S.D.N.Y.: Cryptocurrency Purchases Not Necessarily Cash Transactions

On Thursday, Judge Katherine Polk Failla issued a decision, Tucker v. Chase Bank USA, N.A., 18 Civ. 3155 (KPF), 2019 U.S. Dist. LEXIS 128834 (S.D.N.Y. Aug. 1, 2019), granting in part and denying in part the Defendant's motion to dismiss. The Plaintiffs used Chase credit cards to purchase cryptocurrencies which Chase categorized as 'purchases' from 2017 to January 2018 and charged at one interest rate, but afterwards as 'cash advances' which were subject to a higher interest rate and transaction fees. The Plaintiffs' suit alleged a breach of contract and violations of the Truth in Lending Act because of Chase's failure to make clear and conspicuous disclosures about which transactions were subject to which rates; its failure to give advance notice of changes in account terms; and its failure to make accurate disclosures in account statements. The advance notice and account statements claims were dismissed, but the others were not.

Chase's contract with the account holders treats, "purchasing travelers checks, foreign currency, money orders, wire transfers or similar cash-like transactions" as cash advances. Id. at *5, quoting Amended Complaint at ¶ 39. The breach of contract claim turns on the interpretation of the term, 'cash-like transaction'. Chase defines this term as being the same as 'money' or a medium of exchange, and crytocurrency can be used as a medium of payment. The Plaintiffs choose to interpret cash as government issued currency. Judge Failla found that the term 'cash-like transaction' should be construed by the terms which proceed it, which are instruments which create legal claims to currency. ". . . Plaintiffs plausibly allege, cryptocurrency does not imbue its holder with a legal right to any government-issued currency, acquisitions of cryptocurrency could not be classified as a cash-like transaction." Id. at *16. The breach of contract claim was not dismissed. The claim under TILA's clear and conspicuous disclosure requirement was also not dismissed because Judge Failla disagreed with Chase's position that, "[c]ryptocurrencies are unambiguously cash-like transactions.". Id. at *17.

The advance notice claim was dismissed because the Plaintiffs failed to allege that a significant change in the disclosed terms occurred - no term of the credit card agreement was changed. The change in classification of cryptocurrency may be a breach of contract, but not change in the disclosed terms. The claim under TILA's accurate periodic statement requirement was also dismissed because these statements do not describe all of the legal duties the parties owe to one another, but only the legal obligation with respect to individual transactions.

10th Cir.: Screenshot Displaying Metadata Not Authenticated

Today, the United States Court of Appeals for the Tenth Circuit issued a decision, Vazirabadi v. Denver Health & Hosp. Auth., No.18-1411, 2019 U.S. App. LEXIS 23159 (10th Cir. Aug. 2, 2019) affirming the district court's grant of the defendants' motion for summary judgment in an age discrimination suit. The plaintiff applied for a position with Denver health using an online application process, which included a competency test administered by SHL US, Inc.. One question asked Vazirabadi if he was over 40 years old, and he answered in the affirmative. The case turned on whether or not Denver Health had access to the information about the plaintiff's age collected by SHL, even though such demographic information was only provided in aggregate and not for individual applicants. There was no evidence that the only person with access to batches of aggregate information, the Denver recruitment director, reviewed the portion of it from the relevant time period for this case. The plaintiff appeared pro se.

Vazirabadi submitted a screenshot from a document review tool that showed "40" next to his name in two locations. The reference to his age was found in metadata transmitted with this score report. Despite the fact that Vazirabadi swore that the screenshot was true and correct, the Tenth Circuit found that, "that naked remark says nothing about the source of the document shown to be under review in the screenshot, who performed the review, what program generated the image, etc." Id. *3. The document could not be authenticated, and Judge Carlos F. Lucero's opinion states that the record did not show its origin. The Court found there was no other direct evidence of age discrimination.

A review of the age discrimination claim under a test used in cases where only circumstantial evidence exists, showed that the burden could not be shifted back to Denver Health to show a non-discriminatory basis for its rejection of Vazirabadi's application. The Court also upheld the lower court's quashing of a subpoena to obtain documents from the defendants' forensic expert. Vazirabadi sought the documents pursuant to Federal Rule of Civil Procedure 26(b), which allows for discovery of expert documents when facts or opinions cannot be obtained by any other means. The Tenth Circuit found that the necessary exceptional circumstances did not exist.

Supreme Court of Minnesota: Data Collection Establishes Personal Jurisdiction

Today, the Supreme Court of Minnesota issued a decision, Bandemer v. Ford Motor Co., No. A17-1182, 2019 Minn. LEXIS 427 (Minn. July 31, 2019), finding that personal jurisdiction existed when minimum contacts were established through the sale and advertising of a type of car by a defendant, and when that defendant collected repair and redesign data from dealerships located in the state. This case concerned a 2015 accident which took place in Minnesota involving a driver and a passenger, Bandemer, who were both Minnesota residents, but a vehicle that was manufactured and purchased out of state. Bandemer suffered brain damage when an airbag failed to deploy in the 1994 Ford Crown Victoria.

Justice Anne McKeig's opinion states that, "Ford's data collection, marketing, and advertising in Minnesota demonstrate that it delivered its product into the stream of commerce with the intention that Minnesotans purchase such vehicles. Ford collected data on how its vehicles perform through Ford dealerships in Minnesota and used that data to inform improvements to its designs and to train mechanics." Id. at *10. This demonstrates that Ford purposely availed itself of the benefits and privileges of the forum state. The cause of action is connected to Ford's contacts with the state because it collects safety related data in Minnesota.

Justice Barry Anderson's dissent disagreed finding that Ford's contacts with Minnesota, data collection and advertising, were not related to the cause of action. He found that Ford's responses to Bandemer's request for admissions did not show that it collected safety related data in Minnesota because it received data from all over the United States and only considered it in future designs - not a review of the safety of a 1994 model. There was no specific personal jurisdiction "Ford's data collection efforts may have captured information in Minnesota that was incorporated into the design of the 1994 Crown Victoria and its component parts, which Bandemer claims were defective. But with nothing more, '[i]t may have been' amounts to speculation. McCool v. Davis, 197 N.W. 93, 96 (Minn. 1924). Conjecture and guess are not enough to satisfy due process." Id. at *34-35.