Brown v. Stored Value Cards, Inc., 3:15-cv-01370

Background

Plaintiff Danica Love Brown was arrested in Multnomah County; jail personnel confiscated $30.97 in cash at booking and, upon release, gave her a preloaded NUMI debit card with a $30.97 balance.
The NUMI card is a prepaid/debit card administered by Stored Value Cards, Inc. (d/b/a NUMI Financial) and Central National Bank; cardholders can spend, get cash back at purchases, withdraw in person, or transfer funds online, but various fees apply.
Brown used the card, incurred fees she alleges were disproportionately high, and filed a putative class action asserting (1) violation of the Electronic Fund Transfer Act (EFTA), (2) a § 1983 takings claim, (3) conversion, and (4) unjust enrichment.
Defendants moved to dismiss all claims. The court held oral argument and issued this opinion granting dismissal of the EFTA and § 1983 claims, while denying dismissal of the state-law claims (conversion and unjust enrichment), with leave to amend the § 1983 claim.
Key factual disputes relevant to pleading include whether the card was “marketed to the general public,” the nature and extent of the County’s involvement or authorization (contract terms and delegation), and whether a contract exists between Brown and Defendants.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
EFTA applicability — whether the prepaid card was "marketed to the general public"	Brown: County distribution to arrestees/jurors means Defendants indirectly market cards to the general public	Defendants: Cards were only the mechanism to return funds to specific individuals; not marketed to the public	Court: Card not marketed to the general public; EFTA claim dismissed
§ 1983 takings — whether Defendants are state actors and deprivation was state-caused	Brown: Defendant performed a traditionally governmental function (returning prisoners’ money) and acted jointly with the County; deprivation caused by government policy/contract	Defendants: They are private actors; County did not impose fee rules or participate sufficiently to make them state actors	Court: At pleading stage, Brown sufficiently alleges state-action through public-function and joint-action tests, but fails to allege deprivation caused by a state-imposed rule or person for whom the state is responsible; § 1983 claim dismissed with leave to amend
Conversion (state law) — whether Defendants lawfully exercised control over funds	Brown: Defendants unlawfully exercised dominion over her money via excessive fees	Defendants: A valid contract or County authorization legitimizes fee collection, foreclosing conversion	Court: Dismissal denied; existence/terms of any contract cannot be resolved at motion-to-dismiss stage
Unjust enrichment (state law) — whether retention of fees is unjust	Brown: Retention defeats society’s reasonable expectations of security of person/property	Defendants: County authorization makes enrichment lawful and not unjust	Court: Dismissal denied; County authorization not dispositive on unjust enrichment at pleading stage

Key Cases Cited

Schneider v. California Dep't of Corr., 151 F.3d 1194 (9th Cir.) (pleading-stage standard: accept well-pleaded facts and construe in favor of nonmoving party)
Warshaw v. Xoma Corp., 74 F.3d 955 (9th Cir.) (same)
Scheuer v. Rhodes, 416 U.S. 232 (Sup. Ct.) (plaintiff entitled to offer evidence at pleading stage)
Conley v. Gibson, 355 U.S. 41 (Sup. Ct.) (complaint should not be dismissed unless no set of facts could entitle plaintiff to relief)
Sutton v. Providence St. Joseph Med. Ctr., 192 F.3d 826 (9th Cir.) (state-action attribution analysis for § 1983)
Rendell–Baker v. Kohn, 457 U.S. 830 (Sup. Ct.) (private entities generally not subject to § 1983 absent state action)
Florer v. Congregation Pidyon Shevuyim, N.A., 639 F.3d 916 (9th Cir.) (Lugar two-part test for state action: deprivation caused by state and the actor is a state actor)
Lugar v. Edmondson Oil Co., 457 U.S. 922 (Sup. Ct.) (two-part test for state action in § 1983 cases)
Kirtley v. Rainey, 326 F.3d 1088 (9th Cir.) (no single dispositive factor for state-action; multiple tests exist)
Brentwood Acad. v. Tenn. Secondary Sch. Athletic Ass'n, 531 U.S. 288 (Sup. Ct.) (state-action principles and the normative judgment involved)
Franklin v. Fox, 312 F.3d 423 (9th Cir.) (joint-action test requires substantial cooperation between state and private party)
Gorenc v. Salt River Project Agric. Improvement & Power Dist., 869 F.2d 503 (9th Cir.) (state interdependence/joint participation standard)
Collins v. Womancare, 878 F.2d 1145 (9th Cir.) (private actor as willful participant in joint activity may be state actor)
Cron v. Zimmer, 296 P.3d 567 (Or.) (elements and tests for unjust enrichment under Oregon law)