Court Opinion

ID: 2677225
Source: CourtListenerOpinion
Date Created: 2014-06-05 16:00:37.64674+00
Date Added: 2024-06-11T11:18:25.870273
License: Public Domain

United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 12-3724
                         ___________________________

  Steven E. Hammer, individually and on behalf of all others similarly situated;
   Michael D. White, individually and on behalf of all others similary situated

                       lllllllllllllllllllll Plaintiffs - Appellants

                              United States of America

                              lllllllllllllllllllllIntervenor

                                            v.

Sam's East, Inc., doing business as Sam's Club; Does, 1-10, inclusive; Sam's West,
  Inc., doing business as Sam's Club; Wal-Mart Stores, Inc., individually, doing
business as Sam's Club, doing business as Sam's Wholesale Club; Does, 1-8, inclusive

                      lllllllllllllllllllll Defendants - Appellees
                         ___________________________

                                 No. 12-3858
                         ___________________________

  Steven E. Hammer, individually and on behalf of all others similarly situated;
   Michael D. White, individually and on behalf of all others similary situated

                       lllllllllllllllllllll Plaintiffs - Appellees

                              United States of America

                              lllllllllllllllllllllIntervenor

                                            v.
                  Sam's East, Inc., doing business as Sam's Club

                      lllllllllllllllllllll Defendant - Appellant

                               Does, 1-10, inclusive

                            lllllllllllllllllllll Defendant

      Sam's West, Inc., doing business as Sam's Club; Wal-Mart Stores, Inc.,
individually, doing business as Sam's Club, doing business as Sam's Wholesale Club

                     lllllllllllllllllllll Defendants - Appellants

                                Does, 1-8, inclusive

                            lllllllllllllllllllll Defendant
                                    ____________

                     Appeal from United States District Court
                for the Western District of Missouri - Kansas City
                                 ____________

                          Submitted: September 25, 2013
                               Filed: June 5, 2014
                                 ____________

Before RILEY, Chief Judge, BRIGHT and BYE, Circuit Judges.
                              ____________

BRIGHT, Circuit Judge.

      In this action, plaintiffs (appellants) Steven Hammer and Michael White allege
that Wal-Mart Stores, Inc., Sam’s East, Inc., and Sam’s West, Inc. (collectively

                                         -2-
“Sam’s Club”)1 willfully violated a provision of the Fair and Accurate Credit
Transactions Act (FACTA), 15 U.S.C. § 1681c(g)(1), which prohibits a person
accepting credit or debit cards for a consumer transaction from “print[ing] more than
the last five digits of the card number . . . upon any receipt provided to the
cardholder.” Despite its conclusion that Sam’s Club violated FACTA, the district
court2 granted summary judgment of dismissal in favor of Sam’s Club on the ground
that the violation was not willful. We agree, and therefore affirm.

I.    Background

       Sam’s Club, a membership-only retailer, requires customers to have a
membership card and number in order to shop at a Sam’s Club store. Sam’s Club
members may also apply for a Sam’s Club Private Label Credit Card, which doubles
as a membership card and a credit card. The card has a 19-digit credit card number.
The first seven digits comprise the Bank Identification Number, which identifies the
banking institution issuing the card, and is identical on all cards and publicly
available. Eleven of the remaining twelve digits are unique to the credit card holder.
It is undisputed that prior to the initiation of this action, Sam’s Club designed its
Private Label Credit Cards such that the last twelve digits of that card number read
identical to the last twelve digits of the cardholder’s membership number.

      The appellants hold Sam’s Club Private Label Credit Cards. On multiple
occasions from 2007-2008, they purchased products at Sam’s Club stores in Kansas
and Missouri using their cards and were given electronically-printed receipts at the

      1
      Hammer was the sole named plaintiff in the original complaint. Hammer
subsequently filed an amended complaint adding White as a named plaintiff and Wal-
Mart Stores, Inc., and Sam’s West, Inc., as defendants.
      2
       The Honorable Howard F. Sachs, United States District Judge for the Western
District of Missouri.

                                         -3-
point of sale. The receipts disclosed only the last four digits of appellants’ credit card
numbers; however, the receipts also showed separately the last ten consecutive digits
of their membership numbers. Thus, given that Sam’s Club designed the last twelve
digits of membership and credit card numbers to be the same, the receipts showing
the appellants’ “member” number in fact disclosed the last 10 consecutive digits of
appellants’ credit card numbers.

    The following example illustrates how the receipts disclosed the appellants’
membership numbers (“V Member”) and credit card numbers (“Account #”):

      V Member: 101-00123456789
      Account #: 6789

In this example, the bold numbers comprise the last ten digits of the consumer’s credit
card number.

      Appellants subsequently filed this action on behalf of themselves and others
similarly situated asserting that Sam’s Club in its receipts provided to consumers with
Private Label Credit Cards violated FACTA’s receipt limitation requirement, 15
U.S.C. § 1681c(g)(1), reading:

      [N]o person that accepts credit cards or debit cards for the transaction
      of business shall print more than the last 5 digits of the card number or
      the expiration date upon any receipt provided to the cardholder at the
      point of the sale or transaction.

       Appellants allege that Sam’s Club violated this statute by printing more than
the last five digits of their credit card numbers on electronically-printed receipts
despite the fact that receipts listed the numbers as “member” numbers. Appellants
further allege that the violation was willful because Sam’s Club persisted in printing
credit card numbers on receipts despite knowing and repeatedly being informed about

                                           -4-
FACTA’s receipt requirement. Appellants do not allege actual damages, but seek to
recover statutory damages under a provision of the Fair Credit Reporting Act
(FCRA), 15 U.S.C. § 1681n, which governs liability for FACTA violations. That
provision states:

      Any person who willfully fails to comply with any requirement imposed
      under this subchapter with respect to any consumer is liable to that
      consumer in an amount equal to the sum of . . . any actual damages
      sustained by the consumer as a result of the failure or damages of not
      less than $100 and not more than $1,000.

15 U.S.C. § 1681n(a)(1)(A) (hereinafter “the FCRA liability provision”). Appellants
also seek punitive damages and reasonable attorneys’ fees.

       After the district court denied Sam’s Club’s motion to dismiss under Fed. R.
Civ. P. 12(b)(6), appellants moved for summary judgment on the issue of whether
Sam’s Club violated FACTA’s receipt requirement by printing receipts with
membership numbers that included more than five digits of customers’ credit card
numbers. The district court granted the motion, reasoning that “one cannot avoid the
prohibition by referring on the receipt to a ‘membership number’ if in fact the
collection of numbers includes a long string of more than five digits that are also used
as credit card numbers.” (July 24, 2012, Order at 2.) Although the district court
concluded that Sam’s Club violated FACTA, it reserved for consideration the issue
of whether the violation was willful—a statutory precondition to liability.

       Sam’s Club then moved for summary judgment on the issue of willfulness. The
district court granted the motion and dismissed appellants’ action. Relying on the
Supreme Court’s decision in Safeco Ins. Co. v. Burr, 551 U.S. 47 (2007), the district
court concluded that although Sam’s Club violated FACTA, the violation was not
willful because Sam’s Club’s interpretation of the statute was not objectively
unreasonable. The district court reasoned that Sam’s Club’s reading of the

                                          -5-
statute—that the language of the statute only related to shortening of a credit card
number, so labeled—“not only seems reasonably possible but rather likely, at least
for those not philosophically inclined to think about (or guess at) Congressional
purpose.” (Oct. 16, 2012, Order at 6.) The district court also emphasized that Sam’s
Club had “no guidance except the bare wording of the statute in determining whether
a ‘membership number’ as well as a ‘credit card’ or ‘account’ number must be
truncated.” (Id.)

