Schertzer v. Bank of Am., N.A., Case No.: 19cv264 JM(MSB)

• Decision Date: 28 September 2020
• Docket Number: Case No.: 19cv264 JM(MSB)
• Citation: 489 F.Supp.3d 1061
• Court: U.S. District Court — Southern District of California
• Parties: Kristen SCHERTZER, et al., on behalf of themselves and all others similarly situated, Plaintiffs, v. BANK OF AMERICA, N.A., et al., Defendants.

489 F.Supp.3d 1061

Kristen SCHERTZER, et al., on behalf of themselves and all others similarly situated, Plaintiffs,
v.
BANK OF AMERICA, N.A., et al., Defendants.

Case No.: 19cv264 JM(MSB)

United States District Court, S.D. California.

Signed September 28, 2020

489 F.Supp.3d 1066

Jae Kook Kim, Todd D. Carpenter, Carlson Lynch, LLP, San Diego, CA, Jeffrey Douglas Kaliel, Sophia Goren Gold, Kaliel PLLC, Washington, DC, for Plaintiff Kristen Schertzer.

Jae Kook Kim, Todd D. Carpenter, Carlson Lynch, LLP, San Diego, CA, for Plaintiffs Meagan Hicks, Brittany Covell.

Amanda Leigh Groves, Winston & Strawn LLP, San Francisco, CA, Shawn Rieko Obi, Winston & Stawn LLP, Los Angeles, CA, for Defendant Bank of America, N.A.

David A. Vogel, Douglas P. Lobel, Cooley LLP, Reston, VA, Leo P. Norton, Michelle C. Doolin, Cooley Godward Kronish LLP, San Diego, CA, for Defendant Cardtronics, Inc.

Benjamin Taliaferro Morton, Holly L.K. Heffner, Jeffrey D. Cawdrey, Shelby Poteet, Yan Ren, Gordon Rees Scully Mansukhani, LLP, San Diego, CA, Kristen Sweaney McLeod, Edwards, CA, for Defendant FCTI, Inc.

Eileen M. Ahern, Willenken LLP, Los Angeles, CA, for Defendant Cash Depot LTD.

ORDER ON MOTIONS TO DISMISS

Jeffrey T. Miller, United States District Judge

I. INTRODUCTION

Plaintiffs Kristen Schertzer, Meagan Hicks and Brittany Covell have brought this putative class action case, on behalf of themselves and all others similarly situated, against Bank of America, N.A., Cardtronics Inc., FCTI, Inc., and Cash Depot Ltd. (collectively "Defendants") essentially claiming deceptive, misleading, and unwarranted practices have been employed in the charging and collecting of bank balance inquiry fees.

Presently before the court are four motions to dismiss filed pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Doc. Nos. 97, 98, 99, 100.) The motions have been fully briefed and the court finds them suitable for submission on the papers and without oral argument in accordance with Civil Local Rule 7.1(d)(1).

489 F.Supp.3d 1067

II. PROCEDURAL AND FACTUAL BACKGROUND

On February 5, 2019, Plaintiffs initiated this proposed (or putative) class action by filing suit. (Doc. No. 1.) On May 31, 2019, a second amended complaint ("SAC") was filed alleging original jurisdiction under the Class Action Fairness Act ("CAFA") of 2005 and, specifically under 28 U.S.C. § 1332(d)(2) and setting forth a total of thirteen claims against the defendants individually and collectively. (Doc. No. 56, "SAC".) On March 4, 2020, this court granted Defendants’ motions to dismiss with leave to amend. (Doc. No. 94.)

On March 24, 2020, the third amend complaint ("TAC") was filed, again claiming original jurisdiction under CAFA. (Doc. No. 96.) It alleges claims for: (1) violation of California's Unfair Competition Law ("UCL"), CAL. BUS. & PROF. CODE § 17200, et seq ; (2) breach of the covenant of good faith and fair dealing; and (3) unjust enrichment. (Id. at 34-43¹ .)

The allegations in the TAC can be divided into two categories. First, Plaintiffs assert that the independent Automatic Teller Machine ("ATM") operators Cardtronics, Inc. ("Cardtronics"), Cash Depot, Ltd. ("Cash Depot"), and FCTI, Inc., ("FCTI"), (collectively, the "ATM Defendants") deceptively, unlawfully and systematically maximize the number of out-of-network ("OON") ATM balance inquiries bank accountholders performed by placing misleading representations on the screens and on signs at ATMs they operate regarding the fees that would be charged for balance inquiries. (Id. ¶¶ 1, 3, 4, 15, 16, 18-20, 29, 30-44, 47-53, 55-67, 127-130, 138-143, 151-155.) Second, Plaintiffs allege Bank of America ("BofA") charged its customers unwarranted fees for OON ATM balance inquiries. (TAC at ¶ 2, 5, 6, 15, 16, 69-80, 159-167.)

Attached to the TAC are the Deposit Agreement and Disclosures (Doc. No. 96-2, Ex.1 "the Agreement") and the Personal Schedule of Fees (Doc. No. 96-3, Ex.2 "Fee Schedule"). No party disputes that these are the contract documents between BofA and the Plaintiffs. The electronic bank services fee provision of the Agreement provides:

ATM Fees When you use an ATM that is not prominently branded with the Bank of America name and logo, you may be charged a fee by the ATM operator or any network used and you may be charged a fee for a balance inquiry even if you do not complete a fund transfer. We may also charge you fees.

