Zaun v. Tuttle Inc.
ORDER denying 37 Motion for Judgment on the Pleadings; denying as moot 57 Motion for Protective Order (Written Opinion). Signed by Judge Donovan W. Frank on 05/04/2011. (rlb)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Curtis Zaun, on behalf of himself and
all others similarly situated,
Civil No. 10-2191 (DWF/JJK)
OPINION AND ORDER
Tuttle, Inc., doing business as
Elsie’s Bowling Center
also known as
Elsie’s Restaurant & Bar,
Thomas J. Lyons, Esq., Lyons Law Firm, P.A., and Trista M. Roy, Esq., Consumer
Justice Center PA, counsel for Plaintiff.
Thomas A. Gilligan, Jr., Esq., Andrew T. Shern, Esq., and Christopher G. Angell, Esq.,
Murnane Brandt, PA, and Daniel J. Young, Esq., Lommen, Abdo, Cole, King &
Stageberg, PA, counsel for Defendant.
This matter is before the Court on Defendant’s Amended Motion for Judgment on
the Pleadings (Doc. No. 37). As the Court ruled off the bench at oral argument on this
matter, Defendant’s motion is denied.1 This Order serves to clarify the Court’s reasoning
behind its decision.
In January 2009, Plaintiff made a purchase at Elsie’s Restaurant & Bar in
Minneapolis, Minnesota. (Second Am. Compl. ¶ 22.) He paid with a credit card. (Id.)
Plaintiff contends that the receipt he was given—labeled “Customer Copy”—included the
unredacted expiration date of his credit card. (Id.) Plaintiff claims that the restaurant’s
provision of a credit-card receipt containing his card’s expiration date constitutes a
willful violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, et seq.,
and the Fair and Accurate Credit Transactions Act (“FACTA”), which amended the
FCRA.2 He seeks to represent a class of similarly-situated individuals. (Second Am.
Compl. ¶¶ 26-33.)
A party may move for judgment on the pleadings at any point after the close of
pleadings but early enough to avoid a delay of trial. Fed. R. Civ P. 12(c). A court
Because the Court denied Defendant’s Amended Motion for Judgment on the
Pleadings, the Court also denies Defendant’s Motion for Protective Order (Doc. No. 57)
FACTA amended the FCRA to require that merchants redact customers’ credit
card numbers and expiration dates on receipts provided to consumers. 15 U.S.C.
evaluates a motion for judgment on the pleadings under the same standard as a motion
brought under Rule 12(b)(6). See Ashley County v. Pfizer, 552 F.3d 659, 665 (8th Cir.
2009); Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990).
In deciding a motion to dismiss pursuant to Rule 12(b)(6), a court assumes all
facts in the complaint to be true and construes all reasonable inferences from those facts
in the light most favorable to the complainant. Morton v. Becker, 793 F.2d 185, 187 (8th
Cir. 1986). In doing so, however, a court need not accept as true wholly conclusory
allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir.
1999), or legal conclusions drawn by the pleader from the facts alleged. Westcott v. City
of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). A court may consider the complaint,
matters of public record, orders, materials embraced by the complaint, and exhibits
attached to the complaint in deciding a motion to dismiss under Rule 12(b)(6). Porous
Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).
To survive a motion to dismiss, a complaint must contain “enough facts to state a
claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
545 (2007). Although a complaint need not contain “detailed factual allegations,” it must
contain facts with enough specificity “to raise a right to relief above the speculative
level.” Id. at 555. As the United States Supreme Court recently reiterated, “[t]hreadbare
recitals of the elements of a cause of action, supported by mere conclusory statements,”
will not pass muster under Twombly. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)
(citing Twombly, 550 U.S. at 555). In sum, this standard “calls for enough fact[s] to raise
a reasonable expectation that discovery will reveal evidence of [the claim].” Twombly,
550 U.S. at 556.
Motion to Dismiss
There is no dispute that the FCRA prohibits a merchant from including credit card
expiration dates on customer receipts: “[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.” 15 U.S.C. § 1681c(g). Because there was confusion as to
whether this section prohibited merchants from printing the expiration date on receipts,
Congress clarified the requirements in the “Credit and Debit Card Receipt Clarification
Act of 2007,” Pub. L. No. 110-241, 122 Stat. 1565 (2008) (amending 15 U.S.C. §§ 1601,
1681n). This act provided a safe harbor against accusations of willfulness for merchants
who continued to print expiration dates on customer receipts. Id. § 3(a) (amending
15 U.S.C. §1681n). The safe harbor expired in June 2008, at least six months before the
transaction at issue in this case.
Defendant argues that Zaun has failed to state a claim for a willful violation of
FACTA’s redaction requirements. The importance of a claim for willful noncompliance
is that the consumer need not prove actual damages. See 15 U.S.C. § 1681n (imposing
civil liability of either actual damages or statutory damages of $100 to $1,000 for willful
violations of the FCRA). The Supreme Court has made it clear that “willfulness” under
the FCRA requires a knowing or a reckless violation of the statute’s requirements.
Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007).
Zaun responds that the publicity surrounding the enactment of FACTA and the
Clarification Act in 2008 makes Defendant’s failure to comply with FACTA willful.
Moreover, Zaun contends that the National Restaurant Association, a trade association to
which Defendant belongs, communicated FACTA changes to its members, but Defendant
ignored these warnings. Zaun further asserts that instead of complying with its statutory
duty, Defendant delegated all responsibility for compliance to a third party, North County
Business Products (“NCBP”). Zaun contends that NCBP warned Defendant that
upgrades were necessary in order for Defendant to comply with the laws governing credit
card processing and truncation, but Defendant ignored these warnings. Zaun also asserts
that Defendant cancelled its service contract with NCBP and therefore “recklessly
disregarded its obligations and duties required by the FACTA.” (Second Am. Compl.
The Court finds that Zaun has sufficiently alleged willfulness. Zaun has alleged
that Defendant was aware of the FCRA and FACTA requirements, that Defendant had
the ability to change its credit card terminals to redact the expiration dates and ensure
compliance with the law, that NCBP warned Defendant that it would need to upgrade its
terminals to comply with the law, and that Defendant disregarded those warnings and
cancelled its service contract with NCBP. Then, despite these warnings, Zaun alleges
that the credit card receipts were printed with unredacted expiration dates. Zaun’s
Second Amended Complaint plausibly alleges a willful violation of FACTA and as such,
Defendant’s Motion for Judgment on the Pleadings is denied.
Based on the files, records, and proceedings herein, and for the reasons set forth
above, IT IS ORDERED that:
Defendant’s Amended Motion for Judgment on the Pleadings (Doc.
No. ) is DENIED.
Defendant’s Motion for Protective Order (Doc. No. ) is DENIED AS
Dated: May 4, 2011
s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge
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