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Christopher D. Shurland, Individually and As the Representative of the Certified Class v. Bacci Cafe & Pizzeria On Ogden

August 30, 2011


The opinion of the court was delivered by: Rebecca R. Pallmeyer Judge


In August 2007, Plaintiff Christopher D. Shurland ate at Defendant Bacci Cafe & Pizzeria on Ogden, Inc. ("Bacci"), and received from Bacci a credit card receipt that displayed all of the digits of his credit card number, and its expiration date. Shurland filed this action on behalf of himself a3nd a class of customers, alleging a violation of the Fair and Accurate Credit Transactions Act, ("FACTA"), which prohibits businesses from printing non-truncated credit card numbers on the receipts issued to customers. 15 U.S.C. § 1681c(g). Shurland now moves for summary judgment against Bacci and an award of statutory damages for 6,359 willful violations of FACTA. 15 U.S.C. § 1681n(a)(1)(A).

For a willful violation of the relevant provisions of FACTA, the statute provides for actual damages or statutory damages of between $100 and $1,000 per occurrence. Plaintiff Shurland argues that because Bacci received a billing statement from its third-party credit card processor alerting it to FACTA's truncation requirement, and because that third party also contacted Bacci to advise of the truncation requirement, Bacci's violation of FACTA was willful. Bacci asserts that it was not aware of the FACTA truncation requirement, and notes that it had received a replacement credit card terminal shortly before FACTA went into effect and believed that machine was compliant with all applicable laws. Accordingly, Bacci denies that its conduct was willful. For the reasons explained herein, Plaintiff's motion for summary judgment is denied.


Defendant Bacci is an Illinois corporation located in Berwyn, Illinois. (Pl.'s 56.1(a) ¶ 2.) This case concerns Bacci's compliance with the FACTA truncation regulations that went into effect on December 5, 2006. The following facts are uncontested: On August 11, 2007, Plaintiff Christopher D. Shurland received a receipt displaying his entire credit card number and its expiration date. (Pl.'s 56.1(a) ¶ 31.) At some point during October 2007, an unidentified patron of Bacci complained to one of Bacci's employees that there were too many numbers printed on that customer's credit card receipt. (Id. ¶ 32.) After receiving this complaint, another Bacci employee contacted Bacci's credit card processor for assistance, but was unable to get the truncation function to work properly. (Id. ¶ 33.) Defendant thereafter truncated the numbers manually by crossing them out until it acquired a new credit card machine and processing service. (Id. ¶ 34.) Between the Act's effective date and October 30, 2007, when Defendant stopped issuing non-truncated receipts, Defendant issued 6,359 receipts that violated the truncation requirement of FACTA. Shurland v. Bacci Cafe & Pizzeria on Ogden, Inc., 271 F.R.D. 139, 142 (N.D. Ill. 2010).

The issue in this motion for summary judgment is whether these violations were willful. Assessment of this question requires consideration of events that preceded the FACTA violations, and circumstances relating to Defendant's knowledge or recklessness (or lack thereof) concerning FACTA's requirements. Vincent DiDiana and his wife, Chiara DiDiana, purchased Bacci Cafe & Pizzeria on Ogden in 1998. (Pl.'s 56.1(a)¶ 5.) In 2004, Vincent DiDiana purchased another restaurant in Melrose Park, known as Bacci Pizzeria of Melrose Park. (Id. ¶ 6.) That Melrose Park restaurant had two credit card processing machines, and DiDiana transferred one of those, a Hypercom T7P, to the Berwyn location. (Id. ¶¶7-9.) The Hypercom T7P was the sole credit card processing machine Defendant used at the Berwyn restaurant from May 2004 until mid-July 2006. (Id. ¶10; Def.'s Resp. ¶ 10.) Before using it, Bacci staff contacted National Translink Corp., a credit card processing company, to activate processing services. (Id. ¶¶ 12, 14.) Plaintiff notes that the "Merchant Processing Agreement" that Bacci entered into on May 11, 2004 contained the following provision:

1.15 MERCHANT warrants and agrees that MERCHANT shall fully comply with all federal, state, and local laws, rules and regulations as amended from time to time, including the Federal Truth-in-Lending Act and Regulation Z of the Board of Governors of the Federal Reserve System. (Id. ¶¶ 15, 16.) Defendant admits that it entered into a Merchant Processing Agreement with Provident Bank and Translink, but Chiara DiDiana, who completed the application, testified that she recognized only "her signatures and the handwriting for the date, phone number, hours of the day, and her Social Security number." (Def.'s Resp. ¶ 15.) Chiara DiDiana testified that she "did not recall the other handwriting on the application." In addition, Defendant points out that the provision in the Merchant Processing Agreement cited by Plaintiff appears in a "very small [font] and on the back-side of the Merchant Processing Application." (Id. ¶ 16.)

