BRIGHT, Circuit Judge.
In this action, plaintiffs (appellants) Steven Hammer and Michael White allege that Wal-Mart Stores, Inc., Sam's East, Inc., and Sam's West, Inc. (collectively "Sam's Club")
Sam's Club, a membership-only retailer, requires customers to have a membership card and number in order to shop at a Sam's Club store. Sam's Club members may also apply for a Sam's Club Private Label Credit Card, which doubles as a membership card and a credit card. The card has a 19-digit credit card number. The first seven digits comprise the Bank Identification Number, which identifies the banking institution issuing the card, and is identical on all cards and publicly available. Eleven of the remaining twelve digits
The appellants hold Sam's Club Private Label Credit Cards. On multiple occasions from 2007-2008, they purchased products at Sam's Club stores in Kansas and Missouri using their cards and were given electronically-printed receipts at the point of sale. The receipts disclosed only the last four digits of appellants' credit card numbers; however, the receipts also showed separately the last ten consecutive digits of their membership numbers. Thus, given that Sam's Club designed the last twelve digits of membership and credit card numbers to be the same, the receipts showing the appellants' "member" number in fact disclosed the last 10 consecutive digits of appellants' credit card numbers.
The following example illustrates how the receipts disclosed the appellants' membership numbers ("V Member") and credit card numbers ("Account #"):
In this example, the bold numbers comprise the last ten digits of the consumer's credit card number.
Appellants subsequently filed this action on behalf of themselves and others similarly situated asserting that Sam's Club in its receipts provided to consumers with Private Label Credit Cards violated FACTA's receipt limitation requirement, 15 U.S.C. § 1681c(g)(1), reading:
Appellants allege that Sam's Club violated this statute by printing more than the last five digits of their credit card numbers on electronically-printed receipts despite the fact that receipts listed the numbers as "member" numbers. Appellants further allege that the violation was willful because Sam's Club persisted in printing credit card numbers on receipts despite knowing and repeatedly being informed about FACTA's receipt requirement. Appellants do not allege actual damages, but seek to recover statutory damages under a provision of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681n, which governs liability for FACTA violations. That provision states:
15 U.S.C. § 1681n(a)(1)(A) (hereinafter "the FCRA liability provision"). Appellants also seek punitive damages and reasonable attorneys' fees.
After the district court denied Sam's Club's motion to dismiss under Fed. R.Civ.P. 12(b)(6), appellants moved for summary judgment on the issue of whether Sam's Club violated FACTA's receipt requirement by printing receipts with membership numbers that included more than five digits of customers' credit card numbers. The district court granted the motion, reasoning that "one cannot avoid the prohibition by referring on the receipt to a `membership number' if in fact the collection of numbers includes a long string of more than five digits that are also
Sam's Club then moved for summary judgment on the issue of willfulness. The district court granted the motion and dismissed appellants' action. Relying on the Supreme Court's decision in Safeco Ins. Co. v. Burr, 551 U.S. 47, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007), the district court concluded that although Sam's Club violated FACTA, the violation was not willful because Sam's Club's interpretation of the statute was not objectively unreasonable. The district court reasoned that Sam's Club's reading of the statute — that the language of the statute only related to shortening of a credit card number, so labeled — "not only seems reasonably possible but rather likely, at least for those not philosophically inclined to think about (or guess at) Congressional purpose." (Oct. 16, 2012, Order at 6.) The district court also emphasized that Sam's Club had "no guidance except the bare wording of the statute in determining whether a `membership number' as well as a `credit card' or `account' number must be truncated." (Id.)
Appellants filed a timely notice of appeal to this court.
Appellants assert (1) that the district court erred by concluding that Sam's Club did not willfully violate FACTA and (2) that the district judge failed to recuse himself in the case after disclosure of a conflict of interest. On cross appeal, Sam's Club challenges the district court's conclusion that it violated FACTA. Sam's Club also argues that appellants lack Article III standing to bring their claim. We address standing before proceeding to the merits.
"Article III standing is a threshold question in every federal court case." United States v. One Lincoln Navigator 1998, 328 F.3d 1011, 1013 (8th Cir. 2003). "The exercise of judicial power under Art. III of the Constitution depends on the existence of a case or controversy." Preiser v. Newkirk, 422 U.S. 395, 401, 95 S.Ct. 2330, 45 L.Ed.2d 272 (1975). A central component of the "case or controversy" requirement is standing, "which requires a plaintiff to demonstrate the now-familiar elements of injury in fact, causation, and redressability." Lance v. Coffman, 549 U.S. 437, 439, 127 S.Ct. 1194, 167 L.Ed.2d 29 (2007).
