Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Frederic J. Baker, On Behalf of Himself v. Inter National Bank and Netspend Corporation

January 19, 2012

FREDERIC J. BAKER, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
INTER NATIONAL BANK AND NETSPEND CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Hon. Joseph H. Rodriguez

MEMORANDUM OPINION & ORDER

This matter is before the Court on a renewed motion to dismiss the Amended Complaint. Oral argument on the motion was heard on the record and that discussion is incorporated here. For the reasons discussed that day, and those below, the motion will be granted in part and denied in part.

Background

Plaintiff, Frederic J. Baker, has alleged that in or around November of 2007, his mother purchased*fn1 a Visa gift card in the amount of $50 and gave it to him. (Am. Compl., ¶ 13.) A $4.95 purchase fee applied, as disclosed on the gift card packaging, which contained certain "terms and conditions" which were to "apply to purchaser and any subsequent holder of the card by gift or otherwise." (Id. ¶¶ 14, 20.) The following provisions were also included on the packaging:

"Card good through 11.09." "The funds on this card do not expire." "The monthly administrative fee of $2.95 will be waived for the first 6 months from the date of purchase."

(Am. Compl., ¶ 16.)

Plaintiff used the card in December of 2007 to make purchases at Borders Books in Marlton, New Jersey and at the Regal Cinemas in Burlington, New Jersey. (Id. ¶ 15.) On April 30, 2008 and again on May 31, 2008, Defendants*fn2 charged a $4.95 monthly maintenance fee to the card. (Am. Compl. ¶ 18.)

Plaintiff alleges (1) Defendants did not disclose the $4.95 monthly maintenance fee, or any other type of recurring monthly fee of $4.95 associated with the gift card, (2) the representation that the card was good through 11.09 was necessarily false because the accumulation of monthly fees would make the $50 gift card valueless and unusable well before November 2009, even if no purchases were made; (3) similarly, the representation that the funds do not expire was necessarily false because the accumulation of monthly fees would make the $50 gift card "expire," even if no purchases were made; and (4) the representation that "[t]he monthly administrative fee of $2.95 will be waived for the first 6 months from the date of purchase" was necessarily false because it was Defendants' practice and policy to charge and collect monthly fees of $4.95 after the first six months."

As such, Plaintiff alleges that Defendants have violated the New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8-2*fn3 by employing unfair and deceptive practices, "including, but not limited to: (a) misrepresenting the expiration date of the Gift Card; (b) misrepresenting that "the funds on this card do not expire"; (c) misrepresenting the terms and the amount of the monthly fee charged by Defendants; and (d) collecting and/or attempting to collect monthly fees in excess of the amount they were permitted to collect." Plaintiff also brings a claim under New Jersey's Truth-In-Consumer Contract, Warranty, and Notice Act, N.J. Stat. Ann. § 56:12-15, asserting that by including a provision that states that Defendants will deduct a $2.95 monthly fee from the balance of the card after the first six months, "except where (or unless) prohibited by law," while Defendants instead deduct the sum of $4.95 as a monthly fee, the Defendants include a provision that violates a clearly established right of the consumer or responsibility of the seller. Finally, there is a claim for unjust enrichment.

Accordingly, on November 17, 2008, Plaintiff filed this case as a putative class action on behalf of himself and those similarly situated in the following Class:

All persons who purchased or used an All Access Visa Gift Card in the form attached to the Amended Complaint, in any amount, in New Jersey at any time from a date six (6) years prior to the filing of the Complaint and continuing through to the completion of this litigation.

Plaintiff premised the Court's jurisdiction on the Class Action Fairness Act, 28 U.S.C. § 1332(d), which grants district courts original jurisdiction over "any civil action in which the matter in controversy exceeds the [aggregate] sum or value of $5,000,000, exclusive of interests and costs, and is a class action in which . . . any member of a class of plaintiffs is a citizen of a State different from any defendant," and the number of members of the putative class is 100 or more. The Court previously granted limited discovery to assure that the amount in controversy was met.

