                     FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT

DANICA LOVE BROWN,                                No. 18-35735
               Plaintiff-Appellant,
                                                    D.C. No.
                     v.                          3:15-cv-01370-
                                                      MO
STORED VALUE CARDS, INC., DBA
Numi Financial; CENTRAL NATIONAL
BANK AND TRUST COMPANY, Enid,                       OPINION
Oklahoma,
               Defendants-Appellees.

         Appeal from the United States District Court
                  for the District of Oregon
        Michael W. Mosman, District Judge, Presiding

         Argued and Submitted December 13, 2019
                   Seattle, Washington

                      Filed March 16, 2020

 Before: Ronald M. Gould and Marsha S. Berzon, Circuit
      Judges, and Roger T. Benitez, * District Judge.

                    Opinion by Judge Gould


    *
      The Honorable Roger T. Benitez, United States District Judge for
the Southern District of California, sitting by designation.
2           BROWN V. STORED VALUE CARDS, INC.

                          SUMMARY **


    Electronic Fund Transfers Act / Constitutional Law

    The panel reversed the district court’s partial dismissal
and partial summary judgment on claims under the
Electronic Fund Transfers Act, the Takings Clause, and
Oregon state law concerning a private company’s return of
released jail or prison inmates’ money via a prepaid debit
card loaded with the balance of their funds.

    Defendants assessed fees on the cards. The panel held
that plaintiff stated a claim under EFTA § 1693l-1, which
prohibits charging service fees to “general-use prepaid
cards.” A general-use prepaid card does not include a card
that “is not marketed to the general public.” The panel held
that the released inmates belonged to the general public,
which they rejoined upon release, and defendants indirectly
marketed the cards to the released inmates. The panel
further held that the district court abused its discretion in
denying plaintiff leave to file a third amended complaint
reinstating her EFTA claims under both § 1693l-1 and
§ 1693i, which prohibits the issuance, absent certain
disclosures, of unsolicited validated cards that provide
access to a “consumer’s account.” The panel held that a
consumer account includes the sort of prepaid account that
the released inmates received.

   The panel reversed the district court’s grant of summary
judgment to defendants on plaintiff’s per se takings claim.

    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
          BROWN V. STORED VALUE CARDS, INC.                3

Assuming without deciding that defendants were state
actors, the panel concluded that the release cards were not
the functional equivalent of cash or a check because the
value of the cards quickly and permanently deteriorated.
The panel remanded for the district court to consider in the
first instance the reasonableness of the fees assessed on the
cards.

   The panel also reversed the district court’s grant of
summary judgment on plaintiffs’ state law claims, and
remanded the case to the district court for further
proceedings.


                        COUNSEL

Karla Gilbride (argued), Public Justice, P.C., Washington,
D.C.; Mark Adam Griffin and Daniel Parke Mensher, Keller
Rohrback LLP, Seattle, Washington; Benjamin Wright
Haile, Attorney, Portland, Oregon; for Plaintiff-Appellant.

Eric Nystrom (argued), John C. Ekman, and Natalie I.
Uhlemann, Fox Rothschild LLP, Minneapolis, Minnesota,
for Defendants-Appellees.

Hassan Zavareei, Anna C. Haac, and Tanya S. Koshy, Tycko
& Zavareei LLP, Washington, D.C., for Amici Curiae
International CURE, Equal Justice Under Law, The Florida
Institutional Legal Service Project of Florida Legal Service,
The Legal Aid Society, National Police Accountability
Project, Public Counsel, San Francisco Public Defender's
Office, Southern Poverty Law Center, Texas Civil Rights
Project, Working Narratives, and University Of California
Davis School of Law Immigration Law Clinic.
4          BROWN V. STORED VALUE CARDS, INC.

