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More than 30 banks have been named as defendants in consolidated litigation regarding checking account overdraft policies. A recent decision by the Eleventh Circuit Court of Appeals will allow a specific class action lawsuit over RBC Bank overdraft fees to continue without arbitration.
Plaintiff Michael Dasher alleges in the RBC Bank overdraft class action lawsuit that the company had a policy in effect whereby the bank would process a customer’s largest debit card purchases and payments first in a given day and then proceed in descending order. By allegedly doing so, this increased the possibility that Dasher and others would face multiple overdraft fees on their checking accounts. However, RBC Bank, now a PNC Bank subsidiary, had appealed, arguing that an earlier agreement compelled customers like Dasher to have their disputes resolved in arbitration.
The Eleventh Circuit Court disagreed on nearly every point of the defense team’s argument. First, they noted that the original RBC contract included an amendment clause stating that “the most current version of the Agreement supersedes all prior versions and will at all times govern.” The key phrase is “at all times,” and when PNC issued a new agreement to existing RBC Bank checking account holders, that new contract governed.
Critically, that agreement does not include an arbitration clause. Class action lawyers for Dasher argued that the timing was critical, and the appeals court agreed. They wrote in their opinion denying RBC’s motion by stating, “he had the right not to be charged excessive overdraft fees … at a time when that agreement was still effective. (emphasis original)” However, because the new PNC agreement was written so that it would “at all times govern[,]” the banks lost the ability to request arbitration because the PNC contract was silent on the issue.
While the bank had repeatedly cited the Federal Arbitration Act and a Supreme Court ruling noting that arbitration should be favored whenever possible, the decision noted several times when “arbitration is simply a matter of contract.” In both applying North Carolina law and “common sense,” the Eleventh Circuit Court wrote that the agreement allowed for Dasher to seek damages in civil litigation regarding the excessive overdraft fees.
So far nearly a dozen banks have reached settlements in the consolidated litigation, including U.S. Bank, TD Bank, Chase Bank, Bank of America, and more.
Dasher is represented by class action lawyers E. Adam Webb of Webb Klase & Lemond LLC, Bruce Stephen Rogow of Bruce S. Sogow PA, Robert Cecil Gilbert of Grossman Roth PA and Jeffrey Miles Ostrow of Kopelowitz Ostrow Ferguson Weiselberg Keechl.
The RBC Bank Overdraft Fee Class Action Lawsuit is Michael Dasher v. RBC Bank (USA), Case No. 13-cv-10257, United States Court of Appeals, Eleventh Circuit.
The Bank Overdraft MDL is In re: Checking Account Overdraft Litigation, MDL No. 2036, U.S. District Court, Southern District of Florida.
UPDATE: January 2020, the RBC Bank overdraft fee class action settlement is now open. Click here to learn more.
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