      Appellants filed a timely notice of appeal to this court.

II.   Discussion

       Appellants assert (1) that the district court erred by concluding that Sam’s Club
did not willfully violate FACTA and (2) that the district judge failed to recuse himself
in the case after disclosure of a conflict of interest. On cross appeal, Sam’s Club
challenges the district court’s conclusion that it violated FACTA. Sam’s Club also
argues that appellants lack Article III standing to bring their claim. We address
standing before proceeding to the merits.

      A.     Article III Standing

      “Article III standing is a threshold question in every federal court case.”
United States v. One Lincoln Navigator 1998, 328 F.3d 1011, 1013 (8th Cir. 2003).
“The exercise of judicial power under Art. III of the Constitution depends on the
existence of a case or controversy.” Preiser v. Newkirk, 422 U.S. 395, 401 (1975).
A central component of the “case or controversy” requirement is standing, “which
requires a plaintiff to demonstrate the now-familiar elements of injury in fact,
causation, and redressability.” Lance v. Coffman, 549 U.S. 437, 439 (2007).

                                          -6-
       With these principles in mind, we requested supplemental briefing from the
parties prior to oral argument on the following issues: (1) whether the appellants,
having alleged no actual damages, “have suffered an ‘injury in fact,’” Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1992), and (2) whether the appellants have
suffered an injury “that is likely to be redressed by a favorable decision,” Simon v. E.
Ky. Welfare Rights Org., 426 U.S. 26, 38 (1976), in light of dicta from our decision
in Dowell v. Wells Fargo Bank, NA, 517 F.3d 1024, 1026 (8th Cir. 2008) (“It does not
necessarily follow from [the FCRA liability provision] that statutory damages are
available where a plaintiff fails to prove actual damages.”).

       The parties submitted briefs on the above issues in which they took opposing
positions. Appellants Hammer and White argue that Congress may create legal rights
via statute, the invasion of which creates standing to sue. Here, they assert, by
enacting 15 U.S.C. § 1681n(a)(1)(A), Congress created a statutory right to receive
receipts that disclose no more than the last five digits of the cardholder’s credit card
number. Thus, appellants argue that they suffered an injury-in-fact as a result of
Sam’s Club’s statutory violation sufficient to confer standing. In opposition, Sam’s
Club contends that “[t]he mere fact of a statutory violation, disconnected from any
real-world impact” does not suffice to confer Article III standing. Thus, Sam’s Club
argues that appellants cannot maintain standing absent some showing of actual
damages. Sam’s Club also encourages us to interpret the FCRA liability provision
as requiring some proof of actual damages as a precondition to recovering actual or
statutory damages in order to “avoid serious Article III concerns.”

       After oral argument, the United States filed a motion to intervene in the
proceedings to file a supplemental brief on the two standing questions that we had
posed to the parties. See 28 U.S.C. 2403(a) (permitting the United States to intervene
for argument on the question of constitutionality “[i]n any action, suit or proceeding
in a court of the United States . . . wherein the constitutionality of any Act of
Congress affecting the public interest is drawn in question”). We granted the motion

                                          -7-
and the United States subsequently filed a brief taking the position that appellants
maintain Article III standing to bring their action.

      After considering the parties’ submissions, we conclude that appellants do have
standing to bring their claim.

             i.     Injury-in-fact

       It is well established that “[t]he actual or threatened injury required by Art. III
may exist solely by virtue of statutes creating legal rights, the invasion of which
creates standing.” Warth v. Seldin, 422 U.S. 490, 500 (1975) (citation omitted)
(internal quotation marks omitted); see also Charvat v. Mut. First Fed. Credit Union,
725 F.3d 819, 822 (8th Cir. 2013). Notably, this language is without limitation: the
actual-injury requirement may be satisfied solely by the invasion of a legal right that
Congress created. This is not a novel principle within the law of standing.3

      3
        See Havens Realty Corp. v. Coleman, 455 U.S. 363, 373-74 (1982) (holding
that an individual who receives false information in violation of section 804(d) of the
Fair Housing Act has standing to bring a claim regardless of whether the violation
results in actual injury to the individual); Edwards v. First Am. Corp., 610 F.3d 514,
517 (9th Cir. 2010) (holding that Real Estate Settlement Procedures Act granted
plaintiff certain rights to judicial relief sufficient to confer Article III standing even
though the plaintiff did not suffer actual damages); Robey v. Shapiro, Marianos &
Cejda, L.L.C., 434 F.3d 1208, 1211 (10th Cir. 2006) (“Congress may expand the
range or scope of injuries that are cognizable for purposes of Article III standing by
enacting statutes which create legal rights.”); FMC Corp. v. Boesky, 852 F.2d 981,
993 (7th Cir. 1988) (concluding that the plaintiff sufficiently alleged the violation of
a state-law right “that in itself would suffice to satisfy Article III’s injury
requirement” even in the absence of a specific finding of actual injury (emphasis
added)); Dryden v. Lou Budke’s Arrow Fin. Co., 630 F.2d 641, 647 (8th Cir. 1980)
(explaining that claimants “need not show that they sustained actual damages
stemming from the [Truth in Lending Act] violations proved before they may recover
the statutory damages the Act also provides for”).

                                           -8-
       By enacting 15 U.S.C. § 1681c(g)(1), Congress gave consumers the legal right
to obtain a receipt at the point of sale showing no more than the last five digits of the
consumer’s credit or debit card number. Appellants contend that Sam’s Club invaded
this right. Such is the “actual injury” alleged by the appellants. It is of no
consequence that appellants’ injury is dependent on the existence of a statute. See
Linda R.S. v. Richard D., 410 U.S. 614, 617 n.3 (1973) (emphasizing that the injury-
in-fact requirement is satisfied “even though no injury would exist without the
statute”). Thus, we conclude that appellants have alleged an injury-in-fact sufficient
to confer Article III standing.

        To be sure, Article III places meaningful limitations on the types of interests
that Congress may define as judicially enforceable rights. First, the party seeking
review must “be himself among the injured” in the sense that he alleges that
defendants violated his statutory rights. See Sierra Club v. Morton, 405 U.S. 727,
735 (1972); see also Steger v. Franco, Inc., 228 F.3d 889, 893 (8th Cir. 2000). Such
is the case here. Appellants allege that it was their own receipts that contain numbers
printed in violation of 15 U.S.C. § 1681c(g)(1). Second, “Congress may empower
individuals to sue based only on ‘personal and individual[ized]’ injuries.” In re
Carter, 553 F.3d 979, 989 (6th Cir. 2009) (quoting Lujan, 504 U.S. at 560 n.1
(alteration in original)). Congress may not, for example, permit individuals to enforce
“an abstract, self-contained, noninstrumental ‘right’ to have the Executive observe the
procedures required by law.” Lujan, 504 U.S. at 573. Again, this limitation poses no
obstacle here. The FCRA liability provision states that “[a]ny person who willfully
fails to comply with any requirement imposed under this subchapter with respect to
any consumer is liable to that consumer.” 15 U.S.C. § 1681n(a)(1)(A) (emphasis
added). Hence, the liability provision does not authorize suits by members of the
public at large, but creates a sufficient nexus between the individual plaintiff and the
legal violation to avoid Article III concerns.

                                          -9-
      Because appellants allege that they have suffered an actual, individualized
invasion of a statutory right, we conclude that they have satisfied the injury-in-fact
requirement of Article III standing.

               ii.   Redressability

       As to the question of whether the appellants have suffered an injury “that is
likely to be redressed by a favorable decision,” Simon, 426 U.S. at 38, we also answer
in the affirmative.

