In Hammer v. Sam's E., --- F. 3d ---, 2014 U.S. App. LEXIS 10452 (8th Cir. June 5, 2014), the Eight Circuit Court of Appeals affirmed the District Court's grant of summary to Sam's Club on this class action Fair and Accurate Credit Transaction Act, 15 U.S.C. 1681 et seq (FACTA). The District Court found that although Sam's Club violated FACTA by printing more than the last five digits of consumers' credit card numbers on receipts, the violation was not willful, which is a statutory pre-condition to liability, because Sam's Club's interpretation of FACTA was objectively reasonable. 15 U.S.C. § 1681c(g)(1).
In the past, a Sam's Club's membership number would coincide with the Sam's Club's credit card number issued to a consumer. Sam's Club interpreted FACTA's credit card number truncation requirement as relating only to the shortening of a credit card number. Sam's Club's receipts truncated the credit card number, which was labeled as the credit card number, but did not truncate the membership number on the receipt, which matched the credit card number.
Relying on the Supreme Court's decision in Safeco Ins. Co. of America v. Burr, 140 Fed. Appx. 746 (2007), the District Court found and the Eighth Circuit affirmed that Sam's Club interpretation of FACTA's requirement was objectively reasonable because the statute could be read as to not apply the receipt truncation requirement to the membership designation on the receipts:
"...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." Id. at *21.
The Eighth Circuit concluded 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," even though that interpretation may be deemed erroneous under the law. Id. (citing Safeco, 551 U.S. at 69-70). Thus, Sam's Club interpretation was objectively reasonable and the violation was not willful.