          Case: 14-11006   Date Filed: 01/12/2015   Page: 1 of 29


                                                        [DO NOT PUBLISH]



           IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                      ________________________

                            No. 14-11006
                      ________________________

                  D.C. Docket No. 1:11-cv-04401-WSD



TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA,
ST. PAUL FIRE AND MARINE INSURANCE COMPANY,

                                             Plaintiffs - Counter
                                             Defendants - Appellees,

versus

THE KANSAS CITY LANDSMEN, L.L.C.,
d.b.a. Budget Rent a Car,
A BETTERWAY RENT-A-CAR, INC.,

                                             Defendants - Counter
                                             Claimants - Appellants.

                      ________________________

               Appeal from the United States District Court
                  for the Northern District of Georgia
                     ________________________

                           (January 12, 2015)
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Before WILSON, ROSENBAUM, and BLACK, Circuit Judges.

ROSENBAUM, Circuit Judge:

       In this case, we address whether the appellee insurers owe a duty to defend

their appellant insureds against a lawsuit alleging that the insureds willfully

violated 15 U.S.C. § 1681c(g)(1), a provision of the Fair and Accurate Credit

Transaction Act (“FACTA”) that prohibits “print[ing] more than the last five digits

of the [credit][ 1] card number or the expiration date upon any receipt provided to

the cardholder . . . .”       The answer to this inquiry depends on whether the

underlying lawsuit against the insureds arguably alleges two things: (1) that the

insureds acted with an intent that could be characterized as “willful” though not

“knowing” and (2) that the insureds provided non-truncated receipts of credit-card

account owners to people other than the owners of the credit cards used to conduct

the transactions.

       We find that the answer to the first question is “yes,” so if our review

stopped here, we would reverse the district court’s entry of a declaratory judgment

stating that the insurers have no duty to defend the insureds. But we must also

address the second issue, which turns on whether § 1681c(g)(1), the statute that the

insureds are alleged to have violated, prohibits vendors from providing non-


       1
          The term “credit card” as used in this opinion includes “debit cards” as well. For the
sake of simplicity, however, we refer to credit cards only.


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truncated credit-card receipts to their customers for credit-card accounts that their

customers do not own. If the answer to this question is “yes,” the insurance

companies have a duty to defend, but if it is “no,” they do not.

      This question appears to be one of first impression, and we think that it

would likely benefit from briefing focused directly on it. In addition, the Federal

Trade Commission, which is charged with administering the Fair Credit Reporting

Act, which FACTA amended, may wish to be heard on the issue. For these

reasons, we reverse the judgment of the district court ruling that the insurance

companies had no duty to defend the insureds, and we remand for the district court

to determine whether § 1681c(g)(1) prohibits vendors from providing their non-

credit-card-account-holding customers with non-conforming receipts of their

credit-card-account-holding customers.

                                          I.

                 A. The Underlying Lawsuit Against the Insureds

      In the District Court for the Western District of Missouri, Case No. 4:11-cv-

01020 (the “Galloway Action”), Robert Galloway filed a putative class-action

lawsuit against Defendants-Appellants, The Kansas City Landsmen, LLC, d/b/a

Budget Rent A Car (“KC Landsmen”), and A Betterway Rent-a-Car, Inc.

(“Betterway”) (collectively, the “Car Rental Companies”), in the pending case. In

the Galloway Action, Galloway alleged that the Car Rental Companies had


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violated the provision of FACTA that provides, in relevant part, “[N]o person that

accepts credit cards or debit cards for the transaction of business shall print more

than the last five digits of the card number or the expiration date upon any receipt

provided to the cardholder at the point of the sale or transaction.”

       Specifically, the Galloway Action alleged that the Car Rental Companies

had printed credit-card receipts that included more than the last five digits of the

card number as well as the card’s expiration date and accordingly had “failed to

protect [Galloway] and others similarly situated against identity theft and credit

card and debit card fraud . . . .” Galloway sought statutory and punitive damages

on behalf of himself and the class that he proposed to represent, under 15 U.S.C. §

1681n(a), which imposes liability on “[a]ny person who willfully fails to comply

with any requirement” of FACTA. 2

                                  B. The Pending Case

       In the appeal now before us, Plaintiffs-Appellees Travelers Property

Casualty Company of America (“Travelers”), and St. Paul Fire and Marine

Insurance Company (“St. Paul”) (collectively, “Insurance Companies”) filed suit in

the Northern District of Georgia for a declaratory judgment that they were not

obligated to defend or indemnify their insureds, the Car Rental Companies, in the


       2
          Section 1681o allows a plaintiff to prove and recover actual damages for negligent
violations of FACTA. See 15 U.S.C. § 1681o. In the Galloway Action, however, Galloway
limited his and the proposed class’s claims to “willful” violations.
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underlying Galloway Action.          The Car Rental Companies counterclaimed for

breach of contract and bad faith arising from the Insurance Companies’ failure to

defend or indemnify them.          Because the parties’ claims turn on whether the

insurance-policy agreements made between the Insurance Companies and the Car

Rental Companies provide coverage for the Car Rental Companies’ alleged

FACTA violations in the Galloway Action, we review the applicable parts of the

insurance policies that govern.