      Under FCRA’s liability provision, a person who “willfully” fails to comply
with FACTA is liable to the aggrieved consumer for “any actual damages sustained
by the consumer as a result of the failure or damages of not less than $100 and not
more than $1,000.” 15 U.S.C. § 1681n(a)(1)(A).

         Referring to this provision in Dowell v. Wells Fargo Bank, NA, we stated as
dicta:

         It does not necessarily follow from the cited language that statutory
         damages are available where a plaintiff fails to prove actual damages.
         A reasonable reading of the statute could still require proof of actual
         damages but simply substitute statutory rather than actual damages for
         the purpose of calculating the damage award.

517 F.3d at 1026. For the reasons discussed below, we decline to follow the possible
interpretation of the FCRA liability provision suggested in Dowell and instead
conclude that the plain language of the provision permits recovery of statutory
damages in the absence of actual damages.

     The FCRA liability provision permits a consumer to recover “any actual
damages . . . or damages of not less than $100 and not more than $1,000.” 15 U.S.C.

                                          -10-
§ 1681n(a)(1)(A) (emphasis added). Notably, Congress described these permissible
damages in the disjunctive, which indicates that a consumer can bring a claim to
recover statutory damages “of not less than $100 and not more than $1,000” as an
alternative to a claim for actual damages. See 1A Sutherland Statutes and Statutory
Construction § 21:14 (7th ed. 2009) (“The use of the disjunctive usually indicates
alternatives and requires that those alternatives be treated separately.”); see also
Charvat, 725 F.3d at 823 (“Our Court . . . has held that plaintiffs need not show actual
damages, beyond a statutory violation, in order to recover statutory damages.”). We
reject Sam’s Club’s invitation to foreclose statutory damages in the absence of actual
damages when the language of the FCRA liability provision dictates otherwise.

       Our reading is consistent with the purpose of FACTA’s receipt requirement.
Congress enacted FACTA “to prevent identity theft,” Fair and Accurate Credit
Transactions Act of 2003, Pub. L. No. 108-159, 117 Stat. 1952, and the restriction on
printing more than the last five digits of a card number is specifically intended “to
limit the number of opportunities for identity thieves to ‘pick off’ key card account
information,” S. Rep. No. 108-166, at 13 (2003). However, as a practical matter,
when FACTA is violated, individual losses, if any, may be small. “That actual loss
is small and hard to quantify is why statutes such as the Fair Credit Reporting Act
provide for modest damages without proof of injury.” Murray v. GMAC Mortg.
Corp., 434 F.3d 948, 953 (7th Cir. 2006) (emphasis added).

       We also find support for our reading in the decisions of our sister circuits. See,
e.g., Batemen v. Am. Multi-Cinema, Inc., 623 F.3d 708, 719 (9th Cir. 2010)
(“Congress expressly created a statutory damages scheme that intended to compensate
individuals for actual or potential damages resulting from FACTA violations, without
requiring individuals to prove actual harm.”); Beaudry v. TeleCheck Servs., Inc., 579
F.3d 702, 705 (6th Cir. 2009) (explaining that “‘actual damages’ represent an
alternative form of relief” under 15 U.S.C. § 1681n and that “the statute permits a
recovery when there are no identifiable or measurable actual damages”); Murray, 434

                                          -11-
F.3d at 953. In fact, we cannot locate a single case that interprets the FCRA liability
provision as requiring something more than a statutory violation in order to recover
“damages of not less than $100 and not more than $1,000.”

        By permitting a consumer to recover statutory damages under the FCRA
liability provision, Congress did not require that consumers prove themselves actual
victims of identity theft in order to bring a claim for violation of the FACTA
truncation requirement. Therefore, we conclude that appellants’ action against Sam’s
Club for violating FACTA’s receipt requirement can be redressed in the absence of
a claim for actual damages. See Simon, 426 U.S. at 38.

        Finally, we note that a recent decision by the Ninth Circuit offers strong
support for appellants’ claim that they have Article III standing to bring their claim.
See Robins v. Spokeo, Inc., 742 F.3d 409, 413-14 (9th Cir. 2014) (holding that
plaintiff satisfied the Article III standing requirements by alleging a violation of his
statutory rights under the FCRA and seeking statutory damages under the FCRA
liability provision without a showing of actual damages).

      We conclude that appellants have satisfied the requirements of Article III
standing.4

      4
        The dissenting author asserts that we have “[i]gnor[ed] the last thirty-nine
years of Article III standing jurisprudence” in holding that Hammer and White have
Article III standing to bring their claim. In support, the author cites a score of cases
in which the U.S. Supreme Court repeats the unremarkable proposition that a plaintiff
must have suffered a concrete and particularized injury-in-fact in order to satisfy
Article III standing. See infra dissent, Part I.A. But it bears repeating that to our
knowledge, every federal circuit court of appeals to have addressed whether a
plaintiff is permitted to recover statutory damages under the FCRA liability provision
in the absence of actual damages has answered in the affirmative. Moreover, not one
of these courts has concluded that the FCRA liability provision violates constitutional
standing principles. Federal jurisprudence supports our holding with respect to

                                         -12-
      B.     Willfulness under Safeco

       We now turn to the merits. As discussed, the district court concluded that
Sam’s Club violated FACTA’s receipt requirement by printing more than the last five
digits of appellants’ credit card numbers on electronically printed receipts despite the
fact that those numbers were labeled “member” numbers. However, the district court
dismissed appellants’ action on summary judgment, holding that Sam’s Club did not
willfully violate the statute. For the purposes of our analysis, we accept the district
court’s ruling that Sam’s Club violated FACTA. Nevertheless, we agree with the
district court that the violation was not willful.

       This court reviews a grant of summary judgment de novo, applying the same
standard as the district court. Naucke v. City of Park Hills, 284 F.3d 923, 927 (8th
Cir. 2002). “Summary judgment is appropriate when the evidence viewed in the light
most favorable to the nonmoving party presents no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law.” Coates v. Powell, 639
F.3d 471, 475 (8th Cir. 2011). Questions of law are “particularly appropriate for
summary judgment.” TeamBank, N.A. v. McClure, 279 F.3d 614, 617 (8th Cir. 2002).

      Appellants assert that the district court erred in several respects in concluding
that Sam’s Club did not willfully violate FACTA. First, they argue that such
judgment was inappropriate in light of the district court’s prior conclusion that Sam’s
Club violated the “clear” and “unambiguous” language of FACTA’s receipt
requirement, 15 U.S.C. § 1681c(g)(1). Second, appellants contend that the district
court held them to an “impermissibly high standard of proof.” Finally, appellants
argue that the district court inappropriately relied on disputed facts and considered
the enormity of potential damages in granting a dismissal. In contrast, Sam’s Club

Article III standing.

                                         -13-
argues that it did not act wilfully because its reading of the statute was objectively
reasonable.

       As we have already observed, a person who fails to comply with FACTA’s
receipt requirement does not incur liability for damages unless the violation is willful.
15 U.S.C. § 1681n(a)(1)(A). The Supreme Court has held that a violation becomes
“willful” if it is either “knowing” or “reckless.” Safeco, 551 U.S. at 57. A company
acts in reckless disregard of FACTA when its “action is not only a violation under a
reasonable reading of the statute’s terms, but shows that the company ran a risk of
violating the law substantially greater than the risk associated with a reading that was
merely careless.” Id. at 69. In essence, the central inquiry focuses on “objective
reasonableness.” Fuges v. Sw. Fin. Servs., Ltd., 707 F.3d 241, 249 (3d Cir. 2012).
Thus, even when a court disagrees with a party’s interpretation of FACTA, it may not
impose liability unless the party has interpreted the statute in an objectively
unreasonable manner. See Safeco, 551 U.S. at 69 (concluding that Safeco’s violation
was not reckless because its “reading of the statute, albeit erroneous, was not
objectively unreasonable”).