                          OPINION

GOULD, Circuit Judge:

    When a person is arrested and detained, the detention
facility confiscates his or her personal property, including
any cash. Detention facilities safeguard an inmate’s money
throughout the duration of his or her incarceration, typically
in an inmate trust account. When an inmate is released, the
facility has traditionally returned the inmate’s money. For
local governments, handling inmates’ cash is expensive and
time consuming. In recent years, many local governments
have begun delegating the function of returning the property
of released inmates to private, for-profit companies. One
such company, Stored Value Cards d/b/a Numi (“Numi”),
returns released inmates’ money via a prepaid debit card
loaded with the balance of their funds. Numi does not charge
most local governments for its services. Instead, Numi earns
revenue by charging fees to the cardholders. This case
illustrates some of the hazards and risks that may arise when
prisons transfer what formerly were government functions to
for-profit enterprises.

    Danica Brown (“Brown”) 1 brought suit against Numi
and its partner Central National Bank and Trust Company
(“CNB”) (collectively, “Defendants”), alleging that they
violated the Electronic Fund Transfers Act (“EFTA”),
violated the Fifth Amendment Takings Clause, and were
liable for conversion and unjust enrichment under Oregon
state law. The district court dismissed Brown’s EFTA claim
for failure to state a claim, denied leave to file a third

    1
      Throughout this opinion, we use the terms “Brown” or “Danica
Brown” to refer to Plaintiff Danica Love Brown. When we refer to
shooting victim Michael Brown, we include his first name.
            BROWN V. STORED VALUE CARDS, INC.                      5

amended complaint, and granted summary judgment to
Defendants on Brown’s takings and state law claims. Brown
appeals, and we reverse and remand.

                                 I

                                 A

   The Multnomah County jail confiscates any cash carried
by an arrestee upon incarceration. The inmate’s funds are
kept in an inmate trust account until he or she is released.
Before 2014, Multnomah County returned a released
inmate’s money in the form of cash if the total was less than
$60, or a check if the total was greater than $60. This process
was considered by Multnomah County to be expensive and
time consuming: Multnomah County estimates that it spent
about $275,000 in labor costs annually and two to three staff
hours per day handling inmates’ cash.

    In 2014, Multnomah County contracted with Numi to
return released inmates’ funds via prepaid debit cards, which
are sometimes referred to as “release cards.” 2 Multnomah
County pays nothing at all to participate in Numi’s debit card
program. Numi contracts with CNB to issue the release
cards and hold the card funds in a master funding account.
When an inmate is released, the money in his or her inmate
trust account is transferred into the CNB master funding
account. The released inmate receives a prepaid release card
loaded with his or her funds, and the card is activated and
ready for immediate use.


    2
       Numi is a subcontractor through Multnomah County’s contract
with Securus Technologies. Securus Technologies contracts with
Multnomah County as a commissary partner offering a range of services
in the County’s jails.
6         BROWN V. STORED VALUE CARDS, INC.

    Numi earns revenue from the fees that it charges to
cardholders. Counties and municipalities that contract with
Numi have a choice of several fee schedules, distinguished
by how often maintenance fees are charged. P7C cards
charge maintenance fees once per month, and P1C cards
charge maintenance fees once per week. Some counties and
municipalities have negotiated deviations from the standard
fee schedules to lighten the burden on cardholders. Other
counties and municipalities, including Napa County,
California and Broward County, Florida, pay a flat fee to
subsidize each card instead of passing on the fees to
cardholders. When it contracted with Numi, Multnomah
County adopted a P7C fee schedule with no deviations or
subsidies. The schedule it adopted contemplated that the
County would pay no fees itself and Numi’s compensation
would come from fees paid by the former inmates released
into the public.

    Under the fee schedule adopted by Multnomah County,
Defendants charge cardholders a $5.95 monthly
maintenance fee, first charged only five days after card
activation. There is also a $2.95 fee for every ATM
withdrawal in addition to any fee charged by the ATM itself.
Other fees include a $0.50 fee for contacting the automated
customer service system more than three times per month, a
$9.95 fee for requesting the balance of the card by check, a
$1.00 fee for each ATM balance inquiry made by the
cardholder, and a $0.95 fee for each attempted transaction
that was declined due to insufficient funds or an incorrect
PIN.

