The Debit Card, the Grandfather and the Sneakers

This post examines a recent opinion from the Supreme Court, Appellate Division – New York concerning a juvenile delinquency proceeding:  In the Matter of Luis C., 2014 WL 6779210. The court begins its opinion by explaining how the case arose:

The facts in this juvenile delinquency proceeding are undisputed. The appellant, Luis C., used his grandfather's debit card number, without permission, to buy sneakers on the Internet. There is no evidence that Luis ever took or possessed the card itself.

After a fact-finding hearing, the Family Court found that Luis had committed acts which, if committed by an adult, would have constituted the crimes of grand larceny in the fourth degree under Penal Law § 155.30(4) and criminal possession of stolen property in the fourth degree under Penal Law § 165.45(2). Those sections, as relevant here, relate to the theft or possession of property that `consists of a . . . debit card’ (Penal Law § 155.30[4]; see Penal Law §165.45[2]).

In the Matter of Luis C., supra. The court put Luis “on probation for a period of 12 months.”  In the Matter of Luis C., supra. 

In his appeal, Luis argued that “he could not be found to have violated those particular statutory provisions with respect to his grandfather's debit card in the absence of any evidence that he took or possessed the card itself.”  In the Matter of Luis C., supra. The Appellate Division began its analysis of argument by noting that “[t]his issue . . . is one of first impression in this Department.”  In the Matter of Luis C., supra.  It also noted that

[t]he Presentment Agency now agrees with Luis that the petition should be dismissed. While contending that the evidence of Luis's larcenous intent is “compelling,” the Presentment Agency concedes that without evidence that Luis took or possessed the card itself, the fact-finding rests on legally insufficient evidence. 

In the Matter of Luis C., supra. 

The Appellate Division also, however, pointed out that

in a decision issued after the briefs were filed in this case, the Appellate Division, First Department, upheld a conviction for criminal possession of stolen property in the fourth degree under facts that are analogous to the undisputed facts here. In People v. Barden (117 AD3d 216, lv granted 24 NY3d 959), the defendant's conviction was based on his use of a credit card number, despite undisputed evidence that he never possessed the card itself. Thus, even given the Presentment Agency's concession in the appeal before us, the law is unsettled.

In the Matter of Luis C., supra. 

As to the facts that gave rise to this case, the Appellate Division explained that

[a]t the fact-finding hearing, Luis's grandfather testified that when he tried to use his debit card on March 19, 2013, he found that the balance was insufficient to make his purchase. He called the card issuer and learned that a $120 purchase had been made on the card. When he returned home, he found a package addressed to Luis, who was staying with him. The package contained a pair of sneakers and a receipt. The receipt indicated that the [grandfather’s] debit card had been charged for the purchase.

Luis admitted he had ordered the sneakers and used his grandfather's debit card number to pay for them. There was . . . no evidence that Luis ever possessed the debit card itself. Indeed, when asked at the fact-finding hearing whether Luis ever possessed the debit card itself, the [grandfather] answered: `I never said he had the card in his hand.’

In the Matter of Luis C., supra. 

The Appellate Division then began its analysis of Luis’ argument, noting that it involved the process of statutory interpretation.  In the Matter of Luis C., supra. It explained that

[s]tatutory interpretation is an inquiry into legislative intent (see Matter of Albany Law School v. New York State Office of Mental Retardation & Dev. Disabilities, 19 NY3d 106, 120). The clearest evidence of that intent is in the statutory text (see Majewski v. Broadalbin–Perth Cent. School Dist., 91 N.Y.2d 577; Matter of DaimlerChrysler Corp. v. Spitzer, 7 NY3d 653). Context, however, is also important: `inquiry must be made of the spirit and purpose of the legislation, which requires examination of the statutory context of the provision as well as its legislative history’ (Matter of Sutka v. Conners, 73 N.Y.2d 395. . .). Courts must also respect the principle that a statute is to be construed as a whole. . . . Accordingly, `its various sections must be considered together and with reference to each other’ (People v. Mobil Oil Corp., 48 N.Y.2d 192).

