Ninth Circuit: FACTA Does not Cover Emailed Receipts — Simonoff v. Expedia

[Post by Venkat Balasubramani]

Simonoff v. Expedia, No. 10-35595 (9th Cir.; May 24, 2011)

FACTA is a statute which requires merchants to truncate the customer’s credit card information on receipts that are “electronically printed.” Plaintiffs have brought claims against online retailers for including credit card information on emailed receipts. Courts have not been receptive to these claims, and in Simonoff v. Expedia, the Ninth Circuit joins other circuit courts in holding that FACTA does not apply to email receipts.

Venue Selection

Before getting to the substantive issue, the court addressed the parties’ arguments regarding the applicability of the forum selection clause. Expedia’s online agreement provides that users

consent to the exclusive jurisdiction and venue of courts in King County, Washington.

Simonoff argued that “courts in King County” referred only to state courts, and therefore jurisdiction was not proper in federal court. The court disagrees, noting that if the online agreement used the words “courts of King County,” this would have mandated a different result, because:

the phrase “the courts of” a state refers to courts that derive their power from the state—i.e., only state courts—and [a] forum selection clause, which vested exclusive jurisdiction in the courts “of” [a particular state, would limit jurisdiction to courts of that state.]

[It appears Expedia heeded the Ninth Circuit’s advice from Doe 1 v AOL. Note to self! I think saying “federal or state courts” works, if you are open to jurisdiction in federal or state courts, but if you used this language you would say “federal or state courts in King County.”]

FACTA and Electronic Receipts

On the issue of whether FACTA applies to emailed receipts, the court followed the approach taken by other circuits, including Shlahtichman v. 1-800 Contacts, Inc., discussed in this blog post: “Electronically Printed” Does not Include Automated Merchant Email.” The court notes that although the technologies around the dissemination of information have changed over the years, “print” still means to imprint onto something tangible—no one ever says “print this to your iPad”:

‘Print’ refers to many different technologies—from Mesopotamian cuneiform writing on clay cylinders to the Gutenberg press in the fifteenth century, Xerography in the early twentieth century, and modern digital printing—but all of those technologies involve the making of a tangible impression on paper or other tangible medium. Although computer technology has significantly advanced in recent years, we commonly still speak of printing to paper and not to, say, iPad screens. Nobody says,”Turn on your Droid (or iPhone or iPad or Blackberry) and print a map of downtown San Francisco on your screen.” We conclude that under FACTA, a receipt that is transmitted to the consumer via email and then digitally displayed on the consumer’s screen is not an “electronically printed” receipt.

Congress’s use of the term “electronically printed” isn’t particularly precise, but the court finds that if Congress intended the statute to cover email receipts it could have easily said so:

in enacting FACTA, Congress did not use language that would have clearly extended FACTA’s protection to electronically mailed receipts. For example, Congress could have applied FACTA to ‘electronically printed or transmitted receipts,’ to ‘electronically printable‘ receipts, or to ‘electronically displayed’ receipts. Congress, however, chose not to do so, even though it has referred to digital methods of communication and commerce in numerous other statutes. We can’t fill in the blanks with words that Congress didn’t supply. [emphasis in original]

The court also notes that the structure and staggered implementation of FACTA supports its interpretation that “electronically printed” does not cover emailed receipts. The statute is intended to cover the printing of receipts to the extent this is within the merchant’s control, and not a situation where the printing or display happens at the consumer’s end:

if computer screens were deemed to ‘print’ receipts within the meaning of the statute, merchants’ liability would hinge on the date the customer purchased and began using a computer screen—an unintended, nonsensical, and unpredictable result.

The statute was intended to protect against identity theft, and it is difficult to see where the risk of identity theft is when the customer is emailed a receipt. To the extent the risk exists, it is something the customer, and not the retailer, is better situated to protect against. In any event, as the court in Shlahtichman noted, there are other statutes directed at protecting against identity theft when the information is stored or transmitted in electronic form (e.g., the Computer Fraud and Abuse Act).

At the end of the day, this was another attempt by plaintiffs’ lawyers to push the envelope and sue under a statute which created a civil cause of action without any showing of harm. The court smacks down the plaintiff’s attempt.

Other coverage: “Ninth Circuit: FACTA does not apply to credit card receipts sent via email” (Evan Brown)