With these principles in mind, we requested supplemental briefing from the parties prior to oral argument on the following issues: (1) whether the appellants, having alleged no actual damages, "have suffered an `injury in fact,'" Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992), and (2) whether the appellants have suffered an injury "that is likely to be redressed by a favorable decision," Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 38, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976), in light of dicta from our decision in Dowell v. Wells Fargo Bank, NA, 517 F.3d 1024, 1026 (8th Cir.2008) ("It does not necessarily follow from [the FCRA liability provision] that statutory damages are available where a plaintiff fails to prove actual damages.").
The parties submitted briefs on the above issues in which they took opposing positions. Appellants Hammer and White argue that Congress may create legal rights via statute, the invasion of which creates standing to sue. Here, they assert, by enacting 15 U.S.C.
After oral argument, the United States filed a motion to intervene in the proceedings to file a supplemental brief on the two standing questions that we had posed to the parties. See 28 U.S.C. 2403(a) (permitting the United States to intervene for argument on the question of constitutionality "[i]n any action, suit or proceeding in a court of the United States ... wherein the constitutionality of any Act of Congress affecting the public interest is drawn in question"). We granted the motion and the United States subsequently filed a brief taking the position that appellants maintain Article III standing to bring their action.
After considering the parties' submissions, we conclude that appellants do have standing to bring their claim.
It is well established that "[t]he actual or threatened injury required by Art. III may exist solely by virtue of statutes creating legal rights, the invasion of which creates standing." Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) (citation omitted) (internal quotation marks omitted); see also Charvat v. Mut. First Fed. Credit Union, 725 F.3d 819, 822 (8th Cir.2013). Notably, this language is without limitation: the actual-injury requirement may be satisfied solely by the invasion of a legal right that Congress created. This is not a novel principle within the law of standing.
By enacting 15 U.S.C. § 1681c(g)(1), Congress gave consumers the legal right to obtain a receipt at the point of sale showing no more than the last five digits of the consumer's credit or debit card number. Appellants contend that Sam's Club invaded this right. Such is the "actual injury" alleged by the appellants. It is of no consequence that appellants' injury is
To be sure, Article III places meaningful limitations on the types of interests that Congress may define as judicially enforceable rights. First, the party seeking review must "be himself among the injured" in the sense that he alleges that defendants violated his statutory rights. See Sierra Club v. Morton, 405 U.S. 727, 735, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972); see also Steger v. Franco, Inc., 228 F.3d 889, 893 (8th Cir.2000). Such is the case here. Appellants allege that it was their own receipts that contain numbers printed in violation of 15 U.S.C. § 1681c(g)(1). Second, "Congress may empower individuals to sue based only on `personal and individual[ized]' injuries." In re Carter, 553 F.3d 979, 989 (6th Cir. 2009) (quoting Lujan, 504 U.S. at 560 n. 1, 112 S.Ct. 2130 (alteration in original)). Congress may not, for example, permit individuals to enforce "an abstract, self-contained, noninstrumental `right' to have the Executive observe the procedures required by law." Lujan, 504 U.S. at 573, 112 S.Ct. 2130. Again, this limitation poses no obstacle here. The FCRA liability provision states 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." 15 U.S.C. § 1681n(a)(1)(A) (emphasis added). Hence, the liability provision does not authorize suits by members of the public at large, but creates a sufficient nexus between the individual plaintiff and the legal violation to avoid Article III concerns.
Because appellants allege that they have suffered an actual, individualized invasion of a statutory right, we conclude that they have satisfied the injury-in-fact requirement of Article III standing.
As to the question of whether the appellants have suffered an injury "that is likely to be redressed by a favorable decision," Simon, 426 U.S. at 38, 96 S.Ct. 1917, we also answer in the affirmative.
Under FCRA's liability provision, a person who "willfully" fails to comply with FACTA is liable to the aggrieved consumer for "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).
Referring to this provision in Dowell v. Wells Fargo Bank, NA, we stated as dicta:
517 F.3d at 1026. For the reasons discussed below, we decline to follow the possible interpretation of the FCRA liability provision suggested in Dowell and instead conclude that the plain language of the provision permits recovery of statutory damages in the absence of actual damages.
The FCRA liability provision permits a consumer to recover "any actual damages... or damages of not less than $100 and not more than $1,000." 15 U.S.C.
