14‐3709
Crupar‐Weinmann v. Paris Baguette America, Inc.
14‐3709
Crupar‐Weinmann v. Paris Baguette America, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
_______________
August Term, 2015
(Argued: October 28, 2015 Decided: June 26, 2017)
Docket No. 14‐3709
_______________
DEVORAH CRUPAR‐WEINMANN, individually and on behalf of all others similarly
situated,
Plaintiff‐Appellant,
—v.—
PARIS BAGUETTE AMERICA, INC., doing business as P
aris Baguette,
Defendant‐Appellee.*
_______________
* The Clerk of Court is respectfully directed to amend the caption to conform to the
caption above.
B e f o r e:
KATZMANN, Chief Judge, POOLER and CHIN, Circuit Judges.
_______________
Appeal from a judgment of the district court dismissing the plaintiff’s
amended complaint with prejudice. The plaintiff brought suit against the
defendant alleging a willful violation of the Fair and Accurate Credit
Transactions Act of 2003 (“FACTA”), Pub. L. No. 108–159, 117 Stat. 1952
(codified as amended at 15 U.S.C. § 1681c(g)). Specifically, when the plaintiff
purchased food at the defendant’s restaurant, she received a printed receipt that
contained her credit card’s expiration date, one of several pieces of identifying
information that FACTA prohibits printing on a receipt so as to reduce the risk of
consumer identity theft. The plaintiff alleges that this action presented a material
risk of harm of identity theft and constitutes an injury in fact sufficient for
standing to sue. Here, however, we find it dispositive that Congress
subsequently passed legislation amending FACTA to clarify that a receipt
containing a printed expiration date does not raise a material risk of identity theft.
This clarification, coupled with the absence of any specific allegations concerning
the unintended exposure of the plaintiff’s receipt to others, let alone allegations
of actual identity theft, leads us to the conclusion that the bare procedural
violation the plaintiff alleges here is insufficient to satisfy the injury‐in‐fact
requirement necessary to establish Article III standing. On this basis, we AFFIRM
the judgment of the district court.
_______________
GREGORY A. FRANK (Marvin L. Frank, on the brief), Frank LLP, New
York, NY; Khaled (Jim) El Nabli, Joseph H. Lilly, and Peter Y.
Lee, Nabli & Associates, P.C., New York, NY, for Plaintiff‐
Appellant.
JOSHUA A. BERMAN (Mary Jane Yoon and Eric L. Unis, on the brief),
Troutman Sanders LLP, New York, NY, for Defendant‐Appellee.
_______________
2
KATZMANN, Chief Judge:
When does a bare procedural violation of a statutory right constitute an
injury in fact sufficient for standing to bring suit in federal court? Although the
Supreme Court recently addressed this question in Spokeo, Inc. v. Robins, 136 S.
Ct. 1540 (2016), as revised (May 24, 2016), the inquiry is necessarily context‐
specific to the statutory right in question and the particular risk of harm
Congress sought to prevent. Here, we address this issue as it relates to the Fair
and Accurate Credit Transactions Act of 2003 (“FACTA”), Pub. L. No. 108‐159,
117 Stat. 1952 (codified as amended at 15 U.S.C. § 1681c(g)), an issue of first
impression in this Circuit. Guided by unambiguous statutory language that a
receipt with a credit card expiration date does not raise a material risk of identity
theft, and finding that the bare procedural violation alleged by the plaintiff does
not present a material risk of harm, we conclude that allegations in her amended
complaint do not satisfy the injury‐in‐fact requirement necessary to establish
Article III standing to bring suit. Accordingly, we AFFIRM the judgment of the
district court dismissing her amended complaint for lack of standing.
3
BACKGROUND
I. Factual History
The brief factual history of this case is drawn from plaintiff’s amended
complaint filed after we remanded the case to the district court. FACTA seeks to
prevent identity theft by, among other things, requiring that venders who accept
credit and debit cards not 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
the sale or transaction.” 15 U.S.C. § 1681c(g)(1). When plaintiff Devorah Crupar‐
Weinmann purchased food at Paris Baguette’s midtown Manhattan restaurant
on September 19, 2013, she paid for it with a credit card and received a printed
receipt displaying her card’s expiration date. She alleges that during this time
period, “Paris Baguette routinely gave receipts to its customers at the point of
sale at its various retail stores which displayed the expiration dates of the
customers’ credit and/or debit cards, in violation of the requirements of FACTA.”