    According to Defendants, a released inmate can avoid
these fees. The back of the release card states in small print
that a $5.95 monthly service fee will be charged five days
after the card’s activation. Released inmates are also
            BROWN V. STORED VALUE CARDS, INC.                      7

supposed to receive a Card Usage Tips wallet card with a
section entitled “How to avoid Service Fees.” The wallet
card states that there is no fee to transfer their funds to a
personal bank account on Numi’s website, receive cash back
after making a purchase from a retailer, or withdraw funds
over the counter at a bank. The wallet card does not disclose
that not all retailers will provide cash back, or that bank
withdrawals are free only at Mastercard-affiliated banks.
Multnomah County also gave the departing former inmates
a document entitled “Debit Release Card Information” with
a list of designated “surcharge-free ATMs,” but this list was
inaccurate at the time Brown was released because some of
the listed ATMs charged fees.

                                 B

    On November 25, 2014, Brown was arrested in Portland,
Oregon. She was participating in a public protest after a
Missouri grand jury had decided not to indict Darren Wilson
for the police-shooting death of Michael Brown. 3 At the
time of Danica Brown’s arrest, she carried $30.97 in cash.
Her cash in that amount was confiscated along with the rest
of her personal belongings when she was taken into
Multnomah County custody. She was released around
2:30am on November 26, about seven hours after her arrest.
The charges against her were later dropped.

   Upon her release, Brown did not receive her previously
confiscated money in the form of cash. Instead, she was

    3
      On August 9, 2014, Michael Brown, an unarmed black teenager,
was shot and killed by Wilson, a white police officer, in Ferguson,
Missouri. Timothy Williams, Five Years After Michael Brown’s Death,
His Father Wants a New Investigation, N.Y. Times (Aug. 15, 2019). The
fatal shooting and the failure to indict Wilson sparked nationwide
protests. Id.
8         BROWN V. STORED VALUE CARDS, INC.

given a Numi debit card loaded with $30.97. Along with the
card, Brown received some paperwork with card
information, including the Card Usage Tips wallet card, and
the Debit Release Card Information sheet. She did not read
the paperwork because she did not have her eyeglasses.

    The debit card was not Brown’s immediate concern upon
her release. On November 26, the day after her arrest,
Brown spent most of her time attending her arraignment and
retrieving her other confiscated belongings. November 27
was Thanksgiving Day. When Brown finally examined the
release card and the associated paperwork, she learned that
there was a monthly service charge. She assumed,
incorrectly as it turned out, that the charge would occur after
she had been using the card for a month. She visited Numi’s
website, where she learned that she could transfer the
balance of her card to her personal bank account. But she
chose not to make this transfer because she did not want to
provide her personal bank account information to Numi.
Instead, she used the release card to make small purchases
like buying coffee.

    On December 1, Brown attempted to make a $15
purchase and the transaction was declined. Brown learned
that her card had insufficient funds for the purchase because
Defendants had debited a $5.95 monthly service fee earlier
that day, which was only five days after she originally
received the card. Due to the declined transaction,
Defendants debited another $0.95 from her card. Brown
made two more small purchases in early December. On
January 1, Defendants debited the remaining $0.07 from the
card toward her monthly service fee. In total, Defendants
debited $6.97, or twenty-two percent of the card’s original
$30.97 value.
          BROWN V. STORED VALUE CARDS, INC.                  9

                              C

    In July 2015, Brown filed a complaint against
Defendants on behalf of herself and a proposed class of
formerly incarcerated people who received Defendants’
debit cards upon release and who paid fees associated with
the use or maintenance of those cards. In her original
complaint, she alleged four claims: (1) a violation of section
1693i of EFTA, which prohibits the issuance of unsolicited
debit cards absent certain requirements; (2) a violation of the
Oregon Unfair Trade Practices Act; (3) conversion under
Oregon state law; and (4) unjust enrichment under Oregon
state law.

    Defendants moved to dismiss. In response to the motion
to dismiss, Brown filed her first amended complaint. She
removed any reference to section 1693i and eliminated her
claim under the Oregon Unfair Trade Practices Act. She
added two new claims: a violation of section 1693l-1 of
EFTA, which prohibits service fees on general-use prepaid
cards, and a 42 U.S.C. § 1983 claim for a violation of the
Fifth Amendment’s Takings Clause. She realleged her state
law claims for conversion and unjust enrichment.

