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Nelson v. Pacwest Energy LLC

United States District Court, D. Arizona

July 23, 2018

Amanda Nelson, et al., Plaintiffs,
v.
Pacwest Energy LLC, Defendant.

          ORDER

          HONORABLE DIANE J. HUMETEWA UNITED STATES DISTRICT JUDGE

         Plaintiffs Amanda Nelson (“Nelson”) and Louis Fisher (“Fisher”) (collectively “Plaintiffs”) have filed a one-count, punitive class action lawsuit against Defendant Pacwest Energy, LLC dba Jacksons Car Wash (“Jacksons”). Plaintiffs seek injunctive relief and actual and statutory damages resulting from Jacksons' violation of the Electronic Fund Transfer Act (“EFTA”), 15 U.S.C. § 1693 et seq. The particular provision of the EFTA at issue here states that “A preauthorized electronic fund transfer from a consumer's account may be authorized by the consumer only in writing, and a copy of such authorization shall be provided to the consumer when made.” 15 U.S.C § 1693e(a) (emphasis added). Plaintiffs contend they were not provided a copy of their authorization as required by the statute. (Doc. 19 at ¶ 27). The EFTA allows for consumers to bring suit for money-damages when a violation of its provisions occur, and further authorizes consumers to obtain attorney's fees if they are successful. See § 1693m(a).

         Presently before the Court is Jacksons' Motion to Dismiss the First Amended Complaint (“FAC”). (Doc. 23). Jacksons argues that Plaintiffs lack standing to bring a claim under the EFTA. Jacksons contends that Plaintiffs did not suffer a concrete injury as a result of Jacksons' failure to provide Plaintiffs a copy of their written authorization at the time Fisher purchased a monthly car wash plan. Jacksons further argues that any such injury in fact cannot be attributed to Jacksons.

         The Court originally scheduled oral argument on the matter. After a thorough review of the parties' arguments and evidence, however, the Court determined that additional argument would not aid in the Court's decision. See Fed.R.Civ.P. 78(b) (court may decide motions without oral hearings); LRCiv 7.2(f) (same). Accordingly, the Court vacated the hearing scheduled for July 19, 2018. For the following reasons, the Court will now grant Jacksons' motion.

         I. Procedural Background

         Plaintiffs filed their original complaint on September 22, 2017. (Doc. 1). That complaint alleged two violations of 15 U.S.C. § 1693e(a). (Id.) Specifically, Plaintiffs alleged that Jacksons initiated preauthorized electronic fund transfers out of their bank account without providing Plaintiffs (1) written authorization or its equivalent to do so; and (2) a copy of their signed, written authorization. (Doc. 1). On November 17, 2017, Jacksons moved to dismiss that complaint pursuant to Fed.R.Civ.P. 8(a), 12(b)(1), and 12(b)(6), or alternatively to strike Plaintiffs' class action allegations under Rule 12(f), 23(c)(1)(A), and 23(d)(1)(D). (Doc. 14). Jacksons also requested that the Court take judicial notice of the Automatic Recharge Authorization Agreement signed by Plaintiff Louis Fisher (the “Authorization”) (Doc. 15-1) attached to the Declaration of Jacksons' Vice President Sean Storer (“Storer”) (Doc. 15). (Doc. 16). Instead of responding to Jacksons' motion to dismiss or the request for judicial notice, Plaintiffs thereafter amended their complaint. (FAC, Doc. 19).[1] The FAC removed the claim that Jacksons failed to obtain Fisher's written authorization to electronically debit Plaintiffs' account, but maintained the claim that Jacksons failed to provide Plaintiffs with a copy of Fisher's Authorization as required by the EFTA. (Doc. 19). Jacksons thereafter filed this Motion to Dismiss the FAC (Doc. 23). Jacksons contends that Plaintiffs lack standing to sue under the EFTA and as a result, this Court lacks subject matter jurisdiction over Plaintiffs' claim. (Doc. 23).

         II. Factual Background[2]

         Plaintiffs' FAC alleges that in November 2016, Fisher took his vehicle to get a car wash at one of Jacksons' car wash locations. (Doc. 19 ¶ 16). While there, a Jacksons employee told Fisher that he could get a month of unlimited carwashes for $25.00. (Id. ¶ 18). When Fisher agreed to the purchase, the employee gave Fisher a ticket titled “Automatic Recharge Authorization” and told him to take it to the checkout register located within the lobby of Jacksons' store.

         The Authorization provided to Fisher states in part, “I authorize Jacksons Car Wash #8107 to charge my credit card account $40 on a monthly basis for the Unl. VIP Sld plan. I understand this Automatic Recharge Authorization shall remain in force until I cancel by giving 15 days written notice.” (Doc. 15-1). Fisher's signature is below this language. (Id.) The Authorization also states, “Please complete and verify your information on this receipt and take it to the Car Wash lobby cashier to complete your plan enrollment and receive your FAST PASS tag. Your plan is NOT active until then.” (Id.)