Am. Compl. ¶ 17. The plaintiff’s amended complaint is otherwise devoid of
specific factual allegations concerning her interaction with the restaurant or any
consequences that stemmed from the display of her credit card’s expiration date
4
on the printed receipt. Instead, her complaint emphasizes that Congress’s goal in
passing FACTA was to reduce the risk of consumer identity theft by “mak[ing] it
more difficult for identity thieves to obtain consumers’ [c]ard information by
reducing the amount of information identity thieves could retrieve from found or
stolen [c]ard receipts.” Id. ¶ 26. She further alleges that by “knowingly and
recklessly print[ing] . . . [c]ard expiration dates on the [c]ard receipts,” Paris
Baguette violated FACTA, id. ¶ 92, and that doing so “created a real, non‐
speculative harm in the form of increased risk of identity theft,” id. ¶ 29.
II. Procedural History
In 2013, Crupar‐Weinmann filed her initial complaint, which the defendant
moved to dismiss, primarily on the basis that she failed to plead facts sufficient
to allege plausibly that Paris Baguette willfully violated FACTA. Following full
briefing and oral argument, the district court granted the defendant’s motion to
dismiss. See Crupar‐Weinmann v. Paris Baguette Am., Inc., No. 13 CIV. 7013 JSR,
2014 WL 2990110, at *1, *5 (S.D.N.Y. June 30, 2014). The district court dismissed
the plaintiff’s claims with prejudice, “convinced that plaintiff would not be able
to plausibly plead a claim for willful violation of FACTA, even if she were given
5
the opportunity to replead.” Id. at *5. Crupar‐Weinmann then moved for
reconsideration, asserting both that the district court misconstrued the pleading
standard for a willful violation of FACTA and that it erred in dismissing her
complaint with prejudice and without leave to amend; the court denied this
motion on both grounds. See Crupar‐Weinmann v. Paris Baguette Am., Inc., 41 F.
Supp. 3d 411, 413–14 (S.D.N.Y. 2014).
Crupar‐Weinmann then appealed, and on October 28, 2015, we heard
argument in both her case and a related case involving a similar legal question,
Katz v. The Donna Karan Company, LLC, et al., No. 15‐464. Shortly thereafter, the
Supreme Court heard oral argument in Spokeo, which raised questions
concerning whether a plaintiff who “allege[s] a bare procedural violation,
divorced from any concrete harm, [can] satisfy the injury‐in‐fact requirement of
Article III.” 136 S. Ct. at 1549. We held both this case and Katz until the Court
rendered its decision in Spokeo, which clarified standing doctrine in ways that we
explain in more detail below. Given Spokeo’s elucidation, we subsequently
vacated and remanded both cases “to allow plaintiffs an opportunity to replead
their claims to comport with the pleading standards set forth in Spokeo, and to
6
allow the district courts to address any standing questions in the first instance,”
and we retained appellate jurisdiction over the outcomes. Cruper‐Weinmann v.
Paris Baguette Am., Inc., 653 F. App’x 81, 82 (2d Cir. 2016).
On remand, Crupar‐Weinmann amended her complaint, Paris Baguette
again moved to dismiss, and the district court again dismissed the plaintiff’s
complaint with prejudice, this time concluding that she lacked standing to bring
claims for violations of FACTA’s requirements. Cruper‐Weinmann v. Paris
Baguette Am., Inc., No. 13 CIV. 7013 (JSR), 2017 WL 398657 (S.D.N.Y. Jan. 30,
2017). Crupar‐Weinmann then moved to renew her appeal; we granted that
motion, and the parties submitted letter briefing addressing the propriety of the
district court’s dismissal in light of Spokeo.
DISCUSSION
I. Standard of Review
We review de novo the district court’s decision to dismiss the complaint for
lack of standing pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), “construing the
complaint in plaintiff’s favor and accepting as true all material factual allegations
7
contained therein.” Donoghue v. Bulldog Inv’rs Gen. P’ship, 696 F.3d 170, 173 (2d
Cir. 2012).
II. Standing to Allege A Bare Procedural Violation of Law
On appeal, the plaintiff challenges the district court’s dismissal of her
amended complaint on the basis that she did not plead a concrete injury in fact
sufficient to establish Article III standing to bring suit against Paris Baguette.
