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Oregon Federal Court Issues Class Certification in HRDC Challenge to NUMI Release Debit Cards

by David M. Reutter

An Oregon federal district court issued an order that certified a class in a lawsuit challenging the issuance of debit cards by NUMI upon release in lieu of the cash that was confiscated from detainees upon arrest.

The Courts June 8, 2021, order was issued in a lawsuit that is part of HRDC’s Stop Prison Profiteering campaign. Its six-year travail through the court has been updated in previous issues. (See PLN, Dec. 2020, p. 1.)

The complaint challenged the issuance of debit cards rather than cash when detainees were released from jail. Fees were charged for using the card, checking balances or for allowing the balance to sit dormant.

Before the Court was a motion to certify two classes. The first class sought to create a nationwide class. The second class consisted of persons in Oregon.

The court found three aspects to certify a class were unchallenged by the defendants. Having found no dispute as to whether the numerosity requirement, questions of law or fact common to the class, or that the proposed class counsel requirement was met, the court appointed counsel for the class.

The Court excluded any claims against non-defendant banks. It also noted that there would be some overlap between the putative class in this case and the settlement class in Humphrey v. Stored Value Cards, USDC, N.D. Ohio, Case No. 1:18-cv-01050. Persons who did not opt out of that settlement would not be eligible to receive payment in this case.

The Defendants asserted the class is subject to a “very broad” arbitration agreement, which they “assented to . . . by accepting and using their cards.” They argued that “contract formation [is] a highly individualized factual inquiry” and “a matter of state law.” The lead Plaintiff, Danica Love Brown, disputed that position.

The Court found that the issue of mutual assent hinges on state law, and Brown failed to carry her burden of showing the governing law does not vary by state. It did, however, certify an Oregon subclass. The Court said that if it concludes the Defendants’ arbitration argument fails under Oregon law, it will order briefing under other states’ laws.

The Defendants also argued Brown’s claims under the Electronic Fund Transfer Act (EFTA) was not suited for class-wide adjudication because it requires an individualized factual inquiry as to what extent each section of the EFTA was violated as to each class member.
The Court found the EFTA prohibits the issuance an unsolicited card. To resolve the issue, it defined the class to include only those who did not request a card. The EFTA also prohibits the imposition of certain fees. Specifically, it prohibits the imposition of “a dormancy fees, an inactivity charge or fee, or a service fee with respect to a . . . general-use prepaid card.”

The Court rejected the Defendants’ argument that class members who did not incur fees had no standing. It noted the EFTA allowed recovery of actual damages and statutory damages of up to $1,000. It held that actual damages are not a prerequisite to recovery.

In looking at the atypicality of the claims, the Court was troubled that Brown suffered actual damages but some class members may not have incurred such injury. Her claim is not typical of theirs. Whether those class members are entitled to relief is a thorny issue that the Court was unpersuaded that Brown would have sufficient motivation to prosecute vigorously.

The class it defined any person who was taken into custody by an Oregon jail, prison, or detention center and who was entitled to a return of confiscating money and had money returned via a debit card provided by the Defendants despite never requesting such a card. The Court excluded from the class persons who did not suffer actual injury and those who did not opt out of the Humphrey settlement. See: Brown v. Stored Value Cards, Inc., USDC, D. Oregon, Case no. 3:15-cv-01370.

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Related legal case

Danica Brown v. Stored Value Cards, Inc.