Chase Dodges ‘Interest’ Charge Class Action Lawsuit

A New York judge dismissed a class action lawsuit alleging that JP Morgan Chase & Co. and Chase Bank USA violated their cardholder agreements, ruling that the plaintiff did not have standing to bring the claims on behalf of the class named in the lawsuit.

Lead plaintiff, Stanley Epstein, filed the class action lawsuit against JP Morgan and Chase in July 2013. Epstein claimed that he had made an overpayment on his Chase Marriott Rewards credit card account in the amount of $0.67 and, in the following months, Chase had charged him on his positive account balance in violation of Chase’s cardholder agreement. In September, Chase filed a motion to dismiss the class action lawsuit, arguing that because Chase had offered to reimburse Epstein, he had not suffered an injury as a result of the violation.

On Friday, U.S. District Judge Katherine Polk Failla agreed with Chase and dismissed the class action lawsuit. “Prior to bringing this action, Plaintiff attempted to resolve his claims against Defendants informally,” the judge wrote. However, “resolving the claims to Plaintiff’s satisfaction would entail significant undertakings by Chase that seemingly transcend Chase’s obligations under the Cardmember Agreement.”

“On February 11, 2013, Plaintiff sent a letter to a different representative for CBUSA, in response to a letter from CBUSA,” Judge Failla wrote. “In this correspondence … Plaintiff indicated that his ‘major requirement [to resolving the dispute] will be that [CBUSA] change its illegal and immoral procedures and provide accurate language about credit balances on its statements.'” Judge Failla also pointed out that “approximately seven weeks after Plaintiff first notified CBUSA that he disputed the ‘interest’ charge, Plaintiff received a cashier’s check for $0.67 from JPMC dated February 21, 2013, as reimbursement for the disputed charge. Plaintiff has not cashed, nor does he intend to cash, the Refund Check.”

The defendants argued that Epstein lacked standing to bring the class action lawsuit because he had been offered a full refund, which he refused. “Nonetheless, Plaintiff argues that he has standing to maintain this action because (i) Defendants’ Refund Check (which, Plaintiff repeatedly notes, he has declined to cash) amounts to an improper attempt to ‘pick off’ Plaintiff as class representative, and (ii) Plaintiff has standing, in both individual and class representative capacities, to pursue his claims for injunctive relief,” the judge wrote. “That Plaintiff received the Refund Check demonstrates the absence of any ‘actual’ injury on which Plaintiff’s standing could be established.” The judge further states, “The Court cannot accept Plaintiff’s contention that by neither requesting nor cashing the Refund Check, he has somehow created standing. To do so would not only render hollow the injury-in-fact requirement, but would also engender a disincentive among potential litigants to attempt legitimately to resolve disputes without judicial intervention.”

Finally, in the judge states, “Plaintiff alleges that he has ‘offered concrete evidence of the risk of future injury to himself and ongoing injury to the class.’ Yet, as just determined, Plaintiff has failed to present any actual or imminent injury to himself, and any injury to the purported class is insufficient by itself to create the necessary case or controversy that would vest jurisdiction in this Court.”

Judge Failla also denied Epstein leave to amend his class action lawsuit, stating “an amended complaint would not cure Plaintiff’s jurisdictional defect, and thus would be futile.”

Stanley H. Epstein is represented by Joseph Ignatius Marchese, Neal Jamison Deckant, Scott A. Bursor and Yitzchak Kopel of Burson & Fisher PA.

The Chase Interest Charge Class Action Lawsuit is Epstein v. JPMorgan Chase & Co., et al., Case No. 13-cv-04744, in the U.S. District Court for the Southern District of New York.