Duncan v. Fedex Office & Print Servs., Inc.

2019 IL App (1st) 180857

123 N.E.3d 1249

429 Ill.Dec. 190

Karen DUNCAN, Individually and on Behalf of All Others Similarly Situated, Plaintiff-Appellant,

v.FEDEX OFFICE AND PRINT SERVICES, INC., a Texas Corporation, Defendant-Appellee.

No. 1-18-0857

Appellate Court of Illinois, First District, SIXTH DIVISION.

January 25, 2019

Edelson, PC, of Chicago (Ryan D. Andrews, Roger Perlstadt, and Alexander G. Tievsky, of counsel), for appellant.

Steptoe & Johnson LLP, of Chicago (Darlene K. Alt and Mary E. Buckley, of counsel), and Steptoe & Johnson LLP, of Phoenix, Arizona (Bennett Evan Cooper (pro hac vice), of counsel), for appellee.

JUSTICE HARRIS delivered the judgment of the court, with opinion.

¶ 1 Plaintiff, Karen Duncan, appeals the judgment of the circuit court granting defendant FedEx Office and Print Services, Inc.'s (FedEx) motion to dismiss her complaint, which alleged that FedEx willfully violated the Fair and Accurate Credit Transactions Act of 2003 (FACTA) ( 15 U.S.C. § 1681 et seq. (2012) ) when it printed more than the last five digits of her credit card number on its sales receipt. On appeal, Duncan contends that the court erred by relying on federal case law to find that she lacked standing to pursue her claim in state court. For the following reasons, we reverse and remand for further proceedings.

¶ 2 JURISDICTION

¶ 3 The trial court entered its judgment granting FedEx's motion to dismiss on March 28, 2018. Duncan filed her notice of appeal on April 19, 2018. Accordingly, this court has jurisdiction pursuant to Illinois Supreme Court Rules 301 (eff. Feb. 1, 1994) and 303 (eff. July 1, 2017), governing appeals from final judgments entered below.

¶ 4 BACKGROUND

¶ 5 Section 1681c(g)(1) of FACTA ( 15 U.S.C. § 1681c(g)(1) (2003 Supp. III) ) (amending the Fair Credit Reporting Act (Act) ( 15 U.S.C. § 1681 et seq. ) ) prohibits a merchant who accepts credit cards from "print[ing] 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." The legislative history of FACTA indicates that Congress sought to protect the consumer and prevent identity theft and credit card fraud by requiring truncation of the credit card number on printed receipts. As with all Visa cards, Duncan's card had 16 digits on its face. The meaning of these numbers corresponds to the 2015 standards set by the International Standards Organization, which define the first six digits as the issuer identification number (IIN). These six digits identify the card issuer, including the network, card level, card type, and bank.

¶ 6 On October 31, 2017, Duncan filed a one-count complaint alleging that FedEx issued her a printed receipt in violation of FACTA. Duncan's claim arose from her transaction with FedEx at its retail location in Oak Lawn, Illinois. Duncan alleged that she used her personal Visa credit card and FedEx issued her a printed receipt that listed the first two and last four digits of her credit card number. She alleged that as a result of FedEx's willful noncompliance with FACTA, she and "thousands of FedEx's customers have been burdened with a heightened risk of payment card fraud and identity theft." Duncan sought, on behalf of herself and all others similarly situated, injunctive relief, statutory damages, costs, and reasonable attorney fees.

¶ 7 FedEx filed a combined motion to dismiss Duncan's complaint under section 2-619.1 of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-619.1 (West 2016) ).

In its motion, FedEx argued that Duncan lacked standing because she failed to allege any injury beyond the improper disclosure of the first two digits of her credit card number, where the first six digits comprise the IIN which provides no personal information about Duncan. FedEx also argued that Duncan failed to allege facts showing it willfully violated FACTA in issuing her receipt.

¶ 8 The trial court granted FedEx's motion based on lack of standing, although it believed that "there's a basis here for a claim in the absence of actual damages just based on the statutory framework." However, it found that "three federal courts of appeals * * * have determined that the plaintiff, the consumer whose expiration date is printed on his receipt cannot seek—cannot bring the claim under FACTA in the absence of actual damages." The trial court saw no "distinction between the illegal printing of the expiration date and the illegal printing of more than the last five digits of the credit card number." The court also determined that "there are sufficient facts to allege a willful violation of the statute." Duncan filed this timely appeal.

