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Scott v. J.P. Morgan Chase & Co.

United States District Court, District of Columbia

October 30, 2017

WILLIAM MARK SCOTT, et al., Plaintiffs,
J.P. MORGAN CHASE & CO., Defendant.


          Amit P. Mehta, United States District Judge.

         “I consider [trial by jury] as the only anchor, ever yet imagined by man, by which a government can be held to the principles of its constitution.” - Thomas Jefferson[1]

         Serving on a jury is among the most important responsibilities of an American citizen. Undoubtedly, fulfilling that obligation interrupts day-to-day life, including taking time away from work. To lessen the inconvenience and financial burden that jury service poses, the federal government and the States compensate jurors for their service. In this modern era, the government has the option of compensating jurors by cash, checks, or, as in the present case, debit cards. Often times, the government partners with privately owned banks to distribute juror compensation.

         Plaintiffs William Mark Scott and Ronald Morin allege that they served on juries in the Superior Court of the District of Columbia and received debit cards containing their juror compensation, but did not receive all the compensation to which they were entitled. Specifically, Plaintiffs complain that Defendant J.P. Morgan Chase & Co. forced them to receive their compensation on debit cards, provided them with misleading information about those cards, structured the debit card program so as to prevent them from receiving their full compensation, and charged them outrageous fees for using that compensation. They filed this putative class action against Defendant on behalf of themselves and all others similarly situated, demanding a jury trial and seeking declarative, injunctive, and compensatory relief under state and federal law.

         Before the court are Defendant's Motion to Dismiss and Plaintiffs' Motion to Strike. Defendant asks the court to dismiss Plaintiffs' Consolidated Complaint on the grounds that it fails to name necessary and indispensable parties; it does not state a claim against Defendant; and Defendant is otherwise immune from suit under the doctrine of derivative sovereign immunity. Plaintiff not only opposes Defendant's Motion but also moves to strike the documents Defendant attached to that Motion.

         For the reasons that follow, the court denies Plaintiffs' Motion to Strike and Defendant's Motion to Dismiss with respect to Defendant's claim of derivative sovereign immunity. The court defers ruling on the remaining issues in Defendant's Motion. Rather, the court will permit the parties to conduct limited discovery concerning Defendant's assertion that it is immune from suit for its actions relating to the District of Columbia Courts' juror compensation program.

         I. BACKGROUND

         The Secretary of the United States Department of the Treasury has authority to designate and employ commercial national banks as its financial agents in order to efficiently distribute public monies. 12 U.S.C. § 90; United States v. Citizens & S. Nat'l Bank, 889 F.2d 1067, 1069 (Fed. Cir. 1989). Money does not lose its public character merely by being held in the coffers of commercial banks. See Citizens & S. Nat'l Bank, 889 F.2d at 1069 (referencing Branch v. United States, 12 Ct. Cl. 281 (1876), aff'd, 100 U.S. 673 (1880)). Instead, the money continues to “be regarded as in the public Treasury.” Id. (internal quotation marks omitted).

         In September 2008, the Secretary of the Treasury, acting through the Department of the Treasury's Financial Management Service bureau (“the FMS”), designated Defendant J.P. Morgan Chase & Co. as a federal financial agent and memorialized the relationship in a “Financial Agency Agreement.” See Def.'s Mot. to Dismiss, ECF No. 18 [hereinafter Def.'s Mot.], Attach. 1, ECF No. 18-1 [hereinafter Levine Decl.], ¶ 2; Def.'s Mot., Ex. 1, ECF No. 18-2 [hereinafter FAA]. The agreement took effect on October 1, 2008, and remained in effect until June 30, 2017. See FAA ¶ 2.A; FAA, Amend. 3; Def.'s Reply in Supp. of Def.'s Mot. to Dismiss, ECF No. 22 [hereinafter Def.'s Reply], Attach. 1, ECF No. 22-1 [hereinafter Second Levine Decl.], ¶ 3; Def.'s Reply, Ex. 1, ECF No. 22-2 [hereinafter FAA Ext.]. As the Department of the Treasury's financial agent, Defendant was responsible for executing the U.S. Debit Card Program for federal agencies. See FAA, Ex. A. In the spring of 2012, the Department of the Treasury extended the U.S. Debit Card Program to the District of Columbia government. Specifically, the FMS and “District of Columbia Courts” executed a Memorandum of Understanding on April 18, 2012, to use the U.S. Debit Card Program to compensate jurors who serve in the Superior Court of the District of Columbia (“D.C. Superior Court”). See Def.'s Mot., Ex. 2, ECF No. 18-3 [hereinafter DTA], ¶ 1.[2] On that same date, the FMS also executed a “Direction to Agent” order that instructed Defendant “to provide U.S. Debit Card Program products and services to DC Courts, ” effective April 18, 2012, until March 14, 2013, unless extended. Id. ¶¶ 2-3.

