Antitrust Law Daily Wrap Up, ADVERTISING—9th Cir.: Consumer alleged no statements likely to deceive regarding overdraft program, (Jun 8, 2015)

By Peter Reap, J.D., LL.M.

The federal district court in San Diego correctly dismissed consumer Eduardo Larin’s putative class action against Bank of America alleging violations of the California Consumer Legal Remedies Act, Unfair Competition Law, and False Advertising Law, in connection with the bank’s overdraft protection program (“ODP”), the U.S. Court of Appeals in San Francisco has ruled (Larin v. Bank of America, NA, June 4, 2015, Per curiam). Claims under those statutes are evaluated under a “reasonable consumer standard” by which a plaintiff must “show that members of the public are likely to be deceived,” under Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008). Larin alleged no affirmative misrepresentations in connection with the ODP that would likely deceive a reasonable consumer, the appellate court held.

The bank’s statements concerning the benefits of ODP were qualified, and Bank of America disclosed that its general policy is “to provide availability of deposited funds nextday,” though there is always a “risk that a deposited check may not clear,” the court explained. Larin deposited a $7,500 check, and the balance was made available to him by the next day. When the check failed to clear, under the terms of ODP, Bank of America covered payments made against that check with Larin’s linked credit card account and charged him agreed-upon credit card fees.

Although Larin argued that enrollment in ODP increased his risk of incurring fees because Bank of America would have otherwise held his deposit up to eleven business days, the allegations in his complaint demonstrated that ODP worked in the manner disclosed in the deposit agreement, according to the court. Therefore, there were no affirmative misrepresentations that supported Larin’s claims.

Furthermore, the district court did not abuse its discretion in dismissing this case with prejudice, given Larin’s multiple opportunities for amendment.

The case is No. 12-557288.

Attorneys: Michael Reese (Reese LLP) for Eduardo Larin. Sharon Douglass Mayo (Arnold & Porter LLP) for Bank of America, NA.

Companies: Bank of America, NA

Cases: Advertising AlaskaNews ArizonaNews CaliforniaNews HawaiiNews IdahoNews MontanaNews NevadaNews OregonNews WashingtonNews