United States District Court, E.D. New York
MEMORANDUM & ORDER
A. MATSUMOTO, United States District Judge Eastern District
of New York
amended complaint, plaintiff Yaakov Katz (the
“plaintiff”), on behalf of himself and a putative
class, alleges violations of the Fair and Accurate Credit
Transactions Act (“FACTA”) by the Metropolitan
Transit Authority (the “defendant”), a New York
public benefit corporation, which plaintiff asserts owns
and/or operates transportation facilities throughout the New
York region, including, in pertinent part, the Verrazano
Narrows-Bridge and the Bronx-Whitestone Bridge.
(Plaintiff's Amended Complaint (“Compl.” or
the “complaint”), ECF No. 15, at ¶¶ 1,
10.) Plaintiff asserts that defendant violated FACTA by
issuing credit card transaction receipts that displayed
improperly truncated credit card numbers. (See id.
at ¶¶ 1-4.)
the court is defendant's motion to dismiss for failure to
state a claim under Rule 12(b)(6) of the Federal Rules of
Civil Procedure, and for lack of subject matter jurisdiction,
presumably under Rule 12(b)(1), based on plaintiff's lack
of standing under Article III of the United States
Constitution. For the reasons that follow, the complaint is
dismissed for lack of subject matter jurisdiction under Rule
12(b)(1) of the Federal Rules of Civil Procedure.
following allegations from the complaint are taken as true
for the purposes of a motion to dismiss. See Ashcroft v.
Iqbal, 556 U.S. 662, 679 (2009); Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 555-56 (2007); see also
Morrison v. Nat'l Australia Bank Ltd., 547 F.3d 167,
170 (2d Cir. 2008) (citations omitted) (discussing treatment
of material factual allegations in complaint for purposes of
Rule 12(b)(1) analysis), aff'd on other grounds,
561 U.S. 247 (2010). On August 12, 2015, plaintiff paid a
toll using his Visa credit card on the Verrazano-Narrows
Bridge, and on January 25, 2017, plaintiff paid a toll using
his Visa credit card on the Bronx-Whitestone Bridge. (Compl.
at ¶¶ 18-19.) After plaintiff paid for each toll
with his Visa credit card, he received an electronically
printed receipt. (Id.) Due to the manner in which
defendant programmed its computer systems, both of these
receipts (the “Toll Receipts”) displayed the
first six digits of plaintiff's Visa credit card number.
(Id. at ¶ 20, 22.)
not expressly stated in the complaint, subsequent briefing by
plaintiff clarifies that the first six digits, which
plaintiff asserts are prohibited, and the last four digits,
which plaintiff asserts are permitted, of plaintiff's
credit card number were printed on the Toll Receipts.
(E.g., Plaintiff's Motion of Points and
Authorities in Opposition to Motion to Dismiss the Amended
Complaint (“Pl. Opp.” or the
“opposition”), ECF No. 19, at 15 and n.3.)
Additionally, all other credit card transaction receipts
generated by the same computer system in the seventeen-month
period between the first Toll Receipt and the second Toll
Receipt displayed the first six digits of the toll
payer's credit card number. (Compl. at ¶¶
contends that, at all relevant times, defendant, directly or
through a subsidiary, was responsible for operating, and
collecting tolls on, the Verrazano-Narrows and
Bronx-Whitestone Bridges. (Compl. at ¶ 10.) Defendant
disputes this allegation and contends that a distinct entity,
the Triborough Bridge and Tunnel Authority, is responsible
for the maintenance and operation of the Verrazano-Narrows
and Bronx-Whitestone Bridges. (See Memorandum of Law
in Support of Defendant Metropolitan Transportation
Authority's Motion to Dismiss (“Mot.” or the
“motion”), ECF No. 21-1, at 13-15.)
