First Tranche ActionsGarcia v. Wachovia Bank, N.A. (In re Checking Account Overdraft Litig.)

• Decision Date: 15 December 2011
• Docket Number: MDL No. 2036.Case No. 09–MD–02036–JLK.
• Citation: 829 F.Supp.2d 1316
• Parties: In re: CHECKING ACCOUNT OVERDRAFT LITIGATION.This Document Relates to First Tranche ActionsGarcia, et al. v. Wachovia Bank, N.A. and Wells Fargo Bank N.A., S.D. Fla. Case No. 1:08–ck–22463–JLK.Spears–Haymond v. Wachovia Bank N.A. and Wells Fargo Bank, N.A., S.D. Fla. Case No. 1:09–cv–21680–JLK, N.D. Cal. Case No. 08–4610.Dolores Gutierrez v. Wells Fargo Bank N.A., S.D. Fla. Case No. 1:09–cv–23685–JLK D. Or., Case No. 3:09–cv–01239–ST.Martinez v. Wells Fargo Bank N.A., S.D. Fla. Case No. 1:09–cv–23834, D.N.M. Case No. 6:09–cv–01072–GBW–ACT.Zankich, et al. v. Wells Fargo Bank NA., S.D. Fla. Case No. 1:09–cv–23186–JLK, W.D. Wash. Case No. C–08–1476–RSM.
• Court: U.S. District Court — Southern District of Florida

829 F.Supp.2d 1316

In re: CHECKING ACCOUNT OVERDRAFT LITIGATION.This Document Relates to First Tranche ActionsGarcia, et al.

v.Wachovia Bank, N.A. and Wells Fargo Bank N.A., S.D. Fla. Case No. 1:08–ck–22463–JLK.Spears–Haymond

v.Wachovia Bank N.A. and Wells Fargo Bank, N.A., S.D. Fla. Case No. 1:09–cv–21680–JLK, N.D. Cal. Case No. 08–4610.Dolores Gutierrez

v.Wells Fargo Bank N.A., S.D. Fla. Case No. 1:09–cv–23685–JLK D. Or., Case No. 3:09–cv–01239–ST.Martinez

v.Wells Fargo Bank N.A., S.D. Fla. Case No. 1:09–cv–23834, D.N.M. Case No. 6:09–cv–01072–GBW–ACT.Zankich, et al.

v.Wells Fargo Bank NA., S.D. Fla. Case No. 1:09–cv–23186–JLK, W.D. Wash. Case No. C–08–1476–RSM.

MDL No. 2036.Case No. 09–MD–02036–JLK.

United States District Court, S.D. Florida.

Dec. 15, 2011.

Aaron S. Podhurst, Robert C. Josefsberg, Steven C. Marks, Peter Prieto, Stephen F. Rosenthal, John Gravante III, Podhurst Orseck, P.A., Miami, FL, for Plaintiffs.

Robert Cecil Gilbert, Miami, FL, for Checking Account Overdraft Litigation.

