Amit P. Mehta, United States District Judge.
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.
The Secretary of the United States Department of the Treasury has authority to designate and employ commercial national
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.
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, https://www.dccourts.gov/jurors/about-your-jury-duty ("Subsidy" tab) (last visited Oct. 29, 2017).
The materials Plaintiffs received out-lined the steps required to access their juror compensation. Jurors must activate their debit cards prior to using them by
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.
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 belongs to Defendant or another bank, then Defendant charges $0.45. Cons. Compl. ¶¶ 67, 73.
Finally, a juror can incur fees by not using the debit card. If a juror does not use her debit card for three consecutive months, then Defendant charges the juror
Plaintiff Scott incurred several of the fees outlined above. He was selected to serve on a jury for a four-day trial in D.C. Superior Court in July 2016. Id. ¶¶ 105-06. After receiving and using the compensation on his debit card for several purchases, his card had a balance of $17. Id. ¶ 107. On September 20, 2016, he attempted to use his card and incurred a $0.25 fee for insufficient funds. See id. ¶ 108. Later that same day, he attempted to use the card again and, when it was declined for insufficient funds, incurred a second $0.25 fee. See id. Because Plaintiff Scott did not use his card thereafter, he incurred a $1.50 inactivity fee on both January 1, 2017, and February 1, 2017, which left a balance of $13. Id. ¶¶ 83, 109-11. Plaintiff is unable to retrieve the remaining $13 owed to him because there is no ATM in the District of Columbia that dispenses bills in increments of less than $20, Defendant has no branch locations in the District of Columbia, and Defendant's check fee ($15) exceeds the balance on his debit card. Id. ¶ 112. Further, even if Plaintiff Scott traveled 90+ miles outside the District of Columbia to reach one of Defendant's branch locations, he would have to forfeit half the balance on his card in light of Defendant's $7 in-person withdrawal fee. Id. ¶¶ 63, 90, 112.
Plaintiff Scott and Plaintiff Morin each filed a putative class-action lawsuit on behalf of himself and others similarly situated to him, which the court consolidated into the present matter.
Now before the court are Defendant's Motion to Dismiss and Plaintiffs' Motion to Strike. Defendant asserts that Plaintiffs failed to join the United States Department of the Treasury and District of Columbia Courts, each of which is a necessary and indispensable party to this litigation. Additionally, Defendant contends that Plaintiffs have not pleaded any plausible claim for liability. Lastly, Defendant believes that it cannot be held legally responsible for any action alleged in the Consolidated Complaint because, as an agent of the government, the doctrine of derivative sovereign immunity insulates it from liability.
The court addresses Plaintiffs' Motion to Strike the documents attached to Defendant's filings before turning to the merits of Defendant's Motion to Dismiss.
A district court may consider documents attached to a motion to dismiss, without converting the motion into a motion for summary judgment, if those documents' authenticity is not disputed, they were referenced in the complaint, and they are "integral" to one or more of the plaintiff's claims. See Banneker Ventures, LLC v. Graham, 798 F.3d 1119, 1133 (D.C. Cir. 2015); Kaempe v. Myers, 367 F.3d 958, 965 (D.C. Cir. 2004). To determine how much of a document is incorporated by reference into the plaintiff's complaint, district courts must consider who authored the document, whether the document is reliable, whether the document is necessary to the plaintiff's claims, and whether the plaintiff has adopted the document in full or in part. See Banneker Ventures, 798 F.3d at 1133-34.
