Out of the Fryer: Burger King Beats FACTA Suit

by Goodwin
Contact

On September 27, 2017, the Southern District of Florida dismissed a Fair and Accurate Credit Transactions Act (FACTA) suit against Burger King on standing grounds. In Gesten v. Burger King Corp., Case No. 1:17-cv-22541 (S.D. Fla), the Court joined numerous other courts finding that, where a FACTA plaintiff’s only alleged harm is the printing of too many digits of a credit card number on a consumer-transaction receipt, Article III standing is lacking.  In doing so, however, Judge Scola broke with other judges in the Eleventh Circuit.  The decision is noteworthy both because it clearly articulates why such allegations are insufficient and because it continues a trend of dismissals of similar allegations.

FACTA prohibits, among other things, the printing of more than five digits of a credit card number on any receipt.  In Gesten, plaintiff alleged that a Burger King restaurant violated FACTA by printing a receipt that included ten digits—the first six and the last four.  To clear the standing hurdle, Plaintiff claimed that Burger King’s alleged violation injured him because it increased his risk of identity theft.  Burger King moved to dismiss for lack of standing, asserting that Plaintiff’s alleged injury was procedural and did not satisfy the Article III test (injury in fact, a causal connection between the injury and alleged conduct, and redressability).

The Court first noted that several courts (including the Second and Seventh circuits) have dismissed FACTA claims on standing grounds.  It explained these courts concluded that plaintiffs whose only alleged harm was a heightened risk of identity theft as a result of including more than five credit-card digits on a receipt lacked standing.  The Court acknowledged that other district courts in the Eleventh Circuit have reached the opposite conclusion, but refused to follow those decisions for two reasons.  First, the Court found these decisions unpersuasive because they were based on pre-Spokeo decisions.  Second, the Court rejected the underlying principle of these decisions explaining, “[t]he conclusion of district courts in this circuit that the violation of a substantive right created by Congress is sufficient on its own to confer standing on a plaintiff is contrary to the holding of Spokeo.”

In departing from the decisions of other district courts in the Eleventh Circuit, the Court focused on FACTA’s legislative history.  Examining that legislative history, he concluded that the statute does not create a private right of action for every violation, but only where a violation makes identity theft “certainly impending.”  The Court also rejected plaintiff’s argument that exposure of private information is a long-recognized harm, finding that plaintiff failed to show that any disclosure of his private information actually occurred.  Supporting this finding, the Court noted that there could be no heightened risk of identity theft because plaintiff took the receipt after the transaction and any alleged disclosure of his credit card number to Burger King employees was the same exposure caused by tendering his credit card for payment.  Finally, the Court explained (just as the Kamal court did) that that additional credit card numbers exposed only identified the card issuer, and therefore did not involve private information.

Defendants faced with FACTA suits should take note of the Gesten analysis for several reasons.  First, Gesten continues a trend in FACTA extra-digit litigation of finding no standing.  Second, the ruling takes on Spokeo’s challenge to consider Congress’s purpose in determining whether an alleged violation is procedural or not.  Third, Gesten addressed head on contrary rulings in the Eleventh Circuit, which may lead to appellate review, allowing the Eleventh Circuit to consider this question for the first time.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Goodwin | Attorney Advertising

Written by:

Goodwin
Contact
more
less

Goodwin on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.