         As instructed, Fisher took the ticket to another Jacksons employee and paid for his purchase using a debit card owned by Fisher and Nelson. Although he no longer contends that he did not provide written Authorization to the transfers, Fisher alleges that he was not provided a copy of the Authorization at the time he made the purchase. (Doc. 19 ¶ 27).

         In accordance with the Authorization terms, Jacksons began to debit a bank account owned by Fisher and Nelson on a monthly basis in December 2016. Plaintiffs say they discovered the monthly debits in June 2017, nearly six months later. (Doc. 19 ¶ 25). In their FAC, Plaintiffs allege that they were unaware that Jacksons would be taking money from their bank account on a monthly basis. (Doc. 19 ¶ 28). They also allege that they were confused and claim they had to “incur the time, expense, and disutility associated with discovering why [Jacksons] had done so.” (Id. ¶ 29). They allege that they were forced to obtain counsel to investigate the matter and that the failure to provide them with a copy of Fisher's signed, written authorization exposed them to an “increased risk of fraud.” (Id. ¶¶ 30 & 31).

         Jacksons now moves to dismiss Plaintiffs' one-count Amended Complaint under Federal Rule of Civil Procedure 12(b)(1). Jacksons specifically argues that the Plaintiffs have failed to establish that they have standing to sue under the EFTA.

         III. Discussion

         A. Subject Matter Jurisdiction

         Jacksons challenges the factual basis for this Court's subject matter jurisdiction. (See Doc. 23 at 6-7). When a party makes a factual, as opposed to facial[3], attack on the district court's subject matter jurisdiction under Rule 12(b)(1), as Jacksons has, the court “need not presume the truthfulness of the plaintiffs' allegations.” White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). Moreover, “unlike a Rule 12(b)(6) motion, in a Rule 12(b)(1) motion, the district court is not confined by the facts contained in the four corners of the complaint…” Americopters, LLC v. FAA, 441 F.3d 726, 732 n. 4 (9th Cir. 2006). Instead, a factual attack contests the truth of the plaintiff's factual allegations, “usually by introducing evidence outside the pleadings.” NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 614 (9th Cir. 2016) (quoting Leite v. Crane Co., 749 F.3d 1117, 112 (9th Cir. 2014)). Unlike a facial attack, a factual attack imposes upon the plaintiff “an affirmative obligation to support jurisdictional allegations with proof.” Id; see also St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989) (party opposing 12(b)(1) motion must “present affidavits or any other evidence necessary to satisfy its burden of establishing that the court, in fact, possesses subject matter jurisdiction”) (citation omitted); accord Savage v. Glendale Union High School, Dist. No. 205, 343 F.3d 1036, 1039 n. 2 (9th Cir. 2003), cert. denied, 541 U.S. 1009 (2004) (“Once the moving party has converted the motion to dismiss into a factual motion by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction”). Specifically, “[t]he plaintiff bears the burden of proving by a preponderance of the evidence that each of the requirements for subject-matter jurisdiction has been met.” Leite, 749 F.3d at 1121; A.D. by Carter v. Washburn, 2017 WL 1019685, at *4 (D. Ariz. Mar. 16, 2017) (factual attacks to a plaintiff's standing “requires the plaintiff to support its jurisdictional allegations with competent proof, under the same evidentiary standard applied on summary judgment”). The existence of disputed material facts does not preclude the trial court from evaluating the merits of jurisdictional claims, unless those material disputed facts are intertwined with the merits of a plaintiff's claim. White, 227 F.3d at 1242; Leite, 749 F.3d at 1122 n.3.

         In support of its motion to dismiss, Jacksons furnished a declaration from its Vice President and a copy of the Authorization provided to Fisher. Plaintiffs do not dispute the facts asserted therein or the authenticity of the evidence presented by Jacksons. Instead, in support of their opposition, Plaintiffs furnished two electronically-signed declarations from the named Plaintiffs, Nelson and Fisher. (Docs. 27-1 and 27-2). Jacksons objects to the Court's consideration of these declarations on the grounds that they are electronically signed and thus are inadmissible. (Doc. 30 at 4).

         B. Standing

         Jacksons argues that the Court lacks subject matter jurisdiction because Plaintiffs have failed to establish they have standing to sue under the EFTA. Article III provides that federal courts may only exercise judicial power in the context of “cases” and “controversies.” U.S. Const. art. III, § 2, cl. 1; Lujan, 504 U.S. at 559. For there to be a case or controversy, the plaintiff must have standing to sue. Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016) (“Spokeo II”). See id. at n.6 (noting that even plaintiff who seek to “represent a class must allege and show that they personally have been injured”) (internal quotations omitted). Whether a ...


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