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O'Shea v. P.C. Richard & Son, LLC

United States District Court, S.D. New York

August 3, 2017

KATHLEEN O'SHEA and SANDEEP TRISAL, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
P.C. RICHARD & SON, LLC d/b/a P.C. RICHARD & SON and P.C. RICHARD & SON, INC. d/b/a P.C. RICHARD & SON, Defendants.

          OPINION AND ORDER

          KATHERINE POLK FAILLA United States District Judge.

         Plaintiffs Kathleen O'Shea and Sandeep Trisal bring this class action against Defendants P.C. Richard & Son, LLC and P.C. Richard & Son, Inc., for violations of the Fair and Accurate Credit Transactions Act of 2003, 15 U.S.C. §§ 1681-1681x (“FACTA”). Plaintiffs O'Shea and Trisal each allege that upon making a purchase at one of Defendants' locations, Defendants printed on their receipts the expiration dates of their debit and credit cards, respectively, in violation of 15 U.S.C. § 1681c(g).

         Defendants have moved to dismiss Plaintiffs' First Amended Complaint, the operative complaint in this case, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). They argue that (i) Plaintiffs lack Article III standing because they allege only a bare procedural violation and no actual harm or material risk of harm, and (ii) Plaintiffs failed to allege adequately a willful violation of FACTA. Plaintiffs oppose the motion, and Plaintiff Trisal seeks leave to file an amended complaint if the motion is granted.

         The parties' arguments are impacted significantly by a recent Second Circuit decision: Crupar-Weinmann v. Paris Baguette America, Inc., 861 F.3d 76 (2d Cir. 2017). In light of the holding in that case and for the reasons set forth below, Defendants' motion to dismiss is granted and Plaintiff Trisal's request to file a Second Amended Complaint is denied.

         BACKGROUND[1]

         A. Factual Background

         Plaintiffs allege that Defendants have willfully and repeatedly violated FACTA by printing expiration dates on credit and debit card receipts. (See generally FAC). FACTA provides in relevant part that “no person that accepts credit cards or debit cards for the transaction of business shall print” an improperly truncated receipt - one that contains more than five digits of the card number or the expiration date. 15 U.S.C. § 1681c(g). Defendant P.C. Richard & Son, LLC owns and manages several retail store locations. (FAC ¶ 11). Defendant P.C. Richard & Son, Inc. also owns and manages several retail stores and does business with P.C. Richard & Son, LLC. (Id. at ¶ 12). The two entities collectively use the business name “P.C. Richard & Son.” (Id.).

         Sometime after November 17, 2013, Plaintiff O'Shea made a purchase at one of Defendants' locations and Defendants provided her with one or more receipts that included the expiration date of her debit card and the last four digits of her card number. (FAC ¶ 35). On or about November 2, 2015, Plaintiff O'Shea's counsel served Defendants with a cease and desist letter demanding that Defendants end their FACTA violations. (Id. at ¶ 45). Attached to the letter was a draft complaint. (Id.).

         On May 2, 2016, Plaintiff Trisal received from Defendants a receipt that “contained, among other things, ” his credit card's expiration date and the last four digits of his card number. (FAC ¶ 45). The First Amended Complaint does not clarify what these “other things” are.

         Plaintiffs allege that Defendants continued to print expiration dates on credit and debit card receipts in violation of FACTA until at least August 17, 2016. (FAC ¶ 45). Plaintiffs also allege that these FACTA violations were willful because Defendants (i) “knew of and were well informed about the law” (id. at ¶ 39); (ii) were informed by other entities of FACTA's truncation requirements and the prohibition on expiration dates (id. at ¶ 40); (iii) knew their electronic receipt printing equipment was outdated, but forewent the proper updates to avoid spending the money, time, and other resources required (id. at 44); and (iv) were put on notice of their FACTA violations by Plaintiff O'Shea's letter and Complaint (id. at ¶ 45). Plaintiffs further allege that because Defendants printed their cards' expiration dates on their receipts, Plaintiffs were exposed to “an increased risk of identity theft and credit and or debit card fraud, ” though, significantly and fortunately, neither alleges that such identity theft or fraud actually occurred. (Id. at ¶ 51).

