (pro hac vice pending) keara.gordon@dlapiper.com 1251 Avenue of the Americas, 45th Floor New York, NY 10020-1104 STEVEN R. MARINO (pro hac vice pending) steven.marino@dlapiper.com 51 John F. Kennedy Parkway, Suite 120 Short Hills, New Jersey 07078-2704 Attorneys for Defendant Peter Piper, Inc. Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 25 of 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -19- CERTIFICATE OF SERVICE I hereby certify that on November 11, 2016, I caused the attached document to be electronically transmitted to the Clerk's Office using the CM/ECF System for filing and transmitted a Notice of Electronic Filing to the following CM/ECF registrants: David W. Williams, Esq. dwilliams@davismiles.com DAVIS MILES MCGUIRE GARDNER 40 E. Rio Salado Parkway, Suite 425 Tempe, AZ 85281 Phone: 480.344.4047 Fax: 480.733.3748 Chant Yedalian, Esq. chant@chant.mobi CHANT & COMPANY A Professional Law Corporation 1010 N. Central Ave. Glendale, CA 91202 Phone: 877.574.7100 Fax: 877.574.9411 Attorneys for Plaintiff s/ Joanne Conti Case 4:16-cv-00596-JAS-LCK Document 14-1 Filed 11/11/16 Page 26 of 26