    Defendants again moved to dismiss. This time, the
district court granted Defendants’ motion as to Brown’s
EFTA claim and her takings claim, and it denied the motion
as to Brown’s state law claims. The court granted Brown
leave to amend her takings claim.

    Brown filed a second amended complaint, realleging her
takings claim and her state law claims. Defendants moved
to dismiss, and the district court denied that motion. The
case proceeded to discovery.
10          BROWN V. STORED VALUE CARDS, INC.

    Before the close of discovery, Defendants filed a motion
for summary judgment. 4 While the motion for summary
judgment was pending, Brown filed a motion for leave to file
a third amended complaint to reinstate her EFTA claims as
arising under both section 1693i and section 1693l-1, based
on new evidence obtained in discovery. The district court
denied leave to amend without written opinion or
explanation.

    After hearing oral argument, the district court granted
Defendants’ motion for summary judgment on Brown’s
takings and state law claims. Brown filed this appeal
challenging the district court’s orders (1) dismissing her
EFTA claims; (2) denying her leave to file a third amended
complaint reinstating her EFTA claims; and (3) granting
summary judgment to Defendants on the takings and state
law claims. We consider these issues in turn.

                                 II

    EFTA protects the rights of consumers in electronic fund
transfers. 15 U.S.C. § 1693(b). The Consumer Financial
Protection Bureau (“CFPB”) has regulatory authority over
most provisions of EFTA. Id. § 1693b(a)(1). At various
points in this litigation, Brown alleged claims under sections
1693i and 1693l-1 of EFTA.

    Section 1693i prohibits the issuance, absent certain
disclosures, of unsolicited validated cards that provide
access to a “consumer’s account.” Id. § 1693i. A card is



     4
       Pursuant to Rule 56 of the Federal Rules of Civil Procedure, a
motion for summary judgment can be filed “at any time until 30 days
after the close of all discovery.”
             BROWN V. STORED VALUE CARDS, INC.                           11

“validated when it may be used to initiate an electronic fund
transfer.” Id. § 1693i(c).

    Section 1693l-1 prohibits charging service fees to
“general-use prepaid cards” unless the card has not been
used for 12 months and other requirements have been met.
Id. § 1693l-1(b). A general-use prepaid card is (1)
“redeemable at multiple, unaffiliated merchants or services
providers, or automated teller machines”; (2) “issued in a
requested amount”; (3) “purchased or loaded on a prepaid
basis”; and (4) “honored . . . by merchants for goods or
services, or at automated teller machines.” Id. § 1693l-
1(a)(2)(A). Relevant for this appeal, a general-use prepaid
card does not include a card that “is not marketed to the
general public.” Id. § 1693l-1(a)(2)(D)(iv).

    We review de novo a dismissal for failure to state a claim
under Rule 12(b)(6). Puri v. Khalsa, 844 F.3d 1152, 1157
(9th Cir. 2017). All well-pleaded allegations of material fact
are taken as true and construed in the light most favorable to
the non-moving party. Id. The plaintiff must plead facts to
state a claim for relief that is “plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007).

   Brown contends that the district court erred by
dismissing her claim under section 1693l-1. 5 Defendants

    5
      Brown also contends that the district court erred in dismissing her
claim under section 1693i. However, Brown did not cite to section 1693i
in her first amended complaint. An amended complaint supersedes the
original complaint and renders it without legal effect. Lacey v. Maricopa
County, 693 F.3d 896, 925 (9th Cir. 2012) (en banc). Although Brown
alleged a section 1693i claim in her original complaint, she removed any
reference to that subsection in her first amended complaint. Even
assuming that Brown could state a claim under section 1693i without
citing to that exact provision, she did not plead facts sufficient to state a
12          BROWN V. STORED VALUE CARDS, INC.

respond that section 1693l-1 does not apply because the
release cards are not marketed to the general public.
Specifically, they contend that (1) inmates are not the
general public, and (2) Defendants did not directly market
the cards to inmates.

