The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION
DANICA LOVE BROWN, individually and
on behalf of all other similarly situated,
No. 3:15-cv-01370-MO
Plaintiff,
v. OPINION AND ORDER
STORED VALUE CARDS, INC. (d/b/a
NUMI FINANCIAL); and CENTRAL
NATIONAL BANK AND TRUST
COMPANY, ENID, OKLAHOMA (n/k/a
STRIDE BANK, N.A.),
Defendants.
MOSMAN, J.,
Before me is the Parties’ supplemental briefing on whether the partner banks of
Defendant Stored Value Cards d/b/a Numi Financial (“Numi”) are indispensable parties under
FRCP 19. For the reasons elaborated below, I find that the partner banks are not indispensable
parties.
BACKGROUND
The parties are intimately familiar with the facts of this matter, which has been ongoing
for over eight years. I do not repeat them here.
At a hearing on July 13, I granted Plaintiff’s Motion for Certification of a National Class.
Minutes & Proceedings [ECF 288]. The national class consists of:
All persons (1) taken into custody at a jail, correctional facility, detainment
center, or any other law enforcement facility within the United States, (2) entitled
to the return of money confiscated from them or remaining in their inmate
accounts when they were released from custody, and (3) who had those funds
returned through a debit card provided by Defendant Stored Value Cards and/or
its partner bank, Defendant Central National Bank and Trust Company, despite
never having requested nor applied for a debit card, within one year prior to the
filing of the original Complaint in this action, and during its pendency, and (4)
who incurred fees or charges. Those who satisfy these four criteria but who
received a debit card from April 1, 2017, to April 30, 2018, and did not opt out of
the settlement class in Humphrey v. Stored Value Cards, No. 1:18-CV-01050
(N.D. Ohio), are excluded from this class.
Id.
After certifying the national class, I determined that one issue remained. The class
consists of those who received “a debit card provided by [Numi] and/or its partner bank,
Defendant Central National Bank and Trust Company” (“Central”). Numi claims that it
partnered with other banks in addition to Central. So, I asked the Parties to brief whether Numi’s
other partner banks “are indispensable parties and if so, as to what claims, and whether they can
be joined to this litigation.” Id. The Parties have briefed the issue. Plaintiff argues that the partner
banks are not indispensable parties. Pl.’s Resp. to Defs.’ Supp. Mem. [ECF 291] at 7.
Conversely, Defendants argue that the partner banks are indispensable parties. Defs.’ Supp.
Mem. [ECF 289] at 2.
LEGAL STANDARD
When a court decides whether it is required to join a party under FRCP 19, it first
determines whether the party is necessary to the action. Disabled Rts. Action Comm. v. Las
Vegas Events, Inc., 375 F.3d 861, 878 (9th Cir. 2004). Under FRCP 19(a)(1), a party can be
necessary in either of two ways: (1) complete relief cannot be granted in the party’s absence; or
(2) the party has an interest in the action and the party’s absence will (a) “impair or impede” its
ability to protect its interest or (b) expose an existing party “to a substantial risk of incurring
double, multiple, or otherwise inconsistent obligations.” Fed. R. Civ. Pro. 19(a)(1)(A) and (B).
If the court finds that a party is necessary, it must then determine whether joinder of the
party is feasible. If it is not feasible, “the court must determine whether, in equity and good
conscience, the action should proceed among the existing parties or should be dismissed.” Fed.
R. Civ. Pro. 19(b). If the court determines that the action cannot proceed in equity and good
conscience without joinder, then the party is indispensable, and the court should dismiss the
action.
DISCUSSION
Defendants argue that the partner banks are indispensable parties because Plaintiff cannot
obtain complete relief without them. Complete relief “is concerned with consummate rather than
partial or hollow relief as to those already parties, and with precluding multiple lawsuits on the
same cause of action.” Disabled Rts., 375 F.3d at 879 (citing Northrop Corp. v. McDonnell
Douglas Corp., 705 F.2d 1030, 1043 (9th Cir. 1983)). A party is necessary if the party’s absence
“would preclude the [court] from fashioning meaningful relief as between the parties.” Id.