Pursuant to its agreement with Bacci, Translink provided Bacci with technical and customer service support and coordinated programming of the credit card processing terminal and credit card approvals. (Pl.'s 56.1(a) ¶¶ 17, 18.) Translink sent monthly billing statements reflecting its clients' credit card transactions to each address in its database, which included Bacci's address. (Id. ¶¶ 19, 21.) Included in the March 2005 statement was a notice that read:

IMPORTANT NOTICE: To be in compliance with state, federal, and Visa/MasterCard regulations all merchants must have their customer receipt print only the last 4 digits of the credit card number. If your receipt does not "truncate" the credit card number call 1-877-677-7201 as soon as possible.

(Id. ¶ 20.) Defendant notes that this entire notice took up only one quarter-inch of text on the monthly statement from Translink. (Def.'s Resp. ¶ 20.) When Chiara DiDiana received those billing statements she would "look and see how much money [Translink] was taking out and that's it." (Id. ¶ 23.) Thus, according to Bacci, Chiara did "not really" review that March 2005 billing statement, did not recall seeing the notice regarding truncation, and did not know that the law imposed this restriction. (Id. ¶¶ 19, 20.) In any event, Bacci asserts, "[i]t has not been established that Bacci received the March 2005 billing statement" and Translink "could not verify that every customer received this notice." (Id. ¶¶ 21, 22.)

As additional evidence that Bacci was indeed aware of the FACTA requirements, Plaintiff asserts that in 2006, Translink compiled a list of approximately 200 customers that it believed might have "truncation issues" and called all of the customers on that list, which included Defendant. (Pl.'s 56.1(a) ¶ 24, citing Deposition of Translink employee Douglas Porch, Pl.'s Ex. E at 90-92; List of Customers with Truncation Issues, Pl.'s Am Ex. E at 62; Deposition of Translink Executive Vice President James Tracy, Pl.'s Ex. D at 32.) Defendant "denies that there is undisputed evidence that National Translink called all of those customers, including Bacci." (Def.'s Resp. ¶ 24.) Defendant notes that the list upon which the calls were based "does not show any notation of contact, and Bacci's name is not crossed off." (Id.) A portion of this list is included with Plaintiff's exhibits, and while many names on the list appear to be crossed off, it is indeed difficult to determine whether Bacci's name is among those crossed off, or what other notations that appear on the list may mean. (Pl.'s Am. Ex. E at 62.) The individual responsible for making these calls conceded that there were people he was unable to reach and that "he has no specific recollections of having had any conversations with Bacci regarding truncating of credit card numbers." (Def.'s Resp. ¶ 24.)

Translink personnel also contacted customers who used the same Hypercom terminal model that Bacci used, to ask whether they were properly truncating the credit card information, and give them a telephone number if they needed help in doing so. (Pl.'s 56.1(a) ¶ 25.) (It is unclear whether the list of Hypercom customers contacted by Translink is the same as the list of customers with "truncation issues" contacted by Translink. Plaintiff does not reference an actual list of Hypercom customers in its fact statement, while Defendant references the same list discussed previously. (Pl.'s 56.1(a) ¶ 25; Def.'s Resp. ¶ 25.)) No one from Translink has verified actual contact with Bacci, Defendant points out, nor does the single list of these companies that appears in the record bear any notation reflecting that Bacci had been contacted. (Def.'s Resp. ¶ 25.) Plaintiff asserts that in April 2006, Translink employee Douglas Porch made notations reflecting contact with Defendant about the truncation requirement, but Defendant contends that these notes only demonstrate Porch's contact with the processing center, Card Systems, arranging for the download of truncation software to Bacci. (Pl.'s 56.1(a) ¶ 26; Def.'s Resp. ¶ 26.) Plaintiff contends that additional handwritten notes dated July 13, 2006 refer to truncation issues with Defendant, but Defendant claims that these notes too reflect contact with Card Systems, not with Bacci. (Pl.'s 56.1(a) ¶ 28; Def.'s Resp. ¶ 28.) The court is unable, from its own review of the handwritten notes, to determine whether Porch made contact with Bacci itself, with Card Systems, or with another party. (Pl.'s Am. Ex. D at 49-50.)

In addition to its response to Plaintiff's statement of material facts, Bacci has submitted statements of additional facts, as permitted under Local Rule 56.1(b)(3)(C). Because Plaintiff has not replied to these, they are deemed admitted. L.R. 56.1. According to this additional material, Chiara DiDiana, the co-owner of Defendant's restaurant, only "pay[s] the bills," and does not have other responsibilities. (Def.'s Supp. ¶ 35.) She did complete the application for a credit card processing machine from Translink, but Bacci asserts that she "only filled in a few portions of the application." (Id. ¶ 36.) Chiara DiDiana testified that she never spoke with anyone from Translink regarding truncation issues, and Defendant claims that "no representative or employee of Bacci recalled receiving any notification of the need to truncate credit card numbers on customer credit card receipts." (Id. ¶¶ 39-41.)

Bacci's owners do not belong to any business associations, do not read any business journals or other commercial journals, and had not read anything provided by Visa or Mastercard concerning truncation. (Id. ΒΆ 43.) On July 14, 2006, Defendant asserts, someone at Bacci (Defendant has not provided details) complained to Translink that its credit card processing terminal ...

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