Katz v. Donna Karan Co.
872 F.3d 114
| 2d Cir. | 2017Background
- Plaintiff Ye-huda Katz alleges two purchases (Jan. & Feb. 2014) where receipts printed the first six digits of his credit card number, violating FACTA’s truncation rule (15 U.S.C. § 1681c(g)).
- Katz’s complaint lacked allegations of any downstream misuse or identity theft resulting from the receipts.
- Defendants proffered extrinsic evidence (a BIN/IIN database website and district court decisions) showing the first six digits are an Issuer Identification Number (IIN) identifying the card issuer, not personal data.
- The district court dismissed Katz’s second amended complaint under Rule 12(b)(1) for lack of Article III standing, finding no material risk of identity-theft harm from printing the IIN; it entered dismissal with prejudice.
- On appeal the Second Circuit reviewed the district court’s factual findings for clear error (because defendants made a fact-based jurisdictional challenge) and affirmed lack of Article III standing, but remanded to change the dismissal to without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether printing first six digits of card on receipt (IIN) satisfies Spokeo concreteness requirement | Katz: printing IIN increases material risk of identity theft (also aids brute-force attacks; issuer identity is ‘about’ plaintiff) | Defs: first six digits are non‑personal IIN identifying issuer; publicly available; do not increase real risk of identity theft | Held: Dismissal affirmed — plaintiff failed to prove a material risk of harm; printing IIN is equivalent to printing issuer, which FACTA does not prohibit; district court’s factual finding not clearly erroneous |
| Proper standard/procedure at 12(b)(1) when extrinsic evidence is offered | Katz: court improperly relied on outside sources beyond complaint | Defs: fact-based Rule 12(b)(1) challenge permitted; extrinsic evidence is material | Held: When defendants proffer extrinsic, contested evidence, courts must resolve factual disputes; findings reviewed for clear error and plaintiff bears burden to controvert evidence |
| Remedy when suit dismissed for lack of Article III standing | Katz: dismissal with prejudice was entered below | Defs: N/A | Held: Dismissal for lack of subject-matter jurisdiction must be without prejudice; appellate court remands to amend judgment accordingly |
| Whether FACTA forbids printing issuer identity on receipts | Katz: any extra digits increase vulnerability | Defs: FACTA does not prohibit issuer information | Held: FACTA does not expressly forbid printing issuer IIN; printing issuer identifier does not, without more, show concrete injury |
Key Cases Cited
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (clarified that a bare procedural violation must present a concrete or material risk of harm to satisfy Article III)
- Crupar‑Weinmann v. Paris Baguette Am., Inc., 861 F.3d 76 (2d Cir. 2017) (FACTA violation by printing expiration date did not create material risk of identity theft)
- Strubel v. Comenity Bank, 842 F.3d 181 (2d Cir. 2016) (two‑part test for bare procedural violations: (1) Congress conferred a procedural right tied to a concrete interest; (2) the violation presents a risk of real harm)
- Carter v. HealthPort Technologies, LLC, 822 F.3d 47 (2d Cir. 2016) (distinguishes facial vs. fact‑based Rule 12(b)(1) challenges and the evidentiary burden on plaintiffs when defendants proffer extrinsic evidence)
- Makarova v. United States, 201 F.3d 110 (2d Cir. 2000) (plaintiff bears preponderance burden to prove subject‑matter jurisdiction)
- Hernandez v. Conriv Realty Assocs., 182 F.3d 121 (2d Cir. 1999) (dismissal for lack of Article III standing must be without prejudice)