Olen v. Northern Tier Retail, LLC

• Decision Date: 04 May 2012
• Docket Number: Civil No. 11-2665 (DWF/JJG)
• Parties: Michelle R. Olen, on behalf of herself and all those similarly situated, Plaintiff, v. Northern Tier Retail, LLC, Defendant.
• Court: U.S. District Court — District of Minnesota

Michelle R. Olen, on behalf of herself and all those similarly situated, Plaintiff,

v.Northern Tier Retail, LLC, Defendant.

Civil No. 11-2665 (DWF/JJG)

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

Dated: May 4, 2012

MEMORANDUMOPINION AND ORDER

Thomas J. Lyons, Esq., and Thomas J. Lyons, Jr., Esq., Lyons Law Firm, PA, counsel for Plaintiff.

James K. Langdon, Esq., Shari L. J. Aberle, Esq., and Kathryn Johnson, Esq., Dorsey & Whitney, LLP, counsel for Defendant.

INTRODUCTION

This matter is before the Court on Defendant Northern Tier Retail, LLC's Amended Motion to Dismiss (Doc. No. 13). For the reasons set forth below, the Court grants the motion.

BACKGROUND

During 2011, Plaintiff Michelle Olen ("Olen") received unemployment benefits through Minnesota's Unemployment Insurance Program. (Doc. No. 8, Am. Compl. ¶¶ 7-8.) Like many participants, she received her benefits through U.S. Bank's Visa debit card program, ReliaCard. (Id. ¶ 9.) On July 20, 2011, Olen purchased $20 ofgasoline from one of Defendant Northern Tier Retail, LLC's ("Northern Tier") SuperAmerica stores. (Id. ¶¶ 18-19.) Rather than enter the store, Olen made the purchase with her ReliaCard at the pump. (Id. ¶¶ 22, 27.) Because Olen selected the "credit" payment option at the pump (instead of paying inside the store and authorizing the transaction with her PIN), Northern Tier placed a hold¹ on her account in the amount of $74. (Id. ¶¶ 26-27.) Olen claims that she was unaware that a hold, exceeding the amount of her purchase, might be placed on her account because Northern Tier failed to disclose or otherwise provide notice of its use of such holds. (Id. ¶¶ 28-29.)

Several hours later, Olen attempted to use her ReliaCard again at a Wal-Mart store to purchase $91.76 of groceries and to obtain $20 "cash back" from her account. (Id. ¶ 30.) Wal-Mart, however, declined Olen's card. (Id. ¶ 31.) After trying to pay again, Olen called ReliaCard's customer service number and learned that her available account balance was insufficient to cover the $111.76 transaction. (Id. ¶¶ 32-34.) Olen ultimately purchased her groceries but "was forced" to pay $40 in cash and was able to use her ReliaCard to pay only the remaining $51.76. (Id. ¶ 36.) She did not withdraw an additional $20 in cash as she had planned. (Id. ¶ 40.) When Olen later reviewed her account activity online, she discovered a $74 "pending transaction" with Northern Tier's SuperAmerica store. (Id. ¶ 37.) She contacted the ReliaCard customer service numberagain and a representative told her that the "pending transaction" represented a hold that would remain on her account until Northern Tier submitted the actual amount of Olen's purchase to the bank. (Id. ¶ 38.) "Approximately twenty-four (24) hours later," Northern Tier instructed the bank to debit $20, and the $74 hold was removed on July 21, 2011. (See id. ¶ 39.)

Olen now claims that Northern Tier's hold forced her to use her "emergency cash supply" to purchase groceries and to forgo withdrawing $20. (Id. ¶ 40.) She also alleges that, by placing holds on customer accounts without clear disclosures or notifications, Northern Tier has deprived thousands of other consumers of the use of their money. (Id. ¶ 50.) Accordingly, she seeks to pursue a class action on behalf of all such consumers. (Id. ¶ 47.)

Olen's Amended Class Action Complaint asserts the following causes of action against Northern Tier: (1) Violation of Electronic Fund Transfer Act, 15 U.S.C. § 1693, et seq.; (2) Conversion; (3) Violation of Uniform Deceptive Trade Practices Act, Minn. Stat. § 325D.43, et seq.; and (4) Breach of Contract. Northern Tier now moves to dismiss all four claims. (Doc. No. 13.)

DISCUSSION

I. Legal Standard

In deciding a motion to dismiss pursuant to Rule 12(b)(6), a court assumes all facts in the complaint to be true and construes all reasonable inferences from those facts in the light most favorable to the complainant. Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). In doing so, however, a court need not accept as true wholly conclusoryallegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or legal conclusions drawn by the pleader from the facts alleged, Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). A court may consider the complaint, matters of public record, orders, materials embraced by the complaint, and exhibits attached to the complaint in deciding a motion to dismiss under Rule 12(b)(6). Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).

