Clemmer v. Key Bank Nat. Ass'n

• Decision Date: 22 August 2008
• Docket Number: No. 07-3936.,07-3936.
• Citation: 539 F.3d 349
• Parties: Michael CLEMMER, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. KEY BANK NATIONAL ASSOCIATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

539 F.3d 349

Michael CLEMMER, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. KEY BANK NATIONAL ASSOCIATION, Defendant-Appellee.

No. 07-3936.

United States Court of Appeals, Sixth Circuit.

Argued: April 22, 2008.

Decided and Filed: August 22, 2008.

ARGUED: Robert K. O'Reilly, Ademi & O'Reilly, Cudahy, Wisconsin, for Appellant. Michael N. Ungar, Ulmer & Berne, Cleveland, Ohio, for Appellee. ON BRIEF: Robert K. O'Reilly, David M. Victor, Ademi & O'Reilly, Cudahy, Wisconsin, for Appellant. Michael N. Ungar, Ulmer & Berne, Cleveland, Ohio, for Appellee.

Before: GILMAN, ROGERS, and McKEAGUE, Circuit Judges.

McKEAGUE, J., delivered the opinion of the court, in which GILMAN, J., joined. ROGERS, J. (p. 356), delivered a separate concurring opinion.

OPINION

McKEAGUE, Circuit Judge.

As the district court succinctly summarized, this case turns on whether the Electronic Funds Transfer Act (the "EFTA") permits an automated teller machine's on-screen notice to read that a fee "may" be charged when a fee "will" be charged. Clemmer v. Key Bank, N.A., No. 06-2654, 2007 WL 5303533, at *2 (N.D.Ohio June 20, 2007). Michael Clemmer, a consumer of ATM services, argues that the notice must explicitly state that a consumer "is" or "will be" (or some variant thereof) charged a fee. The district court, however, concluded that use of the less definite "may" coupled with the more definite requirement that a user press "yes" to accept the fee to continue the transaction put the user on sufficient notice that a fee would be incurred. We agree, and affirm summary judgment in favor of Key Bank National Association ("Key Bank").

I

A. The Electronic Funds Transfer Act

The federal government enacted the EFTA as part of the comprehensive Consumer Credit Protection Act (the "CCPA"), Pub.L. No. 95-630 § 2001, 92 Stat. 3641 (1978) (codified as amended at 15 U.S.C. § 1601 et seq.). The EFTA protects individual consumer rights by "provid[ing] a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund transfer systems." 15 U.S.C. § 1693(b). One of the EFTA's provisions requires that operators of automated teller machines ("ATMs") provide notice of fees charged to consumers. Specifically, 15 U.S.C. § 1693b(d) states in relevant part:

(3) Fee disclosures at automated teller machines

(A) In general

The regulations prescribed under paragraph (1) shall require any automated teller machine operator who imposes a fee on any consumer for providing host transfer services to such consumer to provide notice in accordance with subparagraph (B) to the consumer (at the time the service is provided) of—

(i) the fact that a fee is imposed by such operator for providing the service; and

(ii) the amount of any such fee.

(B) Notice requirements

(i) On the machine

The notice required under clause (i) of subparagraph (A) with respect to any fee described in such subparagraph shall be posted in a prominent and conspicuous location on or at the automated teller machine at which the electronic fund transfer is initiated by the consumer.

(ii) On the screen

The notice required under clauses (i) and (ii) of subparagraph (A) with respect to any fee described in such subparagraph shall appear on the screen of the automated teller machine, or on a paper notice issued from such machine, after the transaction is initiated and before the consumer is irrevocably committed to completing the transaction. . . .

C) Prohibition on fees not properly disclosed and explicitly assumed by consumer

No fee may be imposed by any automated teller machine operator in connection with any electronic fund transfer initiated by a consumer for which a notice is required under subparagraph (A), unless—

(i) the consumer receives such notice in accordance with subparagraph (B); and

(ii) the consumer elects to continue in the manner necessary to effect the transaction after receiving such notice.

The EFTA defines an "automated teller machine operator" as a person who operates an ATM and "is not the financial institution that holds the account" of the consumer using that ATM. 15 U.S.C. § 1693b(d)(3)(D)(i).

The EFTA grants to the Board of Governors of the Federal Reserve System (the "Board") the authority and responsibility to "prescribe regulations to carry out the purposes" of the act. Id. § 1693b(a). The Board has implemented various administrative regulations codified at 12 C.F.R § 205 ("Regulation E"). On the issue of ATM notice, Regulation E provides:

(b) General. An automated teller machine operator that imposes a fee on a consumer for initiating an electronic fund transfer or a balance inquiry shall:

(1) Provide notice that a fee will be imposed for providing electronic fund transfer services or a balance inquiry; and

(2) Disclose the amount of the fee.