    Defendants’ contentions lack merit. The CFPB’s official
commentary to section 1693l-1 acknowledges that a subset
of the population may constitute the general public. See 12
C.F.R. § 1005.20(b)(4) (Supp. I 2019). Whether current
inmates as a subgroup constitute the general public is
irrelevant. The release cards are issued to inmates when they
are released from jail or prison, rejoining the general public.

    Second, although at the time of the motion to dismiss
there was no evidence of direct marketing to released
inmates, the CFPB defines “marketing” to include indirect
marketing. See 12 C.F.R. § 1005.20(b)(4) (Supp. I 2019)
(stating that a card is “marketed” if “the potential use of the
card . . . is directly or indirectly offered, advertised, or
otherwise promoted”). Factors to be considered when
determining whether a card is marketed to the general public
include “the means or channel through which the card . . .
may be obtained by a consumer, the subset of consumers that
are eligible to obtain the card . . . and whether the availability
of the card . . . is advertised or otherwise promoted in the
marketplace.” Id.

    Applying these factors, Defendants indirectly market the
cards to released inmates. Here, Defendants market the card
program to municipalities and correctional facilities, and


plausible claim for relief under section 1693i. Accordingly, we need not
address Brown’s contention that the district court erred in dismissing her
claim under section 1693i.
           BROWN V. STORED VALUE CARDS, INC.                   13

Multnomah County does not give released inmates a choice
of whether to accept the cards. Defendants know, expect,
and intend that Multnomah County will give the cards to
released inmates. That is the only way Defendants assure
the use of and obtain payment for the cards. So Defendants
indirectly “offer[], advertise[], or . . . promote[]” the cards to
the released inmates. Id.

    When inmates are released from jail or prison, they
reenter the general public. And when Defendants marketed
the cards to Multnomah County, they indirectly marketed
them to these released inmates. Because Defendants
marketed their cards to the general public, section 1693l-1
applies. We hold that Brown plausibly stated a claim for
relief under section 1693l-1 and that the district court erred
in dismissing that claim.

                               III

    We next consider the district court’s denial of Brown’s
motion for leave to file a third amended complaint. We
review denial of leave to amend for an abuse of discretion.
Curry v. Yelp Inc., 875 F.3d 1219, 1224 (9th Cir. 2017).

    In March 2018, Brown sought leave to file a third
amended complaint reinstating her EFTA claims under both
section 1693i and section 1693l-1. She proposed to include
new paragraphs detailing Defendants’ direct marketing of
their prepaid cards in jails and prisons based on new
evidence obtained during discovery. In particular, Brown
obtained evidence that Defendants displayed “large, color
posters” in each facility “extoll[ing] the benefits” of the card
as a way for released inmates to access their funds
“immediately.”
14        BROWN V. STORED VALUE CARDS, INC.

    Requests for leave to amend should be granted with
“extreme liberality.” Moss v. U.S. Secret Serv., 572 F.3d
962, 972 (9th Cir. 2009) (quoting Owens v. Kaiser Found.
Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001)). When
considering whether to grant leave to amend, a district court
should consider several factors including undue delay, the
movant’s bad faith or dilatory motive, repeated failure to
cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party, and futility. Foman v.
Davis, 371 U.S. 178, 182 (1962). Of the Foman factors,
prejudice to the opposing party carries the most weight.
Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052
(9th Cir. 2003).

    The Foman factors weigh decidedly against denying
leave to amend. There is no indication that allowing the
amendment would prejudice Defendants, and Defendants do
not contend that they would be prejudiced. There is also no
indication of undue delay, bad faith, or dilatory motive by
Brown: she filed her motion for leave to amend just two
days after a deposition revealed new evidence of direct
marketing to released inmates. Likewise, Brown has not
repeatedly failed to cure deficiencies. Rather, Brown sought
leave to amend based on newly discovered evidence.

     Defendants’ central argument on appeal is that any
amendment would be futile because Brown’s EFTA claims
fail as a matter of law. This is incorrect. Brown’s proposed
third amended complaint alleging evidence of direct
marketing to released inmates rejoining the general public
plausibly states a claim for relief under section 1693l-1.

