7TH CIRCUIT INTERPRETS SPOKEO IN RELATION TO THE FACTA
On December 13, 2016, the U.S. Court of Appeals for the 7th Circuit, in addressing an appeal of a denial of class certification brought under the Fair and Accurate Credit Transactions Act (FACTA), became the first circuit to address the question of Article III standing in FACTA cases after the Supreme Court’s decision in Spokeo, Inc. v. Robins (Spokeo). The 7th Circuit, relying on Spokeo, vacated the judgement and remanded the case with instruction to dismiss for lack of jurisdiction based on the absence of Article III standing.
The facts on appeal were undisputed. In February 2015, a customer was given a copy of his receipt after dining at a restaurant. He noticed that the receipt did not truncate the expiration date on his credit card, as required by the FACTA. The individual subsequently filed a putative class action complaint, purportedly on behalf of everyone who had been provided a non-compliant receipt at the restaurant.
Central to the appeal was the question of whether the violation of the FACTA, completely divorced from any potential real world harm, is sufficient to satisfy Article III’s injury-in-fact requirement. The customer argued that the injury-in-fact requirement had been satisfied because Congress, through the FACTA, granted him the right to receive a receipt that truncates the expiration date on his credit card. The restaurant responded that its violation did not cause the customer any harm and that the injury-in-fact requirement had therefore not been satisfied.
The 7th Circuit, in resolving this question, relied on Spokeo. In Spokeo, the plaintiff alleged that Spokeo (a Website allowing users to search for information about others by name, e-mail address, or phone number) generated a profile of him that contained inaccurate information, in violation of the Fair Credit Reporting Act (FCRA). While the 9th Circuit held that these allegations were sufficient for Article III standing, the Supreme Court vacated that decision, holding that a concrete injury is required “even in the context of a statutory violation,” that more than a “bare procedural violation, divorced from any concrete harm” is required to satisfy Article III’s injury-in-fact requirement, and that the plaintiff, to satisfy Article III’s injury-in-fact requirement “must allege a concrete injury that resulted from the violation.”
The 7th Circuit held, in light of Spokeo, that the customer’s allegations, which demonstrated that he did not suffer any harm because of the restaurant’s printing of the expiration date on his receipt, were insufficient to satisfy the injury-in-fact requirement for Article III standing, and 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.”
