Wells Fargo Loses Bid to Dismiss Overdraft Fee Class Action Lawsuit By Matt O’Donnell
Wells Fargo Loses Bid to Dismiss Overdraft Fee Class Action Lawsuit
By Matt O’Donnell
Wells Fargo is just one of more than 30 banks involved in the consolidated case, which includes dozens of class action lawsuits accusing banks of reordering overdrafts to maximize fees. Many of the banks have already settled their portion of the case, including Bank of America, JPMorgan & Chase and U.S. Bank.
Wells Fargo attempted to get out of the class action lawsuit by trying to enforce a mandatory arbitration agreement it has with customers. A federal appeals court denied the request on Friday, however, ruling the bank can’t force arbitration after waiving its right to do so twice.
The court found that Wells Fargo asserted its right to force customers into arbitration after already putting them through a lengthy litigation process that lasted for years and yielded about 900,000 documents. Wells Fargo declined a trial court’s offer to arbitrate disputes in November 2009 and April 2010, and filed a motion to dismiss the class action lawsuit only after the Supreme Court ruled in April 2012 that federal law allows companies to force customers and employees to arbitrate claims individually.
Before the Supreme Court ruling, some state laws made arbitration clauses that contained class-action waivers unenforceable.
The motion to compel arbitration came too late, the court said, and would force Plaintiffs to “suffer substantial prejudice.”
The Wells Fargo Overdraft Fee Class Action Lawsuit case is In re Checking Account Overdraft Litigation, Case No. 09-md-02036, U.S. District Court, Southern District of Florida (Miami).
Updated October 30th, 2012
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