Katz v. Six Flags Great Adventure, LLC

YAAKOV A. KATZ, individuallyand on behalf of a class, Plaintiff, v. SIX FLAGS GREAT ADVENTURE,LLC and SIX FLAGS ENTERTAINMENTCORPORATION, Defendants.

Civil Action No. 18-116 (FLW) (DEA)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

August 13, 2018

*NOT FOR PUBLICATION*

OPINION

WOLFSON, United States District Judge:

In this putative class action, Plaintiff Yaakov A. Katz ("Plaintiff") alleges that Defendants Six Flags Great Adventure, LLC ("SFGA") and Six Flags Entertainment Corporation ("SFEC") (collectively, "Defendants" or "Six Flags") willfully violated the Fair and Accurate Credit Transactions Act of 2003 ("FACTA"), Pub. L. No. 108-159, 117 Stat. 1952 (codified as amended at 15 U.S.C. § 1681c(g)), by printing more than the last 5 digits of Plaintiff's credit card number on a cash register receipt. Defendants move to dismiss Plaintiff's Complaint for lack of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1), arguing that Plaintiff lacks Article III standing. In the alternative, Defendants contend that dismissal is warranted, pursuant to Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief can be granted. In response, Plaintiff moves to remand this matter to state court, pursuant to 28 U.S.C. § 1447(c), on the grounds that if, as Defendants assert, subject matter jurisdiction is lacking, the proper remedy is remand rather than dismissal. For the reasons that follow, the Court finds that: (i) Plaintiff lacks Article III standing, and thus, there is no subject matter jurisdiction; and (ii) that remand, rather than dismissal, is the proper remedy. Consistent with these findings, the Court grants Plaintiff's Motion to Remand this case to the Superior Court of New Jersey, Ocean County, Law Division. Defendants' Motion to Dismiss is denied as moot.

I. BACKGROUND¹

On November 30, 2017, Plaintiff, individually and on behalf of those similarly situated, initiated this putative class action in state court, alleging that Defendants willfully violated FACTA. In 2003, Congress enacted FACTA as an amendment to the Fair Credit Reporting Act of 1970 ("FCRA"), 84 Stat. 1127, as amended, 15 U.S.C. § 1681, et seq. Among other things, FACTA was intended to "prevent identity theft, improve resolution of consumer disputes, improve the accuracy of consumer records, [and] make improvements in the use of, and consumer access to, credit information . . . ." Pub. L. No. 108-159, 117 Stat. 1952.

Relevant here, as part of the effort to prevent identity theft, "FACTA prohibits merchants from printing certain credit and debit card information on receipts." Long v. Tommy Hilfiger U.S.A., Inc., 671 F.3d 371, 373 (3d Cir. 2012). Specifically, 15 U.S.C. § 1681c(g), FACTA's "truncation provision," provides as follows:

(g) Truncation of credit card and debit card numbers

(1) In general

Except as otherwise provided in this subsection, no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction.

(2) Limitation

This subsection shall apply only to receipts that are electronically printed, and shall not apply to transactions in which the sole means of recording a credit card or debit card account number is by handwriting or by an imprint or copy of the card.

15 U.S.C. § 1681c(g).

FACTA imposes civil liability for violations of the truncation provision, "with the available remedies dependent upon whether the violation was negligent or willful." Long, 671 F.3d at 374. In that regard, a plaintiff may recover either actual damages or statutory damages between $100 and $1,000 for willful violations of FACTA. 15 U.S.C. § 1681n(a). Conversely, for negligent FACTA violations, a plaintiff may only recover actual damages. Id. at § 1681o(a).

Here, Plaintiff's FACTA claim is premised on a single transaction at the SFGA amusement park (the "Park") located in Jackson, New Jersey. Complaint ("Compl."), ¶¶ 58-65. Specifically, Plaintiff alleges that on August 5, 2017, he used an American Express credit card to make a purchase at the Park, and that, upon completion of the purchase, he was provided with a customer copy of a computer-generated cash register receipt (the "Receipt") that published both the first six and last four digits of Plaintiff's American Express card, in violation of FACTA's truncation requirement. Id. at ¶¶ 59-60. Plaintiff further alleges, upon "information and belief, that Defendants' computer systems . . . were programmed . . . to print the six first digits of credit card numbers on each and every credit card receipt" that those systems generated. Id. at ¶ 61. As a result, Plaintiff draws an inference that Defendants willfully and recklessly violated the statute's truncation requirement by printing "more than the last 5 digits of [the putative class members'] card number[s] on a minimum of thousands of receipts provided to cardholders at thepoint of transaction." Id. at ¶ 4. Plaintiff avers that, as a consequence of these "violative receipt[s]," the putative class members have "been uniformly burdened with an elevated risk of identify theft," and thus, are "entitled to an award of statutory damages." Id.