Jeremy William Alters, Alters, Boldt, Brown, Rash & Culmo, Kimberly Lynn Boldt, Alters, Boldt, Brown, Rash & Culmo, P.A., Barry Rodney Davidson, Hunton & Williams, William Charles Hearon, Miami, FL, for Plaintiff Melanie L. Garcia.Bruce S. Rogow, Bruce S. Rogow PA, Fort Lauderdale, FL, Burton H. Finkelstein, Eugene J. Benick, Tracy D. Rezvani, Finkelstein Thompson LLP, Washington, DC, Rosemary M. Rivas, Finkelstein Thompson LLP, San Francisco, CA, Jeremy William Alters, Alters, Boldt, Brown, Rash & Culmo, Barry Rodney Davidson, Hunton & Williams, William Charles Hearon, Miami, FL, for Plaintiff Ralph Tornes, April Speers, Estella A. Lopez, John C. Stone, Charles Reed, Jr., Linda McDaniel, Andrea Luquetta.Barry R. Himmelstein, Jordan Elias, Michael W. Sobol, Mikaela Bernstein, Roger Norton Heller, Lieff Cabraser Heimann & Bernstein, San Francisco, CA, Jae Kook Kim, Richard D. McCune, Jr., McCune Wright LLP, Redlands, CA, Nicholas A. Carlin, R. Scott Erlewine, Phillips & Erlewine & Given LLP, San Francisco, CA, for Plaintiff Celia Spears–Haymond, Mike Amrhein, Steve Yourke, Kristine Richards, Willyum Waters, Frank Smith, Faith Gordon, Cynthia Larsen.Edward Adam Webb, G. Franklin Lemond, Jr., Webb Law Group LLC, Atlanta, GA, for Plaintiff William W. Powell, Jr., Jeffrey Buffington, Jeanette Buffington, Lawrence D. Hough, Pamela J. Hough.John Matthew Geyman, John Wentworth Phillips, Phillips Law Group PLLC, Seattle, WA, Ari Y. Brown, Hagens Berman SobolShapiro LLP, Seattle, WA, for Plaintiff Alex Zankich, William Rucker.Denyse Clancy, Baron Budd LLP, Dallas, TX, for Plaintiff Vada Mitchell, Daisy Webb.Stephen P. Willison, Willison & Hellman PC, Grand Rapids, MI, for Plaintiff Michelle Gulley.Bonny E. Sweeney, Lerach Coughlin Stoia Geller Rudman & Robbins, San Diego, CA, for Plaintiff Donald Kimenker.James Jason Hill, Jeffrey James Geraci, Cohelan Khoury & Singer, San Diego, CA, for Plaintiff John D. Kirkland.Joshua L. Ross, Stoll Stoll Berne Lokting & Shlachter, Portland, OR, for Plaintiff Dolores Gutierrez.Chaim S. Setareh, Law Office of Shaun Setareh APC, Beverly Hills, CA, Marcus J. Bradley, Marlin & Saltzman, Agoura Hills, CA, for Plaintiff Sandra Quarles.Genessa A. Stout, Hagens Berman SobolShapiro LLP, Seattle, WA, for Plaintiff Marc Martinez.Miriam Zakarin, TEVA North America, North Wales, PA, Norah Hart, Treuhaft & Zakarin, LLP, New York, NY, Plaintiff Angela Walsh–Duffy, Brett Freeman.Alan M. Mansfield, The Consumer Law Group, San Diego, CA, Alan M. Mansfield, The Consumer Law Group, San Diego, CA, Howard Weil Rubinstein Aspen, CO, Marian S. Rosen, Marian S Rosen & Associates, Houston, TX, for Plaintiff Katherine Anne Williams.

Alisha A. Martin, James R. Patterson, Harrison Patterson & O'Connor, San Diego, CA, for Plaintiff Josh Naehu–Reyes.David M. Given, Nicholas A. Carlin, Phillips & Erlewine & Given LLP, San Francisco, CA, for Plaintiff Maxine Aarons Given.Lisa M. Simonetti, Stroock & Stroock & Lavan, Los Angeles, CA, for Defendant Citibank FSB.Alexandria Rose Kachadoorian, Los Angeles, CA, for Defendants Citibank FSB, Citibank Inc., Citibank (West), FSB, Citibank, N.A.Barbara J. Dawson, Snell & Wilmer, Phoenix, AZ, Brian J. Meenaghan, Ronald E. Beard, Rudy Albert Englund, Tara N. Gillespie, Lane Powell PC, Seattle, WA, Bryanne J. Schmitt, David M. Jolley, Margaret G. May, Sonya Diane Winner, Steven Duane Sassaman, Covington & Burling LLP, San Francisco, CA, Fox Rothschild LLP, West Palm Beach, FL, Emily Johnson Henn, Covington & Burling, Washington, DC, Jay Earl Smith, Smith Larsen & Wixom, Las Vegas, NV, Robert Matthew Kort, Snell & Wilmer LLP, Phoenix, AZ, Tracy L. Ashmore, Holme Roberts & Owen LLP, Denver, CO, for Defendant Wells Fargo Bank, N.A., Wells Fargo & Company.Aaron Schur, Sharon D. Mayo, Arnold & Porter LLP, San Francisco, CA, Barbara Viniegra, James Randolph Liebler, Liebler, Gonzalez & Portuondo, PA, Miami, FL, Christopher Scott Tarbell, Laurence J. Hutt, Arnold & Porter LLP, Los Angeles, CA, Sonya Diane Winner, Covington & Burling LLP, San Francisco, CA, for Defendant Bank of America, N.A., Bank of America Corporation, Bank of America, California.Ann Marie Mortimer, Hunton & Williams, Los Angeles, CA, Barry Rodney Davidson, James R. McGuire, Tracy Thomas Cottingham, III, for Defendant Wachovia Corporation, Wachovia Bank, N.A., Bank of America, N.A., Bank of America Corp.Lisa Simonetti, Sonya Diane Winner, Barry Rodney Davidson, Julia B. Strickland, Stroock & Stroock & Lavan, Los Angeles, CA, for Defendant Citibank Inc., Citibank (West), FSB, Citibank, N.A.A. Stephen Hut, Jr., Michelle Ognibene, Wilmer Cutler Pickering Hale & Dorr LLP, Washington, DC, Alan E. Schoenfeld, Wilmer Cutler Pickering Hale & Dorr LLP, New York, NY, Andrew Benjamin Grossman, Matthew D. Benedetto, Wilmer Cutler Pickering Hale & Dorr LLP, Los Angeles, CA, Christopher R. Lipsett, David Sapir Lesser, Wilmer Cutler Pickering Hale & Dorr, New York, NY, for Defendant J.P. Morgan Chase Bank, N.A., J.P. Morgan Chase & Co.Rita Lin, Morrison & Foerster, San Francisco, CA, for Defendant U.S. Bank N.A., U.S. Bank Corp.C. Marie Eckert, Cody J. Elliott, Miller Nash LLP, Portland, OR, Morrison & Foerster, Los Angeles, CA, Sonya Winner, James R. McGuire, Barry Rodney Davidson, for Defendant U.S. Bank, NA.Constance Melissa Ewing, David B. Darden, Eric Jon Taylor, Nancy H. Baughan, William J. Holley, II, Parker Hudson Rainer & Dobbs, Atlanta, GA, for Defendant Branch Banking and Trust Company.Jan T. Chilton, John B. Sullivan, Mark Douglas Lonergan, Peter H. Bales, Severson & Werson, San Francisco, CA, for Defendant Union Bank, N.A. doing business as Union Bank of California, Unionbancal Corporation.Alan S. Kaplinsky, Martin C. Bryce, Jr., Ballard Spahr Andrews & Ingersoll, Philadelphia, PA, Bruce W. Neckers, John M. Lichtenberg, Paul A. McCarthy, Rhoades McKee PC, Grand Rapids, MI, for Defendant Huntington Bancshares, Inc., Huntington National Bank.Lindsey Elisa Bowen, Lynette Eaddy Smith, William N. Withrow, Jr., Troutman Sanders LLP, Atlanta, GA, for Defendant SunTrust Banks, Inc.Mark D. Flanagan, Wilmer Cutler Pickering Hale & Dorr LLP, Palo Alto, CA, for Defendant J.P. Morgan Chase Bank.