Motion to Dismiss
Notice of Motion, (ECF No. 21), defendant moves to dismiss
under Rule 12(b)(6), under which a plaintiff's complaint
must be dismissed if it fails to state a claim upon which
relief can be granted. Fed.R.Civ.P. 12(b)(6). Additionally,
defendant's Notice of Motion seeks dismissal for lack of
subject matter jurisdiction. (ECF No. 21). “A case is
properly dismissed . . . under Rule 12(b)(1) when the
district court lacks the statutory or constitutional power to
adjudicate it.” Makarova v. United States, 201
F.3d 110, 113 (2d Cir. 2000) (citing Fed.R.Civ.P. 12(b)(1)).
12(b)(1) challenge to subject matter jurisdiction may be
facial, that is, based solely on the pleadings, in which case
the court must determine whether the pleadings “allege
facts that affirmatively and plausibly suggest that [the
plaintiff] has standing to sue.” Amidax Trading
Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir.
2011); accord Carter v. HealthPort Techs.,
LLC, 822 F.3d 47, 56 (2d Cir. 2016). A Rule 12(b)(1)
motion may also be fact-based and rely on evidence beyond the
pleadings, in which case a plaintiff must present
controverting evidence unless the evidence is
“immaterial because it does not contradict plausible
allegations that are themselves sufficient to show
standing.” Carter, 822 F.3d at 57. A plaintiff
must establish subject matter jurisdiction by a preponderance
of the evidence. Makarova, 201 F.3d at 110.
applying Rule 12(b)(1), “‘the court must take all
facts alleged in the complaint as true and draw all
reasonable inferences in favor of plaintiff, ' but
‘jurisdiction must be shown affirmatively, and that
showing is not made by drawing from the pleadings inferences
favorable to the party asserting it.'”
Morrison, 547 F.3d at 170 (quoting Natural Res.
Def. Council v. Johnson, 461 F.3d 164, 171 (2d Cir.
2006) and APWU v. Potter, 343 F.3d 619, 623 (2d Cir.
2003)). Additionally, the court “may consider
affidavits and other materials beyond the pleadings to
resolve the jurisdictional issue, but . . . may not rely on
conclusory or hearsay statements contained in the
affidavits.” J.S. ex rel. N.S. v. Attica Cent.
Sch., 386 F.3d 107, 110 (2d Cir. 2004) (citing
Zappia Middle E. Const. Co. Ltd. v. Emirate of Abu
Dhabi, 215 F.3d 247, 253 (2d Cir. 2000) and Kamen v.
Am. Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d
Article III of the Constitution, the plaintiff must establish
standing to sue in order for a federal court to adjudicate a
suit. See Spokeo Inc. v. Robins, 136 S.Ct. 1540,
1546-1548 (2016); accord Lujan v. Defenders of
Wildlife, 504 U.S. 555, 559-60 (1992). “[T]he
‘irreducible constitutional minimum' of standing
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 (internal
citations omitted) (quoting and citing Lujan, 504
U.S. at 560-61).
establish the first standing element, 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.'”
Id. at 1548 (quoting Lujan, 504 U.S. at
injury is “particularized” when it affects the
plaintiff in a “personal and individual way, ”
Lujan, 504 U.S. at 560 n.1, and is
“concrete” when it “actually
exist[s]” in that it is “‘real' and not
‘abstract.'” Spokeo, 136 S.Ct. at
1548 (citations omitted).
Second Circuit, a plaintiff suing on a “bare procedural
violation of [a statute] . . . must satisfy a two-part test
for such an allegation to constitute a concrete harm.”
Katz v. Donna Karan Co., 872 F.3d 114, 119 (2d Cir.
2017). First, the plaintiff must show “that
‘Congress conferred the procedural right to protect a
plaintiff's concrete interests' as to the harm in
question.” Id. (quoting Strubel v.
Comenity Bank, 842 F.3d 181, 190 (2d Cir. 2016)).
Second, the plaintiff must show “that ‘the
procedural violation presents a risk of real harm to that
concrete interest.'” Id. (quoting
Strubel, 842 F.3d at 190). If a plaintiff suing on a
bare procedural violation cannot satisfy this test, he or she
cannot establish injury in fact, and the court has no
jurisdiction because the plaintiff has no standing.
