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Bank of America Class Action

Comments Off on Bank of America Class Action

An objector in a class action against Bank of America has put the proceedings to a halt. On July 19, attorneys for objector Dawn M. Weaver filed an opposition to the motion for a proposed class action settlement being considered by the court, filed by class counsel earlier this month. The class action claimed that “Bank of America breached its contract with consumer checking Account holders and unfairly assessed and collected Overdraft Fees on certain Debit Card transactions.”The settlement agreement embodies Bank of America’s agreement to pay $27.5 million to resolve the dispute.

In the brief, the objector asserts her contentions with the settlement agreement. Mainly, she asserts that the $5 reimbursement to each class member is too low and that the attorney’s fees (33% of the settlement fund) are too high.

Class actions, especially in the context of approval of the final settlement agreement, differ from other litigation. Unlike contexts where the judge plays a neutral role, class counsel seeks approval from the court in determining whether a class action settlement agreement should receive final approval. Some courts have even gone so far as to term the judge a fiduciary of the class, imposing an even higher duty. Thus, it will be up to the presiding judge in this case to consider the objector’s points and issue a ruling accordingly.

At least as far as attorney’s fees, Weaver may have a point. District courts have discretion as to whether they use the lodestar or common fund accounting methods for determining the proportion going to attorney’s fees. However, the Ninth Circuit has repeatedly recommended checking the value fees as a percentage of each method to ensure that the fees awarded are based on an appropriate multiplier. Both the Ninth and Eleventh Circuit have enacted a 25% benchmark in common fund cases, only awarding additional fees according to individual factors. Thus, the 33% figure asked for by class counsel will undergo additional scrutiny in the court’s analysis.

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