    Brown also states a claim for relief under section 1693i,
plausibly alleging that Defendants issued unsolicited,
validated prepaid cards. Defendants contend that section
1693i does not cover the card that Brown received because
          BROWN V. STORED VALUE CARDS, INC.                 15

that card did not provide access to a “consumer’s account,”
15 U.S.C. § 1693i, as the term “account” was defined by the
CFPB at the time, see id. § 1693a (noting that the CFPB has
the authority to define “account”). In support of this
argument, Defendants note that the regulation implementing
section 1693i, 12 C.F.R. § 1005.2, was amended recently to
state that “[t]he term [account] includes a prepaid account.”
12 C.F.R. § 1005.2(b)(3). Although the change announced
that prepaid cards of the kind that Brown received fall within
section 1693i’s coverage, the former regulation did not state
otherwise. See 12 C.F.R. § 1005.2 (2014). The question is
a statutory interpretation issue for the court.

    The text of section 1693i in no way indicates that a
“consumer[] account” cannot encompass the sort of prepaid
account that Brown received access to through her Numi
card; if it did, the subsequent amendment to section 1005.2
would be invalid. Both then and now, section 1005.2
defined “account” as “a demand deposit (checking), savings,
or other consumer asset account . . . held directly or
indirectly by a financial institution and established primarily
for personal, family, or household purposes.” What Brown
received was an account “held directly or indirectly by a
financial institution”—through Mastercard—that she could
use for her own “personal, family, or household purposes.”

    We acknowledge that Brown sought leave to amend long
after she filed her original complaint and after two previous
amendments. But the Federal Rules call for liberal
amendment of pleadings before trial. Fed. R. Civ. P.
15(a)(2) (“The court should freely give leave [to amend]
when justice so requires.”). And a district court’s denial of
leave to amend without explanation is subject to reversal:
“Such a judgment is ‘not an exercise of discretion; it is
merely abuse of that discretion and inconsistent with the
16        BROWN V. STORED VALUE CARDS, INC.

spirit of the Federal Rules.’” Eminence Capital, LLC,
316 F.3d at 1052 (quoting Foman, 371 U.S. at 182).

    A liberal approach to amendment seems particularly
appropriate where other persons throughout the nation could
benefit from a resolution of novel issues that also apply to
them, especially when there is a vast mismatch of resources
between released inmates and well-funded national
companies and the amendment does not prejudice
defendants. As the use of Numi’s debit release cards
increases, so has the litigation challenging the card fees. See
Humphrey v. Stored Value Cards, 355 F. Supp. 3d 638 (N.D.
Ohio 2019); Regan v. Stored Value Cards, Inc., 85 F. Supp.
3d 1357 (N.D. Ga. 2015). The parties in this case and others
would benefit from a decision by the district court on the
merits as opposed to leaving the issue unresolved by denying
leave to amend.

    We hold that the district court abused its discretion when,
without written explanation or opinion, it denied Brown
leave to file a third amended complaint, and Defendants
suffer no significant prejudice from amendment.

                              IV

    We finally turn to the district court’s grant of summary
judgment to Defendants on Brown’s takings claim. As a
preliminary matter, Defendants did not contest that they
were state actors in their motion for summary judgment.
Defendants previously contested the state action issue in
their motions to dismiss, and the district court found that
Brown sufficiently pleaded that Defendants and the state
were joint participants in the challenged activity. For
purposes of this appeal, we assume without deciding that
Defendants are state actors.
           BROWN V. STORED VALUE CARDS, INC.                    17

    The district court held that there was no per se taking
because the release cards are the functional equivalent of
cash or a check. This analysis is misguided. The release
cards are not the functional equivalent of cash or a check
because the value of the cards quickly and permanently
deteriorates. We hold that Defendants were not entitled to
summary judgment on the per se takings claim. 6

    We review de novo a district court’s grant of summary
judgment. Branch Banking & Tr. Co. v. D.M.S.I., LLC,
871 F.3d 751, 759 (9th Cir. 2017). Summary judgment is
proper when, viewing the evidence in the light most
favorable to the non-moving party, “there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a).

