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Weinstein v. Intermountain Health Care Inc.

United States District Court, D. Utah

April 3, 2017

STEPHEN WEINSTEIN, individually and on behalf of all similarly situated individuals, Plaintiff,


          David Nuffer, United States District Judge.

         Defendant IHC[1] moves to dismiss the First Amended Complaint (“Amended Complaint”)[2] with prejudice under Rules 12(b)(1) and 12(b)(6) (“Motion to Dismiss”).[3] Plaintiff Stephen Weinstein opposes the Motion to Dismiss (“Opposition”).[4] IHC filed a reply in support of the Motion to Dismiss (“Reply”).[5] IHC has also filed five notices of supplemental authority[6] identifying 12 cases[7] it argues are relevant to the outcome of the Motion to Dismiss. For the reasons set forth below, the Motion to Dismiss is GRANTED.

         ALLEGED FACTS[8]

         Mr. Weinstein makes the following allegations:

         1. In 2003, the Fair and Accurate Transaction Act (“FACTA”) was enacted “to assist in the prevention of identity theft and credit and debit card fraud.”[9]

         2. A “main provision of FACTA (codified as 15 U.S.C. § 1681c(g) of the Fair Credit Report Act)” prohibits the printing of “more than the last five digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of sale or transaction.”[10]

         3. Section 1681c(g) shows that “Congress made the determination that the printing of receipts containing more than the last five digits of the credit or debit card number or the card expiration date creates an unacceptable risk of identity theft and fraud to the cardholders.”[11]

         4. “FACTA was signed into law on December 4, 2003, but did not become fully effective until December 4, 2006.” Even with three years to comply, “many merchants did not become compliant and faced liability.” “In response, the Credit and Debit Card Receipt Clarification Act of 2007 . . . was enacted to provide additional time for merchants to become compliant.” “In accordance with the Clarification Act, beginning June 4, 2008, a merchant that prints more than the last five digits of the credit or debit card number or a credit or debit card's expiration date on an electronically generated receipt given to a customer is in violation of FACTA.”[12]

         5. “On February 16, 2016, [Mr. Weinstein] used his American Express card to pay for a doctor's visit at the Intermountain Park City Clinic . . . .” “The hardcopy receipt generated and provided to him by [IHC] contained the expiration date of his card in violation of 15 U.S.C. § 1681c(g).”[13]

         6. “[S]ince at least 2014, if not earlier, through at least February 16, 2016, [IHC] provided non-compliant receipts through point of sale machines that were provided to patients and customers at the point of sale.”[14]

         7. “Despite having more than 12 years to become compliant with FACTA, [IHC] has willfully violated this law and failed to protect [Mr. Weinstein] and others similarly situated against identity theft and credit card and debit card fraud by printing the expiration date on hardcopy receipts provided to debit card and credit card cardholders transacting business with [IHC].”[15]

         8. “Identity theft and fraud is a real harm and serious risk to consumers.” “Skilled criminals are able to use the last few digits of a credit or debit card account number and certain predictive assumptions and computerized mathematical formulas to determine the full account number. When provided with the card expiration date, such criminals have the data needed to commit identity theft or credit or debit card fraud.” “In addition, having those key pieces of personal data can provide criminals sufficient credibility to engage in ‘phishing' email scams or pretext telephone calls through which they are able to gather even more personal confidential data, such as bank account numbers, social security numbers, date of birth, or employment data.” “Access to such comprehensive personal data allows criminals to potentially obtain additional credit cards, obtain loans for vehicles, obtain home mortgages, obtain a passport in the consumer's name, and other similarly serious fraudulent acts that can cause serious harm to the consumer's financial and personal life.”[16]

         9. “[IHC]'s printing of credit card or debit card expiration dates on receipts has harmed [Mr. Weinstein] and other consumers by failing to provide them with a receipt that does not contain their credit or debit card expiration date and by exposing them to a serious risk of identity theft and fraud that could have been avoided if [IHC] had complied with their statutory obligations under FACTA.”[17]

         10. Mr. Weinstein “brings this action against [IHC] based on [IHC]'s violation of 15 U.S.C. §§ 1681 et seq.[18] and seeks to have a Class certified with Mr. Weinstein as the representative of the Class, and the law firm representing Mr. Weinstein as counsel for the Class.[19]

         11. Mr. Weinstein asserts one cause of action for “Violation of 15 U.S.C. §§ 1681 et seq.” and seeks statutory damages, punitive damages, costs, and attorney's fees.[20]


         IHC moves to dismiss the Amended Complaint with prejudice under Rules 12(b)(1) and 12(b)(6).[21] IHC argues, among other things, that Mr. Weinstein does not have standing because he has not alleged a cognizable, concrete injury-in-fact. IHC relies principally on Spokeo, Inc. v. Robins.[22] IHC argues that since Mr. Weinstein does not have standing and has not stated an actionable claim, he cannot represent a class. IHC is correct.

         In Spokeo, the U.S. Supreme Court addressed the question of whether a procedural violation of the Fair Credit Reporting Act gave standing to the plaintiff to pursue his claims.[23]The Supreme Court noted that federal court jurisdiction is limited to “actual cases or controversies.”[24] This mandate “limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress for a legal wrong.”[25] Thus, a litigant must have standing to bring a lawsuit in federal court.

         To have standing, a 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.”[26] The first element, injury in fact, is the “first and foremost of standing's three elements.”[27]

         “To establish 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.”[28] “A ‘concrete' injury must be ‘de facto'; that is, it must actually exist.”[29] This does not mean the injury must be “tangible.”[30] Intangible injuries can be concrete injuries.[31] “Congress is well positioned to identify intangible harms that meet minimum Article III requirements, ”[32] but “Congress cannot erase Article III's standing requirements by statutorily granting the right to sue a plaintiff who would not otherwise have standing.”[33]

         While “Congress may elevate to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law[, ]”[34] “Congress' role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.”[35] “Article III standing requires a concrete injury even in the context of a statutory violation.”[36] A plaintiff that alleges only a “bare procedural violation” that “result[s] in no harm” does not have standing to sue under Spokeo.[37]

         In “the first circuit [decision] to address the question of standing in FACTA cases after Spokeo, ” the Seventh Circuit held in Meyers v. Nicolet Restaurant of de Pere[38] that “without a showing of injury apart from the statutory violation, the failure to truncate a credit card's expiration date is insufficient to confer Article III standing.”[39] The Seventh Circuit observed that FACTA was enacted to combat the “increasing threat of identity theft.”[40] But “not all inaccuracies cause harm or present any material risk of harm” the Seventh Circuit wrote.[41]Indeed, a plaintiff does not automatically satisfy “the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.”[42] Rather, a “plaintiff still must allege a concrete injury that resulted from the violation in his case.”[43]

         The Seventh Circuit ultimately held that the plaintiff in that case “did not suffer any harm because of [the defendant]'s printing of the expiration date on his receipt.”[44] The Seventh Circuit also stated that “the violation [did not] create[] any appreciable risk of harm” because the plaintiff “discovered the violation immediately and nobody else ever saw the non-compliant receipt.”[45]

         The Seventh Circuit explained that “Congress sought to limit FACTA lawsuits to consumers ‘suffering from any actual harm.'”[46] The legislative history of FACTA, the Seventh Circuit observed, showed that “[e]xperts in the field agree that proper truncation of the card number, by itself as required by the [FACTA], regardless of the inclusion of the ...

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