United States District Court, W.D. Washington, Tacoma
JEFFREY REICHERT, individually and on behalf of all other similarly situated, Plaintiff,
KEEFE COMMISSARY NETWORK, L.L.C. d/b/a Access Corrections; Rapid Investments, Inc., d/b/a Rapid Financial Solutions, d/b/a Access Freedom; and Cache Valley Bank, Defendant.
ORDER DENYING MOTIONS TO COMPEL ARBITRATION
B. Leighton, United States District Judge.
MATTER is before the Court on Defendants Rapid Investments,
Inc. and Cache Valley Bank's Motion to Compel Arbitration
[Dkt. #36] and Defendant Keefe Commissary Network, LLC's
Motion to Compel Arbitration and to Stay or Dismiss
Plaintiff's Claims [Dkt. #40]. Oral argument is
front and center issue in these two motions is whether a
binding contract, including a mandatory arbitration clause,
was formed under the circumstances of this case. The Court is
persuaded by the evidence that one was not.
Reichert was arrested on October 21, 2016 by a Kitsap County
Sheriff's Deputy. Upon arrest, the deputy confiscated
$176.77 in cash from him. Reichert was released at 5:00 a.m.
the next day. Instead of receiving cash, Reichert was handed
an “AccessFreedom Card”-a debit card issued by
Defendants Cache Valley and Rapid, pursuant to a contract
between Kitsap County and Keefe. Reichert was not provided
with any paperwork explaining the Card, or given any oral
explanation of its terms. When Reichert asked the jail
officer for his cash, he was told “oh, you don't
get your cash back, you get a debit card.” Declaration
of Jeffrey Reichert [Dkt. #47 at ¶12].
did not request or apply for the Card. He never agreed to
receive the Card. He was not given any documentation showing
how much had been taken from him during his arrest, or how
much was loaded onto the Card. No one explained how to access
his money, that additional fees applied if he did not access
it within 72 hours, or that he would lose nearly 10% of his
cash to fees. He did not sign any document agreeing to the
Card or its terms. Reichert had no opportunity to reject the
Card (or even to affirmatively accept it).
moving defendants argue that by accepting and using the Card
he received, Reichert agreed to the terms contained within
the Cardholder Agreement. Reichert “accepted the
offer” to use the Card (and actually used it), thus
forming a contract. They argue that although Reichert claims
he did not receive a copy of the Cardholder Agreement when he
was released, the back of the Card provides Rapid's
website, where those terms and conditions may be found.
they claim the contract contains an arbitration clause,
including a delegation clause, giving the arbitrator (rather
than the court) the power to decide questions of
arbitrability in the first instance. They claim that in the
Ninth Circuit, delegation clauses are to be enforced, unless
there is a challenge specific to the delegation clause.
Because Reichert asserts no such challenge, they claim, the
delegation clause should be enforced.
parties agree that Washington law governs the contractual
provisions at issue, including contract formation.
contract is a legally enforceable promise or set of promises.
In order for a promise or set of promises to be legally
enforceable, there must be mutual assent and consideration.
Restatement (Second) of Contracts § 1 and § 3
(1981); Corbit v. J.I. Case Co., 70 Wn. 2d 522
(1967). In order for there to be mutual assent, the parties
must agree on the essential terms of the contract, and must
express to each other their agreement to the essential terms.
Yakima County (West Valley) Fire Protection District v.
Yakima, 122 Wn. 2d 371, 388 (1993).
argues that he did not receive the Cardholder Agreement, he
could not and did not agree to it. Moreover, he was not given
a choice to receive his confiscated money or a check for the
full amount. He argues there is no contract; or meeting of
the minds. Without a contract, there is no Arbitration
Agreement, no Arbitrator, and no Delegation of Power to an
Arbitrator to decide the question of arbitrability.
cases around the country provide useful insight into this
precise question. The Northern District of Georgia,
interpreting Georgia contract law, held that use of a prepaid
ATM card received from a jail was not binding
consent to the terms of an arbitration agreement, even when
the plaintiff had received a Cardholder Agreement. Regan
v. Stored Value Cards, Inc., 85 F.Supp.3d 1357, 1364
(N.D.Ga. 2015). The Regan court reasoned:
Unlike in [other cases finding consent], Plaintiff here did
not make an application for the Card, he was not offered a
line of credit that he could choose to use or not to use, he
did not receive the Cardholder Agreement in the same envelope
as the Card, and he had not used the card for a long period
of time and made ...