San Francisco Superior Court — Case No. 301917
Case Type: Consumer RightsConsumer FraudUnfair Business Practices
Status: Class certification expected in 2012.
A statewide class action lawsuit against Bank of America challenging the bank’s practice of seizing exempt funds from Social Security direct deposit accounts to satisfy claims it has against the account holders, in violation of the public policy record established in Kruger v. Wells Fargo Bank (1974) 11 Cal.3d 352, the Consumer Legal Remedies Act, Civil Code section 1750 et seq., and the Unfair Competition Law, Business and Professions Code section 17200 et seq. In 2003, the Honorable Anne Bouliane certified the case as a statewide class action consisting of more than 1.1 million customers. After a five-week jury trial in February 2004, the jury awarded damages exceeding $1.25 billion consisting of more than $75 million in compensatory damages, $1,000 in special statutory damages to each class member, and $275,000 to the named plaintiff for emotional distress. After the jury verdict, Judge Bouliane heard additional equitable claims and in December 2004 issued a decision finding that Bank of America had engaged in “unconscionable,” “unlawful,” “fraudulent,” and “unfair” conduct, ordered the Bank to “immediately implement whatever procedures or other means are necessary to prevent exempt Social Security funds and other governmental benefits from being subject to such setoffs or collection efforts,” ordered the Bank to make restitution of over $284 million to the class. A final judgment and permanent injunction were issued in March 2005. The bank appealed the judgment and obtained a stay of enforcement. The Court of Appeal reversed, 144 Cal.App.4th 1301, 51 Cal.Rptr.3d 223 (2006). On June 1, 2009, the California Supreme Court affirmed the Court of Appeal holding that California’s public policy of protecting exempt funds from bank seizure applied only to separate accounts, not fees collected from a single account. Miller v. Bank of America (2009) 46 Cal.4th 630.
In March, 2010 the trial court issued a memorandum and order granting plaintiff’s motion to file an amended complaint to challenge the bank’s practice involving two accounts. On April 4, 2011, the court denied plaintiff’s motion for class certification. The lower court’s decision was affirmed by the California Court of Appeal on January 25, 2013.