        In determining whether an interpretation is objectively unreasonable, we assess
whether the reading “has a foundation in the statutory text” or whether the party
interpreting the statute “had the benefit of guidance from the courts of appeals” or
federal regulatory agencies “that might have warned it away from the view it took.”
Id. at 69-70. When a party has read the statute in an objectively reasonable manner,
we need not consider facts relating to the party’s subjective intent in assessing
willfulness. Id. at 70, n.20.

      Applying the analytical framework set forth in Safeco, we conclude that Sam’s
Club’s interpretation of FACTA’s receipt requirement as not applicable to the
membership designation on the receipts did not amount to an objectively
unreasonable reading of the statute. As we noted, FACTA provides:

                                          -14-
      [N]o person that accepts credit cards or debit cards for the transaction
      of business shall print more than the last 5 digits of the card number or
      the expiration date upon any receipt provided to the cardholder at the
      point of the sale or transaction.

15 U.S.C. § 1681c(g)(1). Given this language, Sam’s Club reasonably could have
assumed that the statute only prohibits printing of more than the last five digits of the
credit card number, so labeled. A literal-minded company executive could
reasonably read the statute in this manner, even though such a reading may be
contrary to the purposes of preventing identity theft or credit card fraud. We
conclude that Sam’s Club’s reading of the statute “has a foundation in the statutory
text,” even though we acknowledge that the reading may be deemed erroneous under
the law. Safeco, 551 U.S. at 69-70.

       Our conclusion is bolstered by the lack of authoritative guidance available to
Sam’s Club. At the time this suit was filed in October 2008, no guidance had been
rendered by appellate courts or regulatory agencies on the question of whether a
“membership number,” like a “credit card” or “account” number, must be shortened
pursuant to the statute. To this court’s knowledge, only one circuit decision has
referenced the meaning of “card number” in the context of willfulness under FACTA.
See Van Straaten v. Shell Oil Prods. Co, LLC, 678 F.3d 486 (7th Cir. 2012). In that
case, the Seventh Circuit recognized the “absence of a statutory or regulatory
definition of the phrase ‘card number,’” but concluded that interpreting the term was
unnecessary because the alleged FACTA violation was not willful. Id. at 489-91.
And in any event, that decision came after appellants filed suit. Appellants also fail
to identify any regulatory authority available to Sam’s Club which demonstrated its
printing of a customer’s receipt containing a membership number that includes more
than the last five digits of the customer’s credit card number violated FACTA.

    On a final note, we reject appellants’ assertions that the district court
committed various legal errors in its analysis of willfulness. To the contrary, the

                                          -15-
record establishes that the district court correctly focused its inquiry on whether
Sam’s Club’s reading of the statute was objectively reasonable in accordance with the
standards set forth in Safeco.

       We conclude that Sam’s Club’s interpretation of FACTA as not applicable to
a membership number printed on a customer’s receipt “has a foundation in the
statutory text,” Safeco, 551 U.S. at 69-70, and is therefore not objectively
unreasonable.5 Accordingly, we affirm the dismissal of appellants’ action on the
ground that Sam’s Club’s statutory violation was not willful.

      C.     Denial of Appellants’ Motion to Recuse

       Finally, appellants argue that the district court judge erred in not recusing
himself from the case on the ground that his son was an attorney in a law firm that
represented General Electric (GE), the company that partners with Sam’s Club in
financing credit to certain Sam’s Club customers. Appellants contend that the judge’s
failure to recuse violated 28 U.S.C. § 455(a) because an average person knowing the
relevant facts surrounding the case would reasonably question the judge’s impartiality
based on his son’s connection to GE.

      5
        Having concluded that Sam’s Club’s interpretation of 15 U.S.C. § 1681c(g)(1)
is objectively reasonable, we do not consider evidence in the record put forth by
appellants that allegedly shows an intentional or bad faith violation of FACTA by
Sam’s Club. See Safeco, 551 U.S. at 70 n.20 (stating that evidence of subjective bad
faith should not be taken into account “in determining whether a company acted
knowingly or recklessly for purposes of § 1681n(a)” when the company’s reading of
the statute is objectively reasonable); Levine v. World Fin. Network Nat’l Bank, 554
F.3d 1314, 1319 (11th Cir. 2009) (“Safeco makes clear that evidence of subjective
bad faith cannot support ‘a willfulness finding . . . when the company’s reading of the
statute is objectively reasonable.’”).

                                         -16-
       “The denial of a motion to recuse is reviewed for abuse of discretion.” United
States v. Ruff, 472 F.3d 1044, 1046 (8th Cir. 2007). A judge must recuse himself “in
any proceeding in which his impartiality might reasonably be questioned.” 28 U.S.C.
§ 455(a). Under section 455(a), this court considers “whether the judge’s impartiality
might reasonably be questioned by the average person on the street who knows all the
relevant facts of a case.” In re Kan. Pub. Emp. Ret. Sys., 85 F.3d 1353, 1358 (8th Cir.
1996). Because a “judge is presumed to be impartial,” a party seeking recusal “bears
the substantial burden of proving otherwise.” United States v. Denton, 434 F.3d
1104, 1111 (8th Cir. 2006) (citation omitted) (internal quotation marks omitted). A
“relationship between a party and a judge’s son or daughter does not per se
necessitate a judge’s disqualification. Rather, the determination of whether a conflict
exists in a given situation is factually bound.” See In re Kan. Pub. Emp. Ret. Sys., 85
F.3d at 1364 (citations omitted).

         We conclude that appellants have not satisfied their burden of showing that
recusal was required under 28 U.S.C. § 455(a). While appellants allege that the judge
became aware of the potential conflict with GE long before the judge disclosed it,
appellants do not offer adequate support for this claim. The appellants do not point
to anything in the district court’s orders or the record that convincingly shows that the
judge deliberately concealed a conflict from the parties. More importantly, the nature
of the alleged conflict is “simply too remote, speculative, and contingent” to give rise
to a situation in which the judge’s impartiality might reasonably be questioned by a
member of the public. See In re Kan. Pub. Emp. Ret. Sys., 85 F.3d at 1362. The
record does not show GE as a party to this lawsuit, and, as Sam’s Club observes, there
is little realistic possibility that it will become a party given that Sam’s Club is the
only company alleged to have provided appellants with a questioned electronically-
printed receipt. Furthermore, appellants do not dispute Sam’s Club’s assertion that
the judge’s son is in no way involved in this case, and that no lawyer in that law firm
has ever appeared in this case in any capacity. Appellants’ counsel seems to be
grasping at straws blowing in the wind in order to litigate this case further.

                                          -17-
     We conclude that the district court acted properly in denying appellants’
motion to recuse.

III.   Conclusion

       For the foregoing reasons, we affirm.

RILEY, Chief Judge, dissenting.

       Relying on an expansive reading of a single line in Warth v. Seldin, 422 U.S.
490, 500 (1975), the majority unnecessarily decides a difficult Article III standing
question of first impression in our circuit, leading to an unsound ruling on the merits.
I respectfully dissent.