Our reading is consistent with the purpose of FACTA's receipt requirement. Congress enacted FACTA "to prevent identity theft," Fair and Accurate Credit Transactions Act of 2003, Pub.L. No. 108-159, 117 Stat.1952, and the restriction on printing more than the last five digits of a card number is specifically intended "to limit the number of opportunities for identity thieves to `pick off' key card account information," S.Rep. No. 108-166, at 13 (2003). However, as a practical matter, when FACTA is violated, individual losses, if any, may be small. "That actual loss is small and hard to quantify is why statutes such as the Fair Credit Reporting Act provide for modest damages without proof of injury." Murray v. GMAC Mortg. Corp., 434 F.3d 948, 953 (7th Cir.2006) (emphasis added).
We also find support for our reading in the decisions of our sister circuits. See, e.g., Bateman v. Am. Multi-Cinema, Inc., 623 F.3d 708, 719 (9th Cir.2010) ("Congress expressly created a statutory damages scheme that intended to compensate individuals for actual or potential damages resulting from FACTA violations, without requiring individuals to prove actual harm."); Beaudry v. TeleCheck Servs., Inc., 579 F.3d 702, 705 (6th Cir.2009) (explaining that "`actual damages' represent an alternative form of relief" under 15 U.S.C. § 1681n and that "the statute permits a recovery when there are no identifiable or measurable actual damages"); Murray, 434 F.3d at 953. In fact, we cannot locate a single case that interprets the FCRA liability provision as requiring something more than a statutory violation in order to recover "damages of not less than $100 and not more than $1,000."
By permitting a consumer to recover statutory damages under the FCRA liability provision, Congress did not require that consumers prove themselves actual victims of identity theft in order to bring a claim for violation of the FACTA truncation requirement. Therefore, we conclude that appellants' action against Sam's Club for violating FACTA's receipt requirement can be redressed in the absence of a claim for actual damages. See Simon, 426 U.S. at 38, 96 S.Ct. 1917.
Finally, we note that a recent decision by the Ninth Circuit offers strong support for appellants' claim that they have Article III standing to bring their claim. See Robins v. Spokeo, Inc., 742 F.3d 409, 413-14 (9th Cir.2014) (holding that plaintiff satisfied the Article III standing requirements by alleging a violation of his statutory rights under the FCRA and seeking statutory damages under the FCRA liability provision without a showing of actual damages).
We conclude that appellants have satisfied the requirements of Article III standing.
We now turn to the merits. As discussed, the district court concluded that Sam's Club violated FACTA's receipt requirement by printing more than the last five digits of appellants' credit card numbers on electronically printed receipts despite the fact that those numbers were labeled "member" numbers. However, the district court dismissed appellants' action on summary judgment, holding that Sam's Club did not willfully violate the statute. For the purposes of our analysis, we accept the district court's ruling that Sam's Club violated FACTA. Nevertheless, we agree with the district court that the violation was not willful.
This court reviews a grant of summary judgment de novo, applying the same standard as the district court. Naucke v. City of Park Hills, 284 F.3d 923, 927 (8th Cir.2002). "Summary judgment is appropriate when the evidence viewed in the light most favorable to the nonmoving party presents no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Coates v. Powell, 639 F.3d 471, 475 (8th Cir.2011). Questions of law are "particularly appropriate for summary judgment." TeamBank, N.A. v. McClure, 279 F.3d 614, 617 (8th Cir.2002).
Appellants assert that the district court erred in several respects in concluding that Sam's Club did not willfully violate FACTA. First, they argue that such judgment was inappropriate in light of the district court's prior conclusion that Sam's Club violated the "clear" and "unambiguous" language of FACTA's receipt requirement, 15 U.S.C. § 1681c(g)(1). Second, appellants contend that the district court held them to an "impermissibly high standard of proof." Finally, appellants argue that the district court inappropriately relied on disputed facts and considered the enormity of potential damages in granting a dismissal. In contrast, Sam's Club argues that it did not act wilfully because its reading of the statute was objectively reasonable.
