-
Plaintiffs attorneys suing banks over the alleged manipulation of overdraft fees have won some impressive victories in court, but gotten far less positive attention out of court. Now a former colleague is objecting to the class action attorneys’ settlement with Bank of America.
October 3 -
Banks have long argued that processing debit card transactions by starting with the largest dollar balances and working their way to the smallest benefited customers. Here's an alternate explanation of what might have motivated them: "Multiple Millions $$$$$$$$$$$$$$$$$$$$."
September 26 -
Now that Bank of America has bought itself out of a massive class action over the sorting of overdraft fees, its fellow banks need to decide if they hold an advantage that B of A did not.
May 24
A flood of overdraft cases has streamed into the Miami courtroom of U.S. District Judge Lawrence King over the past two years, but a panel of federal judges may have turned off the spigot last Friday.
The U.S. Judicial Panel on Multidistrict Litigation appears to have made the move for logistical reasons. For the bankers and opposing plaintiffs attorneys yet to be dragged into King's courtroom, however, it could inadvertently prove to be a financial boon. For the bankers, the upside of staying out of U.S. District Court for the Southern District of Florida would come from dodging a fight with a well-funded team of plaintiffs that has won a string of major victories there. For the opposing attorneys, avoiding King's courtroom would mean not having to turn over control of their cases — and of any resulting spoils — to the Miami plaintiffs' firms.
The litigation focuses on whether banks large and small inappropriately manipulated the order in which they processed overdrafts to maximize their revenues and the penalties paid by retail customers. With more than 30 banks facing related charges of wrongdoing in the massive Florida class action, the judicial panel wrote that adding more banks could "significantly hinder the resolution of the already centralized actions." Cases already transferred to Miami will stay there.
Specifically, the judicial panel vacated an order that would have transferred an Ohio overdraft case to Miami and instead left it in its original jurisdiction. The judicial panel's move could affect a number of unconsolidated overdraft cases around the country. The most immediate beneficiaries may prove to be Whitney Bank and Trust and Republic Bank & Trust Company, whose cases were set to appear before the panel on December 1.
"The banks wanted the ability to handle these things on a smaller class-by-class basis nationwide," said D. Jeffrey Rengel, a Sandusky, Ohio, plaintiff's attorney whose case, Creative Home Accents LLC v. Fifth Third Bancorp, is now likely to remain in the Northern District of Ohio. "This is one of the situations where we were in agreement with the bank."
Attorneys for the plaintiffs' executive committee in the Miami litigation have previously sought to win control of unconsolidated class actions, including the Creative Home Accents case, Rengel said. A representative of the lawyers' committee did not comment on the judicial panel's decision.
In cases over which they do have control, the Miami plaintiffs' attorneys have managed to block attempts to throw out the case and belated efforts by major banks to force the disputes into the low-stakes world of mandatory arbitration. Bank of America Corp. has already agreed to settle its case for $400 million, pending court approval.
Attorneys following the overdraft litigation said that the panel's decision was understandable, given the scope of the existing litigation.
"Judge King has done a very effective job, but things have slowed down as more and more cases have been sent to him. It just reached the saturation point," said Alan Kaplinsky, whose firm, Ballard Spahr, represents banks in overdraft cases.
