Judge: Elaine Lu, Case: 21STCV38307, Date: 2025-03-18 Tentative Ruling

Case Number: 21STCV38307    Hearing Date: March 18, 2025    Dept: 9

Superior Court of California

County of Los Angeles

Spring Street Courthouse, Department 9

Background

            This is a putative consumer class action. Plaintiff Brian Keim (“Plaintiff”) – on behalf of himself and those similarly situated – alleges that Defendant Trader Joe’s Co. (“Defendant”) knowingly and recklessly violated the Fair and Accurate Credit Transactions Act (“FACTA”) amendment to the Fair Credit Reporting Act (“FCRA”), by failing to truncate credit card numbers on printed receipts provided to consumers pursuant to FACTA.

On October 16, 2019, Plaintiff filed the complaint asserting a single cause of action for violations of FACTA.

On November 27, 2018, Defendant removed this action to the United States District Court for the Central District of California.  On February 5, 2020, the District Court remanded this action back to this Court finding that Plaintiff lacked Article III standing.  (Minute Order 2/18/20; see also Keim v. Trader Joe's Company (C.D. Cal., Feb. 5, 2020, No. CV1910156PSGMRWX) 2020 WL 564120.) 

On November 17, 2020, the Court – presided by the Honorable Yvette M. Palazuelos – sustained Defendant’s demurrer to the complaint with leave to amend finding that Plaintiff failed to sufficiently allege standing under FACTA.  (Order 11/17/20.)

On December 7, 2020, Plaintiff filed the operative First Amended Complaint (“FAC”) asserting a single cause of action for violations of FACTA.

On January 29, 2021, Defendant demurred to the FAC in part on the ground that Plaintiff could not establish standing under California law because the FAC failed to allege actual harm to Plaintiff’s credit or identity.  On May 5, 2021, the Court – presided by Judge Palazuelos – overruled Defendant’s demurrer, finding that actual harm was not required and that the imposition of such a requirement would contradict the plain language of 15 U.S.C. § 1681n(a), the provision prohibiting a willful violation of FACTA’s truncation requirement.  (Order 5/5/21.)

On February 21, 2023, Defendant filed a motion for judgment on the pleadings on the grounds that, under Limon v. Circle K Stores Inc. (2022) 84 Cal.App.5th 671, Plaintiff lacked standing.  On June 9, 2023, the Court – presided by Judge Palazuelos – denied Defendant’s motion for judgment on the pleadings finding that the instant action was distinguishable from Limon.  (Order 6/9/23.)

On December 9, 2024, Defendant filed the instant renewed motion for judgment on the pleadings.  On February 26, 2025, Plaintiff filed an opposition.  On March 4, 2025, Defendant filed a reply.

         Generally, the judge who ruled on a motion must hear any motion for reconsideration of its order.  However, due to Judge Palazuelos’ retirement, the Judge Palazuelos is no longer available.  Thus, the instant motion for reconsideration is properly before this Judge – the Honorable Elaine Lu.  (Ziller Electronics Lab GmbH v. Superior Court (1988) 206 Cal.App.3d 1222, 1232 [“The proper procedure upon a motion for reconsideration or a renewed motion is for the second judge to direct the moving party to the judge who ruled on the first motion.  If the original judge is unavailable, as in this case, the second judge may hear the reconsideration motion.”].)

Allegations of the Operative Complaint

            The FAC alleges, in relevant part, that:

            On July 9, 2019, Plaintiff used his personal Visa debit card at Defendant’s store located at 2560 PGA BLVs., Palm Beach Gardens, Florida 33410.  (FAC ¶ 36.)  During checkout, Plaintiff was provided with a printed receipt that bore the first 6 and last 4 digits of his debit card account number.  (FAC ¶ 37.)  “As a direct result of Defendant’s printing of a receipt bearing the first six (6) and last four (4) digits of his debit card account number, Plaintiff took action to safeguard the receipt.”  (FAC ¶ 39.)  “Defendant’s memorialization of the first six (6) and last four (4) digits of Plaintiff’s debit card account number on the transaction receipt exposed Plaintiff to a material risk of identity theft.”  (FAC ¶ 41.)

Request for Judicial Notice

In conjunction with the moving papers, Defendant requests that the Court take judicial notice of the following:

A.    The January 25, 2023 California Supreme Court order issued in Limon v. Circle K Stores Inc., denying the appellants’ petition for review and request for depublication.