As we have already observed, a person who fails to comply with FACTA's receipt requirement does not incur liability for damages unless the violation is willful. 15 U.S.C. § 1681n(a)(1)(A). The Supreme Court has held that a violation becomes "willful" if it is either "knowing" or "reckless." Safeco, 551 U.S. at 57, 127 S.Ct. 2201. A company acts in reckless disregard of FACTA when its "action is not only a violation under a reasonable reading of the statute's terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with a reading that was merely careless." Id. at 69, 127 S.Ct. 2201. In essence, the central inquiry focuses on "objective reasonableness." Fuges v. Sw. Fin. Servs., Ltd., 707 F.3d 241, 249 (3d
In determining whether an interpretation is objectively unreasonable, we assess whether the reading "has a foundation in the statutory text" or whether the party interpreting the statute "had the benefit of guidance from the courts of appeals" or federal regulatory agencies "that might have warned it away from the view it took." Id. at 69-70, 127 S.Ct. 2201. When a party has read the statute in an objectively reasonable manner, we need not consider facts relating to the party's subjective intent in assessing willfulness. Id. at 70, n. 20, 127 S.Ct. 2201.
Applying the analytical framework set forth in Safeco, we conclude that Sam's Club's interpretation of FACTA's receipt requirement as not applicable to the membership designation on the receipts did not amount to an objectively unreasonable reading of the statute. As we noted, FACTA provides:
15 U.S.C. § 1681c(g)(1). Given this language, Sam's Club reasonably could have assumed that the statute only prohibits printing of more than the last five digits of the credit card number, so labeled. A literal-minded company executive could reasonably read the statute in this manner, even though such a reading may be contrary to the purposes of preventing identity theft or credit card fraud. We conclude that Sam's Club's reading of the statute "has a foundation in the statutory text," even though we acknowledge that the reading may be deemed erroneous under the law. Safeco, 551 U.S. at 69-70, 127 S.Ct. 2201.
Our conclusion is bolstered by the lack of authoritative guidance available to Sam's Club. At the time this suit was filed in October 2008, no guidance had been rendered by appellate courts or regulatory agencies on the question of whether a "membership number," like a "credit card" or "account" number, must be shortened pursuant to the statute. To this court's knowledge, only one circuit decision has referenced the meaning of "card number" in the context of willfulness under FACTA. See Van Straaten v. Shell Oil Prods. Co, LLC, 678 F.3d 486 (7th Cir.2012). In that case, the Seventh Circuit recognized the "absence of a statutory or regulatory definition of the phrase `card number,'" but concluded that interpreting the term was unnecessary because the alleged FACTA violation was not willful. Id. at 489-91. And in any event, that decision came after appellants filed suit. Appellants also fail to identify any regulatory authority available to Sam's Club which demonstrated its printing of a customer's receipt containing a membership number that includes more than the last five digits of the customer's credit card number violated FACTA.
On a final note, we reject appellants' assertions that the district court committed various legal errors in its analysis of willfulness. To the contrary, the record establishes that the district court correctly focused its inquiry on whether Sam's Club's reading of the statute was objectively reasonable in accordance with the standards set forth in Safeco.
Finally, appellants argue that the district court judge erred in not recusing himself from the case on the ground that his son was an attorney in a law firm that represented General Electric (GE), the company that partners with Sam's Club in financing credit to certain Sam's Club customers. Appellants contend that the judge's failure to recuse violated 28 U.S.C. § 455(a) because an average person knowing the relevant facts surrounding the case would reasonably question the judge's impartiality based on his son's connection to GE.
"The denial of a motion to recuse is reviewed for abuse of discretion." United States v. Ruff, 472 F.3d 1044, 1046 (8th Cir.2007). A judge must recuse himself "in any proceeding in which his impartiality might reasonably be questioned." 28 U.S.C. § 455(a). Under section 455(a), this court considers "whether the judge's impartiality might reasonably be questioned by the average person on the street who knows all the relevant facts of a case." In re Kan. Pub. Emp. Ret. Sys., 85 F.3d 1353, 1358 (8th Cir.1996). Because a "judge is presumed to be impartial," a party seeking recusal "bears the substantial burden of proving otherwise." United States v. Denton, 434 F.3d 1104, 1111 (8th Cir.2006) (citation omitted) (internal quotation marks omitted). A "relationship between a party and a judge's son or daughter does not per se necessitate a judge's disqualification. Rather, the determination of whether a conflict exists in a given situation is factually bound." See In re Kan. Pub. Emp. Ret. Sys., 85 F.3d at 1364 (citations omitted).
