United States District Court, D. Hawaii
STEVEN BROOKS, individually and on behalf of all similarly situated individuals, Plaintiff,
HUALALAI INVESTORS, LLC, a Delaware limited liability company, et al., Defendants.
FINDINGS AND RECOMMENDATION TO GRANT PLAINTIFF'S
NOTICE OF MOTION AND MOTION TO REMAND ACTION TO STATE
Kenneth J. Mansfield United States Magistrate Judge.
Steven Brooks (“Plaintiff”) filed his Notice of
Motion and Motion to Remand Action to State Court on August
11, 2017 (“Motion to Remand”). See ECF
No. 9. Defendants Hualalai Investors, LLC and Four Seasons
Hotels Limited (collectively, “Defendants”) filed
their Opposition on September 1, 2017. See ECF No.
22. Plaintiff filed his Reply on September 8, 2016.
See ECF No. 23.
Court held a hearing on the Motion to Remand on September 25,
2017. See ECF Nos. 19, 24. Kenneth S. Robbins, Esq.,
and Melinda M. Weaver, Esq., appeared on behalf of Plaintiff.
Daniel F. Gaines, Esq., also appeared on behalf of Plaintiff
by telephone. Patrick K. Shea, Esq., and Steven A. Ellis,
Esq., appeared on behalf of Defendants. After careful
consideration of the Motion to Remand and the supporting and
opposing briefs, the arguments of counsel, and the relevant
case law, the Court FINDS AND RECOMMENDS that the district
court GRANT Plaintiff's Motion to Remand.
filed his Complaint against Defendants in the Circuit Court
of the Third Circuit for the State of Hawai‘i
(“State Court”) on June 26, 2017, alleging one
cause of action under the Fair Credit Reporting Act of 1970
(“FCRA”), 15 U.S.C. § 1681 et seq.
See ECF No. 1-2 at 12. Plaintiff's Complaint
alleges that he used his Visa credit card to pay for his
hotel stay at the Four Seasons Resort Hualalai in 2017
(“Four Seasons”). Id. at 4, ¶ 9.
Plaintiff asserts that Four Seasons generated and provided
him a receipt that contained more than the last five digits
of his credit card account number and the expiration date of
his credit card, in violation of 15 U.S.C. § 1681c(g).
Id. Plaintiff contends that Defendants' alleged
violation has harmed him and other consumers by:
“failing to provide them with a receipt that does not
contain their credit/debit card expiration date”;
“by exposing them to a serious risk of identity theft
and fraud that could have been avoided if Defendants had
complied with their statutory obligations”; and
“by requiring them to either secure their receipts in a
safe place or destroy them to avoid the risk of
identity.” Id. at 6-7.
removed this action on July 26, 2017. Plaintiff subsequently
filed the Motion to Remand. On August 25, 2017, Defendants
filed a Motion to Dismiss Complaint, Filed June 26, 2017 [ECF
No. 1-2] (“Motion to Dismiss”), which is
currently pending before the district court. See ECF
No. 21. The district court has informed the parties that it
will not take any action on the Motion to Dismiss until the
Motion to Remand is resolved.
instant Motion to Remand requires this Court to determine
whether Plaintiff has standing to maintain a federal action
under the FCRA for an alleged violation of 15 U.S.C. §
1681(c)(g). The FCRA's purpose is to “require that
consumer reporting agencies adopt reasonable procedures for
meeting the needs of commerce for consumer credit, personnel,
insurance, and other information in a manner which is fair
and equitable to the consumer, with regard to the
confidentiality, accuracy, relevancy, and proper utilization
of such information.” 15 U.S.C. § 1681(b).
Pursuant to 15 U.S.C. § 1681n, any person who willfully
fails to comply with any of the requirements imposed in the
FCRA with respect to any consumer, is liable to that consumer
in an amount equal to: “(1A) 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; or .
