Wage Law

In what one of our colleagues called a "billion dollar roll of the dice," review was granted in Miller v. Bank of America NT&SA (S149178). The case is not wage and hour related, and the holding is unlikely to develop the body of law governing class action litigation in general, but it's a popular topic of discussion around our lunch table, so we figured we'd give it a mention. Miller involved a question of whether banks can exercise self-help in withdrawing certain funds from its customers' accounts. The trial court awarded $300 million in damages and restitution, plus penalties and fees that brought the value of the award into ten figures. The Bank appealed, among other things, arguing that its conduct did not violate the underlying statutes, including the unfair competition law and the CLRA; and that federal law preempts state laws prohibiting banks from taking Social Security and other governmental benefits out of customers' accounts to pay overdraft fees. Last year, the Court of Appeal reversed the $1.3 billion award, holding that a bank can prevent (and pay itself for) an overdraft in one of its accounts by using government benefit funds in that account, distinguishing a Supreme Court decision (Kruger v. Wells Fargo Bank (1974) 11 Cal.3d 352) that had banned banks from using government benefit funded accounts to pay outside creditors.

With such a large amount of money at stake, a petition for review was certain, and now the case will be heard by the Supreme Court. The plaintiffs have a broad coalition of support, including the AARP, the National Senior Citizens Law Center, the National Consumer Law Center, the Center for Responsible Lending, the National Association for Consumer Advocates, and the State of California through the Office of the Attorney General. The defendant will have the support of every bank doing business in California, as quite a few similar actions are now pending. The Supreme Court will be greeted by many friends during the briefing of this one.