                               1. The Insurance Policies

       Travelers issued four primary commercial general-liability insurance

policies to Betterway (the “Travelers Policies”).3 St. Paul also issued four excess

commercial general-liability insurance policies to Betterway (the “St. Paul

Policies”) (together with the Travelers Policies, the “Policies”). 4 Appellant KC

Landsmen is a named insured on all of the Policies. As relevant to this appeal, the

Travelers Policies are identical to one another, as are the St. Paul Policies.

       The Travelers Policies insure the Car Rental Companies for damages arising

from various injuries, including “personal injury” suffered by third parties.

Coverage B of the commercial general-liability part of the Travelers Policies was



       3
        The Travelers Policies covered consecutive one-year terms. The first policy’s coverage
began on May 1, 2008, and the last policy’s coverage terminated on May 1, 2012.
       4
         Like the Travelers Policies, the St. Paul Policies covered consecutive one-year terms
and contained the same start and end dates as their Travelers counterparts. See supra note 3.
                                              5
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amended by a “WEB XTEND LIABILITY” Endorsement to provide insurance

coverage for “personal injury” stemming from the insured’s business:

            COVERAGE B. PERSONAL AND ADVERTISING
            INJURY LIABILITY (SECTION I – COVERAGES) is
            deleted in its entirety and replaced by the following:
            COVERAGE             B.         PERSONAL          INJURY,
            ADVERTISING INJURY AND WEB SITE INJURY
            LIABILITY

            1.    Insuring Agreement.

                  a.     We will pay those sums that the insured
                         becomes legally obligated to pay as damages
                         because of “personal injury,” “advertising
                         injury” or “web site injury” to which this
                         insurance applies . . .

                                      ****

                  b.     This insurance applies to:

                         (1)   “Personal injury” caused by an
                               offense arising out of your business,
                               excluding advertising, publishing,
                               broadcasting or telecasting done by or
                               for you;

The Web Endorsement defines “personal injury,” in turn, as follows:

            “Personal injury” means injury, other than “bodily
            injury,” arising out of one or more of the following
            offenses:

                                     ****

            e.    Oral, written or electronic publication of material
                  that appropriates a person’s likeness, unreasonably


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                 places a person in a false light or gives
                 unreasonable publicity to a person’s private life. 5
       But the Travelers Policies also contain provisions that exclude from

coverage “personal injury” knowingly inflicted by the insured:

                        This insurance does not apply to:

                        a.     Knowing Violation of Rights of Another
                               “Personal . . . injury” caused by or at the
                               direction of the insured with the knowledge
                               that the act would violate the rights of
                               another and would inflict “personal injury” .
                               ...

       Like the Travelers Policies, the St. Paul Policies also cover “personal

injury”:

               1. Coverage

               A. We will pay on behalf of:

                   1.          the Insured all sums in excess of the Retained Limit
                               that the Insured becomes legally obligated to pay
                               damages by reason of liability imposed by law; or

                   2.          the Named Insured all sums in excess of the Retained
                               Limit that the Named Insured becomes legally

       5
          The district court noted that “[t]he parties appear to dispute whether ‘personal injury’
coverage exists under the main body of the Travelers Policies or under an endorsement to the
Travelers Policies. Both the main body and the endorsement contain the same Knowing
Violation Exclusion. . . . [T]he Court finds that the parties’ dispute over the source of ‘personal
injury’ coverage is not material to Plaintiffs’ Motion for Summary Judgment.” We agree with
the district court.
        The significant difference between the two policies pertains to the way in which they
define “personal injury.” In relevant part, the main body of the policies defines it as follows:
“Oral or written publication, in any manner, that violates a person’s right of privacy.”
(Emphasis added to highlight the differences). The resolution of this issue has no bearing on the
outcome of this case, so we do not analyze which version controls.
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                          obligated to pay as damages assumed by the Named
                          Insured under an Insured Contract;

                          because of:

                                                 ****

                          2.     Personal Injury or Advertising Injury that is
                                 caused by an Occurrence committed during the
                                 Policy Period

The St. Paul Policies define “personal injury,” in relevant part, as follows:

             Q.     Personal Injury means injury . . . caused by . . .:

                                        ****

                    5.    oral, written or electronic publication of material that
                          violates a person’s right of privacy.