We conclude that appellants have not satisfied their burden of showing that recusal was required under 28 U.S.C. § 455(a). While appellants allege that the judge became aware of the potential conflict with GE long before the judge disclosed it, appellants do not offer adequate support for this claim. The appellants do not point to anything in the district court's orders or the record that convincingly shows that the judge deliberately concealed a conflict from the parties. More importantly, the nature of the alleged conflict is "simply too remote, speculative, and contingent" to give rise to a situation in which the judge's impartiality might reasonably be questioned by a member of the public. See In re Kan. Pub. Emp. Ret. Sys., 85 F.3d at 1362. The record does not show GE as a party to this lawsuit, and, as Sam's Club observes, there is little realistic
We conclude that the district court acted properly in denying appellants' motion to recuse.
For the foregoing reasons, we affirm.
RILEY, Chief Judge, dissenting.
Relying on an expansive reading of a single line in Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975), the majority unnecessarily decides a difficult Article III standing question of first impression in our circuit, leading to an unsound ruling on the merits. I respectfully dissent.
As the majority acknowledges, the plaintiffs in this case "do not allege actual damages." Ante at 496 (emphasis added). This putative "identity theft" case contains no trace of actual identity theft. The plaintiffs, Sam's Club shoppers Steven E. Hammer and Michael D. White (shoppers), do not allege the receipts containing their credit card information were ever at risk of exposure to would-be identity thieves. Until this lawsuit, the receipts apparently never left the shoppers' possessions, and now the receipts are safely ensconced in the sealed record. Even if credit card information listed on secured receipts could somehow cause anxiety, there is no allegation the shoppers suffered so much as a sleepless night or any other psychological harm. Unlike the failed plaintiffs in Clapper v. Amnesty International USA, 568 U.S. ___, ___, 133 S.Ct. 1138, 1146, 185 L.Ed.2d 264 (2013) (internal quotation omitted), the shoppers do not even claim to "have undertaken costly and burdensome measures to protect" themselves from the risk they supposedly face. The shoppers most assuredly lack Article III standing.
The shoppers' only basis for appearing in federal court, the majority recognizes, is a harmless statutory violation: "Sam's Club invaded" the shoppers' "legal right to obtain a receipt at the point of sale showing no more than the last five digits of the consumer's credit or debit card number." Ante at 498. To be sure, this invasion of a statutory right is an injury in law. But it is far from "well established," as the majority asserts, id., that this trivial statutory violation is an injury in fact. The shoppers have suffered injury without damage, "[a] legal wrong" which ordinarily "will not sustain a lawsuit because no harm resulted from it." See Black's Law Dictionary 856 (9th ed.2009) (defining injuria absque damno) (emphasis added). "It is a longstanding principle in civil law that there can be no monetary recovery unless the plaintiff has suffered harm." Mira v. Nuclear Measurements Corp., 107 F.3d 466, 473 (7th Cir.1997); see also, e.g., Pierce v. Ramsey Winch Co., 753 F.2d 416, 435 (5th Cir.1985) ("[I]njury without damage creates no right to compensation."). By requiring injury in fact, the Supreme Court recognizes that Article III incorporates this traditional principle:
Ignoring the last thirty-nine years of Article III standing jurisprudence, the majority adopts an extraordinarily broad reading of the Supreme Court's 1975 dictum in Warth that "`[t]he actual or threatened injury required by Art. III may exist solely by virtue of statutes creating legal rights, the invasion of which creates standing.'" Ante at 498 (quoting Warth, 422 U.S. at 500, 95 S.Ct. 2197). The Supreme Court has never actually held an unharmed plaintiff had standing by virtue of a bare statutory violation.
The majority justifies its adoption of this theory that "the actual-injury requirement may be satisfied solely by the invasion of a legal right that Congress created" on the basis that this theory "is not a novel [one] within the law of standing." Ante at 498 (footnote omitted). This aged theory is even less novel than the majority suggests. Riding circuit, Justice Joseph Story wrote in 1838, "Actual, perceptible damage is not indispensable as the foundation of an action. The law tolerates no farther inquiry than whether there has been the violation of a right." Webb v. Portland Mfg. Co., 29 F.Cas. 506, 508 (D.Me.1838) (No. 17,322).
Since Justice Story decided Webb in 1838 and Justice Powell authored Warth in 1975, the standing doctrine has become more protective of the judicial branch's limited role in our tripartite system of government.
