A New York federal court has rejected Wolfgang’s Steakhouse and ZMF Restaurants LLC’s motion to dismiss a case alleging that the restaurant violated the Fair and Accurate Credit Transactions Act of 2003 (FACTA) by printing credit card expiration dates on receipts. Fullwood v. Wolfgang’s Steakhouse, Inc., No. 13-7174 (S.D.N.Y., order entered November 14, 2014). The court found that the plaintiff’s amended complaint insufficiently supported its allegation that Wolfgang’s knew of the ramifications of violating FACTA yet wilfully disregarded the law, but granted her leave to amend.

The plaintiff brought her putative class action after receiving a receipt from Wolfgang’s that displayed her credit card’s expiration date. She did not, however, allege any actual damages from the disclosure. Under FACTA, actual damages can be awarded for both negligent and willful violations; only willful violations, however, can result in the statutory and punitive damages that the plaintiff seeks. Accordingly, the court devoted much of its decision to determining whether the restaurant’s conduct was willful.

Under the amended complaint’s allegations, the court found that it was not. The plaintiff argued that Wolfgang’s had notice of FACTA’s requirements because its agreements with credit card companies incorporated the requirements into their binding guidelines. According to the court, however, those agreements did not attribute the policies to FACTA, and thus the restaurant may have not known that the guidelines were actually required by federal law. The plaintiff proposed amending the complaint to allege that, “in addition to the general publicity around FACTA’s requirements, Defendants were notified by multiple sources at least monthly of requirements created by FACTA itself, and that Defendants negotiated an insurance contract that specifically highlighted the importance of compliance with FACTA.” These allegations, if properly pleaded, may sufficiently support the plaintiff’s assertion that the restaurant’s FACTA violations were willful, the court said, so it allowed the plaintiff to amend the complaint.


Issue 546

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