“Electronically Printed” Does not Include Automated Merchant Email — Shlahtichman v. 1-800 Contacts

[Post by Venkat]

Shlahtichman v. 1-800 Contacts, Inc., Case No. 09-4073 (7th Cir.; Aug. 10, 2010)

The Seventh Circuit recently concluded that the words “electronically printed,” as used in the Fair and Accurate Credit Transactions Act of 2003, does not include a computer generated email receipt sent by a merchant. The opinion is a fun read and offers a look at how courts deal with changing technologies and commercial practices, when construing legislation.

Background: Shlahtichman purchased contact lenses over the internet at 1-800 Contacts. 1-800 Contacts emailed him a confirmation of his order which contained the expiration date for Shlahtichman’s credit card. FACTA includes a prohibition on including the expiration dates of a credit card but this prohibition only applies to “receipts that are electronically printed.” The question addressed by the Seventh Circuit was whether an automatically generated email confirmation message is a receipt that is “electronically printed.”

Discussion: Most courts had construed the term “electronically printed” to refer only to paper receipts, incorporating the ordinary meaning of the term “print,” and the court here takes the same route:

What FACTA covers are printed receipts. The Same technological advances that have given consumers multiple means of paying their bills and purchasing goods and services have also made it possible for the receipts confirming those transactions to be provided in the form of a voicemail, email, and text message as well as the traditional paper receipt. But when one refers to a printed receipt, what springs to mind is a tangible document. To “print” a receipt thus ordinarily connotes recording it on paper. That is why [the plaintiff] had to print a copy of his receipt to get it off of his computer; it is why the machine used to transfer text from a computer to paper is called a printer, and it is why a judge who asks a law clerk to print a case does not intend for the clerk to merely display the case on his computer screen. [Wait, Seventh Circuit judges don't read cases on their iPads?]

The court looks to the dictionary definition of “print” and notes that it typically refers to the transfer of information to paper (although, as the court acknowledges, you can “print to pdf”). Shlahtichman argued that the addition of the word “electronically” suggests Congressional intent to modernize the definition of the word “print,” but the court disagrees, noting that this suggests intent to capture receipts that are printed by a machine rather than credit card slips or receipts that are imprinted or handwritten. The court notes that where a receipt is automatically emailed by a vendor, the printing is done by the consumer, rather than the vendor (at whom the statute is aimed). Taking Shlahtichman’s logic to its conclusion, a vendor “prints” a receipt “simply by sending [an] email to the consumer.” As the court notes, this is contrary to the ordinary or natural meaning of the term “print.”

The court also looks to the context of the statute and notes that the prohibition on printing expiration dates is aimed at receipts “that are printed and ‘provided to the cardholder at the point of the sale or transaction.’” This raises a host of issues – most importantly,

[w]here is the point of sale for such a purchase – the consumer’s computer? the vendor’s headquarters? the vendor’s server? cyberspace generally?

The statute references “cash registers” as a typical point of sale example, as the statute was written during a time when email receipts were not necessarily the norm. Indeed, since the enactment of the statute, consumer-owned devices [you guessed it, the iPad] have emerged that function as the equivalent of the cash register. [The court cites to a TechCrunch article by Erick Schonfeld: "Square Turns Your iPad Into A Cash Register."] Nevertheless, the court notes that even at the time the statute was enacted, e-commerce was “common,” and the statute does not contain any references to terms such as “Internet” and “email.” Coupled with the fact that the statute expressly refers to cash registers, the court concludes that the absence of any reference to electronic receipts evinces Congressional intent to not capture those types of receipts.

Finally, the statute contains two different effective dates: one effective date for “cash register[s] or other machine[s]” in use before January 1, 2005 and an earlier effective date for “any such machine or device” that is first used on or after January 1, 2005. To the extent electronically printed can include material that is printed on a customer’s computer or equipment, having an effective date that is tied to when this equipment is first put into use problematic, since the effective date is made “dependent on a fact . . . that [is] wholly beyond the contemplation and control of the vendor facing liability.”

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I’m not sure where to begin with this one. The first point that jumps out at me is that courts are routinely criticized for not staying up to date on the latest technological advances. This decision makes clear that at least some courts are not so clueless when it comes to the latest technology. If anyone deserves the “out-of-touch-with-tech” label, I think it’s the drafters of legislation. Regardless of where you come out on the merits of the case, it’s tough to argue with the fact that the court took a careful and informed look at changing practices in construing the statute. [You have to give the court kudos for citing to TechCrunch!]

I didn’t see overwhelming evidence cited in the court’s opinion for this, but it’s possible that Congress intended the statute to cover harm caused by improper access of a paper receipt containing credit card information (such as through dumpster diving). There is risk of harm from improper access to credit card information when stored in electronic (non-paper) form, but as the court noted, other laws are directed towards this (e.g., the Computer Fraud and Abuse Act).

This case is somewhat reminiscent of another case involving the application of a consumer protection statute to changing internet merchant practices: Powers v. Pottery Barn. In that case, the plaintiff brought claims alleging that Pottery Barn improperly collected personal information (an email address) in violation of a California statute that limited the type of information a merchant could collect at the point of transaction. The defendant (Pottery Barn) argued that to the extent the California law extended to the collection of email addresses, it was preempted by CAN-SPAM. The court didn’t reach the issue of whether the statute covered email collection and instead concluded that the statute fell under CAN-SPAM’s exceptions to preemption. (Ethan’s blog post: “CAN-SPAM Doesn’t Preempt CA Privacy Law–Powers v. Pottery Barn.”)

Finally, FACTA is similar to CAN-SPAM in that often plaintiffs who suffered no apparent “injury” sued to obtain statutory damages under the statute. In the process, they stretched the statute to fit some far out fact patterns. Congress should keep these examples in mind as it enacts statutes which provide for civil causes of action along with statutory damages (particularly in the realm of informational or privacy harms).

[I thought it was also worth noting the court's usage: capital "I" "Internet" and no-hyphen "email" (and "voicemail" as one word). I agree with Tom O'Toole, who favors "internet" and "website" ("Web site, Website, web site, Internet, internet") but neither the prevailing style guides nor the Seventh Circuit (which seems to be a trend-setter of sorts in matters of style) are on board with this.]