In recent years, the Supreme Court has strongly suggested that to have a case under Article III, a plaintiff must have suffered not only the violation of a legal right (the "injury" of "injury in fact"), but also a factual harm (the "in fact"). See, e.g., Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. ___, ___, 134 S.Ct. 1377, 1386, 188 L.Ed.2d 392 (2014) ("The plaintiff must have suffered or be imminently threatened with a concrete and particularized `injury in fact.'"); Monsanto
Notably, in Lujan v. Defenders of Wildlife, 504 U.S. 555, 578, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992), the Supreme Court read Warth narrowly, explaining Congress' power to create standing by statute is limited to "elevating to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law." De facto means "actual; existing in fact." Black's Law Dictionary, supra, at 479 (emphasis added). According to Lujan, Warth's dictum stands for the limited and uncontroversial proposition that Congress can, through statute, create a legal remedy for a factual harm. If there is damage without injury, an act of Congress can generate an Article III case where otherwise there would be none. See Lujan, 504 U.S. at 578, 112 S.Ct. 2130. For example, Congress can assign a statutory value to the harm a person experiences from living in a racially segregated community or a private company faces from competing against a government-owned company. See Trafficante v. Metro. Life Ins. Co., 409 U.S. 205, 208-12, 93 S.Ct. 364, 34 L.Ed.2d 415 (1972); Hardin v. Ky. Utils. Co., 390 U.S. 1, 6, 88 S.Ct. 651, 19 L.Ed.2d 787 (1968).
Whether Congress can create justiciable injuries where there is no real harm presents an extremely difficult constitutional question. See Wallace v. ConAgra Foods, Inc., 747 F.3d 1025, 1032 (8th Cir.2014). It is a question the Supreme Court has never answered, and — until today — neither had our court.
Although the justices did not issue a decision in First American, their questions at argument reveal the difficulty of the standing issue raised in both First American and this case. Regarding an argument that "violation of a statute is injury in fact," Chief Justice Roberts said:
Oral Argument at 32:25, First Am., 567 U.S. at ___, 132 S.Ct. at 2537 (emphasis added). Responding to an argument — paralleled by one advanced by the shoppers and accepted by the majority, ante at 498 — that the plaintiff was injured by being "denied something he [wa]s entitled to" (there, "another expert's untainted referral"; here, a receipt with no more than five printed digits), Justice Kennedy remarked:
Id. at 44:54.
If the majority is correct, the federal courts will find themselves deciding strange "cases" indeed. Without any factual limits on its ability to create statutory injuries, Congress could transform the courts into implementers of majoritarian economic and social policies (the proper role of the elected branches) rather than bulwarks against majoritarian excess.
In any event, I see no reason to decide such a complex constitutional question in this case. It is a bedrock rule, "repeatedly affirmed" and "`beyond debate,'" that federal courts must avoid deciding "`grave and doubtful constitutional questions'" whenever possible by adopting a reasonable alternative interpretation of a potentially suspect statute. Jones v. United States, 526 U.S. 227, 239-40, 119 S.Ct. 1215, 143 L.Ed.2d 311 (1999) (quoting Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 575, 108 S.Ct. 1392, 99 L.Ed.2d 645 (1988), and U.S. ex rel. Attorney Gen. v. Del. & Hudson Co., 213 U.S. 366, 408, 29 S.Ct. 527, 53 L.Ed. 836 (1909)); see also, e.g., Ashwander v. TVA, 297 U.S. 288, 345-48, 56 S.Ct. 466, 80 L.Ed. 688 (1936) (Brandeis, J., concurring); Union Pac. R.R. Co. v. DHS, 738 F.3d 885, 892-93 (8th Cir.2013). "Rather than confronting the difficult constitutional question whether Congress can drill through th[e] hard floor of injury in fact by creating an injury in law (i.e., a statutory cause of action requiring no showing the plaintiff was personally and actually harmed)," I would "`follow th[is] traditional rule.'" Wallace, 747 F.3d at 1032 (footnote omitted) (quoting Union Pacific, 738 F.3d at 893).
The statute at issue here is open to the eminently reasonable interpretation offered in a prior panel opinion joined by one member of today's majority:
Dowell v. Wells Fargo Bank, NA, 517 F.3d 1024, 1026 (8th Cir.2008) (per curiam).
Rather than rejecting the Dowell panel's reasonable analysis as the majority does, I would follow Dowell's interpretation of § 1681n(a)(1)(A). Instead of offering a doubtful answer to a difficult constitutional question, I would resolve this case on the settled and unexceptional ground that the shoppers lack Article III standing unless success on the merits is likely to provide redress. See Lujan, 504 U.S. at 561, 112 S.Ct. 2130. Under Dowell's reading of the statute, the shoppers have no hope of redress without some sort of actual (though not necessarily economic) harm. Because the shoppers failed to allege actual harm, they lack Article III standing.
