MIAMI — (Mealey’s) U.S. Bank NA on July 24 agreed to pay $55 million to exit a multidistrict litigation in which class members allege that several banks manipulated the order of debit card transactions to maximize checking account overdraft fees (In Re: Checking Account Overdraft Litigation, No. 09-md-02036, S.D. Fla.).
The plaintiffs’ unopposed motion for preliminary approval of class settlement is subject to the approval of U.S. Judge James Lawrence King of the Southern District of Florida.
In the motion, the plaintiffs say the settlement is “an outstanding result for the Settlement Class” because it “consists of a $55 million cash Settlement Fund, the Bank’s agreement to adhere to its current method of time ordered posting on consumer checking accounts for two years following Final Approval, plus the Bank’s payment of all costs and fees associated with Class Notice and Settlement administration.”
“A testament to the reasonableness and fairness of the Settlement is the magnitude of the Settlement Fund,” the plaintiffs say in the motion. “Settlement Class Counsel negotiated a $55 million cash payment, which is remarkable given that U.S. Bank asserted — and would continue to assert in the absence of this Settlement — that Plaintiff and all Settlement Class Members are required to individually arbitrate the claims asserted on their behalf in the Action and, therefore, that no class could ever be certified. . . . Thus, without a settlement of the Action, if U.S. Bank succeeded in enforcing its arbitration rights, there would be no further litigation in this Court on a classwide basis and Plaintiffs and every Settlement Class Member would be required to individually pursue arbitration proceedings in an attempt to establish that U.S. Bank’s practice of High-to-Low Posting was unlawful and, thereby, to recover damages. . . . In the face of that risk, the $55 million cash recovery secured through in this Settlement is outstanding and clearly merits Preliminary Approval.”
Bank of America NA, JPMorgan Chase Bank NA, PNC Bank NA, RBS Citizens Bank NA, Great Western Bank and TD Bank NA previously reached settlements in the MDL.
The plaintiffs are represented by Aaron S. Podhurst, Robert C. Josefsberg, Peter Prieto and John Gravante III of Podhurst Orseck in Miami; Bruce S. Rogow of Bruce S. Rogow PA in Fort Lauderdale, Fla.; Robert C. Gilbert, Stuart Z. Grossman, David M. Buckner and Seth E. Miles of Grossman Roth in Coral Gables, Fla.; E. Adam Webb, Matthew C. Klase and G. Franklin Lemond Jr. of Webb, Klase & Lemond in Atlanta; Russell W. Budd, Bruce W. Steckler and Mazin A. Sbaiti of Baron & Budd in Dallas; Ruben Honik and Kenneth J. Grunfeld of Golomb & Honik in Philadelphia; Michael W. Sobol, Roger N. Heller and Jordan Elias of Lieff Cabraser Heimann & Bernstein in San Francisco; David S. Stellings of Lieff, Cabraser in New York; and Ted E. Trief and Barbara E. Olk of Trief & Olk in New York.
U.S. Bank is represented by James R. McGuire of Morrison & Foerster in San Francisco.
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