The court has no trouble concluding that it may review and consider in full the documents Defendant attached to its Motion and Reply. Those documents include the agreement between Defendant and the federal government to carry out the U.S. Debit Card Program; a directive extending that agreement to the District of Columbia Courts; an addendum continuing Defendant's service as a financial agent of the government until June 30, 2017; the written information issued with the juror debit cards and expressly referenced in Plaintiffs' Consolidated Complaint; and two affidavits swearing to the authenticity of the foregoing. See FAA; FAA Ext.; DTA; Def.'s Mot., Ex. 3, ECF No. 18-4; Def.'s Mot., Ex. 4, ECF No. 18-5; Def.'s Mot., Ex. 5, ECF No. 18-6; Levine Decl.; Second Levine Decl. These documents are plainly "integral" and "necessary" to Plaintiffs' claims. See Banneker Ventures, 798 F.3d at 1133; Kaempe, 367 F.3d at 965. Plaintiffs' Consolidated Complaint alleges that Defendant is engaged in a "deceptive and unlawful arrangement"; expressly references the terms of use of a debit card issued to compensate jurors for jury service; and puts at issue the legality of the terms of use of that card. See, e.g., Cons. Compl. ¶¶ 6, 53-54, 59, 63-64, 67-71, 79, 95-103, 118, 127, 139, 144-45, 149, 161-62, 169. Indeed, Plaintiffs' Consolidated Complaint even includes a snapshot of a portion of one document that Defendant attached in full to its Motion. See id. ¶ 73. In addition to being referenced in the Consolidated Complaint and relevant to Plaintiffs' claims, the documents do not contain any facts or opinions concerning Defendant's execution of the agreement, which limits any potential prejudice to Plaintiffs. Cf. Banneker Ventures, 798 F.3d at 1134. Further, the court
Accordingly, Plaintiffs' Motion to Strike is denied.
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim is facially plausible when "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. The factual allegations in the complaint need not be "detailed"; however, the Federal Rules demand more than "an unadorned, the-defendant-unlawfully-harmed-me accusation." Id.
In evaluating a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the court must accept a plaintiff's factual allegations as true and "construe the complaint `in favor of the plaintiff, who must be granted the benefit of all inferences that can be derived from the facts alleged.'" Hettinga v. United States, 677 F.3d 471, 476 (D.C. Cir. 2012) (quoting Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979)). The court need not accept as true either "a legal conclusion couched as a factual allegation," Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986), or "inferences ... unsupported by the facts set out in the complaint," Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). If the facts as alleged fail to establish that a plaintiff has stated a claim upon which relief can be granted, then a court must grant the defendant's Rule 12(b)(6) motion. See Am. Chemistry Council, Inc. v. U.S. Dep't of Health & Human Servs., 922 F.Supp.2d 56, 61 (D.D.C. 2013).
Defendant asserts that, under the doctrine of derivative sovereign immunity, it is immune from liability for the acts alleged in the Consolidated Complaint, all of which it took pursuant to the government's Financial Agency Agreement or the extension of the U.S. Debit Card Program to the District of Columbia Courts through the Direction to Agent. Defendant does not claim that its immunity goes to the court's jurisdiction and does not move for summary judgment based on this defense. See Hr'g Tr. (draft), Sept. 29, 2017, at 21. Rather, Defendant asserts that its immunity is an affirmative defense and that the court can find this defense precludes litigation beyond the motion to dismiss stage because Plaintiffs have not alleged that the Financial Agency Agreement is unlawful or that Defendant exceeded its authority under that agreement.
Plaintiffs' Consolidated Complaint contains no explicit allegations that Defendant acted pursuant to invalidly conferred authority or that Defendant exceeded the bounds of authority that was validly conveyed. Plaintiffs make no argument that the National Banking Act itself is unconstitutional, that the existence or the terms of the U.S. Debit Card Program are contrary to the Constitution, or that the Secretary of the Treasury lacks authority to designate Defendant as its agent for the purpose of implementing the U.S. Debit Card Program. At most, Plaintiffs allege that the District of Columbia has acted in violation of its own juror compensation statute. See Cons. Compl. ¶¶ 53, 127. Plaintiffs also allege that Defendant "convinced" the District of Columbia to participate in an illegal juror compensation-debit card program, see id. ¶ 6, but that assertion is conclusory and, in any event, does not suggest that Defendant exceeded any authority conferred on it by the federal government or the District of Columbia. Consequently, Plaintiffs' Consolidated Complaint does not advance allegations that, on their own, at this juncture, would defeat Defendant's claim of derivative sovereign immunity.