A. Standing Doctrine After Spokeo
In Lujan v. Defenders of Wildlife, the Supreme Court explained that the
“irreducible constitutional minimum of standing contains three elements”: (1)
“an injury in fact” to “a legally protected interest” that is both “(a) concrete and
particularized, and (b) actual or imminent, not conjectural or hypothetical,” (2) “a
causal connection between the injury and the conduct complained of,” and (3)
that it is “likely, as opposed to merely speculative, that the injury will be
redressed by a favorable decision.” 504 U.S. 555, 560–61 (1992) (citations and
internal quotation marks omitted). As here, the controversy in Spokeo implicated
the “concrete and particularized” element of injury‐in‐fact standing analysis. See
Spokeo, 136 S. Ct. at 1545, 1548. There, the Court considered a claim against
8
Spokeo, a “people search engine,” alleging that when Spokeo trawled online
sources to generate a profile of the plaintiff, it collected and reported inaccurate
information about him, including his age, education, and marriage and family
status, as well as job and socioeconomic position. Id. at 1544, 1546. The plaintiff
asserted that Spokeo qualified as a “consumer reporting agency” under the Fair
Credit Reporting Act of 1970 (“FCRA”), 84 Stat. 1127 (codified as amended at 15
U.S.C. §§ 1681 et seq.), and that, as a result, Spokeo was required “to ‘follow
reasonable procedures to assure maximum possible accuracy’ of consumer
reports, . . . to limit the circumstances in which such agencies provide consumer
reports ‘for employment purposes,’ . . . and to post toll‐free numbers for
consumers to request reports,” among other protections. Spokeo, 136 S. Ct. at 1545
(quoting 15 U.S.C. §§ 1681e(b), 1681b(b)(1), 1681j(a)). Importantly, as with
FACTA, violators of the FCRA can be liable for both actual and statutory
damages. Id. The Spokeo plaintiff’s putative class action lawsuit alleged that in
publishing incorrect information about the plaintiff and similarly situated
individuals, Spokeo willfully failed to comply with the FCRA’s requirements, id.
at 1546, and the case turned on whether harms stemming from bare procedural
9
violations of the FCRA could satisfy the concreteness element of injury‐in‐fact
standing analysis.
The Supreme Court concluded that while the Spokeo plaintiff could not
“allege a bare procedural violation, divorced from any concrete harm, and satisfy
the injury‐in‐fact requirement of Article III,” that did “not mean . . . that the risk
of real harm cannot satisfy the requirement of concreteness.” Id. at 1549
(emphasis added). After all, as “Congress is well positioned to identify intangible
harms that meet minimum Article III requirements, [and] its judgment is also
instructive and important,” Congress “may ‘elevat[e] to the status of legally
cognizable injuries concrete, de facto injuries that were previously inadequate in
law.’” Id. (quoting Lujan, 504 U.S. at 578). Given the variety of ways a consumer
reporting agency could run afoul of the FCRA, the Court recognized that while
any given “violation of one of the FCRA’s procedural requirements may result in
no harm,” “Congress plainly sought to curb the dissemination of false
information by adopting procedures designed to decrease that risk.” Id. at 1550.
Thus, the critical question for standing purposes is “whether the particular
procedural violations alleged in this case entail a degree of risk sufficient to meet
10
the concreteness requirement.” Id. (emphasis added). The Court remanded the
case for the lower court to engage in this inquiry in the first instance. Id.
B. Post‐Spokeo Second Circuit Standing Doctrine
We recently had the opportunity to apply Spokeo to another consumer class
action lawsuit concerning a statute with a wide‐ranging set of procedural rights
and requirements, the Truth in Lending Act (“TILA”), Pub. L. No. 90–321, 82
Stat. 146 (1968) (codified as amended at 15 U.S.C. §§ 1601 et seq.), in Strubel v.