B.    Pub. L. No. 110-241 § 2, 122 Stat. 1565 (2008), codified at 15 U.S.C. § 1681n note.

C.    Excerpts from the House of Representatives Congressional Record, dated May 13, 2008.

As the court may take judicial notice of court records and government records, (See Evid. Code, § 452(c), (d)), the unopposed requests for judicial notice are granted. However, the Court will not take judicial notice of the truth of assertions within these records. (See Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)

Legal Standard

A party who originally made an application for an order which was refused in whole or part, or granted conditionally or on terms, may make a subsequent application for the same order upon new or different facts, circumstances, or law, in which case it shall be shown by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown. For a failure to comply with this subdivision, any order made on a subsequent application may be revoked or set aside on ex parte motion.

(CCP § 1008(b).)

As the court in Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1499 has stated, a court acts in excess of jurisdiction when it grants a motion to reconsider that is not based upon “new or different facts, circumstances or law.” There is a strict requirement of diligence, meaning the moving party must present a satisfactory explanation for failing to provide the evidence or different facts earlier. (Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 690.)

Discussion

            AS noted above, the Court denied Defendant’s first motion for judgment on the pleadings on June 9, 2023.  Defendant seeks to renew its motion for judgment on the pleadings on the grounds that there has been a change in law due to a recent Court of Appeal decision – Muha v. Experian Information Solutions, Inc. (2024) 106 Cal.App.5th 199.

In the May 5, 2021 Order overruling Defendant’s demurrer to the FAC challenging Plaintiff’s standing, the Court – presided by Judge Palazuelos – found that (1) Plaintiff was the real party in interest under Code of Civil Procedure section 367, and (2) that “actual harm” is not a requirement under California law for a claim of willful violation of FACTA under 15 U.S.C. § 1681n(a).  (Order 5/5/21 at pp.7-15.) 

On February 21, 2023, Defendant filed a motion for judgment on the pleadings asserting that under Limon v. Circle K Stores Inc. (2022) 84 Cal.App.5th 671, Plaintiff lacks standing.  On June 9, 2023, the Court – presided by Judge Palazuelos – concluded that the facts in Limon v. Circle K Stores Inc. (2022) 84 Cal.App.5th 671, were distinguishable and did not apply to Plaintiff’s claims under FACTA.  (Order 6/9/23 at pp.4-6.) 

Defendant claims that “under new, binding authority—Muha v. Experian Info. Sols., Inc., 106 Cal.App.5th 199, 326 Cal.Rptr.3d 622 (2024)— Plaintiff lacks standing under California law because he fails to allege sufficient injury.”  (Motion at p.2:13-15.)

Muha is Not a Change in Law

            In Limon v. Circle K Stores Inc. (2022) 84 Cal.App.5th 671, the plaintiff Ernesto Limon alleged that his employer “Circle K violated the Fair Credit Reporting Act (FCRA) (15 U.S.C. § 1681 et seq.) by failing to provide him with proper FCRA disclosures when it sought and received his authorization to obtain a consumer report about him in connection with his application for employment, and by actually obtaining the consumer report in reliance on that authorization.”  (Id. at p.680, Fn. Omitted.)  Limon initially filed a putative class action suit against Circle K in the United States District Court for the Eastern District of California.  (Id. at p.684.)  In Limon’s initial federal action, Circle K moved for summary judgment which the District Court granted, finding that Limon failed to establish Article III standing.  (Id. at p.684.)  Limon then filed a putative class action suit against Circle K in state court.  (Ibid.)  In the state court proceedings, Circle K filed a demurrer to Limon’s complaint on the grounds that Limon lacked standing.  (Id. at p.685.)  The trial court sustained the demurrer without leave, and the Court of Appeal affirmed.  (Ibid.) 

            The Court of Appeal noted that “California courts are not bound by the ‘case or controversy’ requirement of article III of the United States Constitution[.]”  (Id. at p.690.)  However, the Court of Appeal concluded that “as a general matter, to have standing to pursue a claim for damages in the courts of California, a plaintiff must be beneficially interested in the claims he is pursuing.”  (Id. at p.700.)  Turning to the facts of the case, the Court of Appeal in Limon found that Limon “ha[d] not alleged a concrete or particularized injury to his privacy interests sufficient to afford him an interest in pursuing his claims vigorously.”  (Id. at p.706.)  There was no allegation that Limon did not receive a copy of the consumer report that Circle K obtained or that the consumer report contained any defamatory content.  (Id. at p.705.)  “Similarly, there [we]re no allegations of any exposure to a material risk of future harm, imminent or substantial.”  (Ibid.)  Thus, the Court of Appeal concluded that “there was no injury to Limon's protected interest in ensuring fair and accurate credit (or background) reporting … [nor any] injury associated with any adverse employment decision based on false or inaccurate reporting.”  (Ibid.)  Nor did Limon’s allegations suggest any harm from the release that Limon signed.  (Ibid.)  The Court of Appeal also found that the disclosures on Circle K’s consent form appeared to comply with the FCRA, and Limon admitted that he authorized Circle K to run a background check on him.  (Ibid.) 