Also like the Travelers Policies, the St. Paul Policies exclude coverage of

“personal injury” knowingly caused by the insured:

             This insurance does not apply to:

             ...

             J.     Known Violation of Rights
                    Personal Injury or Advertising Injury caused by
                    or committed at the direction of the Insured, or by
                    an offense committed at the direction of the
                    Insured, with knowledge that the rights of another
                    would be violated and that Personal Injury or
                    Advertising Injury would result.

                   2. The District Court’s Opinion and Order




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      The Insurance Companies moved for summary judgment, and the district

court granted the Insurance Companies’ motion on all claims before it, finding that

the claims in the Galloway Action alleged only knowing violations of FACTA,

which were excluded from coverage under the Policies.               In reaching this

conclusion, the district court rejected the Car Rental Companies’ argument that

they could be found liable under the Galloway Action for reckless violations of

FACTA—conduct that would not be excluded from coverage under the policies.

Because the district court determined that the insureds were excluded from

coverage under the knowing-conduct exclusions to the Policies, the district court

did not consider whether the insureds enjoyed coverage in the first place for

issuing non-conforming credit-card receipts to customers who did not own the

credit-card accounts for which the receipts were issued.

                                        II.

      We review a district court’s grant of summary judgment de novo, drawing

all inferences in the light most favorable to the non-moving party. Rich v. Sec'y,

Fla. Dep't of Corr., 716 F.3d 525, 530 (11th Cir. 2013). Summary judgment is

proper where no genuine dispute exists as to any material fact, and the movant is

entitled to judgment as a matter of law.       Fed. R. Civ. P. 56(a).       Contract

interpretation, including of insurance-related agreements, raises a question of law




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and is subject to de novo review. Am Cas. Co. of Reading, Pa. v. Etowah Bank,

288 F.3d 1282, 1285 (11th Cir. 2002).

                                              III.

       When jurisdiction is based on diversity, such as in this case, the forum

state’s choice-of-law rules govern which state’s substantive law applies. Klaxon

Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020 (1941). Here, Georgia

was the forum state.

       Georgia’s choice-of-law rules, in turn, dictate that insurance contracts are

interpreted under the laws of the place where the contract is made. Avemco Ins.

Co. v. Rollins, 380 F. Supp. 869, 872 (N.D. Ga.), aff'd mem., 500 F.2d 1182 (5th

Cir. 1974).6 Georgia law also provides that a contract is made at the place where it

is delivered. Id.; see Casey Enterprises, Inc. v. Am. Hardware Mut. Ins. Co., 655

F.2d 598, 602 (5th Cir. Unit B 1981) (“Under Georgia law the place of the delivery

of the insurance contract controls.”). 7 The insurance contracts in this case were

delivered in Georgia, so, as both parties agree, Georgia substantive law controls.

       Under Georgia law governing the interpretation of insurance contracts, “an

insurer’s duty to defend is broader than its duty to indemnify.” Shafe v. Am. States

Ins. Co., 653 S.E.2d 870, 873 (Ga. Ct. App. 2007). “Although an insurer need not

       6
         Opinions of the Fifth Circuit issued prior to October 1, 1981, are binding precedent in
the Eleventh Circuit. Bonner v. City of Prichard, Ala., 661 F.2d 1206, 1209 (11th Cir. 1981).
       7
         Opinions of the Fifth Circuit Unit B are binding precedent in the Eleventh Circuit. Stein
v. Reynolds Sec., Inc., 667 F.2d 33, 34 (11th Cir. 1982).
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indemnify an insured for a liability the insured incurs outside the terms of the

insurance contract, an insurer must provide a defense against any complaint that, if

successful, might potentially or arguably fall within the policy’s coverage.” Elan

Pharm. Research Corp. v. Emp’rs Ins. of Wausau, 144 F.3d 1372, 1375 (11th Cir.

1998). Therefore, “[e]ven if some of [the] allegations ultimately [a]re not found to

be covered by the policy,” the insurer still has a duty to defend the entire action if

any of the claims might be. Nationwide Mut. Fire Ins. Co. v. Somers, 591 S.E.2d

430, 434 (Ga. Ct. App. 2003).

      To determine whether a claim against an insured falls within the insured’s

coverage, triggering the insurer’s duty to defend, we must compare the allegations

of the underlying complaint against the provisions of the policy. See id. at 433. If

the complaint against the insured does not assert any claim that could fall within

the policy’s coverage provisions, the insurer is justified in refusing to defend. See

id. “[D]oubt as to [the] liability and [the] insurer’s duty to defend should be

resolved in favor of the insured.” Penn-Am. Ins. Co. v. Disabled Am. Veterans,

Inc., 490 S.E.2d 374, 376 (Ga. 1997) (citation and quotation marks omitted).

