Ticknor v. Rouse's Enters., LLC

Decision Date20 February 2014
Docket Number12–2964.,Civil Action Nos. 12–1151
Citation2 F.Supp.3d 882
PartiesRobert TICKNOR, et al., Plaintiffs v. ROUSE'S ENTERPRISES, LLC, Defendant.
CourtU.S. District Court — Eastern District of Louisiana

OPINION TEXT STARTS HERE

Russ M. Herman, Stephen J. Herman, Soren Erik Gisleson, Herman, Herman, Katz & Cotlar, LLP, Andrew David Bizer, Bizer Law Firm, LLC, New Orleans, LA, Brian T. Ku, M. Ryan Casey, Ku & Mussman, PA, Miami, FL, for Plaintiffs.

Jason W. Burge, E. Blair Schilling, Loretta G. Mince, Fishman Haygood, New Orleans, LA, for Defendant.

ORDER AND REASONS

SUSIE MORGAN, District Judge.

Before the Court are motions for summary judgment filed by Evanston Insurance Company 1 (“Evanston”) and Starr Indemnity & Liability Company 2 (“Starr”). Rouse's Enterprises, LLC (Rouse's) opposes Evanston's and Starr's motions.3 Robert Ticknor, Matthew Russell, and Daniel Cutler, on behalf of themselves and others similarly situated (collectively, plaintiffs), also filed oppositions to Evanston's and Starr's motions.4 Evanston filed a reply to the plaintiffs' opposition, and Starr filed replies to the plaintiffs' opposition and Rouse's opposition. 5

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs filed suit against Rouse's on May 7, 2012, alleging that in April and May 2012, they each purchased groceries from Rouse's, the operator of a chain of local grocery stores.6 Plaintiffs allege they used their personal credit cards for these transactions and that Rouse's failed to truncate the expiration dates when it issued receipts for those transactions. 7 Plaintiffs claim other individuals have had this same experience at Rouse's stores across Louisiana and Mississippi, and thus seek to have this case certified as a class action.8

Plaintiffs seek relief under the “Receipt Provision” of the Fair and Accurate Credit Transactions Act (“FACTA”), 15 U.S.C. § 1681c(g)(3).9 Among other things, FACTA prohibits merchants from printing certain credit and debit card information on receipts. In particular, the Receipt Provision provides:

(g) Truncation of credit card and debit card numbers

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.

15 U.S.C. § 1681c(g)(1).

FACTA imposes civil liability for violations of the law's provisions, including the Receipt Provision. A negligent violation of the Receipt Provision entitles a plaintiff to recover actual damages suffered as a result of the violation. Id. at § 1681 o(a)(1). Statutory damages are not available for negligent violations. Id. A willful violation of the Receipt Provision also entitles a plaintiff to recover actual damages. Id. at § 1681n(a)(1)(A). Unlike a negligent violation, however, a willful violation allows a plaintiff to opt for statutory damages, in lieu of actual damages, between $100 and $1,000 per consumer. Id. Statutory damages are available even if the plaintiff does not claim to have suffered actual damage as a result of the alleged willful violation. See, e.g., Ramirez v. Midwest Airlines, Inc., 537 F.Supp.2d 1161, 1167–69 (D.Kan.2008). A willful violation also makes punitive damages, costs, and attorneys' fees available to the plaintiff in addition to actual or statutory damages. 15 U.S.C. § 1681n(a)(2)-(3).10

Plaintiffs do not claim to have suffered any actual damage as a result of the alleged violations. Instead, plaintiffs claim the fact that Rouse's “knowingly, willfully, intentionally, and reckless violated and continues to violate” the Receipt Provision entitles them to statutory damages under 15 U.S.C. § 1681n, as well as punitive damages, costs, and attorneys' fees. 11 Finally, plaintiffs seek an order enjoining Rouse's from violating the Receipt Provision and directing Rouse's to comply with the provision going forward.12

