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Barcey v. La Beau, Inc.

United States District Court, Eastern District of Michigan, Southern Division

February 17, 2015

TODD BARCEY, Plaintiff,
LA BEAU, INC. Defendant.



This is a case brought under the Fair and Accurate Credit Transactions Act (“FACTA”). The single count of the Complaint (Dkt. 1) asserts a claim under FACTA’s amendments to the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681c(g). In 2003, Congress enacted FACTA, as an amendment to the FCRA, in response to the growing problem of identity theft. FACTA attempts to reduce the misappropriation of personal credit card information by prohibiting merchants from creating receipts that record the entire credit card number. Accordingly, FACTA states that “no 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[1] upon any receipt provided to the cardholder at the point of the sale or transaction” 15 U.S.C. § 1681c(g)(1).

FACTA employs the damages scheme provided by FCRA, permitting the recovery of either statutory damages – between $100 and $1, 000 – or actual damages, and punitive damages “as the court may allow, ” as well as reasonable attorney’s fees and costs for a willful violation of the statute. See 15 U.S.C. § 1681n.


Defendant La Beau, Inc. d/b/a Luigi’s Restaurant/El Toro Pub (“Defendant” or “Luigi’s”) is a pizzeria located in Flint, Michigan. According to the allegations in the Complaint and evidence of record, Plaintiff Todd Barcey (“Plaintiff”) is apparently quite fond of Luigi’s pizza. He visited Luigi’s at least 20 times between December 18, 2012 and January 25, 2013, purchasing food or beverages each time, and generating a receipt.[2] Plaintiff used his Visa debit card to pay for his purchases (which ranged between $51.90 and $7.78, inclusive of gratuities), and received printed receipts from Luigi’s (Dkt. 9, Ex. 4). All of the receipts given by Defendant displayed Plaintiff’s entire Visa debit card number, as well as the card’s expiration date, in violation of FACTA.


The procedural history of this case is straightforward. Plaintiff sued Defendant on January 19, 2014 (Dkt. 1). The Summons and Complaint were personally served upon Defendant on March 3, 2014 (Dkt. 3). Defendant never filed a responsive pleading, thus Plaintiff requested a clerk’s entry of default on May 20, 2014 (Dkt. 4). The Clerk then entered a default against Defendant on September 11, 2014[3] (Dkt. 5). Plaintiff then moved for the entry of a default judgment (Dkt. 7, amended by Dkt. 9). The Court held a hearing on February 9, 2015; Defendant did not appear. Plaintiff’s Complaint alleged that Defendant “willfully” violated FACTA (Dkt. 1 ¶¶ 25, 26). Once a default is entered against a defendant, that party is deemed to have admitted all of the well-pleaded allegations in the Complaint. See Visioneering Construction v. U.S. Fidelity and Guaranty, 661 F.2d 119, 124 (6th Cir. 1981). Thus, it has been established that Defendant willfully violated FACTA.


Obtaining a default judgment is a two-step process: first, the party seeking a default judgment files a motion for entry of default by demonstrating that the opposing party has failed to answer or otherwise respond to the complaint; second, once the clerk has entered a default, the moving party may then seek entry of a default judgment by the Court against the defaulting party. See Keesh Construction, Inc. v. United States, No. 1:02-CV-899, 2004 WL 2536840, *1 n. 1 (S.D. Ohio Sep.28, 2004) (citing Fed.R.Civ.P. 55). Rule 55(b) provides that the clerk may enter a judgment by default when the plaintiff's claim is for a sum certain or for a sum which can be computed with certainty and the defendant has been defaulted for failure to appear and is neither an infant nor incompetent. See Palladino v. General Crushed Stone Co., No. 96-CV-1355, 1997 WL 67792, *1 (N.D.N.Y. Feb.13, 1997) (citing Fed.R.Civ.P. 55(b)). In all other cases, the party seeking a judgment by default must apply to the court for entry of a default judgment under Fed.R.Civ.P. 55(b)(2). Id.

In this instance, because Plaintiff’s claims are not for a sum certain or for a sum which can be computed with certainty, a judgment by default must be entered by the Court under Fed.R.Civ.P. 55(b)(2), which states in pertinent part:

In all other cases the party entitled to a judgment by default shall apply to the court therefor; but no judgment by default shall be entered against an infant or incompetent person unless represented in the action by a general guardian, committee, conservator, or other such representative who has appeared therein. If the party against whom judgment by default is sought has appeared in the action, the party ... shall be served with written notice of the application for judgment at least 3 days prior to the hearing on such application. If, in order to enable the court to enter judgment or to carry it into effect, it is necessary to take an account or to determine the amount of damages or to establish the truth of any averment by evidence or to make an investigation of any other matter, the court may conduct such hearings or order such references as it deems necessary . . .

When a defendant is in default, the well-pleaded factual allegations in the Complaint – except those relating to damages – are taken as true. See Thomson v. Wooster, 114 U.S. 104, 5 S.Ct. 788, 29 L.Ed. 105 (1885); Antoine v. Atlas Turner, Inc., 66 F.3d 105, 110–11 (6th Cir. 1995). Rule 55 does not require a presentation of evidence as a prerequisite to the entry of a default judgment, although it empowers the Court to conduct such hearings as it deems necessary and proper to enable it to enter judgment or carry it into effect. See Wright, Miller & Kane, Federal Practice and Procedure, Civil 3rd § 2688.

In the case before the Court, Plaintiff is asking for a judgment ordering Defendant to pay $20, 000 in statutory damages, based upon the 20 paper receipts that contained Plaintiff’s entire credit card number and expiration date, and calculating the damage amount at $1000 per-receipt. (Dkt. 9). The $1, 000-per-receipt calculus seeks the maximum possible amount of statutory damages available under the FCRA.[4] See 15 U.S.C. § 1681n. In support of this request, Plaintiff cites Shurland v. Bacci Cafe & Pizzeria On Ogden, Inc., No. 08 C 2259, 2011 WL 3840339 (N.D. Ill. Aug. 30, 2011) and Van Straaten v. Shell Oil Products Co., LLC, 813 F.Supp.2d 1005, 1014 (N.D. Ill. 2011) rev'd and remanded, 678 F.3d 486 (7th Cir. 2012). These cases, however, do not support Plaintiff’s damage calculation. Van Straaten, a District Court’s opinion, was reversed by the Seventh Circuit and did not, in any event, definitively determine that a per-receipt damage calculation was appropriate.

As to Shurland, the Court presumes that Plaintiff relies upon the following statement: “For a willful violation of the relevant provisions of FACTA, the statute provides for actual damages or statutory damages of between $100 and $1, 000 per occurrence” Shurland at *1 (emphasis added). However, Shurland was an order denying the plaintiff’s motion for summary judgment, and the quoted statement was part of the Court’s introductory recitation describing the nature of the litigation. As such, this statement is not part of Shurland’s holding and may be treated as mere dicta. Moreover, Shurland w ...

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