Applicable Statutory Law
provides, in pertinent part and subject to a limitation that
is inapplicable here, that “[n]o 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)(1). In other words, FACTA generally
imposes a requirement that merchants truncate or redact all
but the last five digits of a credit card number when they
issue receipts for credit card transactions (the
“Truncation Requirement”). The parties do not
dispute that FACTA's Truncation Requirement was in force
at the time the Toll Receipts were issued.
I. Katz v. Donna Karan
the close of briefing on defendant's motion to dismiss,
the Second Circuit issued its opinion in Katz v. Donna
Karan Co., 872 F.3d 114 (2d Cir. 2017). In that case, as
here, the plaintiff sued under FACTA after making two
payments by credit card to the defendants and, in each
instance, receiving a printed receipt that displayed the
first six and last four digits of his credit card number.
Donna Karan, 872 F.3d at 116. Also as here, the
plaintiff asserted that this failure to comply with
FACTA's Truncation Requirement “raise[d] a material
risk of harm of identity theft” such that he
“suffered a concrete injury sufficient to establish
Article III standing.” Id.
motion to dismiss stage in Donna Karan, the district
court concluded that FACTA's Truncation Requirement
“is a means to the end goal of identity theft
prevention, ” and not a substantive right. Katz v.
Donna Karan Int'l, Inc., No. 14-CV-740 (PAC), 2017
WL 2191605, at *4 (S.D.N.Y. May 17, 2017), aff'd and
remanded sub nom. Katz v. Donna Karan Co., L.L.C., 872
F.3d 114 (2d Cir. 2017). Accordingly, to establish
constitutional standing and subject matter jurisdiction, a
plaintiff suing on a violation of the Truncation Requirement
must establish that the violation presents a material risk of
harm to the interest of identity theft prevention.
District Court Decision
district court in Donna Karan found that the first
six digits of a credit card number, also known as the
“issuer identification number” or “IIN,
” identify the institution that issued the card and
disclose no personal information about the cardholder.
Id. at *1 (citing Bin List & Bin Ranges:
List of Issuer Identification Numbers, Bin Database-Industry
Standard Fraud Prevention,
Donna Karan, 872 F.3d at 116. Because FACTA does not
prohibit identifying a card's issuer on a transaction
receipt, the district court concluded that failure to redact
the first six digits of a credit card number was, standing
alone, insufficient to establish a material risk of harm to
the interest of identity theft protection. Donna
Karan, 2017 WL 2191605 at *5-6 (citations omitted). The
district court also noted that the plaintiff had “not
allege[d] any facts showing that he experienced the
Congressionally-proscribed harm: identity theft, ”
id. at *5, and rejected the plaintiff's argument
that FACTA gives rise to a privacy right in the information
required to be truncated. Id. at *6. Accordingly,
the district court found that the plaintiff had not
demonstrated a risk of injury sufficient to establish
Second Circuit Decision
Second Circuit affirmed the district court's
determination that the plaintiff had not established subject
matter jurisdiction. In setting forth the applicable legal
standards, the Second Circuit characterized the printing of
the first six digits of a credit card number on a receipt as
a “procedural” violation of FACTA and stated that
the interest implicated by FACTA and the Truncation
Requirement is the prevention of identity theft. Donna
Karan, 872 F.3d at 120. The Second Circuit then applied
a “clear error” standard of review to the
district court's finding that printing the first six
digits of a credit card number does not create a material
risk of harm sufficient to confer Article III standing.
discussing the district court's analysis of the
significance and importance of the first six digits of a
credit card number, id. at 116, the Second Circuit
found that the district court did not clearly err “as
to the specific material facts in dispute.”
Id. at 120. The Second Circuit accordingly affirmed
the district court's finding that “the bare
procedural violation in question did not raise a material
risk of harm of ...