Scott v. J.P. Morgan Chase and Co. ( 2017 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_________________________________________
)
WILLIAM MARK SCOTT, et al., )
)
Plaintiffs, )
)
v. ) Case Nos. 17-cv-249, -387 (APM)
)
J.P. MORGAN CHASE & CO., )
)
Defendant. )
_________________________________________ )
MEMORANDUM OPINION AND ORDER
“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
1
Letter from Thomas Jefferson to Thomas Paine (July 11, 1789), in 15 THE PAPERS OF THOMAS JEFFERSON, 27 March
1789–30 November 1789, 266 (Julian P. Boyd ed., 1958), http://founders.archives.gov/documents/Jefferson/01-15-
02-0259.
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
2
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
2
The Memorandum of Understanding is not presently part of the record.
3
[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). 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
3
The D.C. Code does not extend its $30 daily compensation for jurors “employed by a federal, state, or local
government or by a private employer who pays regular compensation during the period of jury service.” D.C. CODE
§ 15-718(a).
4
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.,
4
Defendant does not have any branches within 90 miles of the District of Columbia. Cons. Compl. ¶ 63.
5
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 $1.50 for each subsequent
month of non-use. Id. ¶¶ 71, 73.
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.5
5
See Order, ECF No. 15. Plaintiffs’ Consolidated Complaint names three separate classes of plaintiffs. The
“Nationwide Class” includes “all individuals in the United States who received compensation for jury service and
6
Boiled down to its essence, Plaintiffs’ Consolidated Complaint challenges three aspects of the juror
compensation program: (1) the fees Defendant charges a juror for using or failing to use in a
timely manner the money deposited on his or her debit card, see, e.g., id. ¶¶ 11, 20, 58–59, 68; (2)
the structure of the juror compensation debit card program, including the requirement that jurors
receive their compensation on debit cards and the limited means by which jurors can access their
compensation, if at all, see, e.g., id. ¶¶ 8, 17–18, 21–22, 60–61, 89–91; and (3) the misleading
nature of the paperwork jurors receive from Defendant concerning how to access their
compensation, see, e.g., id. ¶¶ 13, 69, 95–101.
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. 6 To support its claims, Defendant filed with its
Motion and Reply several documents relating to the U.S. Debit Card Program, including the
Financial Agency Agreement, Direction to Agent, and the written information jurors receive in
conjunction with their debit cards. Plaintiffs oppose Defendant’s Motion and move to strike the
exhibits attached to Defendant’s Motion and Reply. See Pls.’ Opp’n to Def.’s Mot. to Dismiss,
were paid with a Chase Debit Card within the applicable statute of limitations.” Cons. Compl. ¶ 30. The “Multistate
Subclass” encompasses “[a]ll individuals in the United States, except for the state of Iowa, who received compensation
for jury service and were paid with a Chase Debit Card within the applicable statute of limitations.” Id. Lastly, the
“D.C. Subclass” covers “[a]ll individuals who received compensation for jury service for jury duty [sic] in the Superior
Court of the District of Columbia and were paid with a Chase Debit card within the applicable statute of limitations.”
Id. The court defers ruling on class certification at this time.
6
Defendant also raises the government contractor defense. See Def.’s Mot. at 22–23. For the reasons that follow, at
this juncture, the court addresses only Defendant’s invocation of derivative sovereign immunity.
7
ECF No. 19; Pls.’ Mot. to Strike or Disregard Extraneous Materials, ECF No. 21 [hereinafter Pls.’
Mot. to Strike].
II. DISCUSSION
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. Plaintiffs’ Motion to Strike
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
8
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 is not
suspicious of the documents’ authenticity. Defendant includes an affidavit representing the
authenticity of each document, see Levine Decl; Second Levine Decl., and Plaintiffs challenge
those documents only on other grounds; namely, that the documents are outdated or have been
selectively disclosed, see Pls.’ Mot. to Strike at 7–8. The additional document attached to
Defendant’s Reply—a letter from the Department of the Treasury to Defendant, extending
Defendant’s designation as a financial agent until June 30, 2017—appears to cure Plaintiffs’ first
concern, and Plaintiffs’ generic assertion that the documents have been selectively disclosed is
neither persuasive nor dispositive.
Accordingly, Plaintiffs’ Motion to Strike is denied.
B. Defendant’s Motion to Dismiss
1. Legal Standard
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
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accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (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 (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).
2. Whether Defendant May be Held Liable for the Claims Alleged
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
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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.
Derivative sovereign immunity refers to the principle that a private contractor who acts at
the behest of a sovereign entity becomes imbued with some of the sovereign’s immunity. To claim
this form of qualified immunity, the private contractor must assert “that (1) it was working pursuant
to the authorization and direction of the federal government, and (2) the acts of which the plaintiff
complained fell within the scope of those government directives.” In re Fort Totten Metrorail
Cases, 895 F. Supp. 2d 48, 73 (D.D.C. 2012) (internal quotation marks omitted); see In re U.S.
Office of Personnel Mgmt. Data Sec. Breach Litig., No. 15-1394, 2017 WL 4129193, at *34–35
(D.D.C. Sept. 19, 2017). The private contractor cannot claim immunity either when the contractor
“exceed[s] the authority” the government conferred on it or the authority itself “was not validly
conferred.” See Campbell-Ewald Co. v. Gomez, 577 U.S. ___, ___, 136 S. Ct. 663, 673 (2016)
(quoting Yearsley v. W.A. Ross Constr. Co., 209 U.S. 18, 21 (1940)). At the motion to dismiss
stage, when the validity of the contract between the private contractor and the government is not
in dispute, a complaint must contain plausible factual allegations that a private contractor acted
pursuant to invalidly conferred authority or exceeded its validly conferred authority in order to
survive a defendant’s assertion of derivative sovereign immunity. In re U.S. Office of Personnel
Mgmt. Data Sec. Breach Litig., 2017 WL 4129193, at *35; see Ackerson v. Bean Dredging LLC,
589 F.3d 196, 206–07 (5th Cir. 2009); cf. Iqbal, 556 U.S. at 682–83; Navab-Safavi v. Glassman,
637 F.3d 311, 317–18 (D.C. Cir. 2011).
Plaintiffs’ Consolidated Complaint contains no explicit allegations that Defendant acted
11
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, it is unclear to the court whether
the terms contained in the Memorandum of Understanding, as executed in April 2012, remained
in place at the time Plaintiffs’ received their debit cards, given that the Direction to Agent may
12
have expired in 2013 and that Plaintiffs allege they served on juries in July 2016 and January 2017.
See DTA ¶ 2; Cons. Compl. ¶¶ 24–25. Absent knowing the precise terms in effect during the time
period when Plaintiffs received their debit cards, the court cannot determine, even at the motion to
dismiss stage, whether Defendant “exceeded [its] authority.” See Campbell-Ewald, 136 S. Ct. at
673.
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
13
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.
IV. CONCLUSION AND ORDER
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 with respect
to the fees Defendant charged, the structure of the program Defendant implemented, and the
content of the instructional information Defendant issued in conjunction with the debit cards. Each
side shall be limited to 15 document requests, 15 interrogatories, and three depositions, unless the
court permits a greater amount.
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
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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.
Dated: October 30, 2017 Amit P. Mehta
United States District Judge
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