            Though Limon alleged an informational injury, Limon ““failed to allege any concrete injury in connection with his claim of informational injury.” (Id. at p.707.) “[U]nder California law, ... an informational injury that causes no adverse effect is insufficient to confer standing upon a private litigant to sue under the FCRA.”  (Ibid.)  “Thus, his alleged informational injury is insufficient under California law to confer upon him standing to pursue his claim in state court.”  (Ibid.)  The Court of Appeal in Limon also held that Limon lacked “public interest” standing.  (Limon, supra, 84 Cal.App.5th at p.703 [“We discern no basis upon which to conclude the FCRA was intended to confer public interest standing upon a private litigant.”].)

            Muha v. Experian Information Solutions, Inc. (2024) 106 Cal.App.5th 199 heavily relies upon and follows the same reasoning as Limon.  In Muha, the plaintiffs Charlotte Muha, Chaning, Graber, and Debra Graber filed a putative class action suit against defendant Experian – a consumer reporting agency under the FCRA.  (Muha, supra, 106 Cal.App.5th at p.203.)  Each of the plaintiffs requested copies of their consumer report from Experian, and a respective copy of their consumer reports was mailed to each of them.  (Ibid.)  The plaintiffs alleged that:

the “Summary of Rights” portion of the consumer reports was “inconsistent with 15 U.S.C. § 1681g(c) and Appendix K of Regulation V because it [did] not include ‘a statement that the consumer may have additional rights under State law, and that the consumer may wish to contact a State or local consumer protection agency or a State attorney general (or the equivalent thereof) to learn of those rights,’ ” in violation of 15 U.S.C. § 1681g(c)(2)(D). Plaintiffs asserted, on information and belief, that “Experian knowingly and willfully made the decision to remove th[at] portion of the Summary of Rights.” They prayed for actual damages, statutory damages, and punitive damages on behalf of themselves and the purported class.

(Muha, supra, 106 Cal.App.5th at p.203.) 

            Experian removed the action to federal district court, and the plaintiffs moved for remand on the grounds that they lacked Article III standing.  (Id. at p.204.)  “The federal district court granted Plaintiffs’ remand motion on the basis that Plaintiffs’ allegations did not establish Article III standing.”  (Ibid.) 

The [district] court explained that “Plaintiffs’ FCRA claim is straightforward: they submitted requests to [Experian] for a copy of their consumer reports and [Experian] produced reports that were missing information required by law.” However, “Plaintiffs do not allege that such non-disclosure resulted in any particular harm to them.” “Plaintiffs have not alleged that they had some reason to contact state authorities, would have done so if the requisite information was provided, and incurred some harm or face the substantial risk of some harm arising from the missed opportunity to contact state authorities.”

(Muha, supra, 106 Cal.App.5th at p.204.) 

            Following remand, Experian moved for judgment on the pleadings which the trial court granted, dismissing the action, relying on the then recently decided Limon v. Circle K Stores Inc. (2022) 84 Cal.App.5th 671.  (Muha, supra, 106 Cal.App.5th at pp.205-206.)  On appeal, “Plaintiffs contend[ed] [that] they need not allege actual injury to recover statutory damages under 15 U.S.C. § 1681n, and argue[d] the Limon court erred in so concluding.”  (Muha, supra, 106 Cal.App.5th at p.208.)  The Court of Appeal in Muha disagreed as they were “not persuaded that Limon was incorrectly decided.”  (Muha, supra, 106 Cal.App.5th at p.208.) 

            The Court of Appeal in Muha reasoned – in agreement with Limon – that the plaintiffs lacked public interest standing under the FCRA.  (Muha, supra, 106 Cal.App.5th at pp.208–209 [“Plaintiffs do not claim the California Legislature expressly authorized FCRA claims by plaintiffs who have not been injured by the FCRA violations. Nor do they claim that the FCRA conferred public interest standing on them.”].)  The Court of Appeal in Muha rejected the plaintiffs’ arguments that they had a beneficial interest – and thus standing under California law – because they suffered an informational injury.  (Id. at p.209.)  Rather, the Court of Appeal in Muha agreed with the Limon Court that “ ‘under California law, ... an informational injury that causes no adverse effect is insufficient to confer standing upon a private litigant to sue under the FCRA.’ ”  (Muha, supra, 106 Cal.App.5th at p.209 [quoting Limon, supra, 84 Cal.App.5th at p.707.)  Accordingly, the Court of Appeal in Muha affirmed the trial court’s dismissal of plaintiffs’ claims for lack of standing.