Now, Defendants NetSpend Corporation and Inter National Bank have reinstated a previous motion to dismiss the Amended Complaint for lack of subject matter jurisdiction and failure to state a claim, arguing that Plaintiff has not alleged Article III "injury in fact." In their factual attack on the Amended Complaint, Defendants argue that Texas law, rather than New Jersey law, should apply and reveal that the Amended Complaint alleges a partial set of facts which affirmatively convey the erroneous impression that Plaintiff suffered an "ascertainable loss" of $4.00 resulting from a $2.00 administrative fee overcharge in April 2008 and another such overcharge in May 2008, [but] Plaintiff -- or someone else acting on behalf of his Gift Card account --in fact sought and received a $4.95 administrative fee refund in May 2008-a fact of critical significance that is nowhere to be found in the Amended Complaint. Thus, Plaintiff actually received an administrative fee net surplus of $0.95.

Further, Defendants argue that even if the Court were to apply New Jersey law, federal preemption bars certain aspects of Plaintiff's CFA claim, and Plaintiff fails to adequately allege CFA standing. Defendants argue that the TCCWNA claim should be dismissed because Plaintiff is not a "consumer" under the Act, and because Plaintiff has not plead facts constituting a violation of the Act. They also argue that they did not unjustly retain a benefit with respect to Plaintiff's gift card.

Plaintiff has opposed the motion to dismiss, arguing that the Amended Complaint sets forth facts and allegations that adequately plead each claim.

The record, as supplied by the defense, indicates that on December 1, 2007, Plaintiff's gift card was used at a Borders, Inc. bookstore in Marlton, New Jersey for two transactions totaling $40.63. (Clukey Aff. ¶ 9.) The first such transaction totaled $19.23 and the second totaled $21.40, immediately following which a $9.37 balance remained on the gift card and in the gift card's electronic account maintained by NetSpend at its Headquarters. (Id.) On December 8, 2007, the gift card was used at Regal Cinemas in Burlington, New Jersey for a $3.75 transaction, immediately following which a $5.62 balance remained on the gift card and in the gift card's electronic account. (Id. ¶ 10.) Thereafter, for the period of December 10, 2007 through April 30, 2008, the Gift Card was not used for any transactions. (Id. ¶ 11.) On April 30, 2008, six months following the gift card's date of purchase, NetSpend, at its Headquarters, assessed the gift card's electronic account an administrative fee of $4.95, immediately following which the remaining balance of the gift card and the gift card's electronic account was $0.67. (Id. ¶ 12.)

On May 10, 2008, the following occurred with respect to the Plaintiff's Gift Card: -Shortly before 1:00 p.m. (EDT), someone attempted to use the Gift Card for a transaction in the amount of $41.33 at the United States Postal Service located in Mount Laurel, New Jersey. This attempted transaction was declined due to the Gift Card's insufficient funds in relation to the amount of the attempted transaction. -At approximately 7:30 p.m. (Eastern Daylight Time), twice within a matter of minutes, someone attempted to use the Gift Card for a transaction in the amount of $29.88 at McCormick & Schmick's Seafood Restaurant located in Cherry Hill, New Jersey. Both of these attempted transactions were declined due to the Gift Card's insufficient funds in relation to the amount of the attempted transactions. (Id. ¶ 15.)

On May 12, 2008, the following occurred with respect to the Plaintiff's Gift Card: -The purported cardholder called NetSpend's gift card balance inquiry "800" number and spoke with a customer service agent at NetSpend's call center located in Manila, Philippines (the "Manila call center"). NetSpend's Headquarters has supervisory authority with respect to the Manila call center. -At its Headquarters, NetSpend assessed the Gift Card's account a $0.50 telephone balance inquiry fee as an automatic consequence of the aforementioned balance inquiry phone ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.