Law360, Miami (June 8, 2015, 8:38 PM ET) — Plaintiffs won class certification
Monday in five cases brought against
Wells Fargo Bank NA that have been included in far-reaching multidistrict litigation alleging
deceptive practices regarding bank overdraft fees.
U.S. District James Lawrence King granted class certification after holding
two days of class certification oral arguments in Miami last month and
reviewing what he suggested may have been the most extensive volume of
evidentiary submissions and briefs in the history of the Southern District
His decision came down in two orders, one regarding
two putative class actions originally filed in Florida and California, respectively, against Wachovia
Bank NA, which was acquired and absorbed by Wells Fargo in 2009, and the
three cases originally filed by Wells Fargo customers in New Mexico, Oregon and Washington.
As part of his ruling, Judge King accepted the plaintiffs’ proposal
for numerous subclasses to cover varying state jurisdictions, saying that
“each and every subclass possesses a materially identical legal
claim and is headed up by bank customers who share that claim and have
ample incentive to prosecute it.”
“The court’s plan appropriately protects the interests of all
class members to the extent feasible, given these named plaintiffs and
state laws, while also affording Wells Fargo the ability to defend itself
in every instance,” he added, noting that federal law covering class
actions calls for nothing more and that decisions on “what will
be tried where and when will be left for another day.”
These cases are among a collection of lawsuits that popped up around the
country in the late 2000s, claiming banks deceptively deducted money from
accounts starting with the highest-valued transactions — despite
contrary presentations to customers — as part of a tactic designed
to maximize overdraft fees.
In the case of Wells Fargo, the bank’s marketing materials said that
debit card and ATM transactions “generally reduce the available
balance in your account immediately” and that “purchase amounts
are automatically deducted from your primary checking account,”
which the plaintiffs claimed were misrepresentations on account of the
Some banks were able to compel arbitration based on provisions in their
customer agreements, but those that were not — including
JPMorgan Chase Bank NA,
Bank of America NA,
TD Bank NA and Capital One Bank NA —
have settled for tens or hundreds of millions of dollars.
The cases came before Judge King on motions for class certification following
a two-year pause while Wells Fargo appealed his ruling that its waiver
of its right to compel arbitration against the named plaintiffs carries
over to the unnamed plaintiffs. The Eleventh Circuit
vacated that finding on jurisdictional grounds because the putative class has not yet been
Counsel for Wells Fargo had argued that the Eleventh Circuit ruling made
clear that arbitration clauses in all its customers’ account contracts
must be considered by the court regarding numerosity requirements for
class certification, but Judge King sided Monday with the plaintiffs’
position that the issue could only be raised once the potential class
members had been certified into the case and entered the court’s
Judge King also noted that the arbitration clauses in Wells Fargo’s
account agreement is permissive, not mandatory, and said, “Therefore,
Wells Fargo’s arbitration-based argument is premature given the
permissive nature of these agreements and the stage of this litigation.”
His orders said that the proposed classes were well defined, noting that
members would be ascertainable through the bank’s own records.
“Plaintiffs and the members of the class are all challenging the
same overdraft policies of Wells Fargo and seeking to recover the additional
overdraft fees they incurred as a result of Wells Fargo’s re-sequencing
of their transactions,” he said.
Judge King found the plaintiffs’ proposed baseline of low-to-high
transaction sequencing to be clear and fair comparison for the high-to-low
policy that is the focus of the allegations, noting it was the method
previously employed by the bank and provided the greatest contrast. He
also rejected Wells Fargo’s arguments in numerous instances that
individual plaintiffs’ differing preferences of baseline sequencing
should cause the class to fail and also noted that the plaintiffs’
expert will be able to determine damages for any of the comparative sequences
“We are pleased and look forward to moving forward with this case
as we have done with other MDL overdraft cases,” plaintiffs’
counsel Bruce S. Rogow told Law360. “Recent articles have pointed
out the continuing high cost to consumers of banks’ use of overdraft
charges, and every success in these cases is a step toward a fairer playing
field for bank customers.”
A representative for Wells Fargo declined comment.
The plaintiffs are represented by
Podhurst Orseck PA, Bruce S. Rogow PA,
Grossman Roth PA,
Lieff Cabraser Heimann & Bernstein LLP,
Baron & Budd PC, Webb Klase & Lemond LLC, Golomb & Honik PC and Trief & Olk,
Wells Fargo is represented by Sonya D. Winner of
Covington & Burling LLP and Barry R. Davidson and Jamie Zysk Isani of
Hunton & Williams LLP.
The case is In re: Checking Account Overdraft Litigation, case number
1:09-md-02036, in the U.S. District Court for the Southern District of Florida.
The underlying cases argued Tuesday are Martinez v. Wells Fargo Bank NA,
case number 1:09-cv-23834, in the U.S. District Court for the Southern
District of Florida, Martinez v. Wells Fargo Bank NA, case number 6:09-cv-01072,
in the U.S. District Court for the District of New Mexico, Gutierrez v.
Wells Fargo Bank NA, case number 7:09-cv-23685, in the U.S. District Court
for the Southern District of Florida, Gutierrez v. Wells Fargo Bank NA,
case number 3:09-cv-01239, in the U.S. District Court for the District
of Oregon, Zankich et al. v. Wells Fargo Bank NA, case number 1:09-cv-23186,
in the U.S. District Court for the Southern District of Florida, and Zankich
et al. v. Wells Fargo Bank NA, case number 2:08-cv-01476, in the U.S.
District Court for the Western District of Washington.