Second Circuit Holds Procedural FACTA Violation Insufficient To Establish Standing.

Author:Chew, Hanley
Position::Fair and Accurate Credit Transactions Act

The U.S. Court of Appeals for the Second Circuit added its voice to the chorus of circuit courts of appeal to hold that allegations that defendants included the first six and last four digits of a plaintiff's credit card number on their receipts in violation of the Fair and Accurate Credit Transactions Act were, on their own, insufficient to satisfy the concrete injury requirement necessary for Article III standing. Every circuit court to have confronted similar factual allegations in FACTA cases has found that they fail to establish standing. The September 19 decision in Katz v. The Donna Karan Company is also significant in that it permits parties to introduce extrinsic evidence in statutory violation cases when the district court is making a determination on standing.

The Fair and Accurate Credit Transactions Act

FACTA was a 2003 amendment to the Fair Credit Reporting Act and provides that "no person that accepts credit cards or debit cards for the transaction of business shall print more than the last five 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 noncompliance with FACTA entitles consumers to "any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000." 15 U.S.C. 1681n(a)(1)(A).


In January and February 2014, the plaintiff in the case visited Donna Karan's stores twice, made purchases each time and was given receipts that contained the first six digits of his credit card number as well as the last four. Later in February 2014, the plaintiff filed a complaint, alleging that these receipts violated FACTA's requirement that businesses print no more than the last five digits of a credit card number on their receipts.

The district court dismissed the complaint, finding that it failed to allege a willful, knowing or reckless violation of FACTA. Following the Supreme Court's decision in Robins v. Spokeo, the Second Circuit vacated the district court's decision and remanded the case to allow the plaintiff to re-plead his claim to comport with the pleading standard set forth in Spokeo.

On remand, the district court dismissed the complaint with prejudice, finding that the plaintiff had failed to establish that defendants' alleged FACTA violation presented a material risk of harm to the statute's underlying interests of identity theft protection and, therefore,...

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