Brown v. Stored Value Cards, Inc. et al
OPINION AND ORDER: For the reasons discussed, I DENY Defendants' Motion for Summary Judgment [ECF228]. Signed on 1/8/21 by Judge Michael W. Mosman. (dls)
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
DANICA LOVE BROWN, individually and
on behalf of all others similarly situated,
OPINION AND ORDER
STORED VALUE CARDS, INC. (d/b/a
NUMI FINANCIAL); and CENTRAL
NATIONAL BANK AND TRUST
COMPANY, ENID OKLAHOMA,
I have issued a minute order [ECF 244] denying Defendants’ Motion for Summary
Judgment [ECF 228] as to Plaintiff Danica Love Brown’s Electronic Fund Transfers Act
(“EFTA”) claims. I write further here to explain my rulings on the remaining claims.
In addition to the EFTA claims, Defendants have moved for summary judgment on Ms.
Brown’s takings challenge and her two claims under Oregon law.1
Defendants also ask me to strike or dismiss Ms. Brown’s class allegations because members of
the putative class are subject to arbitration. I deny this request.
1 – OPINION AND ORDER
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The Ninth Circuit categorized Ms. Brown’s takings challenge as a fee-for-services
challenge. Brown v. Stored Value Cards, Inc., 953 F.3d 567, 576 (9th Cir. 2020). During oral
argument, both sides agreed with this characterization.
The Ninth Circuit remanded with instructions “to determine whether the fees are a ‘fair
approximation of the cost of benefits supplied.’” Id. (quoting United States v. Sperry Corp., 493
U.S. 52, 60 (1989)). As I have consistently stated throughout these proceedings, I do not find this
question, based on the record before me, susceptible to summary judgment. A rational jury could
determine that these fees exceeded a fair approximation of any benefits supplied.
The Ninth Circuit also stated that “the extent to which the fees were avoidable might be a
factor for the district court to consider in the next step of the takings analysis.” Id. I agree with
the D.C. Circuit’s reasoning that “[p]urely prospective burdens do not present the same
constitutional difficulties as retroactive ones, as the affected parties can take measures to protect
themselves against, or at least mitigate, the otherwise resulting loss.” Student Loan Mktg. Ass’n
v. Riley, 104 F.3d 397, 404–05 (D.C. Cir. 1997). In that case, the D.C. Circuit rejected Sallie
Mae’s takings challenge, in part because Sallie Mae had several options to avoid or mitigate the
Ms. Brown argues that whether a potential taking may be avoided is irrelevant, citing
Schneider v. California Department of Corrections, 345 F.3d 716 (9th Cir. 2003). That case
involved inmate trust accounts. Id. at 718. An inmate could place personal funds into either a
savings account, which paid interest, or a trust account, which did not. Id. Inmates sued, alleging
that the failure to pay interest on the trust accounts was an unconstitutional taking. Id. at 719.
The Ninth Circuit agreed it was a taking. Id. at 720.
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Ms. Brown notes that the inmates could have avoided the taking by placing their funds
into a savings account instead. Nevertheless, the Ninth Circuit held that a taking had occurred, a
holding Ms. Brown argues supports her position that whether a potential taking is avoidable is
irrelevant. I disagree with this reading of Schneider. The Ninth Circuit did not squarely address
whether an inmate’s choice between a savings account and a trust account had any constitutional
significance. To the extent Ms. Brown encourages me to read between the lines, I believe the
better takeaway from Schneider is that a fee must be reasonably avoidable. The Ninth Circuit
explained in detail the “compelling reasons to establish” a trust account despite the lack of
First, in order to qualify for an interest-bearing account, an inmate is required to
maintain [a trust account] with a principal balance of at least $25.00. Second, and
more significantly, only those funds placed into [a trust account] are available to
the inmate for purchases in the prison canteen, such as for soap and toothpaste.
Id. at 718.