I.     STANDING
       As the majority acknowledges, the plaintiffs in this case “do not allege actual
damages.” Ante at 5 (emphasis added). This putative “identity theft” case contains
no trace of actual identity theft. The plaintiffs, Sam’s Club shoppers Steven E.
Hammer and Michael D. White (shoppers), do not allege the receipts containing their
credit card information were ever at risk of exposure to would-be identity thieves.
Until this lawsuit, the receipts apparently never left the shoppers’ possessions, and
now the receipts are safely ensconced in the sealed record. Even if credit card
information listed on secured receipts could somehow cause anxiety, there is no
allegation the shoppers suffered so much as a sleepless night or any other
psychological harm. Unlike the failed plaintiffs in Clapper v. Amnesty International
USA, 568 U.S. ___, ___, 133 S. Ct. 1138, 1146 (2013) (internal quotation omitted),
the shoppers do not even claim to “have undertaken costly and burdensome measures
to protect” themselves from the risk they supposedly face. The shoppers most
assuredly lack Article III standing.

                                         -18-
        A.    Injury in Fact
        The shoppers’ only basis for appearing in federal court, the majority
recognizes, is a harmless statutory violation: “Sam’s Club invaded” the shoppers’
“legal right to obtain a receipt at the point of sale showing no more than the last five
digits of the consumer’s credit or debit card number.” Ante at 9. To be sure, this
invasion of a statutory right is an injury in law. But it is far from “well established,”
as the majority asserts, id., that this trivial statutory violation is an injury in fact. The
shoppers have suffered injury without damage, “[a] legal wrong” which ordinarily
“will not sustain a lawsuit because no harm resulted from it.” See Black’s Law
Dictionary 856 (9th ed. 2009) (defining injuria absque damno) (emphasis added).
“It is a longstanding principle in civil law that there can be no monetary recovery
unless the plaintiff has suffered harm.” Mira v. Nuclear Measurements Corp., 107
F.3d 466, 473 (7th Cir. 1997); see also, e.g., Pierce v. Ramsey Winch Co., 753 F.2d
416, 435 (5th Cir. 1985) (“[I]njury without damage creates no right to
compensation.”). By requiring injury in fact, the Supreme Court recognizes that
Article III incorporates this traditional principle:

       An interest unrelated to injury in fact is insufficient to give a
       plaintiff standing.

Vt. Agency of Natural Res. v. U.S. ex rel. Stevens, 529 U.S. 765, 772 (2000)
(emphasis added).

       Ignoring the last thirty-nine years of Article III standing jurisprudence, the
majority adopts an extraordinarily broad reading of the Supreme Court’s 1975 dictum
in Warth that “‘[t]he actual or threatened injury required by Art. III may exist solely
by virtue of statutes creating legal rights, the invasion of which creates standing.’”

                                            -19-
Ante at 8 (quoting Warth, 422 U.S. at 500). The Supreme Court has never actually
held an unharmed plaintiff had standing by virtue of a bare statutory violation.6

       The majority justifies its adoption of this theory that “the actual-injury
requirement may be satisfied solely by the invasion of a legal right that Congress
created” on the basis that this theory “is not a novel [one] within the law of standing.”
Ante at 8 (footnote omitted). This aged theory is even less novel than the majority
suggests. Riding circuit, Justice Joseph Story wrote in 1838, “Actual, perceptible
damage is not indispensable as the foundation of an action. The law tolerates no
farther inquiry than whether there has been the violation of a right.” Webb v.
Portland Mfg. Co., 29 F. Cas. 506, 508 (D. Me. 1838) (No. 17,322).

      Since Justice Story decided Webb in 1838 and Justice Powell authored Warth
in 1975, the standing doctrine has become more protective of the judicial branch’s
limited role in our tripartite system of government.7 Gone are the days when the

      6
        In Massachusetts v. EPA, 549 U.S. 497 (2007), for example, the Supreme
Court conspicuously relied on the harm Massachusetts was in fact suffering, not on
the bare statutory violation of which Massachusetts complained, as the basis for
finding an injury in fact: “Because the Commonwealth owns a substantial portion of
the state’s coastal property” and “rising seas have already begun to swallow
Massachusetts’ coastal land,” “[Massachusetts] has alleged a particularized injury in
its capacity as a landowner.” Id. at 522 (internal quotation omitted).
      7
       In Raines v. Byrd, 521 U.S. 811 (1997), for example, the Supreme Court
explained:

      “[T]he law of Art. III standing is built on a single basic idea—the idea
      of separation of powers.” In the light of this overriding and time-
      honored concern about keeping the Judiciary’s power within its proper
      constitutional sphere, we must put aside the natural urge to proceed
      directly to the merits of this important dispute and to “settle” it for the
      sake of convenience and efficiency. Instead, we must carefully inquire
      as to whether appellees have met their burden of establishing that their

                                          -20-
federal courthouse door was rarely closed to plaintiffs, no matter how attenuated or
speculative their supposed injury. See, e.g., Lewis v. Casey, 518 U.S. 343, 353 n.3
(1996) (“This would perhaps have seemed like good law at the time of Flast[ v.
Cohen, 392 U.S. 83 (1968)], but our later opinions have made it explicitly clear that
Flast erred in assuming that assurance of ‘serious and adversarial treatment’ was the
only value protected by standing.”).

       In recent years, the Supreme Court has strongly suggested that to have a case
under Article III, a plaintiff must have suffered not only the violation of a legal right
(the “injury” of “injury in fact”), but also a factual harm (the “in fact”). See, e.g.,
Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. ___, ___, 134 S. Ct.
1377, 1386 (2014) (“The plaintiff must have suffered or be imminently threatened
with a concrete and particularized ‘injury in fact.’”); Monsanto Co. v. Geertson Seed
Farms, 561 U.S. 139, ___, 130 S. Ct. 2743, 2755 (2010) (“Such harms . . . are
sufficiently concrete to satisfy the injury-in-fact prong of the constitutional standing
analysis.” (emphasis added)); Vermont Agency, 529 U.S. at 771 (defining “injury in
fact” as “a harm that is both ‘concrete’ and ‘actual or imminent, not conjectural or
hypothetical’” (emphasis added) (quoting Whitmore v. Arkansas, 495 U.S. 149, 155
(1990))); Fed. Election Comm’n v. Akins, 524 U.S. 11, 24 (1998) (“[W]here a harm
is concrete, though widely shared, the Court has found ‘injury in fact.’” (emphasis
added)).

       Notably, in Lujan v. Defenders of Wildlife, 504 U.S. 555, 578 (1992), the
Supreme Court read Warth narrowly, explaining Congress’ power to create standing
by statute is limited to “elevating to the status of legally cognizable injuries concrete,
de facto injuries that were previously inadequate in law.” De facto means “actual;

      claimed injury is personal, particularized, concrete, and otherwise
      judicially cognizable.

Id. at 820 (footnote omitted) (quoting Allen v. Wright, 468 U.S. 737, 752 (1984)).

                                          -21-
existing in fact.” Black’s Law Dictionary, supra, at 479 (emphasis added).
According to Lujan, Warth’s dictum stands for the limited and uncontroversial
proposition that Congress can, through statute, create a legal remedy for a factual
harm. If there is damage without injury, an act of Congress can generate an Article
III case where otherwise there would be none. See Lujan, 504 U.S. at 578. For
example, Congress can assign a statutory value to the harm a person experiences from
living in a racially segregated community or a private company faces from competing
against a government-owned company. See Trafficante v. Metro. Life Ins. Co., 409
U.S. 205, 208-12 (1972); Hardin v. Ky. Utils. Co., 390 U.S. 1, 6 (1968).