Other Fees For other fees that apply to electronic banking services, please review the Schedule of Fees for your account and each agreement or disclosure that we provide to you for the specific electronic banking service, including the separate agreement for Online and Mobile Banking services and the separate agreement for ATM and debit cards.

Id. at 35. The Fee Schedule that was in effect beginning May 18, 2018, allows for the following ATM fees:

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Fee Category	Fee Name/Description	Fee Amount	Other Important Information About This Fee
ATM Fees	Withdrawals, deposits, transfers, payments and balance inquiries at a Bank of America ATM	No ATM fee	• Deposits and payments may not be available at some ATMs. Transaction fees may apply to some accounts. See account descriptions in this schedule.
Bank of America ATM – an ATM that prominently displays the Bank of America name and logo on the ATM	Non-Bank of America ATM Fee for:	$2.50 each	• When you use a non-Bank of America ATM, you may also be charged a fee by the ATM operator or any network used and you may be charged a fee for a balance inquiry even if you do not complete a funds transfer.
Non-Bank of America ATM – an ATM that does not prominently display the Bank of America name and logo on the ATM	Withdrawals, transfers and balance inquiries at a non-Bank of America ATM in the U.S.	• The non-Bank of America ATM fees do not apply at some ATMs located outside the United States ...
• See the disclosure information that accompanied your card for other fees that may apply.
• Non-Bank of America ATM fees are in addition to other account fees that may apply to the transaction, such as a Withdrawal Limit Fee for savings.
• Preferred Rewards Platinum customers using a Bank of America Debit or ATM card are not charged the non-Bank of America ATM fee for one withdrawal, transfer and balance inquiry per statement cycle from a non-Bank of America ATM in the U.S., and receive a refund of the ATM operator fee for one withdrawal, transfer and balance inquiry per statement cycle from a non-Bank of America ATM in the U.S.
• Preferred Rewards Platinum Honors customers using a Bank of America Debit or ATM card are not charged the non-Bank of America ATM fee for withdrawals, transfers and balance inquiries from non-Bank of America ATMs in the U.S. and receive a refund of the ATM operator fee for withdrawals, transfers and balance inquiries from non-Bank of America ATMs in the U.S.

Fee Schedule at 10.

On June 1, 2018, Plaintiff Schertzer used her BofA ATM Payment Card at a Cardtronics ATM located at 645 Market St., San Diego, California, 92101, to withdraw $60, for which she was charged a total of $8.75 in fees – $3.75 cash withdrawal fee by Cardtronics, $2.50 OON fee by BofA for making a balance inquiry and $2.50 by BofA for making a cash withdrawal. (TAC at ¶¶ 81, 84.) Ms. Schertzer is only challenging the fee for the balance inquiry. (Id. at ¶ 84.) On May 29, 2018, Plaintiff Covell used her BofA ATM Debit Card at a FCTI ATM at a Seven Eleven (7-11) convenience store located at 592 Santa Fe Drive, Encinitas, California, to withdraw $20, for which she was charged a total of $10.50 in fees – $3.00 cash withdrawal fee by FCTI, $2.50 OON fee by BofA for making a

489 F.Supp.3d 1069

balance inquiry, $2.50 by BofA for making a cash withdrawal, and a second balance inquiry fee of $2.50 by BofA. (Id. at ¶¶ 88, 91.) Ms. Covell is only challenging the second "phantom" balance inquiry fee charged by BofA. (Id. at ¶ 91.) On June 2, 2018, Plaintiff Hicks, a BofA account holder, withdrew $20 from a Cash Depot ATM in Walmart located at 4840 Shawline St., San Diego, California, 92111, for which she was charged a total of $7.00 in fees – $2.50 cash withdrawal fee by Cash Depot, $2.50 fee by BofA for making a balance inquiry and $2.50 by BofA for making a cash withdrawal. (Id. at ¶¶ 95, 97.) Ms. Hicks is only challenging the balance inquiry fee. (Id. at ¶ 100.)

Plaintiff Schertzer seeks to represent the "California Cardtronics Class" consisting of:

All holders of a checking account in California who, within the applicable statute of limitations preceding the filing of this lawsuit, were assessed one or more out-of-network balance inquiry fees for purportedly undertaking a balance inquiry as part of a cash withdrawal at a CARDTRONICS ATM.

Id. at ¶ 106. Plaintiff Hicks seeks to represent the "California Cash Depot Class" consisting of:

All holders of a checking account in California who, within the applicable statute of limitations preceding the filing of this lawsuit, were assessed one or more fees for purportedly undertaking a balance inquiry at the same time as a cash withdrawal at a Cash Depot ATM.

Id. at ¶ 108. Plaintiff Covell seeks to represent the "California FCTI Class" and the "National FCTI Class" consisting of:

All holders of a checking account who, within the applicable statute of limitations preceding the filing of this lawsuit, were assessed more than one fee for purportedly undertaking a balance inquiry at the same time as a cash withdrawal at a FCTI ATM (the "National FCTI Class").

All holders of a checking account in California who, within the applicable statute of limitations preceding the filing of this lawsuit, were assessed more than one fee for purportedly undertaking a balance inquiry at the same time as a cash withdrawal at a FCTI ATM (the "California FCTI Class").

Id. at ¶ 107. All three Plaintiffs seek to represent a Nationwide BofA class and a California sub-class of BofA checking account holders who were assessed one or more fees for undertaking a balance inquiry as part of a cash...