On December 14, 2012, Evanston filed a separate suit against Rouse's, seeking a declaration that Evanston has no duty to defend Rouse's for the plaintiffs' lawsuit and owes no coverage to Rouse's under the insurance policy between Evanston and Rouse's.13 Upon determining the Evanston's suit for a declaratory judgment and the plaintiffs' claims against Rouse's were related, the Court consolidated the cases for purposes of discovery on April 5, 2013.14 After the cases were consolidated, Starr requested and was granted leave to file a complaint in intervention against Rouse's.15 Starr, as Rouse's excess liability insurer, also seeks a declaration that it owes no duty defend Rouse's and owes no coverage to Rouse's for the claims asserted by the plaintiffs.16

Evanston and Starr both filed both motions for summary judgment that the insurance policy Evanston issued to Rouse's provides no coverage for the claims made by the plaintiffs and that neither insurance company owes a duty to defend those claims. The policy Starr issued to Rouse's is an excess liability insurance policy that follows the policy issued by Evanston to Rouse's. Thus, Starr's obligations hinge upon whether Evanston's policy provides coverage. 17

LEGAL STANDARD

Summary judgment is appropriate when “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c)(2); Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994). When assessing whether a dispute as to any material fact exists, the Court considers “all of the evidence in the record but refrains from making credibility determinations or weighing the evidence.” Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co. 530 F.3d 395, 398 (5th Cir.2008). All reasonable inferences are drawn in favor of the nonmoving party, but “unsupported allegations or affidavits setting forth ultimate or conclusory facts and conclusions of law are insufficient to either support or defeat a motion for summary judgment.” Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir.1985) (internal quotations and citations omitted).

If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party “must come forward with evidence which would ‘entitle it to a directed verdict if the evidence went uncontroverted at trial.’ Int'l Shortstop, Inc. v. Rally's Inc., 939 F.2d 1257, 1263–64 (5th Cir.1991). The nonmoving party can then defeat the motion by either countering with sufficient evidence on its own, or “showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party.” Id. at 1265.

If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325, 106 S.Ct. 2548. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324, 106 S.Ct. 2548. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue for trial. Id. at 325, 106 S.Ct. 2548; see also Little 37 F.3d at 1075 (Rule 56 ‘mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.’) (citing Celotex, 477 U.S. at 332, 106 S.Ct. 2548).

LAW AND ANALYSIS

A. The Policy

The parties disagree over whether coverage is provided under the “personal or advertising injury” portion of the policy, and, if so, whether any exclusions apply. The “personal and advertising injury” portion of the policy relied on by Rouse's and the plaintiffs provides coverage for [o]ral or written publication, in any manner, of material that violates a person's right to privacy[.] 18 The Evanston Commercial General Liability Policy, Number 3C30306–0 (“the policy”), issued to Rouse's includes the following relevant provisions:

Coverage B—Personal and Advertising Injury Liability

1. Insuring Agreement

a. We will pay those sums that the insured becomes legally obligated to pay as damages because of “personal and advertising injury” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “personal and advertising injury” to which this insurance does not apply. We may, at our discretion, investigate any offense and settle any claim or “suit” that may result.

...

2. Exclusions

This insurance does not apply to:

a. Knowing Violation of Rights of Another

“Personal and advertising injury” caused by or at the direction of the insured with knowledge that the act would violate the rights of another and would inflict “personal and advertising injury.”

...

p. Distribution of Material in Violation of Statutes

“Personal and advertising injury” arising directly or indirectly out of any action or omission that violates or is alleged to violate:

(1) The Telephone Consumer Protection Act (TCPA), including any amendment of or addition to such law; or

(2) The CAN–SPAM Act of 2003, including any amendment of or addition to such law; or

(3) Any statute, ordinance or regulation, other than the TCPA or CAN–SPAM Act of 2003, that prohibits or limits the sending, transmitting, communicating or distribution of material or information.

...

Section V—Definitio...

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