         Plaintiffs William Scott and Ronald Morin served on juries in D.C. Superior Court in July 2016 and January 2017, respectively. See Unopposed Mot. to Consolidate, ECF No. 14 [hereinafter Mot. to Cons.], Consolidated Class Action Compl., ECF No. 14-2 [hereinafter Cons. Compl.], ¶¶ 24-25. Jurors in D.C. Superior Court receive a “travel allowance” of $4 for each day they travel to the courthouse in response to a jury summons and, if selected, they receive an additional “attendance fee” of $30 for each day they serve on a jury. See D.C. Code § 15-718(a), (b), (e); About Jury Duty, D.C. Courts, (“Subsidy” tab) (last visited Oct. 29, 2017).[3] As a result of Plaintiffs' jury service, Plaintiffs each received a debit card, issued by Defendant, that contained juror compensation, along with written information and instructions about how to access the funds on the card. Cons. Compl. ¶¶ 24-25, 35.

         The materials Plaintiffs received outlined the steps required to access their juror compensation. Jurors must activate their debit cards prior to using them by visiting Defendant's website. See Id. ¶¶ 43-44. The website requires the juror to accept the “Terms of Service” for use of the website, although those Terms of Service do not contain information specific to debit cards received in connection with jury duty. See Id. ¶¶ 47-48. Jurors also must confirm that they are the individual to whom the card was issued by providing personal information, such as their date of birth and zip code, and then select a personal identification number. Id. ¶ 49. The information Plaintiffs received also outlined certain fees attending the use of their cards. See Id. ¶ 73; Def.'s Mot., Ex. 3, ECF No. 18-4.

         The money available on a card can either be withdrawn or used as a cash equivalent. When a juror withdraws money, that transaction is subject to certain fees that are applied to the balance on the card. If a juror elects to withdraw part of or all her juror compensation at one of Defendant's branch locations or at a credit union, then Defendant charges her $7. Cons. Compl. ¶¶ 63, 73.[4]Alternatively, jurors can seek to have the money on their debit cards issued by check, but Defendant charges a $15 check fee. Id. ¶¶ 64, 73. As a third option, jurors may use an automated teller machine (“ATM”) to access their juror compensation, but certain ATMs charge fees. After one free ATM withdrawal, a juror must use one of Defendant's ATMs or an ATM of another bank in Defendant's network (“in-network ATM”) for subsequent withdrawals in order to avoid incurring a fee. Id. ¶¶ 59, 73, 97. Defendant's website, however, does not identify any Defendant ATMs or in-network ATMs in the District of Columbia. Id. ¶ 60. If a juror chooses to use an out-of-network ATM, then Defendant charges a $2 fee, and the out-of-network ATM's bank charges a separate fee. See Id. ¶¶ 59, 73. Jurors cannot add money to their debit cards, and, typically, they are only able to make ATMS withdrawals in increments of $20. See Id. ¶¶ 61, 82.

         The debit cards also can be used like cash, but a juror encounters certain fees if she does not know her balance at the time she uses her card. As a general matter, there is no fee when a juror uses her debit card to purchase an item. See Id. ¶ 73. Defendant charges $0.25, however, for a declined transaction. Id. ¶¶ 68, 73. That fee attaches each time a juror tries to make a purchase for which there are insufficient funds. See Id. ¶¶ 69, 73. A juror can avoid an insufficient funds fee by knowing her precise balance on the card and asking the retailer to use a sum certain towards a purchase, with the remainder of the purchase made by other means-a method of use known as a “split transaction.” See Hr'g Tr. (draft), Sept. 29, 2017, at 27-28. A juror, therefore, can avoid fees most easily if she knows the balance on the debit card. See id.

         Determining the card's balance, however, might itself involve a fee. There is no fee associated with making an account balance inquiry through Defendant's website. See Def.'s Mot., Ex. 3, ECF No. 18-4; Hr'g Tr. (draft), Sept. 29, 2017, at 61. But if a juror checks her debit card's balance at an ATM, regardless of whether the ATM ...

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