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Taylor v. Fred's Inc.

United States District Court, N.D. Alabama, Southern Division

February 2, 2018

TIFFANY TAYLOR, individually and on behalf of all others similarly situated, Plaintiff,
FRED'S, INC. and FRED'S STORES OF TENNESSEE, INC., et al., Defendants.


          VIRGINIA EMERSON HOPKINS United States District Judge

         I. Introduction

         Plaintiff Tiffany Taylor (“Ms. Taylor”) initiated this purported class action arising under the Fair and Accurate Credit Transactions Act of 2003 (“FACTA”), 15 U.S.C. § 1681c(g), an amendment to the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681-1681x, against Defendants Fred's, Inc. and Fred's Stores of Tennessee, Inc. (collectively “Fred's”) on March 29, 2017. (Doc. 1). On May 24, 2017, Ms. Taylor filed a First Amended Class Action Complaint (the “FAC”). (Doc. 29).

         Pending before the Court is Fred's Motion To Dismiss Plaintiff's First Amended Class Action Complaint (doc. 32) (the “Motion”) filed on June 7, 2017. Fred's brings this Motion pursuant to Rule 12(b)(1) and Rule 12(b)(6). The Court has reviewed the parties' filings offered in support of and opposition to the Motion. (Docs. 32-1, 34, 35, 45, 46, 48, 55). For the reasons set out below, the Motion is due to be granted in part and otherwise termed as moot.

         II. Standards

         A. Rule 12(b)(1) Generally

         As the Eleventh Circuit has explained the standard on motions to dismiss for lack of subject matter jurisdiction:

Attacks on subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1) come in two forms. “Facial attacks” on the complaint “require[] the court merely to look and see if [the] plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in his complaint are taken as true for the purposes of the motion.” Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir.), cert. denied, 449 U.S. 953, 101 S.Ct. 358, 66 L.Ed.2d 217 (1980) (citing Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977)). “Factual attacks, ” on the other hand, challenge “the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered.” Id.
These two forms of attack differ substantially. On a facial attack, a plaintiff is afforded safeguards similar to those provided in opposing a Rule 12(b)(6) motion-the court must consider the allegations of the complaint to be true. Williamson v. Tucker, 645 F.2d 404, 412 (5th Cir.), cert. denied, 454 U.S. 897, 102 S.Ct. 396, 70 L.Ed.2d 212 (1981). But when the attack is factual, the trial court may proceed as it never could under 12(b)(6) or Fed.R.Civ.P. 56. Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction-its very power to hear the case-there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. In short, no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.

Id. at 412-13 (quoting Mortensen, 549 F.2d at 891). Lawrence v. Dunbar, 919 F.2d 1525, 1528-29 (11th Cir. 1990) (emphasis added); see also Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir. 1981) (“The district court consequently has the power to dismiss for lack of subject matter jurisdiction on any one of three separate bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.”).[1]

         Here, the jurisdictional attack is facial. (See Doc. 32 at 1 (“[T]hough Plaintiff has filed an amended complaint, Plaintiff continues to fail to plead injury-in-fact as required by Article III of the U.S. Constitution.”)). Consequently, the Court has accepted all allegations contained in Ms. Taylor's FAC as true.

         B. General Principles Governing Standing

         “The Constitution limits the exercise of the judicial power to cases and controversies.” Church of Scientology Flag Serv. Org., Inc. v. City of Clearwater, 777 F.2d 598, 604 (11th Cir. 1985). “The Art. III doctrine that requires a litigant to have ‘standing' to invoke the power of a federal court is perhaps the most important of these doctrines [that pertain to the case-or-controversy requirement]. ‘In essence the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues.'” Allen v. Wright, 468 U.S. 737, 750-51 (1984) (quoting Warth v. Seldin, 422 U.S. 490, 498 (1975)), abrogated on other grounds by Lexmark Int'l, Inc. v. Static Control Components, Inc., 134 S.Ct. 1377 (2014). An individual plaintiff has standing under the Constitution's case-or-controversy limitation in Art. III, § 2, when “(1) [the plaintiff] has suffered an ‘injury in fact' that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)).

         The doctrine of standing encompasses “both constitutional limitations on federal-court jurisdiction and prudential limitations on its exercise.” Kowalski v. Tesmer, 543 U.S. 125, 128 (2004) (internal quotation marks omitted) (quoting Warth, 422 U.S. at 498). “[S]tanding in no way depends on the merits of the plaintiff's contention that particular conduct is illegal[.]” Warth, 422 U.S. at 500. Standing, instead, is based on whether the plaintiff has “‘alleged such a personal stake in the outcome of the controversy' as to warrant his invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers on his behalf.” Warth, 422 U.S. at 498-99 (quoting Baker v. Carr, 369 U.S. 186, 204 (1962)).