         B. Procedural Background

         This case has been significantly impacted by the litigation of another case initially filed in this District: Crupar-Weinmann v. Paris Baguette America, Inc., No. 13 Civ. 7013 (JSR) (S.D.N.Y.). During the pendency of this litigation, the Second Circuit has reviewed Crupar-Weinmann twice; first in Crupar-Weinmann v. Paris Baguette America, Inc., 653 F. App'x 81 (2d Cir. 2016) (summary order) (“Crupar-Weinmann I”), and again in Crupar-Weinmann v. Paris Baguette America, Inc., 861 F.3d 76 (2d Cir. 2017) (“Crupar-Weinmann II”). In brief, Plaintiff Crupar-Weinmann alleged that Paris Baguette violated FACTA by issuing a receipt with the full expiration date of her credit card on it. Crupar-Weinmann I, 653 F. App'x at 81. And, as in the instant case, Crupar-Weinmann did not allege any actual harm, such as identify theft or credit card fraud. Id. Crupar-Weinmann I and II bear directly on the arguments raised by the parties in this case. Consequently, the Court considers the instant case's procedural history in light of both Crupar-Weinmann decisions.

         1. Plaintiffs' Pleading and Crupar-Weinmann I

         Plaintiff O'Shea filed the original Complaint in this matter on November 18, 2015, alleging debit card violations of FACTA. (Dkt. #1). On January 29, 2016, Defendants filed a letter motion requesting an extension of time to answer the Complaint in light of the Second Circuit's then-pending decision in Crupar-Weinmann I. (Dkt. #12). Defendants' basis for their request was that the decision in Crupar-Weinmann I would address pleading standards for willfulness under FACTA and would “directly impact whether Defendants move to dismiss the Complaint[.]” (Id. at 1). The Court granted Defendants' letter motion on February 1, 2016, and stayed this case pending the Second Circuit's decision in Crupar-Weinmann I. (Dkt. #13).

         The Second Circuit issued Crupar-Weinmann I on June 30, 2016. See Crupar-Weinmann v. Paris Baguette America, Inc., 653 F. App'x 81 (2d Cir. 2016) (summary order). There, the Second Circuit remanded the case, allowing Crupar-Weinmann to replead her FACTA claim to meet the standard recently established by the Supreme Court in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016), that plaintiffs alleging statutory violations show concrete injury to establish Article III standing. Crupar-Weinmann I, 653 F. App'x at 82.

         On July 7, 2016, the parties submitted a joint letter requesting that the Court lift the stay in this case and stating that Plaintiff O'Shea would not amend the existing Complaint despite the concerns Crupar-Weinmann I raised about concrete injuries and Article III standing. (Dkt. #18). The Court granted that application in a July 8, 2016 endorsement. (Dkt. #19).

         On August 11, 2016, Defendants filed a letter announcing their intention to move to dismiss Plaintiff O'Shea's Complaint pursuant to (i) Federal Rule of Civil Procedure 12(b)(1) for failure to establish Article III standing and (ii) Rule 12(b)(6) for failure to state a claim for a willful violation of FACTA. (Dkt. #24). Plaintiff O'Shea filed a letter response on August 15, 2016. (Dkt. #27).

         At a conference on August 18, 2016, Plaintiff O'Shea's counsel informed the Court that he had been retained by another plaintiff who had received a credit card receipt from Defendants in May 2016 that violated FACTA, though he did not identify the plaintiff at that time. (Transcript 3:14-4:3). O'Shea's counsel then stated his intention to amend the original Complaint to include credit card violations (at the time, it included only debit card violations (see Dkt. #1 at ¶ 33)), to bolster willfulness allegations, and potentially to add a second plaintiff. (Transcript 6:3-19). On September 24, 2016, Plaintiffs O'Shea and Trisal filed the First Amended Complaint, which included all of these proposed modifications. (Dkt. #33).

         2. Defendants' Motion to Dismiss and Cru ...


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