      Normally, we might conduct our analysis by first determining whether the

alleged conduct was covered under the coverage provisions of any insurance

policy, and, if so, then evaluating whether any exclusion provisions of the

applicable policy precluded coverage. In this matter, however, the district court


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believed a policy exclusion to be applicable, so it had no reason to consider

whether the conduct alleged in the Galloway Action fit within the coverage

provisions of the Policies. Neither would we, if we agreed with the district court

that the exclusion provisions preclude coverage of the claims in the Galloway

Action. We therefore begin our analysis by addressing the exclusion provisions.

                           A. The Exclusion Provisions

      An insurer has no duty to defend when the allegations in an underlying

complaint are excluded by a specific policy provision. See, e.g., City of Atlanta v.

St. Paul Fire & Marine Ins. Co., 498 S.E.2d 782, 784 (Ga. Ct. App. 1998); Cont’l

Graphic Servs., Inc. v. Cont’l Cas. Co., 681 F.2d 743, 745 (11th Cir. 1982)

(applying Georgia law). An insurer can rely solely on the allegations contained

within the complaint to establish that a policy exclusion precludes coverage. First

Specialty Ins. Corp. v. Flowers, 644 S.E.2d 453, 455 (Ga. Ct. App. 2007) (citation

omitted).

      Here, Galloway’s underlying putative class-action lawsuit sought to impose

liability on the Car Rental Companies for committing “willful” FACTA violations

under § 1681n. The Supreme Court has held that “willfulness,” as defined in §

1681n, encompasses not only “knowing” violations, but also those committed in

“reckless disregard” of the statute’s requirements. See Safeco Ins. Co. v. Burr, 551

U.S. 47, 71, 127 S. Ct. 2201, 2216 (2007).


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      In this case, the distinction between the two levels of “willful” intent is

especially important: as the parties agree, “knowing” violations are excluded from

coverage, but violations committed with “reckless disregard” are not. The district

court concluded that the Galloway complaint asserted “willful” FACTA violations

under the “knowing” level of intent only, so the district court determined that the

Policies precluded coverage under their knowing-conduct exclusions.            We

respectfully disagree.

      In reaching its conclusion that the Galloway Action charged only “knowing”

“willful” violations, the district relied on the following four paragraphs of the

Galloway complaint:

             57. At the time of the FACTA violations identified in
                 this Complaint and before, Defendants knew of their
                 obligations under FACTA . . . .

             60. Despite knowledge of FACTA’s requirements . . . ,
                 Defendants continued to willfully disregard
                 FACTA’s requirements . . . .

             63. Defendants knew of and failed to comply with their
                 legal duty [under FACTA] . . . .

             65. Notwithstanding all of the publicity and the
                 Defendants’     knowledge     of     the  statute’s
                 requirements, they willfully failed to comply with
                 FACTA . . . .

      The “knowledge” allegations in these paragraphs, though, go only to the Car

Rental Companies’ alleged knowledge of FACTA’s requirements, not their


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knowledge of any alleged violations of its requirements. 8 But Section 1681n, the

section on which the Galloway Action is premised, concerns itself with the

defendant’s mental state as it relates to alleged non-compliance—i.e., violations—

only, not with the defendant’s mental state with regard to the statute’s

requirements. See 15 U.S.C. § 1681n (“Civil liability for willful noncompliance.

(a) In general[:] Any person who willfully fails to comply with any [FACTA]

requirement . . . is liable . . . .”) (emphasis added).

       Paragraph 65 of the Galloway complaint perhaps best exemplifies the

distinction that the Galloway complaint makes between the Car Rental Companies’

mental state with regard to FACTA’s requirements and their mental state as it

relates to any alleged violations that they may have committed.                       It reads,

“Notwithstanding . . . the Defendants’ knowledge of the statute’s requirements,

they willfully failed to comply with FACTA . . . ,” meaning that they both knew of

FACTA’s requirements and that they failed to comply with them either knowingly

or with reckless disregard. Even the Insurance Companies’ motion for summary

judgment acknowledges that “[the underlying complaint] alleges that Defendants’

violations were willful and that the willful violations entitled the class to recover . .



       8
        And even the allegations related to the Car Rental Companies’ knowledge of FACTA’s
requirements, read in the context of the other allegations of the complaint, assert only that the
Car Rental Companies had notice of FACTA’s requirements, not that they had subjective
knowledge of FACTA’s requirements. But notice does not necessarily equate with actual
knowledge.
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. damages . . . .” Conspicuously absent from the complaint is any allegation that

the violations were knowing.