But in writing a statute, Congress need not restate what is already obvious from the Constitution and the federal courts' constitutional jurisprudence. "Congress is `predominantly a lawyer's body,' and it is appropriate for [the courts] `to assume that [the people's] elected representatives... know the law.'" Albernaz v. United States, 450 U.S. 333, 341, 101 S.Ct. 1137, 67 L.Ed.2d 275 (1981) (quoting Cannon v. Univ. of Chi., 441 U.S. 677, 696-97, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979), and Callanan v. United States, 364 U.S. 587, 594, 81 S.Ct. 321, 5 L.Ed.2d 312 (1961)). "Congress legislates against the background of ... standing." Bennett v. Spear, 520 U.S. 154, 163, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997).
The canon of constitutional avoidance "is a tool for choosing between competing plausible interpretations of a statutory text, resting on the reasonable presumption that Congress did not intend the alternative which raises serious constitutional doubts. The canon is thus a means of giving effect to congressional intent, not subverting it." Clark, 543 U.S. at 381-82, 125 S.Ct. 716 (emphasis added) (citations omitted). The government, intervening in support of the shoppers' theory that injury in law equals injury in fact, concedes that the Dowell panel's interpretation "is plausible." That should be the end of this appeal.
Setting aside the majority's precarious constitutional theory, I fear the majority's resolution of the merits strays from the unambiguous statutory text. Misreading the remedy provision applicable to the shoppers' FACTA claims, § 1681n(a)(1)(A), to confer standing in the absence of actual harm leads the majority to an unpleasant choice: either (1) follow the plain text of FACTA, 15 U.S.C. § 1681c(g)(1), and authorize unharmed Sam's Club credit-cardholders to recover disproportionate damages, or (2) misread other parts of FACTA to preclude such damages even for those who are harmed. By taking the second path, the majority thwarts clear congressional intent and makes it impossible for truly harmed cardholders to recover the statutory damages to which they should be entitled. In accordance with well-established principles of statutory construction, I would instead follow the clear and unambiguous text of § 1681c(g)(1), giving effect to Congress' plainly expressed intent to provide a remedy for any cardholders who suffered real harm.
All questions of statutory construction begin with the same first step: a reading of the statute. See, e.g., Hawaii v. Office of Hawaiian Affairs, 556 U.S. 163, 173, 129 S.Ct. 1436, 173 L.Ed.2d 333 (2009). When the text of the statute is clear, this first step "is also the last: `judicial inquiry is complete.'" Conn. Nat'l Bank v. Germain, 503 U.S. 249, 254, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992) (quoting Rubin v. United States, 449 U.S. 424, 430, 101 S.Ct. 698, 66 L.Ed.2d 633 (1981)). The text at issue provides:
15 U.S.C. § 1681c(g)(1) (emphasis added). This prohibition only applies "to receipts that are electronically printed," not "transactions in which the sole means of recording a credit card or debit card account
Congress could hardly have spoken more plainly. Only five — the last five — digits of any credit or debit card number may be printed anywhere on any electronically printed receipt. This is true whether the digits are labeled "credit card number," "Account #," "Member," or not labeled at all. Had Congress intended labels to matter, Congress could easily have said so (e.g., "more than the last 5 digits of the card number so labeled"). Instead, Congress spoke in unequivocal terms, presumably saying just what it meant and meaning exactly what it said. See Conn. Nat'l Bank, 503 U.S. at 254, 112 S.Ct. 1146. Our court's sole task, then, is to enforce the plain statutory language of § 1681 c(g) "according to its terms." Jimenez v. Quarterman, 555 U.S. 113, 118, 129 S.Ct. 681, 172 L.Ed.2d 475 (2009). By printing "more than the last 5 digits of the card number" on "any receipt" "electronically printed," Sam's Club plainly violated § 1681c(g).
Because the statute unambiguously prohibits printing too many digits of the number, regardless of labeling, it was not objectively reasonable for Sam's Club to read a labeling requirement into the statute. See, e.g., Alabama v. North Carolina, 560 U.S. 330, 352, 130 S.Ct. 2295, 176 L.Ed.2d 1070 (2010) ("We do not — we cannot — add provisions to a federal statute.").