At the same time, however, the documents attached to Defendant's pleadings leave unanswered key questions about Defendant's entitlement to immunity. For starters, the court does not have before it the Memorandum of Understanding between FMS and the District of Columbia Courts which, according to the Financial Agency Agreement, should contain all the "terms and conditions pursuant to which [the District of Columbia Courts'] program will operate and the fees that [the District of Columbia Courts] and/or its cardholders will pay to FMS or [Defendant]." See FAA, Ex. A, ¶ 4.b. Thus, the precise terms of the program Defendant operated on behalf of the District of Columbia Courts are not presently known. The documents attached to Plaintiffs' pleadings do not fill that yawning gap in the record. Additionally,
Even were the court to assume that the terms contained in the Memorandum of Understanding mirror those in the Financial Agency Agreement, certain questions concerning Defendant's claim of immunity would remain. On one hand, if the terms of the Financial Agency Agreement govern the version of the U.S. Debit Card Program implemented in the D.C. Superior Court, then Defendant arguably is immune from suit for any claim pertaining to the amount of fees it charged for a particular transaction. The Financial Agency Agreement plainly dictates the fees jurors are to be charged, and those are the same fees that the Consolidated Complaint alleges were charged. Compare Cons. Compl. ¶¶ 63-64, 68, 71, 73, with FAA, Ex. C. On the other hand, the documents set forth an ambiguous directive for Defendant, "[s]ubject to the approval of FMS," to supply jurors with "cardholder instruction information," including "card carriers, informational brochures, and Cardholder Terms of Use disclosures." FAA, Ex. A ¶ 13.c (emphasis added). That language does not make clear whether Defendant had to secure approval as to the specific words it used to convey the terms of using the debit cards or the visual formatting of that information, or both. If such approvals were required and obtained, then Defendant may be immunized from claims alleging that its informational material was fraudulent or misleading. If, however, the government never approved that information before Defendant gave it to jurors, then immunity may prove elusive.
Thus, based on the Consolidated Complaint and the documents offered by Defendant, the court cannot say whether Defendant is immune from suit and, accordingly, denies Defendant's Motion. Construing the allegations and documents in the light most favorable to Plaintiffs, as the court must, the court concludes Plaintiffs have advanced plausible claims that are not defeated, on the present limited record, by Defendant's assertion of derivative sovereign immunity. As such, Defendant's Motion to Dismiss is denied insofar as it asks the court to dismiss the Consolidated Complaint on the ground of derivative sovereign immunity. The parties will be permitted to take limited discovery on that question. Because resolution of the immunity issue may resolve this matter, the court defers ruling on all other aspects of Defendant's Motion to Dismiss.
In light of the foregoing, the court denies Plaintiffs' Motion to Strike, denies in part Defendant's Motion to Dismiss, and defers ruling on the remainder of Defendant's Motion.
The parties may engage in limited discovery on the question of Defendant's entitlement to derivative sovereign immunity. Discovery shall focus on (1) the terms of the juror compensation-debit card program that the FMS and District of Columbia Courts agreed upon for the time period relevant to this case, and (2) whether Defendant complied with those terms, including
The parties may not file a discovery motion without leave of court. In the event that a discovery dispute arises, the parties shall make a good faith effort to resolve or narrow the areas of disagreement. If the parties are unable to resolve the discovery dispute, then the parties shall jointly call Chambers at (202) 354-3250, at which time the court will either rule on the issue or determine the manner in which it will be handled.
Discovery will close on January 29, 2018, and the parties shall appear for a Post-Discovery Conference on January 30, 2018, at 9:00 a.m. in Courtroom 10.