Comenity Bank, 842 F.3d 181 (2d Cir. 2016). Unlike the single violation alleged
here, Strubel involved a variety of alleged violations of the TILA, all related to
required disclosures concerning the plaintiff’s rights and responsibilities as a
credit card holder and borrower of the bank. Id. at 185–86. Applying Spokeo, we
recognized that “an alleged procedural violation can by itself manifest concrete
injury where Congress conferred the procedural right to protect a plaintiff’s
concrete interests and where the procedural violation presents a ‘risk of real
harm’ to that concrete interest.” Id. at 190. We noted, however, an important
limitation: “[E]ven where Congress has accorded procedural rights to protect a
concrete interest, a plaintiff may fail to demonstrate concrete injury where
11
violation of the procedure at issue presents no material risk of harm to that
underlying interest.” Id. at 190. A central inquiry, then, is whether the particular
bare procedural violation may present a material risk of harm to the underlying
concrete interest Congress sought to protect. Accordingly, in Strubel, we held that
those of the defendant’s practices that “could cause consumers unwittingly not
to satisfy their own obligations and thereby to lose their rights . . . raise[d] a
sufficient degree of the risk of real harm necessary to [establish] concrete injury
and Article III standing,” while other allegations where plaintiff “fail[ed] to
demonstrate sufficient risk of harm to a concrete TILA interest from
[defendant’s] alleged failure[s]” were properly dismissed for lack of standing. Id.
at 200.
III. Material Risk of Harm under FACTA
Applying Strubel, the key inquiry here is whether Paris Baguette’s alleged
bare procedural violation — printing Crupar‐Weinmann’s credit card expiration
date on her receipt — presents a material risk of harm to the underlying concrete
interest Congress sought to protect in passing FACTA. We find it dispositive that
in 2007, Congress clarified FACTA in the Credit and Debit Card Receipt
12
Clarification Act of 2007 (“Clarification Act”), stating that “[e]xperts in the field
agree that proper truncation of the card number, . . . regardless of the inclusion of
the expiration date, prevents a potential fraudster from perpetrating identity theft
or credit card fraud.” Pub. L. 110–241, § 2(a)(6), 122 Stat. 1565, 1565 (2007)
(emphasis added). This makes clear that Congress did not think that the inclusion
of a credit card expiration date on a receipt increases the risk of material harm of
identity theft.
Crupar‐Weinmann counters that the Clarification Act maintained
FACTA’s prohibition on printing credit card expiration dates on receipts, which
reflects Congress’s continued belief that the action does pose a material risk of
harm. While we acknowledge that the Clarification Act maintained FACTA’s
prohibition on this practice, we decline to draw plaintiff’s proposed inference,
because in the same Act, Congress expressly observed that the inclusion of
expiration dates did not raise a material risk of identity theft, presumably to
curtail the “hundreds of lawsuits [that] were filed [after FACTA’s passage]
alleging that the failure to remove the expiration date was a willful
violation . . . even where the account number was properly truncated[, and n]one
13
of these lawsuits contained an allegation of harm to any consumer’s identity.”
Pub. L. 110–241 § 2(a)(4)–(5), 122 Stat. at 1565. Congress could not have been
clearer in stating that “[t]he purpose of this Act is to ensure that consumers
suffering from any actual harm to their credit or identity are protected while
simultaneously limiting abusive lawsuits that do not protect consumers but only
result in increased cost to business and potentially increased prices to
consumers.” Id. § 2(b), 122 Stat. at 1566. Given this clarification of FACTA,
coupled with our holding in Strubel that a plaintiff must allege that, at a
minimum, the bare “procedural violation presents a ‘risk of real harm’ to [her]
concrete interest,” 842 F.3d at 190, we conclude that the plaintiff here has not
alleged in her amended complaint that Paris Baguette’s bare procedural violation
of FACTA posed a material risk of harm to her.1 We thus join our sister Circuit in
concluding, in a case with a nearly identical set of allegations, that “[i]n these
1 This is not to say that it is impossible to allege a different “bare procedural violation”
of 15 U.S.C. § 1681c(g) for which some plaintiff might have standing. In a circumstance
like this, however, where the plaintiff alleges no particular harm beyond a purely
procedural violation, and Congress has found that that particular bare procedural
violation does not increase the risk of the relevant material harm, the plaintiff lacks
standing to proceed with such a suit.
14
circumstances, it is hard to imagine how the expiration date’s presence could
have increased the risk that [plaintiff’s] identity would be compromised.” Meyers
v. Nicolet Rest. of De Pere, LLC, 843 F.3d 724, 727 (7th Cir. 2016).
CONCLUSION
For these reasons, we join the Seventh Circuit in holding that the printing
of an expiration date on an otherwise properly redacted receipt does not
constitute an injury in fact sufficient to establish Article III standing to bring a
claim alleging a bare procedural violation of FACTA. Accordingly, the judgment
of the district court is AFFIRMED.
15
Crupar-Weinmann v. Paris Baguette America, Inc.
Combined Opinion