In Re Checking Account Overdraft Litigation
797 F. Supp. 2d 1312
| S.D. Fla. | 2011Background
- MDL 2036 overdraft fee litigation in SD Fla; Omnibus Order denied preemption dismissal.
- JPMorgan Chase Bank moved to reconsider based on Baptista v. JPMorgan (11th Cir. 2011).
- Court previously held NBA preemption does not bar state contract/tort claims incidental to deposit-taking powers.
- Baptista held Florida § 655.85 preempts if directed at limiting a bank's fee-charging authority.
- Court distinguishes Baptista from MDL 2036: plaintiffs claim bad-faith implementation, not fee-authorization itself.
- Court declines to certify interlocutory appeal; denies reconsideration and joinder motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Baptista control preemption in MDL 2036? | Baptista requires preemption where statute limits fee-charging authority. | Baptista compels preemption of claims that target fee authority; MDL 2036 claims are different. | Baptista does not control; MDL 2036 not preempted |
| Are the MDL 2036 state-law claims preempted by the NBA and OCC regulations? | Claims fall within state tort/contract law not preempted if incidental. | NBA preemption should bar state-law claims conflicting with fee-charging authority. | Not preempted; claims largely incidental to deposit-taking powers |
| Does the interaction of 12 C.F.R. § 7.4002 and 7.4007 permit state contract/tort claims? | Regulations support state-law claims as incidental to the banking powers. | Regulations preempt state law restricting banks' fee-charging authority. | Incidental-state-law claims allowed; not preempted |
| Is interlocutory-appeal certification appropriate? | Interlocutory appeal should be allowed if there is controlling legal question. | No controlling issue; Baptista does not control MDL 2036. | Certification denied |
| What is the court's ultimate conclusion on reconsideration and joinder motions? | Reconsideration necessary to align with Baptista interpretation. | Reconsideration and joinder should be granted based on preemption. | Reconsideration denied; joinder motions denied |
Key Cases Cited
- Baptista v. JPMorgan Chase Bank, N.A., 640 F.3d 1194 (11th Cir.2011) (preemption where statute limits bank fee-charging authority)
- Gutierrez v. Wells Fargo Bank N.A., 622 F. Supp. 2d 946 (N.D. Cal.2009) (not preempted where claim targets bad-faith manipulation of transactions)
- Watters v. Wachovia Bank, 550 U.S. 1 (U.S. 2007) (states may regulate general banking activities not conflicting with NBA)
- Wells Fargo Bank N.A. v. James, 321 F.3d 488 (5th Cir.2003) (state law can significantly impair NBA powers when directed at fee-structures)
- Barnett Bank of Marion County, N.A. v. Nelson, 517 U.S. 25 (Supreme Court, 1996) (preemption inquiry: conflict between federal grant of power and state law)
- Cuomo v. Clearing House Ass'n, 129 S. Ct. 2710 (U.S. 2009) (state banking laws persist unless conflicting with NBA)
- In re Checking Account Overdraft Litig., 694 F. Supp. 2d 1302 (S.D. Fla.2010) (court's earlier analysis of NBA preemption in overdraft-fee context)
- Gutierrez v. Wells Fargo Bank N.A., 2010 WL 1233885 (N.D. Cal.2010) (overdraft postings not inherently regulatory; focus on bad-faith manipulation)