            As illustrated above, Muha merely confirms the reasoning in Limon. Muha is not a change of law.  Because Muha is not “new law,” reconsideration of the Court’s ruling on the prior motion for judgment on the pleadings and granting the instant motion would be in excess of this Court’s jurisdiction.  (Gilberd, supra, 32 Cal.App.4th at p.1500 [“a court acts in excess of jurisdiction when it grants a motion to reconsider that is not based upon ‘new or different facts, circumstances, or law.’”].)   

            Moreover, Muha and Limon are distinguishable from the instant action.  Muha and Limon address consumer reports under the FCRA.  FCRA’s overreaching purpose is “ensuring accurate credit reporting, promoting efficient error correction, and protecting privacy.”  (Limon, supra, 84 Cal.App.5th at p.689.)  In contrast, the instant action involves a violation of FACTA’s truncation requirement of credit card numbers.  (FAC ¶¶ 36-42.) 

The D.C. Circuit’s ruling in Jeffries v. Volume Services America, Inc. (D.C. Cir. 2019) 928 F.3d 1059 is instructive.  “FACTA punishes conduct that increases the risk of third-party disclosure, not the actual disclosure itself.”  (Jeffries v. Volume Services America, Inc. (D.C. Cir. 2019) 928 F.3d 1059, 1065 [italics in original].)  In Jeffries, the plaintiff Doris Jeffries made a purchase at Centerplate and was provided a receipt that violated FACTA’s truncation requirements for credit cards on receipts.  (Id. at p.1063.)  Centerplate moved to dismiss the action contending that Jeffries lacked Article III standing, and the district court agreed, dismissing the case.  (Ibid.)  The D.C. Court of Appeals reversed finding that Jeffries had sufficiently alleged Article III standing.  (Ibid.) 

Here, the FAC alleges that Defendant provided Plaintiff with a printed receipt that bore the first 6 and last 4 digits of his debit card account number in violation of FACTA’s truncation requirement, thereby causing Plaintiff to suffer an increased risk of identity fraud.  (FAC ¶¶ 37, 41.)  Thus, “[a]t the point of sale—the time at which FACTA measures liability—there was no way to know whether [Plaintiff] would recognize [Defendant]'s mistake and mitigate any harm or whether the receipt would end up in the trash for anyone to find or otherwise be accessed by a malevolent third party (e.g., an employee or fellow customer). Accordingly, [Plaintiff] was not able to use h[is] credit card without incurring an increased risk of identity theft and, as a result, suffered a concrete injury in fact.”  (Jeffries, supra, 928 F.3d at p.1066.)  It is irrelevant that Plaintiff alleges that he took steps to safeguard the receipt.  (FAC ¶ 40.)  “FACTA itself does not prohibit the crime of identity theft; instead, it establishes a procedural requirement to ensure that consumers can use their credit and debit cards without incurring an increased risk of identity theft. Moreover, there was no guarantee at the point of sale that [Plaintiff] would recognize and safeguard the non-compliant receipt. Just as someone who replaces the pin in a grenade remains, nonetheless, previously at risk of getting blown up, [Plaintiff’s] effort to safeguard h[is] receipt does not change the fact that []he was prevented from using h[is] credit card without at the same time facing exposure to increased identity theft risk.”  (Jeffries, supra, 928 F.3d at pp.1066–1067.)  Accordingly, because FACTA protects a different interest than those addressed in Muha and Limon, neither case supports a finding that Plaintiff lacks standing in this action.  (Los Angeles County Metropolitan Transportation Authority v. Yum Yum Donut Shops, Inc. (2019) 32 Cal.App.5th 662, 673 [“ ‘Cases are not authority for propositions not considered.’ ”].) 

Because FACTA protects against the increased risk of identity theft – unlike the provisions of the FCRA addressed in Muha and Limon – Plaintiff’s allegation that he suffered an increase in risk of identity fraud due to Defendant’s violation of FACTA’s truncation requirements is an injury in fact such that Plaintiff has a beneficial interest in the action under California law. 

Accordingly, Defendant’s renewed motion for judgment on the pleadings is DENIED.

CONCLUSION AND ORDER

Based on the foregoing, Defendant Trader Joe’s Co.’s renewed motion for judgment on the pleadings is DENIED. 

The Judicial Assistant shall give notice to Defendant, and Defendant is ordered to file proof of service of the instant order on all other parties within 10 days.

DATED: March 18, 2025                                                       _____________________________

                                                                                                  Elaine Lu

                                                                                                  Judge of the Superior Court