¶ 9 ANALYSIS

¶ 10 Duncan appeals the dismissal of her complaint pursuant to section 2-619.1 of the Code. 735 ILCS 5/2-619.1 (West 2016). A motion filed under section 2-619.1 seeks dismissal under both sections 2-615 and 2-619 (id. §§ 5/2-615, 2-619). Dratewska-Zator v. Rutherford , 2013 IL App (1st) 122699, ¶ 13, 375 Ill.Dec. 95, 996 N.E.2d 1151. While a section 2-615 motion to dismiss challenges the legal sufficiency of the pleadings, a section 2-619 motion admits the legal sufficiency of the pleadings but asserts certain defects or defenses. Id. We review a dismissal under either section de novo . Kean v. Wal-Mart Stores, Inc. , 235 Ill. 2d 351, 361, 336 Ill.Dec. 1, 919 N.E.2d 926 (2009).

¶ 11 FedEx argues that this court should affirm the dismissal because Duncan lacks standing to pursue her FACTA claim in the trial court below. In her complaint, Duncan alleges that FedEx violated section 1681c(g)(1) of the statute by printing more than the last five digits of her card number on her receipt. Section 1681n(a)(1)(A) provides that

"[a]ny person who willfully fails to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer in an amount equal to the sum of * * *

(1)(A) any actual damages sustained by the consumer as a result of the failure or damages of not less than $ 100 and not more than $ 1,000." 15 U.S.C. § 1681n(a)(1)(A) (2012).

Without more, the clear language of the statute grants private citizens, like Duncan, the right to seek recourse for violations made against them. Courts must give effect to clear statutory language without resort to other aids for construction. Gruszeczka v. Illinois Workers' Compensation Comm'n , 2013 IL 114212, ¶ 12, 372 Ill.Dec. 833, 992 N.E.2d 1234.

¶ 12 FedEx, however, urges this court to follow federal cases finding that despite the clear language of the statute, a claim alleging a bare procedural violation of FACTA is not sufficient to satisfy federal standing requirements. As these federal cases cite Spokeo, Inc. v. Robins , 578 U.S. ––––, ––––, 136 S.Ct. 1540, 1544, 194 L.Ed.2d 635 (2016), as support, we set forth Spokeo and its analysis here.

¶ 13 In Spokeo , the United States Supreme Court addressed whether Robins, who discovered that a " ‘people search engine’ " had gathered and disseminated inaccurate information about him, had standing to maintain an action in federal court under the Act. Id. at ––––, 136 S.Ct. at 1544. The Court noted that the purpose of the Act is to ensure " ‘fair and accurate credit reporting’ " by regulating the creation and use of " ‘consumer report[s].’ " Id. at ––––, 136 S.Ct. at 1545 (quoting 15 U.S.C. §§ 1681(a)(1), 1681a(d)(1)(A)-(C) (2006) ). To achieve this goal, the Act requires consumer reporting agencies to follow reasonable procedures to assure the maximum accuracy of such reports, to notify providers and users of consumer information of their responsibilities under the Act, to limit the circumstances in which consumer reports can be provided for employment purposes, and to post a toll-free number that consumers can call to request reports. Id. at ––––, 136 S.Ct. at 1545.

¶ 14 The district court found that although Robins claimed that the information about him was inaccurate, he had not properly pled an injury in fact to confer standing. Id. at ––––, 136 S.Ct. at 1546. The Ninth Circuit reversed, determining that Robins adequately alleged an injury in fact because he had alleged that Spokeo violated "his statutory rights," and "his personal interests in the handling of his credit information are individualized rather than collective." (Emphasis in original and internal quotation marks omitted.) Id. at ––––, 136 S.Ct. at 1546. The Supreme Court, however, found the Ninth Circuit's analysis "incomplete." Id. at ––––, 136 S.Ct. at 1545.

¶ 15 Under federal law, standing is an issue of jurisdiction that is limited by the authority conferred on the federal judiciary by the United States Constitution. Id. at ––––, 136 S.Ct. at 1546-47. Article III of the Constitution specifies that judicial power extends only to actual cases and controversies. To satisfy the cases and controversies requirement and establish 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." Id. at ––––, 136 S.Ct. at 1547. "Injury in fact is a constitutional requirement," and to satisfy this element, a plaintiff must show not only that he or she suffered a particularized injury (one that affected the plaintiff in a personal, individual way) but also that the injury is concrete. Id. at ––––, 136 S.Ct. at 1547-48. While the Ninth Circuit found that Robins had alleged a particularized injury from Spokeo's violation of the Act, it failed to address whether he had adequately alleged a concrete injury. Id. at ––––, 136 S.Ct. at 1548. A concrete injury is one that "actually exist[s]." Id. at ––––, 136 S.Ct. at 1548.

¶ 16 The Supreme Court recognized that through statutory enactments, Congress may exercise its authority to elevate intangible harms previously inadequate in law to the status of legally cognizable injuries. Id. at ––––, 136 S.Ct. at 1549. The Court cautioned, however, that Co...