As noted, on November 30, 2017, Plaintiff filed the Complaint in the Superior Court of New Jersey, Ocean County, Law Division, asserting a single cause of action under FACTA. ECF No. 1-2. On January 4, 2018, Defendants removed the instant matter to this Court, pursuant to 28 U.S.C. § 1441(a), on the basis that federal question jurisdiction exists over Plaintiff's FACTA claim under 28 U.S.C. § 1331.² ECF No. 1.

On January 11, 2018, Defendants moved to Dismiss the Complaint, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. ECF No. 4. Most relevant here, Defendants argue that the Complaint fails to establish that Plaintiff sustained a concrete injury-in-fact, and thus, that Article III standing is lacking, thereby depriving this Court of subject matter jurisdiction. In addition to opposing Defendants' Motion to Dismiss, Plaintiff responded by filing the instant Motion to Remand, arguing that: (i) as the parties invoking federal jurisdiction, Defendants bear the burden of establishing subject matter jurisdiction; (ii) Article III standing is an element of subject matter jurisdiction; and (iii) that in light of Defendants' concession that Plaintiff does not have Article III standing, this Court lacks subject matter jurisdiction, and thus, must remand this action under 28 U.S.C. § 1447(c). ECF Nos. 10, 12. Both of these Motions have been fully briefed. ECF Nos. 13-15.

II. DISCUSSION

As a preliminary matter, the Court notes that Defendants' Motion to Dismiss for lack of subject matter jurisdiction and Plaintiff's Motion to Remand are largely intertwined. In that regard, Defendants move to dismiss the Complaint under Federal Rule of Civil Procedure 12(b)(1), arguing that Plaintiff lacks Article III standing because he has not sufficiently alleged an injury-in-fact, and thus, that this Court should dismiss the case for lack of subject matter jurisdiction. Specifically, Defendants contend that the harm alleged by Plaintiff - a future risk of identity theft - is entirely speculative, and thus, does not constitute a concrete injury-in-fact. Additionally, Defendants maintain that this Court should dismiss this matter, rather than remand, because: (i) removal was proper on the basis of Plaintiff's FACTA claim and under CAFA; (ii) remand would be futile, because, "[i]n applying federal precedent, the state court would necessarily reach the conclusion that the Complaint fails to adequately allege any violation or willful conduct by Six Flags," Defs.' Opp. to Pl.'s Mot. to Remand at 5-6; and (iii) remand would run contrary to public policy and the Congressional intent behind FACTA.

In response, Plaintiff takes no position on the issue of Article III standing. See Pl.'s Mot. to Remand at 4 ("Mr. Katz, in contrast, takes no position on his standing to bring this suit in federal court after Spokeo."). Instead, Plaintiff cites the well-settled proposition that the party invoking federal jurisdiction bears the burden of showing that subject matter jurisdiction exists. Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). And, because this is a removal case, Plaintiff argues that Defendants bear the burden of establishing all elements of subject matter jurisdiction, including Article III standing. Accordingly, because Defendants contend that Article III standing, an element of subject matter jurisdiction, is lacking, Plaintiff posits that this Court must remand this case, pursuant to 28 U.S.C. § 1447(c), rather than dismiss.

A. Legal Framework

Because the crux of the present dispute implicates issues of this Court's subject matter jurisdiction, as well as the provisions governing removal and remand, I begin by briefly reviewing the relevant legal framework. It is axiomatic that, as "courts of limited jurisdiction," federal courts "possess only that power authorized by Constitution and statute." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). "In order to provide a federal forum for plaintiffs who seek to vindicate federal rights, Congress has conferred on the district courts original jurisdiction in federal-question cases—civil actions that arise under the Constitution, laws, or treaties of the United States." Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005) (citing 28 U.S.C. § 1331). State courts are not so limited, and, except where a federal statute provides otherwise, have concurrent jurisdiction "to adjudicate claims arising under the laws of the United States." Tafflin v. Levitt, 493 U.S. 455, 458 (1990); see Claflin v. Houseman, 93 U.S. 130,...