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Irvine v. 233 Skydeck

February 12, 2009


The opinion of the court was delivered by: Hon. Harry D. Leinenweber


Before the Court is Defendant's Motion to Dismiss Plaintiff's Complaint, filed pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, Defendant's Motion is Denied.


233 Skydeck, LLC (hereinafter, the "Defendant"), operates the Skydeck at the Sears Tower in Chicago, a popular tourist attraction that accepts credit card payment for admission. George R. Irvine, III (hereinafter, the "Plaintiff"), alleges that he visited Skydeck on July 17, 2008, paid for admission with a credit card, and received a computer-generated receipt that contained the expiration date of his card in violation of the Fair and Accurate Credit Transactions Act (the "FACTA"). Plaintiff filed suit on behalf of a putative class seeking statutory damages, punitive damages and attorneys fees and costs. Plaintiff alleges that Defendant willfully violated FACTA but does not allege that he suffered any actual damages as a result of Defendant's conduct. Because Defendant's Motion to Dismiss challenges the constitutionality of FACTA, the Court permitted the United States of America to intervene to defend the statute's constitutionality under 28 U.S.C. § 2403(a).

In 2003, Congress enacted FACTA as an amendment to the Fair Credit Reporting Act (the "FCRA") in response to the growing problem of identity theft. FACTA is aimed at curbing identity theft accomplished through the misappropriation of personal credit card information contained on lost or discarded receipts. Accordingly, FACTA states that "no person that accepts credit cards or debit cards for the transaction of business shall print 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." 15 U.S.C. § 1681c(g)(1). However, FACTA expressly exempts from this prohibition "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)(2). FACTA employs the damages scheme provided by FCRA and permits a plaintiff to recover statutory damages between $100 and $1,000 or actual damages, punitive damages, and attorney's fees and costs for a willful violation of the statute. 15 U.S.C. § 1681n.

Defendant moved to dismiss the Complaint pursuant to Rule 12(b)(6) on the grounds that FACTA is unconstitutional in three respects: (1) FACTA violates due process because the range of statutory damages permitted for a willful violation of the Act (i.e., $100 to $1,000) is impermissibly vague and, combined with the punitive damages provision, would permit excessive damage awards; (2) FACTA violates due process because the provision for punitive damages, in addition to the range of statutory damages, constitutes impermissible "double punishment"; and (3) FACTA violates the Equal Protection Clause of the Fourteenth Amendment because it exempts merchants who issue handwritten or imprinted credit card receipts. The court addresses each of Defendant's arguments in turn.


A. Standard of Review

In deciding a Rule 12(b)(6) motion to dismiss, the court accepts all well-pleaded facts as true, and draws all reasonable inferences in favor of the plaintiff. See, e.g., Jackson v. E.J. Brach Corp., 176 F.3d 971, 977-78 (7th Cir., 1999). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims. . . . Rule 12(b)(6) should be employed only when the complaint does not present a legal claim." Smith v. Cash Store Management, Inc., 195 F.3d 325, 327 (7th Cir., 1999) (citing Caremark, Inc. v. Coram Healthcare Corp., 113 F.3d 645, 648 (7th Cir., 1997)). A motion to dismiss will be granted "only if it appears beyond doubt that the plaintiff can prove no set of facts that would entitle him to relief." Venture Associates Corp. v. Zenith Data Systems Corp., 987 F.2d 429, 432 (7th Cir., 1993) (citing Beam v. IPCO Corp., 838 F.2d 242, 244 (7th Cir., 1988)).

B. Defendant's Motion to Dismiss

1. Defendant's Due Process Challenges to FACTA's Damages Scheme

a. Sliding Scale for Statutory Damages

Defendant claims that FACTA violates due process because its statutory damages range of $100-$1,000 per willful violation is vague because it fails to provide juries with any guidance over the precise amount of statutory damages to award.

A statute is impermissibly vague where it fails to give fair warning of what is prohibited, fails to give explicit standards to those enforcing it, creates a risk of discriminatory enforcement and, thus, chills lawful behavior. Anderson v. Milwaukee County, 433 F.3d 975, 978 (7th Cir., 2006). A statute regulating economic activity, such as FACTA, however, is subject to a less stringent vagueness test than criminal statutes "because its subject matter is often more narrow, and because businesses, which face economic demands to plan behavior carefully, can be expected to consult relevant legislation in advance of action." Village of Hoffman Estates v. Flip-side, Hoffman Estates, Inc., 455 U.S. 489, 498 (1982). In the commercial context, a ...

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