      Nor does any other aspect of the Galloway complaint necessarily limit its

allegations against the Car Rental Companies to violations of § 1681n conducted

knowingly, as opposed to those committed with reckless disregard. It matters not

that the Galloway complaint does not use the phrase “reckless disregard”

specifically because the Galloway complaint alleges that the Car Rental

Companies acted “willfully” when they violated § 1681c(g)(1). Under Safeco, this

means that the Galloway plaintiffs can succeed on their claims if they show that

the Car Rental Companies acted either “knowingly” or with “reckless disregard.”

See 551 U.S. at 71, 127 S. Ct. at 2216. Indeed, if, under the Galloway complaint,

the Galloway plaintiffs asked for a jury instruction explaining that where “willful”

violations are alleged, they can be proven by evidence of either knowledge or

reckless disregard, they would likely be entitled to such an instruction, provided

that they had presented evidence of reckless disregard. In any case, we can find

nothing in the Galloway complaint that would foreclose the Galloway plaintiffs

from being able to proceed and, given the necessary evidence, prevail at trial on

the theory that the Car Rental Companies violated § 1681c(g)(1) with reckless

disregard.




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      For these reasons and because Georgia law dictates that “an insurer must

provide a defense against any complaint that, if successful, might potentially or

arguably fall within the policy’s coverage,” Elan Pharm. Research Corp., 144

F.3d at 1375 (emphasis added), the knowing-conduct exclusion does not relieve the

Insurance Companies of their obligation to provide a defense to the Galloway

Action if the Policies otherwise provide coverage.

                            B. The Coverage Provisions

      Because the exclusion provisions do not eliminate the possibility that the

Insurance Companies must provide a defense to the Car Rental Companies in the

Galloway Action, we are faced with the question of whether the Policies provide

coverage for the conduct alleged in the Galloway complaint. As we have noted,

the district court did not have the opportunity to address this question, so we must

decide whether to consider it for the first time now.

      “It is the general rule . . . that a federal appellate court does not consider an

issue not passed upon below.” Singleton v. Wulff, 428 U.S. 106, 120, 96 S. Ct.

2868, 2877 (1976). While an appellate court enjoys discretion to address issues

not ruled on by the district court, an appellate court should exercise that discretion

only where the circumstances warrant such review. Id. at 121, 96 S. Ct. at 2877.

The Supreme Court has not set forth an exhaustive list of circumstances that might

justify initial consideration of an issue at the appellate-court level, but it has


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identified two such situations: “where the proper resolution is beyond any doubt”

and “where injustice might otherwise result.” Id. (citations and internal quotation

marks omitted). Here, neither applies.

       First, the proper resolution is not “beyond any doubt.” The Galloway Action

alleges that the Car Rental Companies willfully provided non-conforming credit-

card receipts to their customers in violation of § 1681c(g)(1). Both the Insurance

Companies and the Car Rental Companies agree that the Policies do not cover the

Car Rental Companies’ provision of violative credit-card receipts to the credit-card

account owner. This is because although the Policies cover “personal injury”

resulting from “publication of material” that gives “unreasonable publicity to a

person’s private life” and “publication of material that violates a person’s right to

privacy,” the parties agree that the term “publication” contemplates dissemination

to at least someone other than the person who provided the card information at

issue to the Car Rental Companies.9 Since the Car Rental Companies do not

suggest that the term “publication” is ambiguous or that it could reasonably be

construed as including a vendor’s provision of a violative receipt to only the

paying cardholder, see W. Pac. Mut. Ins. Co. v. Davies, 601 S.E.2d 363, 368-69

(Ga. Ct. App. 2004), we need not and do not consider whether the term

       9
          The Car Rental Companies accept that the definition of “publication” includes
dissemination to the public, despite the fact that they maintain that the Travelers General
Commercial Liability Policies control (as opposed to the Web Endorsement), which provides for
personal injuries caused by “publication, in any manner.”
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“publication” as used in the Policies in this case can include the return of a

violative receipt to the paying cardholder.

      But the Car Rental Companies assert that, under their business model, they

accept payment at the time of rental from the person producing the credit card and

provide credit-card receipts to the individual returning the rental car, who may not

be the same as the person who paid for the rental of the vehicle in the first place—

and who may not be an owner of the credit-card account used to pay for the rental.

Regardless of whether the person returning the rental car owns the credit-card

account for which the Rental Car Company provides a receipt, the Car Rental

Companies claim that they consider the person returning the car to be a customer

and further argue that they could be held liable under the Galloway Action for

engaging in such conduct. As the Car Rental Companies view their Policies, the

Policies provide coverage for any conduct involving providing non-conforming

receipts to people other than the credit-card account owners. Whether that is

correct turns on two questions: whether § 1681c(g)(1) prohibits vendors from

providing non-truncated credit-card receipts to their customers for credit-card

accounts that their customers do not own, and, if so, whether the Galloway

complaint can arguably be read to encompass such violations.

