Soto v. Great Am. LLC
| Decision Date | 22 January 2020 |
| Docket Number | No. 2-18-0911,2-18-0911 |
| Citation | 2020 IL App (2d) 180911,445 Ill.Dec. 83,165 N.E.3d 935 |
| Parties | Hugo SOTO and Sharon Soto, Individually and on Behalf of Similarly Situated Persons, Plaintiffs-Appellants, v. GREAT AMERICA LLC, d/b/a Six Flags Great America and Six Flags Hurricane Harbor, and Does 1 to 20, Defendants-Appellees. |
| Court | United States Appellate Court of Illinois |
Daniel A. Edelman, Julie Clark, and David Kim, of Edelman, Combs, Latturner & Goodwin, LLC, of Chicago, and Curtis C. Warner, of Warner Law Firm, LLC, of Park Ridge, for appellants.
Bevin Brennan, of Pedersen & Houpt, P.C., of Chicago, and Spencer Persson, of Norton Rose Fulbright US LLP, of Los Angeles, California, for appellee.
¶ 1 Plaintiffs, Hugo and Sharon Soto, individually and on behalf of similarly situated persons, filed a complaint against defendants, Great America LLC, doing business as Six Flags Great America and Six Flags Hurricane Harbor, and Does 1 to 20 (collectively Six Flags), alleging that Six Flags willfully violated the federal Fair and Accurate Credit Transactions Act of 2003 (FACTA) ( 15 U.S.C. § 1681c(g)(1) (2012) ) when it printed more than the last five digits of their debit card numbers on its sales receipts. On defendants' motion, the trial court dismissed the complaint under section 2-619(a)(9) of the Code of Civil Procedure (Code) (735 ILCS 5/2619(a)(9) (West 2016)), federal case law to find that plaintiffs lacked standing to pursue their claim in state court. Plaintiffs appeal and for the following reasons, we reverse and remand for further proceedings.
¶ 3 FACTA was enacted in 2003 to amend the Fair Credit Reporting Act (FCRA) ( 15 U.S.C. §§ 1681 et seq. (2012) ). Section 1681c(g)(1), as amended by FACTA, prohibits a merchant who accepts credit or debit cards from "print[ing] 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)(1) (2012). FACTA sought to protect the consumer from identity theft and credit- and debit-card fraud. See 15 U.S.C. § 1681c(g) (2012). A merchant in willful noncompliance with FACTA's requirements is liable to the affected consumer for actual damages resulting from the violation or statutory damages of $100 to $1000. 15 U.S.C. § 1681n(a)(1)(A) (2012).
¶ 4 On August 11, 2017, plaintiffs filed a class action complaint alleging that defendants issued printed receipts in willful violation of FACTA. Plaintiffs' claim arose on August 5, 2017, when they used their debit cards to make five food purchases at Six Flags, each time receiving an electronically printed receipt that included at least the first six digits of their debit card numbers in addition to the last four digits.1 Plaintiffs alleged that Six Flags' conduct exposed them and the members of the class to "an increased risk that their payment card could be compromised." Plaintiffs further alleged that Six Flags either knowingly violated FACTA's truncation requirements or engaged in "reckless conduct" by failing to take necessary steps to prevent the requirements from being violated. Plaintiffs sought statutory damages, punitive damages "if the evidence warrants," and attorney fees and costs.
¶ 5 Defendants removed the case to federal district court, citing diversity and federal-question jurisdiction. The district court granted plaintiffs' motion to remand the case to state court, stating:
¶ 6 In state court, defendants filed a combined motion to dismiss plaintiffs' complaint under section 2-619.1 of the Code ( 735 ILCS 5/2-619.1 (West 2016) ). Defendants argued, pursuant to section 2-619(a)(9), that plaintiffs lacked standing because they did not allege any injury beyond the improper disclosure of the first six digits of their debit card numbers. According to defendants, plaintiffs could not have been injured by the disclosure because under the numbering system set by the International Standards Organization, the first six digits, defined as the Issuer Identification Number (IIN), identify only the card issuer and reveal no personally identifying information. Defendants also argued, pursuant to section 2-615, that plaintiffs failed to allege facts showing a willful violation of FACTA in issuing the receipts.
¶ 7 The trial court granted defendants' motion to dismiss under section 2-619(a)(9) based on standing. The court declined to reach the issue of willfulness and did not rule on the section 2-615 portion of defendants' motion.