At oral argument, counsel for Defendants agreed that the opportunity to avoid a potential
taking must be reasonable, not imaginary, but argued that Ms. Brown had had such an
opportunity. Counsel explained that Ms. Brown could have avoided the fees by taking one of
three actions within five days: withdrawing the funds at a Mastercard-affiliated bank,
transferring the balance to her bank account, or asking for cash back from a retailer. In response,
Ms. Brown’s counsel conceded, multiple times, that Ms. Brown reasonably could have avoided
the fees. For purposes of summary judgment, I disagree with both sides.2
At this stage of litigation, the issue of whether Ms. Brown could have reasonably avoided
the fees within five days must be viewed through the prism of summary judgment. And
After oral argument, Ms. Brown attempted to walk back this concession. Pl.’s Suppl. Mem.
[ECF 242]. Defendants have asked me to strike that filing. Defs.’ Resp. [ECF 243]. Given my ruling,
these filings are moot.
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considering the facts before me in the light most favorable to Ms. Brown, a rational jury could go
either way. Thus, summary judgment is inappropriate as to Ms. Brown’s takings challenge.
State Law Claims
Ms. Brown’s claims for conversion and unjust enrichment under Oregon law stand or fall
with her takings challenge. Since her takings challenge survives, so do her claims under state
“To state a claim for conversion, a party must establish the intentional exercise of
dominion or control over a chattel that so seriously interferes with the right of another to control
it that the actor may justly be required to pay the full value of the chattel.” Emmert v. No
Problem Harry, Inc., 192 P.3d 844, 850 (Or. Ct. App. 2008). If a jury finds that Ms. Brown
could have reasonably avoided the fees, then Defendants did not “seriously interfere” with her
Defendants argue that Ms. Brown failed to demand the return of her money and therefore
cannot succeed on her conversion claim. When the original taking is lawful, conversion does not
occur until plaintiff demands return. Davis v. F.W. Financial Servs., Inc., 317 P.3d 916, 926 (Or.
Ct. App. 2013). But “when the act consists of a wrongful taking, . . . there is no necessity for a
demand; the defendant’s conduct is sufficient to prove the conversion.” Or. Bank v. Fox, 699
P.2d 1147, 1150 (Or. Ct. App. 1985). Here, the original taking of Ms. Brown’s money upon
incarceration was lawful. If she had not received her money upon release, then Ms. Brown
probably would have had to demand return before suing for conversion. But that is not what
happened. Her money was returned (via prepaid card), only to be taken again in the form of fees.
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If those fees were not reasonably avoidable, then Defendants committed a wrongful taking, and
no demand for return was required.
In sum, Ms. Brown’s conversion claim turns on the same factual issue as her takings
challenge, and summary judgment is inappropriate.
To succeed on an unjust enrichment claim, a plaintiff must prove “(1) a benefit conferred,
(2) awareness by the recipient that she has received the benefit, and (3) it would be unjust to
allow the recipient to retain the benefit without requiring her to pay for it.” Cron v. Zimmer, 296
P.3d 567, 577 (Or. Ct. App. 2013). This is not a classic unjust enrichment claim since any benefit
conferred is in the form of money.
Applying the Cron factors to the facts of this case, the first two prongs are met.
Defendants received a benefit in the form of fees, and they were aware that they received the
benefit. But the third prong turns on two factual issues, neither of which is susceptible to
First, prong three turns on whether Ms. Brown could have reasonably avoided the fees. If
she could have, then it would not be unjust to allow Defendants to keep them. This is the same
factual issue present in Ms. Brown’s takings challenge and conversion claim, and summary
judgment is inappropriate for the same reasons.
Second, and more fundamentally, prong three turns on whether the fees were reasonable.
If the fees were a fair approximation of the cost of benefits supplied, then it would not be unjust
to allow Defendants to keep them. But, again, I do not find the question of whether the fees
involved in this case were reasonable susceptible to summary judgment, as a rational jury could
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determine that the fees were too high. And if the fees were too high, it would be unjust to allow
Defendants to keep any amount exceeding the cost of their services.
Accordingly, summary judgment is inappropriate as to Ms. Brown’s claim of unjust
For the reasons discussed, I DENY Defendants’ Motion for Summary Judgment [ECF
IT IS SO ORDERED.
DATED this ____ day of January, 2021.
MICHAEL W. MOSMAN
United States District Judge
6 – OPINION AND ORDER
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