      Section 1681c(g)(1) prohibits “print[ing] more than the last five digits of the

[credit] card number or the expiration date upon any receipt provided to the


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cardholder . . . .” 15 U.S.C. § 1681c(g)(1). “[O]ur authority to interpret statutory

language is constrained by the plain meaning of the statutory language in the

context of the entire statute, as assisted by the canons of statutory construction.”

Edison v. Douberly, 604 F.3d 1307, 1310 (11th Cir. 2010). Within this framework,

we start our analysis by evaluating whether the statutory language is clear and

unambiguous. CBS Inc. v. PrimeTime 24 Joint Venture, 245 F.3d 1217, 1222 (11th

Cir. 2001). If so, we also end our analysis there. Id. But we have recognized one

exception to this procedure: “courts may reach results inconsistent with the plain

meaning of a statute if giving the words of a statute their plain and ordinary

meaning produces a result that is not just unwise but is clearly absurd.” Id. at 1228

(citation and quotation marks omitted). The circumstances in which this exception

applies, however, are “rare[]” and “exacting.” Id.

      Here, at first blush, the statutory language appears to be clear and

unambiguous: § 1681c(g)(1) prohibits “print[ing] more than the last five digits of

the [credit] card number or the expiration date upon any receipt provided to the

cardholder . . . .” (emphasis added). “Cardholder,” however, is not defined in 15

U.S.C. § 1681a, which sets forth the definitions and rules of construction

pertaining to § 1681c(g)(1). Section 1681a(r) does define the term “credit card,”

though, as having “the same meaning as in section 1602 of this title.” 15 U.S.C. §

1681a(r)(2). And surveying the other definitions in § 1602, we observe that §


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1602(n) defines the term “cardholder” to mean “any person to whom a credit card

is issued or any person who has agreed with the card issuer to pay obligations

arising from the issuance of a credit card to another person.” So some might

suggest that we should apply this same definition to the word “cardholder” in §

1681c(g)(1).

      But, under the clear language of § 1602, the definitions set forth in that

section “are applicable for the purposes of [Subchapter I of Chapter 41 of Title

15].” 15 U.S.C. § 1602. Section 1681c(g)(1) does not fall under Subchapter I;

instead, it appears under Subchapter III. While we “may consider Congress’s use

of a particular term elsewhere in the statute to determine its proper meaning within

the context of the statutory scheme,” Shotz v. City of Plantation, Fla., 344 F.3d

1161, 1168 (11th Cir. 2003) (citation and quotation marks omitted), the fact that

Congress imported the definition of “credit card” from § 1602 for purposes of

construing Subchapter III but did not also incorporate the definition of

“cardholder” found at § 1602 for purposes of interpreting Subchapter III may

suggest that Congress made a deliberate decision not to employ § 1602’s definition

of “cardholder” for purposes of construing § 1681c(g)(1). Indeed, we have also

recognized that “[w]here Congress includes particular language in one section of a

statute but omits it in another section of the same Act, it is generally presumed that

Congress acts intentionally and purposely in the disparate inclusion or exclusion.”


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Shotz v. City of Plantation, 344 F.3d 1161, 1168 (11th Cir. 2003) (citations and

internal quotation marks omitted).

      Moreover, the other definitions found at § 1681a(r), which do apply to the

terms appearing in the provisions within Subchapter III, are not the same as the

definitions for the same terms that also are defined in Section 1602. Compare,

e.g., 15 U.S.C. § 1681a(r)(1) with 15 U.S.C. § 1602(o) (defining “card issuer”

differently); compare 15 U.S.C. § 1681a(r)(5) (incorporating by reference

definitions of “credit” and “creditor” contained at 15 U.S.C. § 1691a with 15

U.S.C. § 1602(f), (g) (setting forth its own definitions of the terms “credit” and

“creditor,” respectively). In fact, some definitions under § 1681a(r) expressly

incorporate definitions from statutory provisions other than § 1602, even though §

1602 also defines the same terms. See 15 U.S.C. § 1681a(r)(5) (incorporating by

reference definitions of “credit” and “creditor” contained at 15 U.S.C. § 1691a).

So presuming that the definition of “cardholder” from § 1602(n) applies for

purposes of construing § 1681c(g)(1) may be presuming too much.