¶ 10 Defendants' motion to dismiss the complaint was filed pursuant to section 2-619.1 of the Code (id. ), which allows a party to move to dismiss under both section 2-615 and section 2-619. Garlick v. Bloomingdale Township , 2018 IL App (2d) 171013, ¶ 24, 430 Ill.Dec. 957, 127 N.E.3d 193. A motion for involuntary dismissal under section 2-615 challenges the legal sufficiency of the pleadings; a section 2-619 motion to dismiss admits the legal sufficiency of the pleadings but asserts certain defects or defenses that defeat the claim. Davidson v. Gurewitz , 2015 IL App (2d) 150171, ¶ 8, 400 Ill.Dec. 689, 48 N.E.3d 1129. A dismissal under section 2-619.1 is reviewed de novo . Garlick , 2018 IL App (2d) 171013, ¶ 24, 430 Ill.Dec. 957, 127 N.E.3d 193.
¶ 11 Defendants cited section 2-619(a)(9), which allows involuntary dismissal where the claim is barred by other affirmative matter avoiding the legal effect of or defeating the claim. 735 ILCS 5/2–619(a)(9) (West 2016). Lack of standing is "affirmative matter" that is properly raised under section 2-619(a)(9). Muirhead Hui L.L.C. v. Forest Preserve District , 2018 IL App (2d) 170835, ¶ 21, 427 Ill.Dec. 229, 117 N.E.3d 1166 (citing Glisson v. City of Marion , 188 Ill. 2d 211, 220-21, 242 Ill.Dec. 79, 720 N.E.2d 1034 (1999) ). The issue of standing presents a question of law and is subject to de novo review. Malec v. City of Belleville , 384 Ill. App. 3d 465, 468, 322 Ill.Dec. 748, 891 N.E.2d 1039 (2008).
¶ 13 Plaintiffs argue that the trial court erred in determining that they lacked standing to bring this action under FACTA because they did not plead an injury in fact. According to plaintiffs, the statute does not require a plaintiff to plead an injury or actual damages in addition to a statutory violation and, therefore, the court's ruling on standing is incorrect. Defendants contend that Illinois's principles of standing require a "concrete and palpable" injury in fact and that their failure to truncate the first six digits of plaintiffs' debit cards was harmless. Both sides also contest whether defendants adequately pleaded a willful failure to comply with FACTA.
¶ 14 FACTA imposes liability on any person who violates the digit truncation requirements for credit or debit card transactions:
¶ 15 We consider first whether section 1681n required plaintiffs to plead actual damages in addition to a statutory violation in order to establish standing. The primary goal of statutory construction is to ascertain and give effect to the intent of the legislature. Rosenbach v. Six Flags Entertainment Corp. , 2019 IL 123186, ¶ 24, 432 Ill.Dec. 654, 129 N.E.3d 1197. The most reliable indicator of the legislature's intent is the plain language of the statute itself, which must be given its plain and ordinary meaning. Id. When the statutory language is plain and unambiguous, the court may not depart from the law's terms by reading into it "exceptions, limitations, or conditions the legislature did not express, nor may [it] add provisions not found in the law." Id. If the resolution of an appeal turns on a question of statutory interpretation, de novo review is appropriate. Id. ¶ 18.
¶ 16 When given its plain and ordinary meaning, the language of section 1681n(a)(1)(A) indicates the legislature's intent that the statute provide alternative recovery for actual damages, if any, or statutory damages of not less than $100 and not more than $1000. The statute uses the word "or," which in its " ‘ordinary use is almost always disjunctive, that is, the words it connects are to be given separate meanings’ " ( Dinerstein v. Evanston Athletic Clubs, Inc. , 2016 IL App (1st) 153388, ¶ 45, 408 Ill.Dec. 47, 64 N.E.3d 1132 (quoting Loughrin v. United States , 573 U.S. 351, 357, 134 S. Ct. 2384, 2390, 189 L.Ed.2d 411 (2014) ); see also In re E.B. , 231 Ill. 2d 459, 468, 326 Ill.Dec. 1, 899 N.E.2d 218 (2008) (). Under the plain and ordinary meaning of section 1681n(a)(1)(A), actual damages must be pleaded and proved only if the relief sought is actual damages; if the alternative relief of statutory damages is sought, actual damages need not be pleaded or...
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