Miller v. Bank of America N.T. & S.A.

Major financial services trade associations

In case of great importance to national banks as well as other federal financial institutions, now pending before the California Supreme Court, our attorneys are representing the major financial services trade associations as amici. At issue in the case is a state court order requiring Bank of America to pay US$284 million in restitution and US$1,000 each to approximately 1.3 million customers who had overdraft fees withdrawn from their accounts. Miller v. Bank of Am. N.T. & S.A., No. CCC-99-301917, 2004 WL 3153009 (Cal. App. Dep't Super. Ct. Dec. 30, 2004). The trial court upheld a jury verdict awarding damages to a class of all California residents who had Social Security funds directly deposited into their checking accounts at any time between August 1994 and December 2003. On appeal, both the United States (the OCC and the Social Security Administration), as well as the banking association amici, have filed briefs in support of the Bank of America, arguing that, among other things, the judge erred in failing to recognize that the plaintiff class's claims were preempted by the NBA and the OCC's regulations and that the Superior Court's judgment is directly at odds with the federal government's policy to encourage the use of banking services through the use of direct deposits, particularly for recipients of Social Security and other government benefits. In a ruling issued on November 20, 2006, the Court of Appeal found in favor of Bank of America, ruling that the trial court had misapplied applicable law and erroneously concluded that the bank's practice involved a "setoff" against Miller's account. Miller v. Bank of America, 144 Cal. App. 4th 1301 (Cal. Ct. App. 2006). Briefing regarding the Court of Appeals' decision is currently underway in the California Supreme Court.

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