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Stelmachers v. Verifone Systems, Inc.

United States District Court, N.D. California, San Jose Division

September 7, 2017

PAUL M. STELMACHERS, individually and on behalf of a class of similarly-situated persons, Plaintiff,


          EDWARD J. DAVILA, United States District Judge

         The Fair and Accurate Credit Transactions Act of 2003 (“FACTA”), an amendment to the Fair Credit Reporting Act of 1970, 15 U.S.C. § 1681 et seq., provides that “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 . . . upon any receipt provided to the cardholder at the point of the sale transaction.” 15 U.S.C. § 1681c(g)(1). Unsurprisingly, its purpose was to assist in the prevention of identity theft, which Congress recognized had by that time reached “epidemic proportions.” H.R. Rep. No. 108-263, at 25 (2003). In this putative class action, Plaintiff Paul M. Stelmachers (“Plaintiff”) maintains in a Second Amended Complaint (“SAC”) that Defendant Verifone Sytems, Inc. (“Verifone”) violated FACTA's truncation requirement by printing more than the last 5 digits of his credit card number on a receipt he received after a cab ride. Dkt. No. 53.

         Federal jurisdiction arises pursuant to 28 U.S.C. § 1331. Presently before the court is Verifone's third motion to dismiss. Dkt. No. 54. Though Plaintiff opposes, he cannot escape the fatal shortcoming in the SAC's standing allegations. Thus, as will be explained, this court lacks subject matter jurisdiction to proceed further and must grant Verifone's motion to dismiss, without leave to amend, for the reasons explained below.


         Plaintiff alleges that Verifone “produces machines that accept credit cards or debit cards in the course of transacting business . . . .” SAC, at ¶ 48. These machines electronically print receipts documenting the transactions. Id. Verifone also manages the machines after they have been sold and programs its machines to produce receipts only to the specifications of Verifone. Id. at ¶¶ 49, 50.

         On June 3, 2014, Plaintiff took a taxi cab ride in Las Vegas and used his credit card to pay. Id. at ¶¶ 29, 30. One of Verifone's machines was used to receive Plaintiff's payment. Id. at ¶ 32. Once the payment was processed, Plaintiff “received” a “computer-generated receipt displaying more than the last five (5) digits of Plaintiff's credit card number.” Id. at ¶ 33.

         Plaintiff alleges the receipt violated § 1681c(g) of FACTA, and seeks to represent a class of individuals who received electronically printed receipts from Verifone which displayed more than the last five digits of the purchaser's credit or debit card number. The court dismissed Plaintiff's original Complaint on December 7, 2015. Dkt. No. 34. His First Amended Complaint (“FAC”) was later dismissed on November 21, 2016, for failure to plead a basis for standing. Dkt. No. 52. Plaintiff filed the SAC on December 7, 2016, and this motion followed.


         Standing is properly challenged through a Rule 12(b)(1) motion.[1] White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). Such a motion challenges subject matter jurisdiction, and may be either facial or factual. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004).

         A facial 12(b)(1) motion involves an inquiry confined to the allegations in the complaint. Thus, it functions like a limited-issue motion under 12(b)(6); all material allegations in the complaint are assumed true, and the court must determine whether lack of federal jurisdiction appears from the face of the complaint itself. Thornhill Publ'g Co. v. General Tel. Elec., 594 F.2d 730, 733 (9th Cir. 1979).


         A. General Principles of Standing

         The constitutional standing doctrine “functions to ensure, among other things, that the scarce resources of the federal courts are devoted to those disputes in which the parties have a concrete stake.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 191 (2000). This “case or controversy” requirement is jurisdictional and cannot be waived. City of Los Angeles v. Cty. of Kern, 581 F.3d 841, 845 (9th Cir. 2009). The party asserting federal jurisdiction must carry the burden of establishing standing under Article III. DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 341 (2006).

         Generally, the inquiry critical to determining the existence of standing under Article III of the Constitution 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)). Three basic elements must be satisfied: (1) an “injury in fact, ” which is neither conjectural or hypothetical, (2) causation, such that a causal connection between the alleged injury and offensive conduct is established, and ...

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