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Kivo v. Blumberg Exelsior, Inc.

United States District Court, E.D. New York

November 16, 2013

MELISSA KIVO, individually and on behalf of a class, Plaintiff,
BLUMBERG EXELSIOR, INC., and DOES 1-10, Defendants

For the Plaintiff: Abraham Kleinman, Esq., Of Counsel, Abraham Kleinman, Esq., Of Counsel, Uniondale, NY.

For the Plaintiff: Cathleen, M. Combs, Esq., Tiffany N. Hardy, Esq., Of Counsel, Edelman, Combs, Latturner & Goodwin, LLC, Chicago, IL.

For Blumberg Excelsior, Inc., Defendant: Andrew N. Krinsky, Esq., Maxwell D. Rosenthall, Esq, Of Counsel, Tarter Krinsky & Drogin LLP, New York, NY.

For Blumberg Excelsior, Inc., Defendant: Alan R. Arkin, Esq., Of Counsel, Arkin Kaplan Rice LLP, New York, NY.



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ARTHUR D. SPATT, United States District Judge.

On July 23, 2013, the Plaintiff Melissa Kivo (the " Plaintiff" ) commenced this action on behalf of herself and a putative class, alleging that the Defendant Blumberg Excelsior, Inc. (the " Defendant" ) violated Section 1681c(g) of the Fair and Accurate Credit Transactions Act of 2003 (FACTA), which requires that merchants truncate the credit card information they

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include on customers' receipts. The Plaintiff, who made an online, credit card purchase from the Defendant, contends that the Defendant violated Section 1681c(g) by including the expiration date of her credit card in the computer-generated receipt that was mailed to her. She argues that she is therefore entitled to statutory damages under FACTA Section 1681n.

" Section 1681n, however, only provides for liability where the merchant's noncompliance is willful, and the Supreme Court has held that a merchant is not in willful noncompliance when the merchant's interpretation of the statute is objectively reasonable." Simonoff v. Kaplan, Inc., 10 CIV. 2923 (LMM), 2010 WL 4823597, at *1 (S.D.N.Y. Nov. 29, 2010). This Court finds that the Defendant's proposed interpretation of Section 1681c(g) -- interpreting the Section as applying only to receipts that result from in-person transactions -- is objectively reasonable and thus grants the Defendant's motion to dismiss.


A. Legal Standard

A complaint should be dismissed if it " fail[s] to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). " In deciding a motion to dismiss, the Court ordinarily accepts as true all well-pleaded factual allegations and draws all reasonable inferences in the plaintiff's favor." In re Parmalat Sec. Litig., 501 F.Supp.2d 560, 572 (S.D.N.Y. 2007) (citing Levy v. Southbrook Int'l Invs., Ltd., 263 F.3d 10, 14 (2d Cir. 2001)). However, " the plaintiff must provide the grounds upon which his claim rests through factual allegations sufficient 'to raise a right to relief above the speculative level.'" ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (quoting Bell A. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).

B. The Relevant FACTA Sections: 1681c(g) and 1681n

FACTA was passed in 2003 as an amendment to the Fair Credit Reporting Act (FCRA). Fair and Accurate Credit Transactions Act of 2003, Pub. L. No. 108-159, § 1, 117 Stat.1952, 1952 (2003). " FACTA Section 1681c(g) imposes restrictions on the disclosure of credit and debit card information by those who accept the cards for business transactions." Simonoff, 2010 WL 4823597, at *1. In pertinent part, Congress provided:

Truncation of credit card and debit card numbers.

(1) In general
Except as otherwise provided in this subsection, no person 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 sale or transaction.

15 U.S.C. § 1681c(g)(emphasis added). FACTA Section 1681n outlines civil liability for willful noncompliance with FACTA sections, including Section 1681c. It provides in relevant part:

Any person who willfully fails to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer in an amount equal to the sum of --
(1) (A) 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, whichever is greater;
. . . .
(2) such amount of punitive damages as the court may allow; and
(3) in the case of any successful action to enforce any liability under this section,

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the costs of the action together with reasonable attorney's fees as ...

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