      But, then, what does “cardholder” mean? If, as the Insurance Companies

suggest, the word refers strictly to the person in whose name the credit or debit

account is owned, that would mean that FACTA renders a vendor liable for giving

the account holder a copy of a receipt with his or her own account number on it,

but it allows a vendor to escape with impunity for providing the same non-


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truncated receipt to anyone other than the person whose account the receipt is for. 10

Some might suggest that such an interpretation would create plainly absurd results,

see CBS Inc., 245 F.3d at 1228, that fly in the face of FACTA’s stated purpose of

“prevent[ing] identity theft,” Pub. L. No. 108-159, 117 Stat. 1952, particularly

because FACTA has been described as a remedial statute that should be construed

broadly. See Long v. Tommy Hilfiger U.S.A., Inc., 671 F.3d 371, 375-76 (3d Cir.

2012); Simonoff v. Expedia, Inc., 643 F.3d 1202, 1210 (9th Cir. 2011). On the

other hand, some might disagree that the results are absurd, since “Congress is not

required to address every aspect of a problem whenever it decides to act.” United

States v. Nat’l Treasury Emps. Union, 513 U.S. 454, 484, 115 S. Ct. 1003, 1021-22

(1995) (O’Connor, J., concurring in part and dissenting in part).

       In any case, we do not conclude that whether § 1681c(g)(1) prohibits

vendors from providing non-conforming receipts of credit-card account owners to

persons other than the account owners is clear “beyond any doubt.” Under these

circumstances, we think that consideration of this issue would benefit from the

parties’ and the district court’s focused attention in the first instance. As this

appears to be an issue of first impression, the Federal Trade Commission, which is

the agency charged with administering the Fair Credit Reporting Act, which

FACTA amended, may also wish to seek to intervene in the district-court

       10
          No other provision of FACTA appears to create express liability for a vendor who
provides someone other than a credit-account owner with a non-conforming credit-card receipt.
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proceedings under Rule 24(b)(2)(A), Fed. R. Civ. P., and weigh in with its

understanding of § 1681c(g)(1).

      Nor can we resolve this case without reaching the issue of whether §

1681c(g)(1) can impose liability on a vendor for providing a non-conforming

credit-card receipt to a person who does not own the account for which the receipt

was provided. As the Galloway complaint is written, it alleges that the Car Rental

Companies “violated 15 U.S.C. § 1681c(g)(1) . . . .” It does not necessarily limit

its claim to reaching only the providing of non-conforming credit-card receipts to

the owners of the accounts for which the receipts are issued. To the contrary, the

complaint describes the “publication of more than five digits of a credit card or

debit card number on customer receipts disseminated at the point of sale” as

violative of § 1681c(g)(1), and the parties have already agreed that, at least for

purposes of construing the terms of the Policies, the term “publication” necessarily

refers to dissemination of the receipt to only someone other than the account

owner.

      In addition, the complaint proposes a class of “all persons who used . . . [a]

debit or credit card . . . at any of Defendant’s rental locations where Defendant

provided an electronically printed receipt at the point of sale or transaction that

violated FACTA’s truncation requirements of that person’s credit or debit card . . .




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.” This language at least arguably makes the Galloway claim as broad as §

1681c(g)(1) allows.

      Similarly, the complaint alleges the following relevant common questions of

fact and law: “[w]hether [the Car Rental Companies] had a practice of providing

customers with a sales or transaction receipt which failed to comply with the

truncation requirement,” and “[w]hether [the Car Rental Companies] thereby

violated FACTA.”       (Emphasis added).        Under these allegations, it is at least

arguable that the Car Rental Companies could be held liable for providing non-

account owners with non-truncated credit-card receipts when they returned rental

cars, if § 1681c(g)(1) prohibits such conduct. That is all Georgia law requires for

an insurer’s duty to defend to be triggered. See Elan Pharm. Research Corp., 144

F.3d at 1375. For this reason, the outcome of this case rests entirely on whether §

1681c(g)(1) can impose liability on a vendor for issuing a non-conforming credit-

card receipt to someone who is not the owner of the account for which the receipt

was issued.

      Turning to the second reason for an appellate court to consider an issue for

the first time on appeal—if injustice might otherwise result—neither party has

identified any injustice that might result from our remand of this action to the

district court for consideration of the issue in the first instance. Nor is any injustice

apparent to us. We similarly find no other reason to vary from the usual rule of


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allowing the district court to address the issue before we do. We therefore remand

this matter to the district court for further consideration.

                                           IV.

      For the foregoing reasons, we reverse the judgment of the district court

declaring that the Insurance Companies have no duty to defend the Car Rental

Companies, and we remand for further proceedings consistent with this opinion.

      REVERSED AND REMANDED.