       Whether Congress can create justiciable injuries where there is no real harm
presents an extremely difficult constitutional question. See Wallace v. ConAgra
Foods, Inc., ___ F.3d ___, ___, No. 13-1485, 2014 WL 1356860, at *5-6 (8th Cir.
Apr. 4, 2014). It is a question the Supreme Court has never answered, and—until
today—neither had our court.8 In fact, our court recently recognized the question’s
difficulty in Wallace and declined to answer based on statutory grounds and the
canon of constitutional avoidance.9 See id. And in 2012, the Supreme Court granted

      8
        Despite the majority’s citation, ante at 8, of Charvat v. Mut. First Fed. Credit
Union, 725 F.3d 819, 822 (8th Cir. 2013), that case neither decided the question nor
supports the majority’s answer. In Charvat, our court did no more than follow the
settled principle that a factual “informational injury” constitutes injury in fact
pursuant to a statute providing redress for this real harm. Id. at 823; see, e.g., Akins,
524 U.S. at 21. Dryden v. Lou Budke’s Arrow Fin. Co., 630 F.2d 641 (8th Cir. 1980),
is a similar informational injury case involving a defendant who actually harmed the
plaintiff by providing incorrect or incomplete information. See id. at 643-44, 647.
Contradicting the majority’s standing analysis, Charvat recognized, “Because injury
in fact is a constitutional requirement, Congress may not grant standing to an
individual who would not otherwise have standing.” Charvat, 725 F.3d at 822
(emphasis added).
      9
      “The canon is not a method of adjudicating constitutional questions by other
means,” Clark v. Martinez, 543 U.S. 371, 381 (2005), so Wallace does not preclude

                                          -22-
certiorari and heard argument on this precise question in First American Financial
Corp. v. Edwards, 567 U.S. ___, ___, 132 S. Ct. 2536, 2537 (2012) (per curiam), yet
ultimately dismissed the writ as improvidently granted, evidently because the case did
not involve a purely legal injury.10

       Although the justices did not issue a decision in First American, their questions
at argument reveal the difficulty of the standing issue raised in both First American
and this case. Regarding an argument that “violation of a statute is injury in fact,”
Chief Justice Roberts said:

      I would have thought that would be called injury in law. And when we
      say, as all our standing cases have, . . . that what is required is injury in
      fact, I understand that to be in contradistinction to injury in law. And
      when you tell me all that you’ve got or all that you want to plead is
      violation of the statute, that doesn’t sound like injury in fact.

the majority from answering this constitutional question today (although Wallace’s
logic counsels against doing so). By the same token, however, the majority’s
constitutional ruling today cannot affect our court’s statutory interpretation in
Wallace, ___ F.3d at ___, 2014 WL 1356860, at *6. See Clark, 543 U.S. at 382
(refusing to “render every statute a chameleon, its meaning subject to change
depending on the presence or absence of constitutional concerns in each individual
case”); see also Mader v. United States, 654 F.3d 794, 800 (8th Cir. 2011) (en banc)
(stating we are bound by the decisions of prior panels).
      10
        The Supreme Court seems to have discovered at argument that the case turned
on a factual dispute about whether a particular harm was an injury in fact, rather than
on the legal question whether Congress could create an injury in fact without actual
harm. Chief Justice Roberts said at argument, “[I]f you tell me what this case is about
is whether or not you’ve shown injury in fact, it’s not a . . . significant case, and your
client has to prove that at trial.” Oral Argument at 34:02, First Am., 567 U.S. at ___,
132 S. Ct. at 2537 (No. 10-708), available at http://www.oyez.org/cases/2010-
2019/2011/2011_10_708.

                                          -23-
Oral Argument at 32:25, First Am., 567 U.S. at ___, 132 S. Ct. at 2537 (emphasis
added). Responding to an argument—paralleled by one advanced by the shoppers
and accepted by the majority, ante at 9—that the plaintiff was injured by being
“denied something he [wa]s entitled to” (there, “another expert’s untainted referral”;
here, a receipt with no more than five printed digits), Justice Kennedy remarked:

      [I]t’s circular for you to say he was denied something that he is entitled
      to. The question is whether there is an injury. The Constitution requires
      an injury. . . . If you were to say he was entitled to it and therefore, there
      is an injury, that’s just—that’s just circular.

Id. at 44:54.

       If the majority is correct, the federal courts will find themselves deciding
strange “cases” indeed. Without any factual limits on its ability to create statutory
injuries, Congress could transform the courts into implementers of majoritarian
economic and social policies (the proper role of the elected branches) rather than
bulwarks against majoritarian excess.11 See, e.g., Clapper, 568 U.S. at ___, 133 S. Ct.
at 1146 (“The law of Article III standing, which is built on separation-of-powers
principles, serves to prevent the judicial process from being used to usurp the powers
of the political branches.”). Congress would be able to give one’s neighbor, co-
worker, or political adversary the right to sue if one fails to live the way the majority
in Congress thinks one should.12 I question whether the Supreme Court’s carefully

      11
         As then-Judge Scalia put it, “[T]he law of standing roughly restricts courts to
their traditional undemocratic role of protecting individuals and minorities against
impositions of the majority, and excludes them from the even more undemocratic role
of prescribing how the other two branches should function in order to serve the
interest of the majority itself.” Antonin Scalia, The Doctrine of Standing as an
Essential Element of the Separation of Powers, 17 Suffolk U.L. Rev. 881, 894 (1983).
      12
       Under the majority’s theory, the shoppers have standing solely because
“Congress gave consumers the legal right to obtain a receipt at the point of sale

                                          -24-
crafted injury in fact jurisprudence can be so easily circumvented by Congress. See,
e.g., Summers v. Earth Island Inst., 555 U.S. 488, 497 (2009) (“[T]he requirement of
injury in fact is a hard floor of Article III jurisdiction that cannot be removed by
statute.” (emphasis added)).

       B.     Constitutional Avoidance
       In any event, I see no reason to decide such a complex constitutional question
in this case. It is a bedrock rule, “repeatedly affirmed” and “‘beyond debate,’” that
federal courts must avoid deciding “‘grave and doubtful constitutional questions’”
whenever possible by adopting a reasonable alternative interpretation of a potentially
suspect statute. Jones v. United States, 526 U.S. 227, 239-40 (1999) (quoting Edward
J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568,
575 (1988), and U.S. ex rel. Attorney Gen. v. Del. & Hudson Co., 213 U.S. 366, 408
(1909)); see also, e.g., Ashwander v. TVA, 297 U.S. 288, 345-48 (1936) (Brandeis,
J., concurring); Union Pac. R.R. Co. v. DHS, 738 F.3d 885, 892-93 (8th Cir. 2013).
“Rather than confronting the difficult constitutional question whether Congress can
drill through th[e] hard floor of injury in fact by creating an injury in law (i.e., a
statutory cause of action requiring no showing the plaintiff was personally and
actually harmed),” I would “‘follow th[is] traditional rule.’” Wallace, ___ F.3d at
___, 2014 WL 1356860, at *6 (footnote omitted) (quoting Union Pacific, 738 F.3d
at 893).

      The statute at issue here is open to the eminently reasonable interpretation
offered in a prior panel opinion joined by one member of today’s majority:

      This language [in 15 U.S.C. § 1681n(a)(1)(A)] clearly provides that an
      award of statutory damages is available as an alternative to an award of

showing no more than the last five digits of the consumer’s credit or debit card
number.” Ante at 9. This theory lacks any internal limiting principle, reducing
Article III standing to a nullity.

                                        -25-
      actual damages. The plaintiffs argue the district court overlooked this
      fact and summary judgment was, therefore, inappropriate. We disagree.
      It does not necessarily follow from the cited language that statutory
      damages are available where a plaintiff fails to prove actual damages. A
      reasonable reading of the statute could still require proof of actual
      damages but simply substitute statutory rather than actual damages for
      the purpose of calculating the damage award.

