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Kathy Aliano, Individually and On Behalf of All Others Similarly v. Joe Caputo and Sons -Algonquin

May 5, 2011


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


Before the Court is Defendant Joe Caputo and Sons -- Algonquin, Inc.'s (hereinafter, the "Defendant") Motion for Summary Judgment. For the reasons stated herein, the Motion is denied.


Plaintiff Kathy Aliano (hereinafter, the "Plaintiff") lives in Villa Park, Illinois. On February 12, 2008, she shopped at Joe Caputo & Sons Fruit Market in Algonquin, Illinois, and used her Discover credit card to purchase $105.57 in groceries. She received a receipt from the store that showed the first six digits and last four digits of her credit card number, which violates the Fair and Accurate Credit Transactions Act ("FACTA"). 15 U.S.C. § 1681c(g)(1)("[N]o 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.").

On February 12, 2009, Plaintiff filed a putative Class Action Complaint against Defendant, seeking statutory damages of $100 to $1,000 per FACTA violation, plus attorneys' fees and costs, for Defendant's alleged willful FACTA violations. Aliano has not claimed any actual injury from Defendant's actions. The Court certified the putative class in an opinion read in court on September 21, 2010.

Brothers Natale and Vito Caputo co-own the Defendant grocery store. The brothers also own and operate retail produce markets in Palatine and Des Plaines, which are each separate corporate entities. Natale serves as Defendant's President, and Vito as its Vice President, Secretary, and Treasurer. Defendant opened to the public on August 30, 2007. To implement its electronic transactions system, Defendant retained Integrated Store Systems, Inc. ("ISSI"). ISSI purchased, upgraded, and maintained the equipment for Defendant's point-of-sale system, which included the equipment to print credit and debit card receipts. ISSI selected and installed the Store Management Suite software manufactured by LOC Software for Defendant's point-of-sale system. Defendant alleges it did not know that this software did not comply with FACTA's truncation requirements until Plaintiff filed this lawsuit, and that it relied completely on ISSI for its FACTA truncation compliance.

Plaintiff filed this action on February 12, 2009. In November 2008, ISSI President Roger Larsen ("Larsen") informed Defendant that it had an upgrade to install for the point-of-sale software. This installation would take at least three to four weeks to complete and require Defendant to close some of its check-out lanes. Defendant did not want this disruption to occur during the holiday season, which is its most active time of the year for business. Defendant alleges that Larsen did not tell it that the upgrade would make it FACTA compliant, but rather that Larsen said it would make the system more efficient. Larsen testified at a deposition that the upgraded software would truncate the printed credit or debit card numbers on receipts to five or fewer digits. In an interrogatory response, Defendant states that it became aware of FACTA's truncation requirements in September 2007, when Natale Caputo received a phone call from his cousin-in-law, Robertino Presta ("Presta"), the President of Caputo's New Farm Produce, Inc. Presta was being sued by the same Plaintiff in this case for violating FACTA. Defendant, however, argues that Presta did not tell Natale about the specific nature of the lawsuit, such as that it involved credit card receipts or that it involved improper truncation on the receipts. Defendant also argues that it did not understand the question to which it gave this answer.


Summary judgment is proper if "the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A fact is material if it could affect the outcome of the suit, and a dispute is genuine where the evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In ruling on summary judgment, the Court does not weigh the evidence or determine the truth of the matter, but determines whether a genuine issue of material fact exists that warrants trial. See id. at 249. In making this determination, the Court must view all the evidence and draw any reasonable inferences therefrom in the light most favorable to the nonmoving party. See Miller v. Am. Family Mut. Ins. Co., 203 F.3d 997, 1003 (7th Cir. 2000).

The moving party bears the burden of establishing the basis for its motion, together with evidence demonstrating the absence of any genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met this burden, the nonmoving party may not rest on mere allegations, but must present specific facts showing that a genuine issue exists for trial. See Big O Tire Dealers, Inc. v. Big O Warehouse, 741 F.2d 160, 163 (7th Cir. 1984). To support their position that a genuine issue of material fact does or does not exist, the parties may cite to materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations, admissions, and interrogatory answers, or show that the materials in the record do or do not establish a genuine dispute. FED. R. CIV. P. 56(c).


FACTA statutory damages are limited to willful noncompliance. 15 U.S.C. § 1681n(a). The Supreme Court has held that willful noncompliance under FACTA encompasses both knowing and reckless behavior. Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 59--60 (2007). The Court cited the Restatement (Second) of Torts in giving context to the definition of "reckless":

The actor's conduct is in reckless disregard of the safety of another if he does an act or intentionally fails to do an act which it is his duty to the other to do, knowing or having reason to know of facts which would lead a reasonable man to realize, not only that his conduct creates an unreasonable risk of physical harm to another, but also that such risk is substantially greater than that which is necessary to make his conduct negligent.

Id. at 69 (citing Restatement (Second) of Torts ยง 500 (1963--64)). The legislative history of FACTA and the Credit and Debit Card Clarification Act does not offer any indication that a "knowing" ...

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