    The district court mistakenly reasoned that the release
card is the functional equivalent of cash. According to the
district court, the release card is a “highly transferable,
usable liquid” form of currency, similar to cash. The district
court acknowledged certain transaction costs and practical
difficulties that come with the card, such as the fact that to
avoid paying a fee, a card recipient must go to a Mastercard-
affiliated bank to receive the cash value of the card from a
bank teller, but it concluded that such costs and difficulties
were de minimis.

    There is at least one crucial difference between the
release card and cash: the ticking clock. From the moment
Brown received her release card, she had only five days to
either spend the money or retrieve the card’s cash value

    6
      Because we conclude that the district court erred in granting
summary judgment to Defendants on Brown’s per se takings theory, we
do not address her regulatory takings theory.
18           BROWN V. STORED VALUE CARDS, INC.

before being charged a $5.95 monthly service fee. Cash does
not similarly deteriorate in value in five days. If Brown put
$30.97 in cash in her wallet and did not spend it, then she
would still have $30.97 in cash after six months’ time. By
contrast, if Brown did not spend the $30.97 on the release
card, then the card would have no value six months later
because of the monthly service fees. Similarly, a check does
not deteriorate in value if it is not cashed within such a very
short time. And although a particular check may not be
negotiable after several months, see U.C.C. § 4-404, the debt
meant to be paid is not cancelled, and the maker of the check
still owes the full amount. Because the release card
deteriorates in value quickly and permanently, the district
court was incorrect to conclude that the release card is the
functional equivalent of cash or of a check.

   The district court erred in granting summary judgment to
Defendants on Brown’s takings claim. 7

    The next step in a fees-for-services takings analysis is to
determine whether the fees are a “fair approximation of the
cost of benefits supplied.” United States v. Sperry Corp.,
493 U.S. 52, 60 (1989) (quoting Massachusetts v. United
States, 435 U.S. 444, 463 n.19 (1978)). The district court
explicitly declined to rule on the reasonableness of the fees.
We decline to opine at length upon an issue not decided
below, see Foti v. City of Menlo Park, 146 F.3d 629, 638
(9th Cir. 1998). We note that the extent to which the fees

     7
      The district court also erred in granting summary judgment to
Defendants on Brown’s Oregon state law claims for conversion and
unjust enrichment. The district court based its ruling on its analysis that
the release cards were the functional equivalent of cash. Having
explained why this analysis was incorrect, see supra, we vacate that
ruling and remand for the district court to evaluate Brown’s state law
claims in the first instance.
            BROWN V. STORED VALUE CARDS, INC.                        19

were avoidable might be a factor for the district court to
consider in the next step of the takings analysis. 8 We reverse
and remand so that the district court may consider the
reasonableness of the fees in the first instance.

                                   V

     There can be little doubt that Multnomah County’s
release card program with Numi has changed the simple
government function of returning confiscated money to a
released inmate into a venture in which the released inmate’s
money can be eroded or lost by the charge of profit-oriented
fees. Numi is entitled to fair compensation for its services,
but that does not mean that it should be able without
restriction to provide cards to released inmates who have not
asked for them and who are likely to end up with less money
than was taken from them. Similarly, the government of
Multnomah County should not so easily be able to shift the
burden of securing and returning released inmates’ funds to
the released inmates themselves, many of whom, like
Brown, are never charged with a crime.

     We hold that (1) Brown’s section 1693l-1 claim should
not have been dismissed for failure to state a claim; (2) the
district court abused its discretion when it denied Brown
leave to file a third amended complaint; (3) summary
judgment was not proper on Brown’s takings claim; and (4)
summary judgment was not proper on Brown’s state law




    8
      As this issue is not pertinent to our holding, we do not decide at
this point whether the district court was correct in determining that the
fees were voluntarily incurred by Brown.
20       BROWN V. STORED VALUE CARDS, INC.

claims. We reverse and remand for further proceedings not
inconsistent with this opinion.

     REVERSED AND REMANDED.