Dowell v. Wells Fargo Bank, NA, 517 F.3d 1024, 1026 (8th Cir. 2008) (per curiam).

       Rather than rejecting the Dowell panel’s reasonable analysis as the majority
does, I would follow Dowell’s interpretation of § 1681n(a)(1)(A). Instead of offering
a doubtful answer to a difficult constitutional question, I would resolve this case on
the settled and unexceptional ground that the shoppers lack Article III standing unless
success on the merits is likely to provide redress. See Lujan, 504 U.S. at 561. Under
Dowell’s reading of the statute, the shoppers have no hope of redress without some
sort of actual (though not necessarily economic) harm. Because the shoppers failed
to allege actual harm, they lack Article III standing.13 See id.

      13
         The majority’s reliance on Robins v. Spokeo, Inc., 742 F.3d 409, 412-13 (9th
Cir. 2014), see ante at 12, is misplaced because Robins did not present the Ninth
Circuit with a difficult constitutional question that could be avoided by adopting an
alternative reading of § 1681n(a)(1)(A). Whether a bare statutory violation gives rise
to an injury in fact was not an open question for the Ninth Circuit. See Edwards v.
First Am. Corp., 610 F.3d 514, 517 (9th Cir. 2010). But it is an open question for our
circuit in this case, and “the hallowed rules of constitutional avoidance” preclude us
from answering this difficult question without necessity. Union Pacific, 738 F.3d at
900; see also, e.g., Clark, 543 U.S. at 381.

       Equally misplaced is the majority’s reliance on the fact that other
circuits—without expressly considering constitutional standing—have “permitted
[plaintiffs] to recover statutory damages under [§ 1681n(a)(1)(A)] in the absence of
actual damages.” Ante at 12 n.4. Because constitutional standing “was not argued
or decided in these cases, . . . it is axiomatic that they provide absolutely no support

                                         -26-
       By rejecting Dowell, the majority embraces the shoppers’ reading of
§ 1681n(a)(1)(A), which will lead to results Congress cannot have intended.
According to the shoppers, the stores are liable for billions of dollars in statutory
damages without any evidence the shoppers, and the class they wish to represent,
were harmed at all. From small to large retailers, the shoppers’ interpretation could
easily result in bankruptcy. A retailer earning less than $100 per average receipt
could not afford a $100 penalty per receipt, let alone $1,000. The district court took
the fact that damages “would exceed $1 billion despite the absence of a penny’s
worth of injury,” as a sign “that Congress probably knew not what they wrought.”
(Internal quotations omitted).

       But in writing a statute, Congress need not restate what is already obvious from
the Constitution and the federal courts’ constitutional jurisprudence. “Congress is
‘predominantly a lawyer’s body,’ and it is appropriate for [the courts] ‘to assume that
[the people’s] elected representatives . . . know the law.’” Albernaz v. United States,
450 U.S. 333, 341 (1981) (quoting Cannon v. Univ. of Chi., 441 U.S. 677, 696-97
(1979), and Callanan v. United States, 364 U.S. 587, 594 (1961)). “Congress
legislates against the background of . . . standing.” Bennett v. Spear, 520 U.S. 154,
163 (1997).14 Congress presumably expected the federal courts to require factual

for the” majority’s “position.” United States v. Bruguier, 735 F.3d 754, 763 (8th Cir.
2013) (en banc). “‘Questions which merely lurk in the record, neither brought to the
attention of the court nor ruled upon, are not to be considered as having been so
decided as to constitute precedents.’” Cooper Indus., Inc. v. Aviall Servs., Inc., 543
U.S. 157, 170 (2004) (quoting Webster v. Fall, 266 U.S. 507, 511 (1925)). And even
if these other cases did constitute precedent on the constitutional standing issue,
which they do not, our court would remain independently bound to follow the
Supreme Court and avoid offering unnecessary answers to difficult constitutional
questions.
      14
         Though the Supreme Court in Bennett focused on prudential standing, see
520 U.S. at 163, Article III places even clearer limits on Congress’ ability to create
civil remedies, see, e.g., Ass’n of Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S.

                                         -27-
harm under Article III’s injury in fact prong. It makes sense that Congress intended
§ 1681n(a)(1)(A) to permit consumers suffering real harm from a retailer’s failure to
truncate credit card numbers to recover statutory damages even if actual damages
were minimal or difficult to quantify. But it does not make sense to assume Congress
intended to confer a windfall on consumers—like the shoppers in this case—who face
no reasonable likelihood of harm, let alone any actual harm. These shoppers’ secured
receipts could not possibly lead to the identity theft Congress wanted the FACTA to
prevent. In this context, our court should not presume the people’s elected legislators
“knew not what they wrought” or intended potentially to bankrupt retailers of all sizes
and descriptions in the absence of any harm.

       The canon of constitutional avoidance “is a tool for choosing between
competing plausible interpretations of a statutory text, resting on the reasonable
presumption that Congress did not intend the alternative which raises serious
constitutional doubts. The canon is thus a means of giving effect to congressional
intent, not subverting it.” Clark, 543 U.S. at 381-82 (emphasis added) (citations
omitted). The government, intervening in support of the shoppers’ theory that injury
in law equals injury in fact, concedes that the Dowell panel’s interpretation “is
plausible.” That should be the end of this appeal.15

150, 154 (1970).
      15
         My analysis of Article III standing and constitutional avoidance leads me to
dissent rather than concur in the judgment. Unlike the majority, which affirms the
district court’s grant of summary judgment under Rule 56(a) and prejudicial entry of
judgment in favor of Sam’s Club, I would vacate the district court’s rulings and
remand with instructions to dismiss the case without prejudice. This procedure is the
appropriate course when a district court enters judgment in a case in which it lacks
jurisdiction. See, e.g., Burton v. Stewart, 549 U.S. 147, 149 (2007) (per curiam);
Rosebud Sioux Tribe v. McDivitt, 286 F.3d 1031, 1035 (8th Cir. 2002).

                                         -28-
II.    MERITS
       Setting aside the majority’s precarious constitutional theory, I fear the
majority’s resolution of the merits strays from the unambiguous statutory text.
Misreading the remedy provision applicable to the shoppers’ FACTA claims,
§ 1681n(a)(1)(A), to confer standing in the absence of actual harm leads the majority
to an unpleasant choice: either (1) follow the plain text of FACTA, 15 U.S.C.
§ 1681c(g)(1), and authorize unharmed Sam’s Club credit-cardholders to recover
disproportionate damages, or (2) misread other parts of FACTA to preclude such
damages even for those who are harmed. By taking the second path, the majority
thwarts clear congressional intent and makes it impossible for truly harmed
cardholders to recover the statutory damages to which they should be entitled. In
accordance with well-established principles of statutory construction, I would instead
follow the clear and unambiguous text of § 1681c(g)(1), giving effect to Congress’
plainly expressed intent to provide a remedy for any cardholders who suffered real
harm.

       A.     Statutory Text
       All questions of statutory construction begin with the same first step: a reading
of the statute. See, e.g., Hawaii v. Office of Hawaiian Affairs, 556 U.S. 163, 173
(2009). When the text of the statute is clear, this first step “is also the last: ‘judicial
inquiry is complete.’” Conn. Nat’l Bank v. Germain, 503 U.S. 249, 254 (1992)
(quoting Rubin v. United States, 449 U.S. 424, 430 (1981)). The text at issue
provides:

       [N]o person that accepts credit cards or debit cards for the transaction
       of business shall print more than the last 5 digits of the card number or
       the expiration date upon any receipt provided to the cardholder at the
       point of the sale or transaction.