. . (2) such amount of punitive damages as the court may
allow;” and (3) reasonable attorneys' fees
“in the case of any successful action to enforce any
liability” under § 1681n.
2003, Congress amended the FCRA and enacted the Fair and
Accurate Transactions Act of 2003 (“FACTA”). As
part of the amendments, Congress added § 1681c(g) to the
FCRA, which prohibits any “person” that accepts
credit cards or debit cards for the transaction of business
from printing “more than the last 5 digits of the card
number or the expiration date” on any receipt
“provided to the cardholder at the point of the sale or
transaction.” 15 U.S.C. § 1681c(g)(1); see
also id. at § 1681a (providing that the definition
of “person” includes any “individual,
partnership, corporation, trust, estate, cooperative,
association, government or governmental subdivision or
agency, or other entity”). Section 1681n thus confers
to consumers a right to sue any person that fails to comply
with any provision of the FCRA, including § 1681c(g).
Congress' grant of a statutory cause of action for
violations of FACTA, the United States Supreme Court has
maintained that Congress cannot confer any more power beyond
those contained in Article III of the Constitution.
Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016)
(“Spokeo”) (“Congress' role in
identifying and elevating intangible harms does not mean that
a plaintiff automatically satisfies the injury-in-fact
requirement whenever a statute grants a person a statutory
right and purports to authorize that person to sue to
vindicate that right.”). Accordingly, although §
1681n provides a means to impose civil liability for
noncompliance with any provision in FCRA, a plaintiff
invoking federal jurisdiction pursuant to § 1681n
nonetheless bears the burden of establishing the
“irreducible constitutional minimum” of standing
to sue. Spokeo, 136 S.Ct. at 1547 (citing Lujan
v. Defenders of Wildlife, 504 U.S. 560 (1992)). To
establish federal standing, “[t]he plaintiff must have
(1) suffered an injury in fact, (2) that is fairly traceable
to the challenged conduct of the defendant, and (3) that is
likely to be redressed by a favorable judicial
decision.” Id. (citing Lujan, 504 U.S. at
the parties dispute only the “injury in fact”
element of federal standing. See ECF No. 9-1 at 2
(“For purposes of this motion, Plaintiff concedes that
he lacks the requisite Article III standing to proceed in
federal court because he has sustained no injury in fact
within the meaning of federal standing law . . . .”);
ECF No. 22 at 13 (“[T]his Court should conclude that
Plaintiff has alleged an injury in fact sufficient to satisfy
the requirements of Article III.”). Plaintiff contends
that he lacks standing to sue under Article III of the United
States Constitution because he is unable to establish a
sufficient injury in fact for the purposes of the Motion to
Remand. See ECF No. 9-1 at 2. Plaintiff argues that
an alleged violation of § 1681c(g) without allegations
of “actual incidents of identity theft” is
insufficient to confer federal court jurisdiction.
Id. at 7. Plaintiff thus asserts that this Court
lacks jurisdiction over this action, and therefore, this
action must be remanded to State Court. Id. at 10.
Establishing an Injury In Fact
protect the jurisdiction of state courts, removal
jurisdiction is strictly construed in favor of remand.”
Nasrawi v. Buck Consultants, LLC, 776 F.Supp.2d
1166, 1169 (E.D. Cal. 2011) (citing Harris v. Bankers
Life and Cas. Co., 425 F.3d 689, 698 (9th Cir. 2005)).
“Any doubt as to the right of removal must be resolved
in favor of remand.” Id. (citing Gaus v.
Miles, 980 F.2d 564, 566 (9th Cir.1992)). “Th[is]
‘strong presumption' against removal jurisdiction
means that the defendant always has the burden of
establishing that removal is proper.” Id.
(brackets in original) (citing Gaus, 980 F.2d at 566
(internal citations omitted)). Accordingly, Defendants bear
the burden of establishing that removal is proper in this
action, i.e. that Plaintiff has alleged a sufficient
injury in fact in his Complaint to maintain standing in this
Court. See Spokeo, 136 ...