Montgomery McCracken Secures Dismissal of Class Action for Printing Expiration Month on Credit Card Receipts

February 22, 2011

Rejecting a claim that printing a credit card’s month of expiration-but not the year-on a sales receipt violates federal law, the United States District Court for the Western District of Pennsylvania dismissed a proposed class action against Tommy Hilfiger U.S.A., Inc. without leave to amend.  Long v. Tommy Hilfiger U.S.A., Inc., No. 09-1701 (W.D. Pa. Feb. 11, 2011).  Montgomery McCracken represented Hilfiger.

The court’s order turned on an interpretation of the Fair and Accurate Credit Transaction Act, 15 U.S.C. § 1681(c)(g) (“FACTA”).  FACTA prohibits retailers and other merchants from printing on electronic credit and debit card receipts more than the last five digits of the card number, and also prohibits the printing of the card’s expiration date.

The plaintiff claimed Hilfiger willfully violated FACTA by printing the month (but not the year) of the expiration date of his credit card.  He sought to recover $100 to $1000 for every credit and debit card receipt Hilfiger has issued since June 2008.

Hilfiger moved to dismiss plaintiff’s complaint on two grounds: (1) a month is not an expiration date and, thus, it did not violate the statute’s prohibition against printing cardholders’ expiration dates; (2) even if printing the month was a technical violation of the statute, it could not have been a willful violation since Hilfiger’s interpretation of the statute was objectively reasonable.

The court agreed with Hilfiger on both points.  Because FACTA does not define the phrase “expiration date,” the court first looked to the ordinary meaning of the term.  After reviewing dictionary definitions of the word “expiration,” the court found the plain meaning of the term “expiration” to be the day or year when the validity of a particular thing comes to an end.  As applied to credit cards, the court found that “expiration date” means the date the cardholder can no longer make purchases on the card.  Since the plaintiff’s credit card expired in a particular month and year, and since Hilfiger did not print the month and year (it printed only the month), Hilfiger did not violate the statute.

The court also dismissed plaintiff’s complaint on the ground that Hilfiger did not commit a “willful” violation of the statute.  In Safeco Insurance Co. of America v. Burr, 551 U.S. 47 (2007), the United States Supreme Court explained that “[w]here the statutory text and relevant court and agency guidance allow for more than one reasonable interpretation, it would defy history and current thinking to treat a defendant who merely adopts one such interpretation as a knowing or reckless violator.  Congress could not have intended such a result for those who followed an interpretation that could reasonably have found support in the courts, whatever their subjective intent may have been.”  Id. at 70 n.20.  See also Shlahtichman v. 1-800 Contacts, Inc., 615 F.3d 794 (7th Cir. 2010) (affirming order granting a motion to dismiss FACTA complaint where defendant’s interpretation of the act was objectively reasonable).

Relying on Safeco and Shlahtichman, the Hilfiger court ruled that even if Hilfiger’s interpretation of the statute was incorrect, it was objectively reasonable.  In support of its opinion, the court noted the “dearth of guidance from FACTA or the federal courts” regarding the meaning of the phrase “expiration date.”  Under those circumstances, the court held that even if Hilfiger committed a technical violation of the statute by printing the month of plaintiff’s expiration date, it could not be willful.  The court therefore dismissed plaintiff’s complaint, with prejudice.