A non-starter in federal court, case vs Roti over credit card digits on receipts still headed to Cook court

By Scott Holland | Jul 28, 2017

A federal judge has again sent back to Cook County Circuit Court a class action dispute about how many credit card digits appear on restaurant receipts, saying, while federal courts have been clear the case is a non-starter, Illinois state courts have yet to answer.

In an opinion issued July 24, U.S. District Judge Robert M. Dow Jr. said — again — his court is not the proper venue for a complaint against Roti Restaurants LLC, which stands accused of including too many digits from customers’ credit card numbers on printed receipts.

Last year, plaintiffs Cooper Lindner and Kim Smith filed their complaint in Cook County court against Roti, a Chicago-based chain specializing in fast, fresh Mediterranean-style food, alleging Roti’s practice of printing the first six digits and the last four digits of a customer’s 16-digit card number on receipts violates federal law.

According to Dow’s opinion, Lindner filed his original complaint on July 28, 2016, in federal court, alleging a violation of the Fair and Accurate Transactions Act, a 2003 federal law amending the Fair Credit Reporting Act. He added Kim Smith as a plaintiff in an amended complaint filed Aug. 15, 2016.

Roti moved to dismiss that complaint in November, arguing the defendants did not have standing for a federal complaint. On Dec. 13, Dow set a briefing schedule on that motion, which was the same day the U.S. Seventh Circuit Court of Appeals issued a decision in Meyers v. Nicolet Restaurant of De Pere, LLC, “an analogous case under the FACTA,” he explained.

On Dec. 14, the plaintiffs voluntarily dismissed their case. But on Dec. 16, they filed a Cook County complaint, expanding on the federal complaint and moving for class certification. Roti removed the issue to federal court, then moved for a dismissal, saying the complaint did not successfully allege a willful FACTA violation. But rather than address the dismissal motion, the plaintiffs asked to have the matter sent back to the circuit court.

“Thus,” Dow wrote, “the parties presently stand in the following, rather unusual position: Plaintiffs, who originally brought this dispute to federal court about a year ago, now insist that the case can only proceed in state court, while (Roti), which consistently has argued that this cannot proceed in federal court, resists Plaintiffs’ effort to return the case to state court.”

In reviewing Meyers — which involved credit card expiration numbers — Dow explained the federal law “was not meant to impose liability for trivial violations that resulted in no real harm to the ‘victim. ’ ” He further explained that while Roti’s receipts didn’t comply with federal standards, the plaintiffs did not adequately allege an injury that would have solidified their standing to bring a federal complaint.

Dow said the Seventh Circuit dismissed Meyers for lack of jurisdiction, noting the parties who received those noncompliant receipts did not explain how their personal data was put at risk, or if any outside party saw the receipts, and said other courts have reached similar conclusions.

Roti sought to have the case dismissed altogether, saying the state court would apply the same requirement for proof of a sustained injury. But Dow said “neither side can point to an Illinois Supreme Court case that definitively resolves the issue,” and so dismissal on those grounds would be inappropriate.

Finally, the plaintiffs wanted Dow to force Roti to pay their legal fees and court costs based on arguing for removal. Dow rejected that request, explaining “all losing removal arguments do not merit a fee award. Moreover, the jurisdictional jousting in this case has been a shared endeavor, as this dispute has ferried back and forth between state and federal court repeatedly over the past year. In these circumstances, each side deserves to bear its own fees and costs.”

Roti is represented in the case by Thompson Coburn Llp, of Chicago and St. Louis.

The plaintiffs are represented by the firm of Markoff Leinberger LLC, of Chicago.

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Illinois Supreme Court Markoff Leinberger LLC Thompson Coburn LLP U.S. District Court for the Northern District of Illinois

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