I. Recovery of Full Extent of Actual Damages
Defendants first argue that the partner banks are needed to afford Plaintiff complete relief
because she cannot recover the full extent of actual damages without the partner banks for two
reasons. Defs.’ Supp. Mem. at 4. First, Defendants argue that the cardholder agreements between
the partner banks and cardholders imposed the fees. Id. This means, according to Defendants, the
partner banks are needed to determine actual damages because the court will be unable to
provide complete relief for class members whose damages resulted from fees imposed by the
cardholder agreements of absent partner banks. Id. at 5–6. Second, Defendants argue that
because Plaintiff is challenging the terms of the cardholder agreements, which are contracts, all
parties to the contract—meaning, the partner banks—must be part of the lawsuit. Id. at 4.
Although Defendants are correct that the absence of partner banks might result in a
smaller recovery for Plaintiffs, a smaller recovery than possible is not the same as incomplete
relief under FRCP 19. Complete relief “is concerned only with ‘relief as between the persons
already parties, not as between a party and the absent person whose joinder is sought.’” Eldredge
v. Carpenters 46 N. Cal. Cntys. Joint Apprenticeship & Training Comm., 662 F.2d 534, 537 (9th
Cir. 1981) (citing 3A Moore’s Federal Practice P 19.07-1(1) at 19–128 (2d ed. 1980)). Plaintiff
only seeks to recover damages from Defendants in relation to Defendants’ violations of the
Electronic Funds Transfer Act (“EFTA”). Because Defendants are liable on their own for their
violations, Plaintiff can obtain complete relief for Defendants’ violations from Defendants.
Therefore, it not necessary to join the other partner banks.
Likewise, Defendants’ contract argument is misplaced. To begin, there is no contract
claim at issue here. Plaintiffs only allege claims under the EFTA. Furthermore, I already found
that the class members were not obligated to arbitrate their claims because they did not mutually
assent to the cardholder agreements. See O & O Denying Mot. to Compel [ECF 263]; Mins. of
Proceedings Certifying Nat’l Class [ECF 288]. In other words, the class members never entered a
valid contract with Defendants or the partner banks. In sum, there is no contract claim at issue
that would require joinder of the partner banks.
II. Statutory Damages Cap
Defendants next argue that the partner banks are needed to afford Plaintiff complete relief
because Plaintiff cannot recover statutory damages from Numi because it satisfied the statutory
damages cap in Humphrey v. Stored Value Cards, No. 1:18-cv-1050 (N.D. Ohio). Defs.’ Supp.
Mem. at 7.
Section 1693m(a)(2)(B) of the EFTA caps statutory damages in “any class action or
series of class actions” at $500,000. In Humphrey, Numi settled for $550,000. Defendants claim
that the settlement constituted statutory damages because (1) the class definition was not limited
to individuals who actually incurred fees, and (2) the settlement provided for cy pres relief.
Defs.’ Supp. Mem. at 8.
Contrary to Defendants’ argument, Numi has not satisfied the statutory damages cap.
Section 1693m of the EFTA makes available three kinds of damages/awards: (1) actual damages;
(2) statutory damages not more than the lesser of $500,000 or one percent of the defendant’s net
worth; and (3) attorney fees. The settlement in Humphrey does not specify whether it falls under
actual damages, statutory damages, or a combination of the two. See Decl. of Eric J. Nystrom Ex.
2 [ECF 290-2] at 5. The settlement merely notes that it creates a $550,000 “fund” to pay class
members, costs, attorney fees, and a representative fee. Id. Indeed, after fees and costs are
deducted, only about $87,000 remain for class members. Id. As such, even if the Humphrey
settlement were characterized as statutory damages, Numi is still potentially liable for over
$400,000 in statutory damages. Defendants’ statutory damages argument fails.
CONCLUSION
For the foregoing reasons, I find that the partner banks are not indispensable parties under
FRCP 19.
IT IS SO ORDERED.
DATED this 29 day of September, 2023.
Uechal UW VWleeman
MICHAEL W. MOSMAN
Senior United States District Judge
6 — OPINION AND ORDER