850 F. Supp. 2d 1008
N.D. Cal.2011Background
- Arevalo and Sandow hold Bank of America's credit cards and were charged for Credit Protection Plus (CPP).
- Arevalo declined CPP in January 2010; CPP charges appeared in April 2010 and prior months; Bank of America refused refunds totaling $712.50.
- Sandow asserts involuntary CPP enrollment based on a spouse’s letter and OCC complaint; Bank of America later claimed voluntary enrollment with misleading details.
- Plaintiffs sue California residents who paid CPP during relevant period and were involuntarily enrolled or unable to use CPP due to exclusions.
- FAC asserts mass CPP allegations against Bank of America, including advertising misrepresentation and improper enrollment, with various state-law claims plus unjust enrichment.
- Bank of America moves to dismiss under Rule 12(b)(6); court grants in part and denies in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to represent absent class members | Arevalo and Sandow have standing to represent involuntary and voluntary CPP claims. | Plaintiffs lack standing for voluntary-enrollment-related claims; intra-class differences undermine standing. | Standing insufficient for voluntary CPP claims; involuntary-enrollment claims may proceed. |
| Whether Bank of America is proper defendant | Bank of America directly involved in CPP; FIA is subsidiary; allegations facially plausible against Bank of America. | FIA, not Bank of America, issued CPP; Bank of America isn’t proper defendant. | Court rejects exclusive misjoinder; Bank of America remains properly named; claims facially plausible against Bank of America. |
| Preemption under the National Bank Act | NBA preempts state consumer protection claims (CLRA/UCL/FAL) via OCC regs. | OCC regulations preempt state law in areas governing CPP and refunds. | Preemption not established; CLRA, UCL, and FAL not preempted. |
| Sufficiency of CLRA, UCL, and FAL claims related to involuntary CPP enrollment | CLRA would apply for involuntary enrollment; UCL and FAL similarly rooted in concealment/omission. | Claims fail for specificity or scope; some pleaded facts do not link to involuntary CPP. | CLRA claim survives; UCL and FAL claims survive as to involuntary enrollment. |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requirement; injury in fact)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (facial plausibility standard; not mere possibility)
- Balistreri v. Pacifica Police Dept., 901 F.2d 696 (9th Cir.1990) (pleading sufficiency; §12(b)(6) standard)
- Warth v. Seldin, 422 U.S. 490 (1975) (standing as threshold jurisdictional question)
- Bates v. United Parcel Service, Inc., 511 F.3d 974 (9th Cir.2007) (named plaintiff standing to represent class; limitations)
- Blum v. Yaretsky, 457 U.S. 991 (1982) (standing and class representation; intra-class considerations)
- General Telephone Co. of the Southwest v. Falcon, 457 U.S. 156 (1982) (standing and typicality/adequacy considerations)