         From a prudential standpoint more particularly, “a party ‘generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.'” Kowalski, 543 U.S. at 129 (quoting Warth, 422 U.S. at 499). “This rule assumes that the party with the right has the appropriate incentive to challenge (or not challenge) governmental [or private] action and to do so with the necessary zeal and appropriate presentation.” Kowalski, 543 U.S. at 129 (citing Warth, 422 U.S. at 500).

         Finally, a plaintiff “bears the burden of showing that he has standing for each type of relief sought.” Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009) (emphasis added) (citing Los Angeles v. Lyons, 461 U.S. 95, 105 (1983)).

         C. Spokeo's Examination of the Doctrine of Standing

         The jurisdictional portion of Fred's Motion is primarily premised upon the Supreme Court's examination of standing and the reversal of the Ninth Circuit in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016), as revised (May 24, 2016).[2] Spokeo, a company that “operates a ‘people search engine'”, was sued in district court under the Fair Credit Reporting Act (“FCRA”) when the plaintiff discovered that a search request concerning him contained inaccurate personal information. Id. at 1544. Determining that the plaintiff lacked standing, the district court dismissed the case. Id. On appeal, the Ninth Circuit reversed and the Supreme Court granted certiorari review of that standing determination. Id. at 1544-45, 1546.

         Finding the Ninth Circuit's analysis of standing to be “incomplete, ” the Supreme Court “vacat[ed] the decision below and remand[ed] for the Ninth Circuit to consider both aspects of the injury-in-fact requirement.” Id. at 1545 (emphasis in original). More specifically, “[t]he Ninth Circuit's analysis focused on the second characteristic (particularity), but it overlooked the first (concreteness).” Id. The Supreme Court expressed no opinion “as to whether the Ninth Circuit's ultimate conclusion-that Robins adequately alleged an injury in fact-was correct.” Id. at 1550.[3]

         As the Supreme Court explained the component of concreteness in Spokeo:

A “concrete” injury must be “de facto”; that is, it must actually exist. See Black's Law Dictionary 479 (9th ed. 2009). When we have used the adjective “concrete, ” we have meant to convey the usual meaning of the term-“real, ” and not “abstract.” Webster's Third New International Dictionary 472 (1971); Random House Dictionary of the English Language 305 (1967). Concreteness, therefore, is quite different from particularization.
“Concrete” is not, however, necessarily synonymous with “tangible.” Although tangible injuries are perhaps easier to recognize, we have confirmed in many of our previous cases that intangible injuries can nevertheless be concrete.

Id. at 1548-49 (some citations omitted).[4]

         The Spokeo Supreme Court further instructed:

In determining whether an intangible harm constitutes injury in fact, both history and the judgment of Congress play important roles. Because the doctrine of standing derives from the case-or-controversy requirement, and because that requirement in turn is grounded in historical practice, it is instructive to consider whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts. See Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 775-777, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000). In addition, because Congress is well positioned to identify intangible harms that meet minimum Article III requirements, its judgment is also instructive and important. Thus, we said in Lujan that Congress may “elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.” 504 U.S., at 578, 112 S.Ct. 2130. Similarly, Justice Kennedy's concurrence in that case explained that “Congress has the power to define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before.” Id., at 580, 112 S.Ct. 2130 (opinion concurring in part and concurring in judgment).

Id. at 1549 (emphasis added).

         Finally, in illustrating the meaning of these (and other) principles of concreteness, the Supreme Court provided two examples of conceivable violations of FCRA that would lack the level of concreteness necessary to satisfy Article III's injury-in-fact framework:

On the one hand, Congress plainly sought to curb the dissemination of false information by adopting procedures designed to decrease that risk. On the other hand, Robins cannot satisfy the demands of Article III by alleging a bare procedural violation. A violation of one of the FCRA's procedural requirements may result in no harm. For example, even if a consumer reporting agency fails to provide the required notice to a user of the agency's consumer information, that information regardless may be entirely accurate. In addition, not all inaccuracies cause harm or present any material risk of harm. An example that comes readily to mind is an incorrect zip code. It is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm.

Id. at 1550 (emphasis added).