In Safeco Insurance Company of America v. Burr, 551 U.S. 47, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007), the Supreme Court established two points of law relevant to this appeal: (1) a "willful" violation of the FACTA includes a "reckless disregard" of its requirements, and (2) a violation premised on an "objectively reasonable" reading of the FACTA cannot be "reckless." Id. at 52, 69, 70 n. 20, 127 S.Ct. 2201. To be objectively reasonable, a reading must have "a foundation in the statutory text." Id. at 69-70, 127 S.Ct. 2201. If that text is "less-than-pellucid," the absence of authoritative guidance may also affect the reasonableness analysis.
Sam's Club strains to direct the court's focus to the term "card number," insisting a "membership number" cannot be a "card number," in order to distract from the decisive term: "5 digits." Perhaps the term "card number" in the abstract is open to multiple reasonable interpretations, but the statute does not prohibit printing card
Because the stores' reading was not objectively reasonable, it is a fact question whether the stores' violation was willful, and the shoppers (with standing bestowed by the majority) have presented more than enough evidence to submit this question to a jury. See Fed.R.Civ.P. 56(a).
As early as 2004, one of Sam's Club's fraud experts warned that membership and credit numbers should differ because "the way membership is handled — well, including on printing on receipts, is less secure than how a credit card number would be handled." Yet Sam's Club failed to mitigate this admittedly "unnecessary risk" despite numerous warnings. In 2005, an internal security unit issued a report addressing "top-level issues" "where customer and associate personal information could be compromised intentionally or otherwise." The first "top-level issue": "Membership numbers are not handled in a manner that would minimize the possibility of the account number being compromised." The report warned:
(Emphasis added). To counter this significant risk, the report recommended "obscur[ing]" all membership numbers — not simply those duplicated in credit card numbers — "on both sales and refund receipts."
Yet, as the shoppers discovered several years later when they made purchases using their membership/credit cards at two different Sam's Club stores, Sam's Club ignored these internal warnings. Instead, both shoppers received receipts listing their names and membership numbers (i.e., all eleven unique digits of their credit numbers) — precisely the information required, according to Sam's Club's internal security unit, to "use a previously available credit line or attempt to open a new [one]."
In late October 2008, one week after the shoppers commenced this case, a Wal-Mart employee sent an e-mail to senior point-of-sale personnel with the subject "We got trouble, right here in Member City," warning of a "terrific and terrible emergency." (Emphasis added). The e-mail explained that using the member number to generate the card number was "not good [because] there's now a federal law stating that we can only print the last four [sic] digits of any account number on the receipt." (Emphasis added). Printing too many digits, the e-mail said, resulted in "a dangerous situation." As a remedy, the e-mail recommended "reissuing the [membership/credit] cards with a random non-derived account number ... immediately,
Based on this evidence, a reasonable jury could easily find Sam's Club acted in "reckless disregard of statutory duty," Safeco, 551 U.S. at 57, 127 S.Ct. 2201, running "`an unjustifiably high risk of harm that [was] either known or so obvious that it should [have] be[en] known,'" id. at 68, 127 S.Ct. 2201 (quoting Farmer v. Brennan, 511 U.S. 825, 836, 114 S.Ct. 1970, 128 L.Ed.2d 811 (1994)).
Mindful of the judiciary's limited role under Article III, I cannot join the majority's unnecessary resolution of a difficult constitutional question. Relying on Dowell, I would vacate the district court's judgment and remand with instructions to dismiss for lack of Article III standing. If it were necessary to reach the merits, I would reverse the judgment because (if the shoppers have standing) this case presents a jury question.
Id. at 820, 117 S.Ct. 2312 (footnote omitted) (quoting Allen v. Wright, 468 U.S. 737, 752, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984)).
Equally misplaced is the majority's reliance on the fact that other circuits — without expressly considering constitutional standing — have "permitted [plaintiffs] to recover statutory damages under [§ 1681n(a)(1)(A)] in the absence of actual damages." Ante at 501 n. 4. Because constitutional standing "was not argued or decided in these cases, ... it is axiomatic that they provide absolutely no support for the" majority's "position." United States v. Bruguier, 735 F.3d 754, 763 (8th Cir.2013) (en banc). "`Questions which merely lurk in the record, neither brought to the attention of the court nor ruled upon, are not to be considered as having been so decided as to constitute precedents.'" Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 170, 125 S.Ct. 577, 160 L.Ed.2d 548 (2004) (quoting Webster v. Fall, 266 U.S. 507, 511, 45 S.Ct. 148, 69 L.Ed. 411 (1925)). And even if these other cases did constitute precedent on the constitutional standing issue, which they do not, our court would remain independently bound to follow the Supreme Court and avoid offering unnecessary answers to difficult constitutional questions.
