Legal Watch: Volume 24

Prepared by William H. Bode
Bode & Associates
1150 Connecticut Ave., NW
Washington, D.C. 20036
Telephone: 202-862-4300 | Email:

Court Rules Against Shell Oil’s Motion To Terminate Purported Class Action Law Suit Involving Shell Oil Credit And Debit Cards

Case Summary: In 2003, to combat identify fraud, Congress enacted the Fair and Accurate Credit Transactions Act (“FACTA”). FACTA provides that no merchant “that accepts credit cards or debit cards for transactions of business shall print more than the last 5 digits of the card number or the expiration date” on electronically printed receipts provided at the point of sale. FACTA provides for statutory damages of at least $100 but not more than $1,000 per each occurrence against any person who willfully fails to comply with its requirements. Shell Oil Company issued credit and debit cards (“payment cards”) and thus is governed by FACTA. Shells payment cards, designed decades before FACTA and contrary to customary industry practice, divided the numbers embossed on the front of a payment card into two sequences: an “account number” -- the numbers on the left of the card -- and a “card number”-- the numbers on the right of the card. Shell’s masking protocol was to print only the last four digits of the “account number” on electronically printed receipts, and mask all other numbers. This had the practical effect of Shell printing on the electronically printed receipts, only four digits in the middle of the entire sequence of numbers on the front of the Shell card. Shell undertook this masking protocol for sound business reasons. In particular, printing only the last digits from Shell’s “card number” on electronically printed receipts would make it difficult for a merchant to use digits from Shell’s “card number” to cross-reference receipts and other documents when performing returns, refunds, and chargebacks. After FACTA was enacted, Shell determined that its existing masking protocol complied with FACTA’s requirements. Natalie Van Straaten who used credit and debit cards at Shell gas stations sued Shell on behalf of herself and a class of Shell payment card users contending that Shell violated FACTA by improperly truncating the digits on Shell’s payment cards by masking the wrong digits on the receipts. Shell moved for summary judgment arguing that its “account number” was the same as FACTA’s “card number” and, if not, its mistake was not “willful.” The Court rejected Shell’s argument and denied Shell’s motion for summary judgment. The Court reasoned that this case turned on the meaning of the words “card number” and determined that “the most natural definition of ‘card number’ . . . is ‘all of the numbers on the front of a card,’ . . . [and] . . . that the phrase ‘card number’ most naturally refers to the entire sequence of numbers on the front of the card.” The court then found that a willful violation of FACTA occurs when the actor’s conduct is either “knowing or reckless.” The court rejected Shell’s contention that it cannot be held liable for willful conduct unless a court has previously held its practice violated FACTA and it continued its card masking protocol. The court then held that there existed enough evidence to present this issue to a jury. Specifically, the court held the fact that Shell’s employees who decided whether Shell’s truncating practice complied with FACTA were not lawyers and thus Shell could not rely on an “advice of counsel” defense. The Court commented if a jury later determines Shell’s conduct in violating FACTA to be willful, then Shell, due to the “number of Shell payment cards in existence,” could be liable for “an extremely large number” if the case were to proceed as a class action. Natalie Van Straaten v. Shell Oil Products Company LLC, Equilon Enterprises LLC, and Shell Oil Company