Scott v. J.P. Morgan Chase and Co.
Civil Action No. 2017-0249
| D.D.C. | Oct 30, 2017Background
- Plaintiffs Scott and Morin served on D.C. Superior Court juries (July 2016, Jan. 2017) and received juror compensation on Chase-issued debit cards.
- Cards required online activation, PIN setup, and various account-verification steps; cardholders faced fees for ATM withdrawals, out-of-network use, declined transactions, check issuance, and inactivity.
- Scott’s card was left with a small balance ($13) that he could not practically recover because of fee and ATM constraints; plaintiffs allege the program’s structure and disclosures prevented full access and imposed excessive fees.
- Plaintiffs brought a putative class action alleging deceptive practices, unlawful fee structure, and misleading disclosures; they seek declaratory, injunctive, and compensatory relief.
- Chase moved to dismiss, arguing (inter alia) failure to join indispensable parties, failure to state a claim, and derivative sovereign immunity based on its role as a federal financial agent under a Financial Agency Agreement (FAA) and related documents; plaintiffs moved to strike Chase’s exhibits.
- The court denied the motion to strike, denied dismissal insofar as it rested on derivative sovereign immunity (but deferred other dismissal issues), and permitted limited discovery narrowly tailored to the immunity question (15 RFPs, 15 interrogatories, 3 depositions; discovery deadline and conference set).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion to Strike exhibits | Exhibits are outdated or selectively disclosed; should be excluded | Exhibits are authentic, referenced in complaint, and integral | Denied — court may consider exhibits |
| Derivative sovereign immunity | Chase is liable for misleading/dispositive conduct; plaintiffs do not concede FAA authority | Chase acted as Treasury/FMS agent under FAA/Direction to Agent and is entitled to derivative sovereign immunity unless it exceeded authority or authority was invalid | Denied dismissal on immunity ground; court could not resolve immunity on present record and ordered limited discovery |
| Failure to join necessary parties (Treasury, D.C. Courts) | Not explicitly developed in complaint (plaintiffs say program allowed claims to proceed) | These entities are necessary/indispensable parties | Court deferred ruling pending further development (not decided) |
| Failure to state a claim (misleading disclosures, unlawful fees, program structure) | Plaintiffs pleaded deceptive practices, unlawful arrangements, and concrete injury (lost funds/fees) | Complaint insufficiently pleads conduct outside FAA authority or invalid delegation | Court deferred ruling on merits; allowed discovery focused on immunity before deciding remaining dismissal arguments |
Key Cases Cited
- Banneker Ventures, LLC v. Graham, 798 F.3d 1119 (D.C. Cir.) (courts may consider documents referenced in complaint on a motion to dismiss if authentic and integral)
- Kaempe v. Myers, 367 F.3d 958 (D.C. Cir.) (standards for incorporating documents by reference on Rule 12(b)(6) motion)
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for Rule 12(b)(6) complaints)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must state a plausible claim for relief)
- Yearsley v. W.A. Ross Constr. Co., 209 U.S. 18 (private contractors acting within valid government authority may be immune from liability)
- Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (private-contractor immunity unavailable if contractor exceeded authority or government authorization was invalid)