United States District Court, S.D. New York
CYNTHIA M. FULLWOOD, Plaintiff,
WOLFGANG'S STEAKHOUSE, INC., et al., Defendants.
OPINION AND ORDER
KATHERINE POLK FAILLA, District Judge.
Plaintiff Cynthia M. Fullwood sued Defendants Wolfgang's Steakhouse, Inc. ("Wolfgang's") and ZMF Restaurants LLC, alleging that Defendants willfully violated the Fair and Accurate Credit Transactions Act of 2003 ("FACTA"), Pub. L. No. 108-159, 117 Stat. 1952, by printing credit card receipts that included the expiration date of customers' cards. Defendants previously moved to dismiss the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that Plaintiff had not plausibly alleged a willful violation of FACTA. Plaintiff, in responding, included a proposed Second Amended Complaint. The Court denied the motion without prejudice to refiling once Plaintiff filed the Second Amended Complaint. See Fullwood v. Wolfgang's Steakhouse, Inc. (" Fullwood I "), No. 13 Civ. 7174 (KPF), 2014 WL 6076733, at *1 (S.D.N.Y. Nov. 14, 2014). Defendants now move to dismiss the Second Amended Complaint. For the reasons set forth in remainder of this Opinion, Defendants' motion to dismiss is denied.
A. Factual Background
The Court assumes familiarity with its prior opinion, but briefly retraces the relevant facts, particularly as Plaintiff's Second Amended Complaint is somewhat more specific than her Amended Complaint.
Plaintiff dined at Defendants' Park Avenue location on October 3, 2013. (Compl. ¶¶ 6, 15). After paying for her meal with a credit card, she received an electronically printed receipt displaying the expiration date. ( Id. ). Plaintiff does not allege that any actual damages flowed from this act, but sues for the statutory damages available for a willful violation of FACTA, on behalf of herself and a class of similarly situated plaintiffs. ( See generally Compl.).
Under FACTA, and as clarified by the Credit and Debit Card Receipt Clarification Act of 2007 (the "Clarification Act"), Pub. L. No. 110-241, 122 Stat. 1565, merchants should print neither the expiration date nor more than four digits of customers' credit card numbers on their receipts. Plaintiff alleges that Defendants were or should have been aware of these requirements through a number of avenues.
As a general matter, FACTA's requirements were widely publicized during its phase-in period between passage and effect. ( See Compl. ¶¶ 30-36). This publicity was only increased by the passage of the Clarification Act in 2007. ( Id. at ¶¶ 45-46).
More specific to Defendants,  Plaintiff alleges that Defendants had been informed of FACTA's requirements by numerous companies with which they had commercial relationships, including Visa, MasterCard, American Express, the PCI Security Standards Council (a consortium of credit card companies), and others. (Compl. ¶ 50). Plaintiff alleges that throughout the relevant period Defendants received the Card Acceptance Guidelines for Visa merchants (the "Visa Rules") and the MasterCard Security Rules and Procedures, Merchant Edition (the "MasterCard Rules"), both of which instructed merchants (including Defendants) not to print more than the last four digits of credit card numbers or any expiration dates. ( Id. at ¶¶ 52-60). As the Court previously noted, neither the Complaint nor the brochures indicate that this guidance came from FACTA rather than Visa's or Mastercard's own determination of best practices. See Fullwood I, 2014 WL 6076733, at *1.
Plaintiff further alleges that Defendants received information specifically referencing their obligations under FACTA in monthly statements from their merchant bank, their Point of Sale ("POS") provider or providers, and trade associations. (Compl. ¶¶ 62-65). Critically, Plaintiff further alleges that Defendants partially complied with FACTA by changing their credit and debit card receipts to remove all but the last four digits of the card number. ( Id. at ¶ 65).
Finally, Plaintiff alleges that on October 29, 2013, Plaintiff was advised that Defendants' insurance carrier was denying coverage because the governing "Policy specifically excludes violations of the Fair and Accurate Credit Transactions Act." (Compl. ¶ 67). From this, Plaintiff infers that Defendants specifically negotiated a contract that carved out an exclusion for FACTA, suggesting knowledge of its applicability. ( Id. at ¶¶ 68-69).
B. Procedural Background
Plaintiff filed suit on October 10, 2013, and filed her Amended Complaint on November 4, 2013. (Dkt. #1, 5). Pursuant to the Court's Order, Defendants moved to dismiss the Amended Complaint on January 10, 2014. (Dkt. #13). Plaintiff included in her opposition to the motion to dismiss a proposed Second Amended Complaint. (Dkt. #18 Ex. H). On July 17, 2014, the Court stayed the case on consent of both parties during the pendency of a motion for reconsideration in a highly similar case, Crupar-Weinmann v. Paris Baguette America, Inc., No. 13 Civ. 7013 (JSR). After the Honorable Jed S. Rakoff denied the motion for reconsideration, 2014 WL 4337978 (S.D.N.Y. Sept. 2, 2014), the Court lifted the stay in the instant litigation on October 1, 2014. (Dkt. #25). On November 14, 2014, finding that the proposed Second Amended Complaint "may or may not demonstrate that Defendants were sufficiently informed [of FACTA's requirements and applicability] so as to plausibly infer a willful violation, " such that repleading would not be futile, the Court denied the motion to dismiss without prejudice to refiling, and instructed Plaintiff to file her Second Amended Complaint. Wolfgang I, 2014 WL 6076733, at *8. Plaintiff did so on December 1, ...