The U.S. Court of Appeals for the Third Circuit has upheld the dismissal of a suit against retailer J. Crew for allegedly printing more than five digits of a customer’s credit card number on a cash register receipt.
Applying the U.S. Supreme Court’s 2016 ruling in Spokeo v. Robins, the Third Circuit said a plaintiff whose suit accused J. Crew of violating the Fair and Accurate Credit Transactions Act of 2003 suffered no concrete injury and therefore lacked standing to seek damages.
The plaintiff, Ahmed Kamal, made purchases at three J. Crew stores and was issued receipts that listed the first six and the last four digits of his credit card number. He alleged two concrete harms: the printing of the prohibited information itself and the increased risk of identity theft that he faced as a result of such printing.
In 2017, New Jersey U.S. District Judge William Martini dismissed the suit, finding no sufficiently concrete injury because no third parties ever got access to Kamal’s credit card number and he suffered no financial loss. Kamal appealed.
The Third Circuit panel, composed of Judges Michael Chagares, Anthony Scirica and Marjorie Rendell, noted Spokeo‘s directive to evaluate the concreteness of an intangible harm by considering whether the harm has a “close relationship” to a harm that has been traditionally regarded as providing a basis for a common-law action. Kamal claimed his injury is analogous to common-law privacy torts and an action for breach of confidence.
But the Third Circuit judges disagreed, finding Kamal’s alleged injury was different from the harms providing a basis for those common-law actions. Scirica, writing for the court, said the most analogous tort to the plaintiff’s circumstances is unreasonable publicity, which protects against unauthorized disclosures of information. Similarly, a breach of confidence involves unprivileged disclosure to a third party of nonpublic information that a defendant learned within a confidential relationship.
“Kamal’s injury does not have the requisite ‘close relationship’ with these actions because he does not allege disclosure of his information to a third party,” Scirica wrote for the court.
FACTA suits can inflict serious damage. In 2017, sandwich chain Subway agreed to a $31 million settlement of a suit over failure to conceal customers’ credit card numbers in the Southern District of Florida. But Spokeo has helped to defeat other FACTA suits against appliance retailer P.C. Richard and a parking garage operator.
The Second, Seventh and Ninth circuits have determined that plaintiffs lacked standing due to lack of a concrete injury in FACTA suits based on circumstances similar to the J. Crew case, the court of appeals said. But the Eleventh Circuit found in 2018 that the same type of FACTA violation created a concrete injury. In that case, the Court of Appeals affirmed a $6.3 million class action settlement against Godiva Chocolatier after concluding that the circumstances were similar to a common-law breach-of-confidence action. The Third Circuit said a breach-of-confidence action was not analogous without disclosure of card numbers to a third party.
The Eleventh Circuit also held that the plaintiff in the Godiva case alleged another concrete injury of shouldering the cost of safely keeping or destroying the receipt to avoid having someone find the credit card numbers printed on it. The Third Circuit said it need not discuss how such an allegation might change the standing analysis.
The trial court dismissed the Kamal case with prejudice, but the appeals court said that action was improper because the plaintiff lacked standing. The Third Circuit vacated that order and remanded the case to the trial court for dismissal without prejudice.
New York attorney Marvin Frank argued for Kamal. Frank’s associate, Asher Hawkins, said the firm would not comment on the ruling.
J. Crew was represented by Keara Gordon of DLA Piper in New York, who did not return a call about the ruling.