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Ninth Circuit Finds No Standing in California Consumer Lawsuit Against Business

The United States Constitution grants authority to the federal judiciary to hear “cases and controversies” arising under various circumstances. U.S. Const., Art. III, § 2, cl. 1. If a plaintiff does not present a justiciable controversy, federal courts lack subject matter jurisdiction to hear the case. One part of this analysis involves determining whether a plaintiff has standing to sue. The U.S. Supreme Court has defined a general test to determine standing, which requires evidence of an “injury in fact,” a “causal connection” between this injury and the defendant’s alleged conduct, and a likelihood that a “favorable decision” would redress the injury. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). The court further addressed the “injury in fact” requirement in Spokeo, Inc. v. Robins, 578 U.S. ___ (2016), finding that the Ninth Circuit needed to consider both the “concrete” and the “particularized” aspects of the alleged injury. The Ninth Circuit, whose jurisdiction includes many California business disputes, cited Spokeo in two recent decisions finding that plaintiffs lacked standing to sue for alleged violations of a federal consumer protection statute. Bassett v. ABM Parking Services, Inc., 883 F. 3d 776 (9th Cir. 2018); Noble v. Nevada Checker Cab Corporation, No. 16-16573, slip op. (9th Cir., Mar. 9, 2018).

Both Bassett and Noble alleged violations of the Fair and Accurate Credit Transactions Act (FACTA) of 2003. This law amended the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., with various provisions granting consumers access to their own credit information and protecting against identity theft. Thanks to FACTA, consumers can receive a copy of their credit report from each of the major credit reporting agencies once a year, free of charge.

The two Ninth Circuit cases alleged violations of FACTA provisions requiring the truncation of credit and debit card numbers, printing no “more than the last 5 digits of the card number or the expiration date,” on receipts provided to consumers at the point of sale. Id. at § 1681c(g). Willful noncompliance with these requirements can result in liability to an aggrieved consumer for damages of $100 to $1,000, as well as actual damages and attorney’s fees. Id. at § 1681n(a).

Spokeo involved a complaint brought under the FCRA. It therefore has direct relevance to lawsuits brought under FACTA. The plaintiffs in Bassett alleged willful violations of FACTA on parking receipts issued by the defendant. The plaintiffs in Noble made similar allegations against a taxi company. The Ninth Circuit ruled in Bassett that the plaintiffs had failed to allege a “concrete” injury, as required by Spokeo, noting that alleged “exposure to identity theft is…too speculative for Article III purposes.” Bassett, 883 F.3d at 783 (internal quotations omitted). The court cited Bassett in an unpublished decision in Noble. Since the plaintiffs’ “alleged injury depended entirely on a FACTA violation,” the court held that its ruling in Bassett was controlling. Noble, slip op. at 4.

For more than 40 years, California business litigation attorney James G. Schwartz has advocated for the rights and interests of businesses and business owners involved in fraud claims in the Bay Area. You can contact us today online or at (925) 463-1073 to schedule a free and confidential consultation to see how our experienced and knowledgeable team can help you.

More Blog Posts:

California Federal Appellate Court Rules on Question of Standing in Consumer Lawsuit Against Business, Pleasanton Business & Commercial Law Blog, December 20, 2017

California Court Allows False Advertising Lawsuit to Proceed, Pleasanton Business & Commercial Law Blog, February 28, 2017

U.S. Supreme Court Will Review Ninth Circuit Decision Involving Consumers’ Standing to Sue Without Evidence of Financial Harm, Pleasanton Business & Commercial Law Blog, May 29, 2015