ORDER DENYING MOTION TO DISMISS OR, IN THE ALTERNATIVE, STAY IN FAVOR OF ARBITRATION

JAMES LAWRENCE KING, District Judge.

THIS CAUSE comes before the Court upon Defendants Wells Fargo Bank, N.A. (“Wells Fargo”) and Wachovia Bank, N.A.'s (“Wachovia”) Motion to Dismiss or, in the Alternative, to Stay in Favor of Arbitration (DE # 1384), filed April 29, 2011. The Court is fully briefed in the matter and proceeds having had the benefit of oral argument.¹ For the reasons stated below, the Court denies the motion as untimely and finds that Defendants waived their right to demand arbitration in these matters.

I. RELEVANT FACTUAL BACKGROUND

Wells Fargo and Wachovia adopted arbitration clauses which are included in their customer agreements. Each of the provisions is permissive rather than mandatory, allowing either party to request arbitration. See Wells Fargo Account Agreement, p. 5 (“Either of us may submit a dispute to binding arbitration at any reasonable time notwithstanding that a lawsuit or other proceeding has been commenced”) (DE # 1972–1); Wachovia Deposit Agreement, p. 12 (“if either you or we request any dispute or claim concerning your account or your relationship to us will be decided by binding arbitration”) (DE # 1972–2).

Pursuant to such permissive arbitration clauses, if one party files to litigate in court and a second party desires to arbitrate, the second party must promptly demand to arbitrate. The earliest cases against these Defendants that were transferred to this MDL were filed in October 2008 for Wells Fargo and September 2008 for Wachovia. See, e.g., Original Complaint in Zankich v. Wells Fargo Bank, N.A., Case No. 08–cv–1476–RSM (W.D.Wa.); Original Complaint in Garcia v. Wachovia Bank, N.A., Case No. 08–cv–22468–JLK (S.D.Fla.). Defendant banks have conceded that they did not request arbitration as to any of the Plaintiffs until April 27, 2011.

II. RELEVANT PROCEDURAL BACKGROUND

This MDL was created in June 2009, with the active support of Wachovia and ultimately Wells Fargo as well. See In re Checking Account Overdraft Litig., 626 F.Supp.2d 1333, 1334 (J.P.M.L.2009) (“Wachovia supports centralization of all actions in the Southern District of Florida”); Wells Fargo Response to Motion to Vacate, pp. 2–3 (advocating all Wells Fargo actions should be centralized) (JPML DE # 40). Defendant banks argued that having an MDL court handle these matters would “promote judicial efficiency and prevent the possibility of conflicting rulings.” E.g., Wachovia Response to Motion to Transfer, p. 5 (JPML DE # 7).

At a status conference before this Court in October 2009, counsel for Wachovia and Wells Fargo began expressing concerns about litigating multiple cases in this MDL proceeding. See Oct. 22, 2009 Status Conf. Transcript, ...