12 C.F.R. § 205.16. The regulation has different requirements for on-machine and on-screen notices. The on-machine notice must alert a potential consumer that:

(i) A fee will be imposed for providing electronic fund transfer services or for a balance inquiry; or

(ii) A fee may be imposed for providing electronic fund transfer services or for a balance inquiry, but the notice in this paragraph (c)(1)(ii) may be substituted for the notice in paragraph (c)(1)(i) only if there are circumstances under which a fee will not be imposed for such services. . . .

Id. § 205.16(c)(1). The on-screen notice must notify the consumer that a fee will be imposed and the amount of the fee before the consumer commits to paying the fee. Id. § 205.16(c)(2).

B. Factual Background

Key Bank is a federally chartered bank that conducts business in the United States. As a part of its banking services, Key Bank operates ATMs, which permit both Key Bank customers and non-customers to conduct transactions. While Key Bank customers can use the bank's ATMs free of service fees, the bank usually assesses fees on non-customers who use the ATMs. After a non-customer places the card into a Key Bank ATM and enters the personal identification number, the following message appears on the screen:

This terminal may charge a fee of $2.00 for a cash withdrawal. This charge is in addition to any fees that may be assessed by your financial institution.

Do you wish to continue this transaction?

If yes press to accept fee

If no press to decline fee

However, Key Bank does not actually charge a fee to all non-customers who receive this message and accept the fee. For example, Key Bank does not charge a fee to certain members of the military, customers of affiliated banks, non-customers conducting international transactions, and non-customers using the Key Bank ATM at the Cleveland Clinic. As Charles M. Scavelli, Key Bank's ATM channel manager, testified during his deposition, only after a non-customer accepts the fee does the Key Bank ATM ascertain whether that person should actually be charged a fee. Scavelli Dep. at 14, 65.

Michael Clemmer is not a Key Bank customer. On November 4, 2005, Clemmer withdrew $20 from a Key Bank ATM in Rocky River, Ohio. When prompted by the on-screen message, Clemmer selected "yes," received his $20, and Key Bank charged him a fee of $2.

Clemmer sued Key Bank in the Northern District of Ohio on behalf of himself and all others similarly situated. He asserted two claims: Count I, failure to provide sufficient on-screen notice, in violation of 15 U.S.C. § 1693b(d)(3) and 12 C.F.R. § 205.16; and Count II, unjust enrichment, in violation of Ohio common law. After permitting limited discovery, the district court granted Key Bank's motion for summary judgment on both counts and denied Clemmer's motion for partial summary judgment. Clemmer, 2007 WL 5303533, at *5-6.

This appeal followed.

II

We review de novo the district court's grant of summary judgment. Bender v. Hecht's Dep't Stores, 455 F.3d 612, 619 (6th Cir.2006), cert. denied, ___ U.S. ___, 127 S.Ct. 2100, 167 L.Ed.2d 814 (2007). Summary judgment is appropriate when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). To survive summary judgment, the non-movant must provide evidence beyond the pleadings "set[ting] out specific facts showing a genuine issue for trial." Fed.R.Civ.P. 56(e)(2).

In addition to the EFTA, the CCPA includes several other consumer-protection statutes, including the Truth in Lending Act (the "TILA"), 15 U.S.C. §§ 1601-1667f, and the Fair Credit Reporting Act, 15 U.S.C. §§ 1681-1681x. With the common purpose of each statute to protect consumers with respect to financial credit, courts draw upon case law interpreting one statute for persuasive authority for another statute. See, e.g., Johnson v. W. Suburban Bank, 225 F.3d 366, 379 (3d Cir.2000) (finding class-action provisions in the TILA and the EFTA to have the same meaning because the court did "not believe that Congress would have different intended meanings for identical statutory language contained in similar statutes"). The EFTA, like the TILA and other CCPA provisions, is a remedial statute accorded "a broad, liberal construction in favor of the consumer." Begala v. PNC Bank, Ohio, Nat'l Ass'n, 163 F.3d 948, 950 (6th Cir.1998) (citations omitted). "Unless demonstrably irrational, Federal Reserve Board staff opinions construing" the EFTA or Regulation E "should be dispositive." Id.

Clemmer's primary argument on appeal is straightforward: the EFTA and Regulation E both require a definite statement on the screen to the effect that a fee "is" or "will be" charged if Key Bank in fact charges a fee to a non-customer using its ATM. Beyond the language of the statute and regulation, 15 U.S.C. § 1693b(d)(3)(A)(i) ("is"); 12 C.F.R. § 205.16(b)(1) ("will be"), Clemmer finds additional support from an inference-by-omission: because Regulation...