In the Matter of Luis C., supra. 

The court went on to explain that the “relevant statutory provisions” are

Penal Law § 155.30 Grand larceny in the fourth degree

A person is guilty of grand larceny in the fourth degree when he steals property and when . . .

4. The property consists of a credit card or debit card (Penal Law § 155.30[4]).

Penal Law § 165.45 Criminal possession of stolen property in the fourth degree

A person is guilty of criminal possession of stolen property in the fourth degree when he knowingly possesses stolen property, with intent to benefit himself or a person other than an owner thereof or to impede the recovery by an owner thereof, and when: . . .

 2. The property consists of a credit card, debit card or public benefit card” (Penal Law § 165.45[2]).

Penal Law § 155.00 Larceny; definitions of terms

The following definitions are applicable to this title: . . .

7. Credit card means any instrument or article defined as a credit card in section five hundred eleven of the general business law.

7—a. Debit card’ means any instrument or article defined as a debit card in section five hundred eleven of the general business law (Penal Law § 155.00[7], [7–a]).

In the Matter of Luis C., supra. 

The Appellate Division then pointed out that the

texts of the statutes speak only in terms of physical items; intangibles such as accounts or account numbers are not included. Even the catch-all phrases -- `other identification card or device’ and `other similar device’ -- refer to physical items (General Business Law § 511[1], [9]). Thus, a purely textual reading of the statutes that Luis was alleged to have violated supports the conclusion of Luis and the Presentment Agency that `debit card’ means the physical card or device itself.

This conclusion is reinforced when the provisions are viewed in context. The common structure of article 155 (larceny) and article 165 (`Other Offenses Relating to Theft’) evinces the legislature's careful consideration of how various thefts and possessions of stolen property should be classified. For the most part, the article 155 and article 165 crimes are classified by the value of the property taken or possessed (see Penal Law §§ 155.25, 155.30[1]; 155.35[1]; 155.40[1]; 155.42, 165.40, 165.45[1]; 165.50, 165.52, 165 .54).

In the Matter of Luis C., supra. 

But it also noted that some

classifications . . . depend not on the value of the property, but on the kind of property. Most of these provisions elevate, to felony classification, thefts or possessions that would have been misdemeanors had they been measured based solely on the value of the property. These provisions relate to public records, writings, or instruments (Penal Law § 155.30[2]); secret scientific material (Penal Law § 155.30[3]); firearms, rifles, or shotguns (Penal Law §§ 155.30[7], 165.45[4]); access devices that the person intends to use unlawfully to obtain telephone service (Penal Law § 155.30[10]); and certain substances that may be used to manufacture methamphetamine (Penal Law §§ 155.30[11], 165.45[7]). They also include the enhancement at issue in this case, debit cards, as well as credit cards (Penal Law §§ 155.30[4], 165.45[2]).

In the Matter of Luis C., supra (emphasis in the original).

The court went on to explain that

[o]ne important reason for the automatic enhancement in classification of certain larceny and possession crimes is a difficulty in establishing a value for some types of property. Even though the larceny or possession of the property is regarded as inherently serious, a solely value-based classification would often result in misdemeanor classification.

Thus, as one commentator noted with respect to grand larceny in the fourth degree, `[i]t is for these reasons that the section at hand arbitrarily classifies any such theft as grand larceny and felonious’ (Arnold D. Hechtman, Practice Commentaries, McKinney's Cons Laws of NY, Book 39, Penal Law § 155.30 at 156 [1975 ed]).

In the Matter of Luis C., supra. 

It then returned to the issue at hand, explaining that

[i]t was precisely this valuation problem that prompted the legislature to enact the first versions of what are now Penal Law §§ 155.30(4) and 165.45(2). A credit card -- the card itself -- was seen as having only negligible value, so the theft of a credit card could not be punished as a felony based on valuation. In approving Chapter 115 of the Laws of 1969, Governor Nelson A. Rockefeller explained that credit cards had become a major factor in the consumer economy only over the past decade, but the laws had not kept pace with this change. Organized crime had taken advantage of loopholes. 