         D. Rule 12(b)(6)

         Fred's alternatively maintains that Ms. Taylor's FAC is subject to dismissal pursuant to Rule 12(b)(6). (Doc. 32 at 1). A Rule 12(b)(6) motion attacks the legal sufficiency of the complaint. See Fed. R. Civ. P. 12(b)(6) (“[A] party may assert the following defenses by motion: (6) failure to state a claim upon which relief can be granted[.]”). The Federal Rules of Civil Procedure require only that the complaint provide “‘a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957) (footnote omitted) (quoting Fed.R.Civ.P. 8(a)(2)), abrogated by Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007); see also Fed. R. Civ. P. 8(a) (setting forth general pleading requirements for a complaint, including providing “a short and plain statement of the claim showing that the pleader is entitled to relief”).

         While a plaintiff must provide the grounds of his entitlement to relief, Rule 8 does not mandate the inclusion of “detailed factual allegations” within a complaint. Twombly, 550 U.S. at 555 (quoting Conley, 355 U.S. at 47). However, at the same time, “it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint.” Twombly, 550 U.S. at 563.

         “[A] court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Iqbal, 556 U.S. at 679. “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Id. “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id. (emphasis added). “Under Twombly's construction of Rule 8 . . . [a plaintiff's] complaint [must] ‘nudge[] [any] claims' . . . ‘across the line from conceivable to plausible.' Ibid.” Iqbal, 556 U.S. at 680.

         A claim is plausible on its face “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556).

         III. Analysis

         A. Ms. Taylor Has Not Shown an Injury-in-Fact.

         Fred's raises two issues in its initial brief regarding standing. First, Fred's maintains that Ms. Taylor's allegations do not show that she has suffered an injury-in-fact. (Doc. 32-1 at 8-21).[5] Second, even assuming Ms. Taylor has suffered a cognizable injury-in-fact, such an injury is not traceable to any alleged violation of the FACTA by Fred's. (Doc. 32-1 at 21-22). With the foregoing standards in mind, the Court turns to an evaluation of whether Ms. Taylor's FACTA allegations establish an injury-in-fact.

         1. Ms. Taylor's FACTA Allegations and the Purpose of FACTA

         Ms. Taylor asserts that, on or about April 2, 2016, she “purchased certain goods from [Fred's] business location in Bessemer, Alabama.” (Doc. 29 at 11 ¶ 33). Ms. Taylor paid for her purchases using “her personal VISA debit card” and received a receipt that “displayed the first six digits and the last four digits of [that] debit card.” Id. “This receipt also displayed [Ms. Taylor's] full name.” Id.

         Subsequently, on or about January 2, 2017, Ms. Taylor bought items “from Fred's business location in Marion, Alabama.” (Doc. 29 at 12 ¶ 34). The receipt that she received on this date “displayed the first six digits and the last four digits of her VISA debit card.” Id.

         Ms. Taylor also bought items “from Fred's business location in Pleasant Grove location” on or about March 13, 2017. (Doc. 29 at 12 ¶ 35). The receipt she received on this visit reflected “the expiration date of her [VISA] debit card.” Id.

         Separate from these specific dates, Ms. Taylor alleges that she “made additional prior purchases with the same VISA debit card . . . within the last five years . . . and did not retain the receipts.” (Doc. 29 at 12 ¶ 36). Ms. Taylor asserts that “[t]hese lost or discarded electronically-printed receipts . . . likely contain more than the last five digits or the expiration date of her VISA debit card.” Id. (emphasis added).

         Ms. Taylor did not discover Fred's noncompliance with FACTA until March 2017. (Doc. 29 at 12 ¶ 37). Since then, Ms. Taylor “has expended time, effort, and resources monitoring her financial accounts and credit reports to protect herself from identity theft and financial fraud.” (Doc. 29 at 13 ¶ 37). Ms. Taylor further contends that Fred's actions have caused her to “suffer[] other intangible injuries, including … stress, worry, concern, and frustration from the imminent, increased risk of identity theft and financial fraud . . . .” (Doc. 29 at 13 ¶ 38).

         Ms. Taylor maintains that Fred's electronic-receipt practices violate 15 U.S.C. § 1681c(g). That section of the FCRA as amended by FACTA provides:

(g) Truncation of credit card and debit card numbers
(1) In general Except as otherwise provided in this subsection, 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.
(2) Limitation
This subsection shall apply only to receipts that are electronically printed, and shall not apply to transactions in which the sole means of recording a credit card or debit card account number is by ...

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