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WILSON, Circuit Judge, concurring in the result:

      We are called upon to determine whether the class action complaint filed in

the Galloway Action alleges only knowing violations of the Fair and Accurate

Credit Transactions Act (FACTA) 1 or also alleges violations in reckless disregard

of those requirements. See Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57, 127 S.

Ct. 2201, 2208–09 (2007) (holding that a “willful” violation under 15 U.S.C. §

1681n includes both knowing and reckless violations). While I concur in the

Majority’s conclusion, I write separately to elucidate the finding that the Galloway

complaint alleges “willfulness” in terms of both knowledge and recklessness,

rather than in terms of only knowledge. This being the sole issue on appeal, I

would remand on this issue alone, leaving it to the district court to consider, in the

first instance, the Insurance Companies’ alternative argument that the Policies do

not provide coverage for the conduct alleged in the Galloway complaint.

      The Galloway complaint asserts a single cause of action under § 1681n,

which imposes civil liability on “[a]ny person who willfully fails to comply with

any requirement imposed under [FACTA] with respect to any consumer.” To

establish a “willful” violation under § 1681n, the class action plaintiffs must show

either that the Car Rental Companies knowingly violated FACTA or that they

acted in reckless disregard of FACTA’s requirements. See Safeco, 551 U.S. at 57,

      1
         See Fair and Accurate Credit Transactions Act, Pub. L. No. 108–159, 117 Stat. 1952
(2003) (codified at 15 U.S.C. § 1681c(g)).
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127 S. Ct. at 2208; see also Harris v. Mexican Specialty Foods, Inc., 564 F.3d

1301, 1310 (11th Cir. 2009).

       Generally speaking, recklessness entails “an unjustifiably high risk of harm

that is either known or so obvious that it should be known.” Safeco, 551 U.S. at

68–69, 127 S. Ct. at 2215 (internal quotation marks omitted) (discussing common

law and Restatement definitions of “recklessness”). In the context of § 1681n, this

means that,

       [t]o prove a reckless violation, a consumer must establish that the
       action of the agency “is not only a violation under a reasonable
       reading of the statute’s terms, but shows that the company ran a risk
       of violating the law substantially greater than the risk associated with
       a reading that was merely careless.”
Levine v. World Fin. Network Nat’l Bank, 554 F.3d 1314, 1318 (11th Cir. 2009)

(quoting Safeco, 551 U.S. at 69, 127 S. Ct. at 2215).2 In other words, a violation of

FACTA is not reckless when the violating action is “in accord with an objectively

reasonable interpretation of the Act.” Levine, 554 F.3d at 1319.

       Both Safeco and Levine suggest that recklessness is something more than

negligence or mere carelessness. See, e.g., Safeco, 551 U.S. at 69, 127 S. Ct. at

2215 (noting, but not pinpointing, a division between negligence and recklessness).



       2
         To further illuminate the standard, Levine provides that, to establish reckless disregard
under § 1681n, “[a]n interpretation that favors the agency must be ‘objectively unreasonable’
under either the text of the Act or ‘guidance from the courts of appeals or the Federal Trade
Commission that might have warned [the agency] away from the view it took.’” Levine, 554
F.3d at 1318 (second alteration in original).
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We have previously suggested that “recklessness is closer to a lesser form of

intent” as opposed to “merely a greater degree of ordinary negligence.” See

McDonald v. Alan Bush Brokerage Co., 863 F.2d 809, 814 n.10 (11th Cir. 1989)

(internal quotation marks omitted). This distinction is bolstered by the existence of

a separate section applicable to negligent violations of FACTA. See 15 U.S.C. §

1681o. Practically, then, both knowing and reckless violations of FACTA first

require some knowledge of FACTA’s requirements. Thus, the class action

plaintiffs’ allegations that the Car Rental Companies had knowledge of FACTA’s

requirements prior to any violation thereof can be read to allege willfulness in

terms of either knowledge or recklessness and not in terms of knowledge alone.

      While the exact theory of liability (i.e., knowing violation or reckless

disregard) is unknown at present, the class action plaintiffs have stated a claim that

“might potentially or arguably fall within the policy’s coverage,” Elan Pharm.

Research Corp. v. Emp’rs Ins. of Wausau, 144 F.3d 1372, 1375 (11th Cir. 1998),

by alleging nothing more than the Car Rental Companies’ knowledge of FACTA’s

requirements and their “willful failure” to follow and “willful disregard” of those

requirements, see Levine v. World Fin. Network Nat’l Bank, 437 F.3d 1118, 1123–

24 (11th Cir. 2006) (reasoning allegation of “a willful violation” and claim for

damages states prima facie claim under § 1681n). The nature of the Car Rental




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Companies’ knowledge will prove determinative, but we are not, at this stage,

concerned with the certainty of their success.




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