In the Matter of Luis C., supra. 

The court went on to explain that then-Governor Rockefeller said Chapter 115 was intended to close those loopholes:

`Specifically the bill would:

—make the theft of a credit card grand larceny in the third degree. (Under existing law, when applying the larceny statutes, the value of a credit card is deemed to be no more than the value of the plastic or paper on which it is printed, resulting in a minimal penalty for conviction when compared to the gravity of the subsequent crimes its theft facilitates)’ (Governor's Mem approving L 1969, ch 115, 1969 McKinney's Session Laws of N.Y. at 2541 [emphasis added]).

In the Matter of Luis C., supra. 

It therefore found that

in accord with the legislative intent, the theft of a credit card has been, since 1969, a completed felony upon the taking of the card. There is no need for the People to prove that the thief actually used the card, nor any need for the People to prove the `value’ of the card. Since 1988, the same has been true with respect to debit cards (see L 1987, ch 556). The purpose of the addition of debit cards was to give holders of debit cards the same protection that holders of credit cards already enjoyed (see Letter of L. Paul Kehoe, July 2, 1987, at 5, Bill Jacket, L 1987 ch 556 [urging Governor's approval of A3279]).

In summary, given the text of the provisions at issue, the context of the law and its development over the years, we agree with Luis and the Presentment Agency that `debit card’ as used in Penal Law §§ 155.30(4) and 165.45(2) means the physical card, not the intangible account information associated with it. We also agree that, at bottom, this case involves errors made when the petition was drafted. Luis's acts undoubtedly violated provisions of the Penal Law, but not the provisions charged in the petition.

In the Matter of Luis C., supra. 

The Appellate Division went on to explain that someone who

appropriates account information is not immune from punishment. The legislature has enacted laws to protect account information, in addition to the laws relating to the cards themselves. Specifically, in chapter 619 of the Laws of 2002, the legislature amended or added sections to various statutes in order to address the problem of people who engage in identity theft or use other people's personal information without authorization. That legislation added the crimes of identity theft in the third, second, and first degrees (Penal Law §§ 190.78, 190.79, and 190.80), as well as unlawful possession of personal identification information in the third, second, and first degrees (Penal Law §§ 190.81, 190.82, and 190.83). Later, the legislature added `aggravated identity theft’ (Penal Law § 190.80–a; see L 2008, ch 226, § 2). These provisions . . .  make the criminal possession of account information a completed crime; no proof is required that the information was actually used.

In the Matter of Luis C., supra. 

It also pointed out that

[o]ne of the crimes added in 2002, unlawful possession of personal identification information in the third degree (Penal Law § 190.81), directly proscribes what Luis did in this case when he used his grandfather's debit card number, without permission, to buy sneakers:

`A person is guilty of unlawful possession of personal identification information in the third degree when he or she knowingly possesses a person's financial services account number or code, savings account number or code, checking account number or code, brokerage account number or code, credit card account number or code, debit card number or code, automated teller machine number or code, personal identification number, mother's maiden name, computer system password, electronic signature or unique biometric data that is a fingerprint, voice print, retinal image or iris image of another person knowing such information is intended to be used in furtherance of the commission of a crime defined in this chapter ‘ (emphasis added).

Thus, just as the legislature added credit cards to the penal provisions of the law when the use of credit cards became widespread, and added debit cards when the use of debit cards became widespread, it also added provisions related to the unauthorized possession of the intangible account information when technology demanded.

In the Matter of Luis C., supra (emphasis in the original).

The Appellate Division, therefore agreed with Luis and the Presentment Agency that “Luis's theft and possession of his grandfather's debit card number, and not the debit card itself, was insufficient to support a finding that he stole or possessed property that consisted of a `debit card.’” In the Matter of Luis C., supra. It therefore reversed

the order of disposition . . . insofar as reviewed, on the law, the fact-finding order is vacated, the petition is dismissed, and the matter is remitted to the Family Court, Kings County, for further proceedings in accordance with Family Court Act § 375.1.

In the Matter of Luis C., supra.