15 U.S.C. § 1681c(g)(1) (emphasis added). This prohibition only applies “to receipts
that are electronically printed,” not “transactions in which the sole means of recording

                                           -29-
a credit card or debit card account number is by handwriting or by an imprint or copy
of the card.” Id. § 1681c(g)(2).

       Congress could hardly have spoken more plainly. Only five—the last
five—digits of any credit or debit card number may be printed anywhere on any
electronically printed receipt. This is true whether the digits are labeled “credit card
number,” “Account #,” “Member,” or not labeled at all. Had Congress intended
labels to matter, Congress could easily have said so (e.g., “more than the last 5 digits
of the card number so labeled”). Instead, Congress spoke in unequivocal terms,
presumably saying just what it meant and meaning exactly what it said. See Conn.
Nat’l Bank, 503 U.S. at 254. Our court’s sole task, then, is to enforce the plain
statutory language of § 1681c(g) “according to its terms.” Jimenez v. Quarterman,
555 U.S. 113, 118 (2009). By printing “more than the last 5 digits of the card
number” on “any receipt” “electronically printed,” Sam’s Club plainly violated
§ 1681c(g).

       B.    Objective Reasonableness
       Because the statute unambiguously prohibits printing too many digits of the
number, regardless of labeling, it was not objectively reasonable for Sam’s Club to
read a labeling requirement into the statute. See, e.g., Alabama v. North Carolina,
560 U.S. 330, 352 (2010) (“We do not—we cannot—add provisions to a federal
statute.”).

       In Safeco Insurance Company of America v. Burr, 551 U.S. 47 (2007), the
Supreme Court established two points of law relevant to this appeal: (1) a “willful”
violation of the FACTA includes a “reckless disregard” of its requirements, and (2) a
violation premised on an “objectively reasonable” reading of the FACTA cannot be
“reckless.” Id. at 52, 69, 70 n.20. To be objectively reasonable, a reading must have
“a foundation in the statutory text.” Id. at 69-70. If that text is “less-than-pellucid,”

                                          -30-
the absence of authoritative guidance may also affect the reasonableness analysis.16
Id. at 70. But a reading which is inconsistent with the pellucid text of the statute,
unsupported by any authoritative guidance, and at odds with the obvious purpose of
the statute, is objectively unreasonable. See id. at 69-70. Sam’s Club’s imaginative
reading falls squarely into this category. According to Sam’s Club, all manner of
identifying information—indeed, every single letter and number on a credit card,
including the holder’s name, the account number, the security code, and the
expiration date—could be printed on a receipt so long as the information was
mislabeled or not labeled at all. Not so, according to the plain text of the statute. No
reasonable reader of the statute, even the majority’s “literal-minded company
executive,” ante at 15, could think otherwise.

       Sam’s Club strains to direct the court’s focus to the term “card number,”
insisting a “membership number” cannot be a “card number,” in order to distract from
the decisive term: “5 digits.” Perhaps the term “card number” in the abstract is open
to multiple reasonable interpretations, but the statute does not prohibit printing card
numbers; it prohibits printing digits of a card number. What matters is (1) how many
of the digits are printed on the receipt, and (2) whether those digits make up some
sequential part of the card number. As the Seventh Circuit explained, “we need not
essay a definition of ‘card number’ as an original matter, because we can’t see why
anyone should care how the term is defined. A precise definition does not matter as
long as the receipt contains too few digits to allow identity theft.” Van Straaten v.
Shell Oil Prods. Co., 678 F.3d 486, 488 (7th Cir. 2012) (second emphasis added).

      16
        The majority today turns Safeco on its head by giving Sam’s Club the benefit
of missing authoritative guidance even though the statutory text is not “less-than-
pellucid,” Safeco, 551 U.S. at 70. See ante at 14-15. Here, the absence of guidance
supporting the stores’ reading should cut the other way because it means Sam’s
Club’s reading has no foundation in the unambiguous statutory text or in any extra-
statutory guidance.

                                         -31-
The stores printed every single digit required for identity theft, a practice no
reasonable reading of FACTA would allow.

       C.    Willfulness
       Because the stores’ reading was not objectively reasonable, it is a fact question
whether the stores’ violation was willful, and the shoppers (with standing bestowed
by the majority) have presented more than enough evidence to submit this question
to a jury. See Fed. R. Civ. P. 56(a).

      As early as 2004, one of Sam’s Club’s fraud experts warned that membership
and credit numbers should differ because “the way membership is handled—well,
including on printing on receipts, is less secure than how a credit card number would
be handled.” Yet Sam’s Club failed to mitigate this admittedly “unnecessary risk”
despite numerous warnings. In 2005, an internal security unit issued a report
addressing “top-level issues” “where customer and associate personal information
could be compromised intentionally or otherwise.” The first “top-level issue”:
“Membership numbers are not handled in a manner that would minimize the
possibility of the account number being compromised.” The report warned:

      An individual able to obtain a membership number and a member name
      has adequate information to engage in a confidence scheme. The most
      likely scenario would be one where an individual would attempt to
      obtain a duplicate card on the compromised account. The subject could
      then use a previously available credit line or attempt to open a new
      credit line on a member[’]s account.

(Emphasis added). To counter this significant risk, the report recommended
“obscur[ing]” all membership numbers—not simply those duplicated in credit card
numbers—“on both sales and refund receipts.”

                                         -32-
       Yet, as the shoppers discovered several years later when they made purchases
using their membership/credit cards at two different Sam’s Club stores, Sam’s Club
ignored these internal warnings. Instead, both shoppers received receipts listing their
names and membership numbers (i.e., all eleven unique digits of their credit
numbers)—precisely the information required, according to Sam’s Club’s internal
security unit, to “use a previously available credit line or attempt to open a new
[one].”

       In late October 2008, one week after the shoppers commenced this case, a Wal-
Mart employee sent an e-mail to senior point-of-sale personnel with the subject “We
got trouble, right here in Member City,” warning of a “terrific and terrible
emergency.” (Emphasis added). The e-mail explained that using the member number
to generate the card number was “not good [because] there’s now a federal law stating
that we can only print the last four [sic] digits of any account number on the receipt.”
(Emphasis added). Printing too many digits, the e-mail said, resulted in “a dangerous
situation.” As a remedy, the e-mail recommended “reissuing the [membership/credit]
cards with a random non-derived account number . . . immediately, if not sooner,”
because “we do not consider these cards secure until this is completed.” (Emphasis
added). Of course, Sam’s Club cannot be faulted for failing to achieve the impossible
task of acting sooner than immediately, but the retailer deliberately waited more than
three months to improve security, continuing to print each unique digit required for
identity theft out of a desire to avoid disrupting profitable holiday sales.

      Based on this evidence, a reasonable jury could easily find Sam’s Club acted
in “reckless disregard of statutory duty,” Safeco, 551 U.S. at 57, running “‘an
unjustifiably high risk of harm that [was] either known or so obvious that it should
[have] be[en] known,’” id. at 68 (quoting Farmer v. Brennan, 511 U.S. 825, 836
(1994)).

                                         -33-
III.   CONCLUSION
       Mindful of the judiciary’s limited role under Article III, I cannot join the
majority’s unnecessary resolution of a difficult constitutional question. Relying on
Dowell, I would vacate the district court’s judgment and remand with instructions to
dismiss for lack of Article III standing. If it were necessary to reach the merits, I
would reverse the judgment because (if the shoppers have standing) this case presents
a jury question.17
                      ______________________________

       17
       I agree the district court did not abuse its discretion by denying the shoppers’
motion to recuse.

                                         -34-