To survive a motion to dismiss, a complaint must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007). Although a complaint need not contain "detailed factual allegations," it must contain facts with enough specificity "to raise a right to relief above the speculative level." Id. at 555. As the United States Supreme Court recently reiterated, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements," will not pass muster under Twombly. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 555). In sum, this standard "calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the claim]." Twombly, 550 U.S. at 556.

II. Electronic Fund Transfer Act

Northern Tier argues that Olen's complaint fails to state a claim under the Electronic Fund Transfer Act ("EFTA") because the statute's disclosure requirements apply only to financial institutions. The EFTA requires that "[t]he terms and conditions of electronic fund transfers involving a consumer's account shall be disclosed at the time the consumer contracts for an electronic fund transfer service . . . ." 15 U.S.C.§ 1693c(a). 15 U.S.C. § 1693b(a) of the EFTA expressly grants the Board of Governors of the Federal Reserve System "the authority and responsibility to 'prescribe regulations to carry out the purposes' of the act," Clemmer v. Key Bank Nat'l Ass'n, 539 F.3d 349, 351 (6th Cir. 2008), and 12 C.F.R. § 205 ("Regulation E") administers the EFTA as dictated by the statute. See also Johnson v. U.S. Bank Nat'l Ass'n, 276 F.R.D. 330, 331 (D. Minn. 2011). Express delegation of authority by Congress to an administrative agency to "fill any gap" left by a particular statute requires that the legislative regulations be given "controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute." Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843-44 (1984). An EFTA claim should be dismissed when neither the language of the statute nor a provision of Regulation E applies to the defendant's conduct. See Azose v. Wash. Mut. Bank, 588 F. Supp. 2d 366, 373 (E.D.N.Y. 2008) (dismissing EFTA claim because "neither the EFTA nor Regulation E required [defendant] as the ATM operator to make any disclosure to [p]laintiffs concerning any fee that the account-holding bank may impose on [p]laintiffs"); see also Metro. Med. Ctr. & Extended Care Facility v. Harris, 693 F.2d 775, 782-83 (8th Cir. 1982) (looking to implementing regulations for guidance as to statutory interpretation).

The question before the Court is whether the EFTA's disclosure provisions in 15 U.S.C. § 1693c(a) apply to a business entity like Northern Tier that is not a financial institution. The statute itself does not expressly state whether any or all of its provisionsapply to entities other than financial institutions,² and the Court is unaware of any case that construes 15 U.S.C. § 1693c(a) of the EFTA to require non-financial institutions to provide notice of their use of holds as Olen asserts here. (See Am. Compl. ¶ 59 (alleging that Northern Tier violated 15 U.S.C. § 1693c(a) by "failing to disclose that a condition of using its pay-at-pump service was the imposition of an account hold exceeding the purchase").) Contra Grillasca v. Hess Amerada Corp., No. 8:05-CV-1736-T-17TGW, 2006 WL 3313719, at *3 (M.D. Fla. Nov. 14, 2006) (concluding that the "EFTA does not apply to the challenged acts [defendant gas station's placements of 'holds' on customer accounts in amounts substantially higher than the amounts contracted for by the customers when they purchased their gasoline] because it does not address whether businesses must notify their potential customers regarding any 'holds'").

In light of the absence of an express statement by Congress in the EFTA regarding any notice requirement for non-financial institutions, the Court looks to Regulation E for guidance. See Chevron, 467 U.S. at 842-44 (recognizing "the principle of deference to administrative interpretations" and noting that "if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer isbased on a permissible construction of the statute"). Regulation E contains the following coverage provision:

This part applies to any electronic fund transfer that authorizes a financial institution to debit or credit a consumer's account. Generally, this part applies to financial institutions. For purposes of §§ 205.3(b)(2) and (b)(3), 205.10(b), (d), and (e), 205.13, and 205.20, this part applies to any person.

12 C.F.R. § 205.3(a). As defined by the regulation, a corporation constitutes a "person." 12 C.F.R. § 205.2(j).³ None of the subsections that explicitly apply to "persons," however, are implicated with respect to the conduct at issue in this case.⁴ Olen has not alleged that a transfer took place using information derived from a check or similar paper instrument. 12 C.F.R. § 205.3(b)(2). Nor does this dispute involve preauthorized recurring transfers or attempts to collect a fee for unpaid checks. 12 C.F.R. §§ 205.2(k), 205.3(b)(3), 205.10. Rather, Olen alleges that she initiated a transfer with her Visa debit card to pay for a gasoline purchase. (Am. Compl. ¶¶ 1, 9-10, 20, 22.)

Here, Olen...