Bratton v. Sisters of Charity

PREPAID CARDS 
Bratton v. Sisters of Charity of Leavenworth Health System, Inc. (SCL Health) 
Date: Nov. 25, 2019 

Issue: Whether SCL Health’s use of prepaid debit cards to issue a refund violated Montana state law.  

‌Case Summary: ABA filed an amicus brief urging the Montana Supreme Court to uphold a lower court decision ruling that SCL Health did not violate Montana law by directing Bank of America (BofA) to refund plaintiff Cheryl Bratton by prepaid debit card instead of a paper check. 

The dispute arose from a $27.75 refund that SCL Health paid Cheryl Bratton by prepaid debit card. Bratton filed a lawsuit against SCL Health in Montana district court alleging that SCL Health violated Montana law by transferring to BofA its obligation to refund the credit balances on her account without her consent. Bratton claimed she was injured because she received the prepaid cards instead of a paper check. 

The district court rejected the plaintiff’s argument, finding that SCL Health did not transfer its duty to the bank to authorize the refunds. Rather, the bank withdraw money from SCL Health’s general account and sent the prepaid cards to Bratton. The court concluded that Bratton’s consent was not necessary “just because SCL Health refunded Bratton’s money in a manner Bratton found inconvenient.”   

ABA filed an amicus brief urging the Montana Supreme Court to affirm the lower court’s decision. The brief argued that SCL Health’s authorization for BofA to withdraw money from SCL Health’s account to send Bratton prepaid debit cards is like a wire transfer or cashier’s check. According to ABA, “[e]very aspect of the debit-card transaction to which [Bratton] objects is also true of a check transaction, as both rely on intermediary banks between payer and payee.” Further, the brief explained that debit cards offer tangible benefits to consumers in cost and convenience and are a standard form of payment in a modern economy. ABA argued that Bratton’s “idiosyncratic preference” for receiving her refunds by paper checks instead of prepaid cards “should not impair the ability of financial institutions to offer Montanans services that have become standard nationwide.”  The brief emphasized that if Bratton prefers a different regulatory regime, she is free to seek further rulemaking. However, Bratton “should not ask [the Montana Supreme Court] to act as legislator and regulator and impose [her] ill-considered views on businesses and consumers doing their best to navigate an increasingly paperless economy.”   

Bottom Line: Bratton’s opening brief is due January 8, 2020.  

Download the amicus brief to read the full text.