Ninth Circuit dismisses putative FCRA class action based on lack of standing under Spokeo
- Filter By Consumer Finance Litigation
In a recent opinion, the Ninth Circuit held a plaintiff lacked Article III standing under Spokeo for her complaint on behalf of herself and a putative class action alleging violations of the Fair Credit Reporting Act (“FCRA”) against the National Park Service (the “NPS”). In Daniel v. National Park Service, No. 16-35689 (9th Cir. May 30, 2018), Stephanie Daniel alleged that the NPS violated the FCRA when Daniel purchased an entrance pass to Yellowstone National Park and the NPS printed a receipt containing the full expiration date of Daniel’s debit card. Daniel alleged the NPS violated the FCRA’s prohibition on printing more than the last 5 digits of a card number or the expiration date upon any receipt. Daniel further alleged that after her transaction with the NPS, her debit card was used fraudulently causing her to suffer damages. The district court granted the NPS’s motion to dismiss on sovereign immunity grounds.
On appeal, the Ninth Circuit affirmed the dismissal of the lawsuit for different reasons. According to the court, Daniel failed to establish standing to pursue a cause of action against the NPS. Under the U.S. Supreme Court’s decision in Spokeo, Inc. v. Robins, a plaintiff must meet three requirements to establish standing under Article III of the U.S. Constitution: (1) that the plaintiff suffered an injury in fact; (2) that the injury is fairly traceable to the challenged conduct of the defendant; and (3) that the plaintiff’s injuries are likely to be redressed by a favorable resolution.
The court found Daniel did sufficiently allege an injury in fact by alleging that after her transaction with the NPS her debit card was used fraudulently, which caused her damages. However, the court held Daniel did not satisfy Spokeo’s second requirement – that the injury can be traced back to the conduct of the NPS. While the court noted that at the pleading stage the plaintiff does not have to show proximate causation, the plaintiff must still show that the injury is “fairly traceable” to the defendant’s conduct. The court held Daniel failed to show how the damages suffered by the fraudulent use of her credit card was fairly traceable to the NPS printing the receipt with Daniel’s debit card’s expiration date. According to the court, a mere allegation that a theft occurred at some point after the issuance of the receipt, absent any other factual allegations, fails to satisfy Spokeo’s standing requirement. Instead, the plaintiff must point to some factual link between the issuance of the receipt and the fraudulent use of the debit card.
The Daniel decision shows how Spokeo arguments remain live and most active in FCRA disputes, where they originate. Litigants should never underestimate the odds of a well-made motion to dismiss in face of bare allegations regarding procedural and not particular harms.