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Oregon Federal Court Sides with HRDC, Denies Motion to Compel Arbitration by “NUMI” Stored Value Cards

by Jacob Barrett

On December 6, 2021, the U.S. District Court for the District of Oregon denied a motion to compel arbitration by Stored Value Cards in a case filed by the Human Rights Defense Center (HRDC), publisher of PLN, on behalf of a released detainee whose cash was returned on a debit card. Judge Michael W. Mosman also ordered further briefing to determine if the Court should grant nationwide class certification in the case.

The detainee, Danica Love Brown, was arrested during a protest in Portland in 2014 and held at the Multnomah County jail before her release the next day. At intake, Brown had $30.97 in cash on her, all of which was confiscated. When she was released, Brown received one of Stored Value Cards’ NUMI debit cards preloaded with the amount.

Brown then used the card, incurring high fees that ate 22.5% of her balance. She brought suit opposing the fees and sought class-action status for other similarly situated plaintiffs. The Court initially agreed with Stored Value Cards and dismissed Brown’s claims under the Electronic Funds Transfer Act 15 U.S.C. § 1693, et seq. But the U.S. Court of Appeals for the Ninth Circuit reversed that decision, bringing the case back to the Court, which then certified a class in Oregon. [See: PLN, Apr. 2020, p.38; and Jul. 2021, p.54.]

Stored Value Cards moved to compel arbitration in accordance with the terms of its Cardholder Agreement, pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 3 and 4. In deciding to deny that motion, the Court found that Oregon law governing the formation of contracts holds that “[a] contract is most commonly formed by an offer, an acceptance of that offer, and an exchange of consideration.”

“Oregon follows the mirror image rule of offer and acceptance,” the Court continued. “In Oregon, it is settled that the acceptance of an offer must correspond to the offer at every point, leaving nothing open for future negotiations.”

That acceptance, furthermore, must be “positive, unconditional, unequivocal, and unambiguous, and must not change, add to, or qualify the terms of the offer.”

Stored Value Cards argued that Brown and other class members “manifested their assent to the arbitration agreement contained in the Cardholder Agreement through (1) accepting the release cards, (2) not opting out of arbitration, and (3) using the cards to access the money.”

Not so, Brown asserted.

“Class members had no choice but to receive the money confiscated from them on the cards,” she argued, adding that “the cards were activated before being handed to class members, and card activation started the accumulation of fees that would continue until the balance on the card was depleted.”

The Court agreed with Brown.

“Oregon courts have found ‘conduct in using [a] card constitute[s] mutual assent to the terms of the credit card agreement’ when a plaintiff applies for and receives a consumer credit card along with a card agreement,” the Court allowed. However, it said that Oregon has never found an agreement where the cardholder did not apply for the card.

“I stand by my analysis from 2016 and again find that where the class members received a card they did not request upon their release from prison, failure to opt out of the arbitration agreement does not amount to mutual assent,” Judge Mosman said, agreeing with Brown that “there is no need for an individual to opt out of an arbitration provision of a contract that the individual did not agree to in the first place.”

In its previous decision in the case in the fall of 2020, the Court granted in part and denied in part Brown’s motion for class certification, saying that because “Ms. Brown failed to brief whether the mutual assent and consideration analysis varied by state,” the Court must deny her request to certify a nationwide class and “instead certified an Oregon subclass.”

However, Judge Mosman warned that if “Defendants’ arbitration argument fails under Oregon law,” he would order the parties to submit briefs in order to determine whether he “should reach the same conclusion under the laws of other states.”

Because the Court this time found that Stored Value Cards’ arbitration argument did in fact fail, it ordered the parties to submit that supplemental briefing containing a state-by-state analysis. See: Brown v. Stored Value Cards, Inc., 2021 U.S. Dist. LEXIS 238736 (D. Or.).

Stored Value Cards filed an appeal of the ruling to the U.S. Court of Appeals for the Ninth Circuit on December 16, 2021. See: Brown v. Stored Value Cards, Inc., USCA (9th Cir.), Case No. 21-36031.

Brown and HRDC are represented in the suit by attorneys Chris R. Youtz and Richard E. Spoonemore of the Seattle firm of Sirianni Youtz Spoonemore Hamburger PLLC; Karla Gilbride of Public Justice P.C. in Oakland, California; Megan E. Glor, Attorney at Law, Portland, Oregon; and Daniel Marshall of HRDC.

If you have been victimized with a prepaid debit card upon release from jail or prison, HRDC wants to hear from you at P.O. Box 1151, Lake Worth, FL 33460. Tel. (561) 360-2523 or 


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Related legal cases

Brown v. Stored Value Cards, Inc.

Danica Brown v. Stored Value Cards, Inc.