Boecherer v. Burling Bank

MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS

N.D. Ill.May 19, 2008

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION CARL BOECHERER, individually and on behalf ) of all others similarly situated, ) )Plaintiff, ) )v. ) )BURLING BANK, ) ) Defendant. ) Case No. 08 cv 1332 Judge Blanche Maning Magistrate Judge Schenker DEFENDANT BURLING BANK'S MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION TO DISMISS NOW COMES Burling Ban, by its attorneys, John K. Kneafsey, Donald C. Shine and Thomas M. Lombardo ofNisen & Elliott, LLC, and for its Memorandum of Law in Support of its Motion to Dismiss, pursuant to Rule 12(b )(6) and (d) ofthe Federal Rules of Civil Procedure, states as follows: i. Introduction The Plaintiff, Carl Boecherer, seeks actual and statutory damages because he was charged an Automatic Teller Machine ("ATM") fee of $1.75 by Burling Ban The Plaintiff argues that he is entitled to damages because, when he utilized the services provided by Burling Ban and its A TM, there purortedly was no sign on the ATM regarding the fee.! However, Burling Ban's ATM screens expressly notify consumers of the $1.75 fee, and to complete the transaction, a consumer must expressly consent to the $1.75 fee by pressing a button on the ATM. The class of individuals ! Banks typically do not charge their own customers for using the bank's own A TMs. However, banks usually charge customers of other banks (hereinafter "consumers") a fee for the convenience and service of using their A TMs. The Plaintiff is not a Burling Ban customer, and therefore he may have been charged a nominal $ i .75 fee to take advantage of Burling Bank's ATM services. Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 1 of 44 PageID #:20 on whose behalf the Plaintiff purortedly brings this suit would have pressed that same button and, like the Plaintiff, they would have consented to the $1.75 fee. Under federal law, Burling Ban is entitled to dismissal of ths case in its entirety, because an A TM operator that posts a transaction fee notice on or near its A TM canot be held liable for actual or statutory damages under the Electronic Fund Transfers Act ("EFT A") if that notice is subsequently removed, damaged or altered by someone who is not a ban employee. Burling Ban installed appropriate signs near its ATMs, and nobody from Burling Ban took the signs down. As a matter of law, Burling Bank canot be held liable to the Plaintiff for actual or statutory damages under these facts. Therefore, the Plaintiff s entire case should be dismissed. 2 Concomitantly, a Plaintiff is not entitled to actual damages under the EFTA due to the voluntary or self-inflicted natue of his "injur." The EFT A contains a causation requirement linkng the wrongdoing of an A TM operator to the consumer's injur- a link the Plaintiff canot make because his express consent to the fee destroys his claim that he was hared by a missing sign on the machine. Because the Plaintiff consented to the A TM fee by pressing the "click -through" button, he can have no actual damages pursuant to the EFT A. Additionally, the maxim valenti non fit injuria disallows a plaintiff from recovering damages that are self-inficted. For these additional reasons, the Plaintiff s claim for actual damages should be dismissed. 2 The Plaintiffs counsel, Lance Raphael and his "Consumer Advocacy Center," who have fied a large number of nearly identical lawsuits in this district and throughoutthe countr, apparently hope to secure an exorbitant attorney's fee award because ofthis so-called $ 1.75 "injury" that the Plaintiff agreed to pay in return for using Burling Bank's A TM services, or to coerce a settlement by theatening lengthy and costly class action litigation. This Cour should grant Burling Ban's 2 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 2 of 44 PageID #:21 II. Applicable Standard for Dismissal Rule 12(b)(6) permits dismissal where the plaintiff has failed to state a claim upon which relief may be granted. Fed. R. Civ. P. 12(b)( 6). A par may raise matters outside of the pleadings on a Rule 12(b)( 6) motion, but the cour must treat the motion as one for sumar judgment under Rule 56. Edward Gray Corp. v. Nat'l Union Fire Ins. Co., 94 F.3d 363,366 (7th Cir. 1996), Fleischfesser v. Directors of School Dist. 200, 15 F.3d 680, 684 (7th Cir. 1994). Burling Ban's Motion to Dismiss is supported by affdavit. Consequently, the Motion to Dismiss should be treated as one for sumar judgment. Fleischfresser, 15 F.3d at 684. Sumar judgment should be granted if the pleadings and supporting documents show that there is no genuine issue as to any material fact and the moving par is entitled to a judgment as a matter oflaw. Id. at 685, see also Fed. R. Civ. P. 56(c). Furhermore, if the par opposing amotion for sumar judgment bears the burden of proof on an issue, he must go beyond the pleadings and affirmatively demonstrate a genuine issue of material fact for tral. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). As set forth below, there is no genuine issue of fact and thus Burling Ban is entitled to sumar judgment at this time. III. Statement of Facts 1. Burling Ban operates two ATMs in the lobby of 141 West Jackson Boulevard in Chicago, Ilinois. (Affidavit of Dora Asmussen, Burling Ban's Vice President and Cashier, attached hereto as "Exhibit A.") Motion to Dismiss before the Plaintiffs self-inflcted injury forces Burling Bank to devote any more money or resources in responding to these self-inflcted and baseless claims. 3 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 3 of 44 PageID #:22 2. Burling Ban has never operated A TMs at 144 West Jackson Boulevard in Chicago, Ilinois. ("Exhbit A.") 3. The ATMs at 141 West Jackson are side-by-side one another, and were installed in February of2006. ("Exhibit A.") 4. Burling Ban caused a transaction fee notice to be posted on each ofthe two A TMs, upon completion of the installation in Februar of2006. The notices were affxed to the machines with adhesive and provided: FEE NOTICE A fee may be imposed for a cash withdrawaL. This fee is added to the amount of your transaction and is in addition to any fees that may be charged by your financial institution. ("Exhbit A.") 5. At no time since the A TM transaction fee notices were installed did Burling Ban cause the notices to be removed, damaged or altered. ("Exhibit A.") 6. At no time prior to August of2007 was Burling Ban placed on notice that the A TM fee notices were removed, damaged or altered. ("Exhibit A.") 7. Before any Burling Ban A TM consumer was charged with an A TM transaction fee in August of 2007, the A TM screen notified the consumer: Burling Ban will charge U.S. cardholders a $1.75 fee for this transaction. This fee is in addition to any fees which may be charged by your financial institution. Do you wish to continue? Yes (Fee wil be assessed) ------------ ;: No (Cancel, Fee wil not be assessed) -;: 4 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 4 of 44 PageID #:23 ("Exhibit A.") 8. A consumer who uses a Burling Ban A TM must press a "click-through" button and consent to the A TM transaction fee before the fee is charged to the consumer. ("Exhibit A.") iv. Plaintiff's Entire Case Fails Under Federal Law The Plaintiff s entire case should be dismissed because the EFT A provides A TM operators with an absolute defense where the operator installed a fee notice that was subsequently removed, damaged or altered by someone other than a ban employee. Burling Ban put up such a sign, and therefore the Plaintiff canot recover any actual or statutory damages whatsoever under the provisions of the EFT A. A. The Electronic Fund Transfer Act and Regulation E Under section 1693 b of the EFT A, an A TM operator must (1) provide notice to the consumer that a fee is being imposed by the operator, and (2) disclose the amount of the fee. 15 U.S.c. § 1693b (d)(3)(A) (2007). Specified notices must appear on the A TM screen and "...in a prominent and conspicuous location on or at the automated teller machine at which the electronic fud transfer is initiated by the consumer." 15 U.S.C. § 1693b(d)(3)(B) (2007). Regulation E was issued by the Board of Governors of the Federal Reserve System to implement the EFT A. 12 C.F .R. § 205.1 (2007). Section 205.16 of Regulation E governs disclosures at A TMs, and provides, in pertinent par: ( c) Notice requirement. To meet the requirements of paragraph (b) of this section, an automated teller machine operator must comply with the following: (1) On the machine. Post in a prominent and conspicuous location on or at the automated teller machine a notice that: 5 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 5 of 44 PageID #:24 (i) A fee wil be imposed for providing electronic fud transfer services or for a balance inquiry; or (ii) A fee may be imposed for providing electronic fud transfer services or for a balance inquiry, but the notice in this paragraph (c )(1 )(ii) may be substituted for the notice in paragraph (c)(1 )(i) only if there are circumstances under which a fee wil not be imposed for such services; and 12 C.F.R. § 205.16 (2007). In sumar, both EFTA section 1693b and Regulation E require an A TM operator to post a fee notice on or near its A TMs. Violations of the EFT A may result in civil liabilty against A TM operators. Civil liability for EFT A violations is governed by section 1693m, which provides in pertinent par: (a) Individual or class action for damages; amount of award Except as otherwise provided by this section and section 1693h of this title, any person who fails to comply with any provision of this subchapter with respect to any consumer, except for an error resolved in accordance with section 1693f of this title, is liable to such consumer in an amount equal to the sum of- - 15 U.S.C. § 1693m (2007) (emphasis added). According to section 1693m, the safe harbor provision contained in section 1693h shields an A TM operator from liability under section 1693m in certain situations. Specifically, under section 1693 h, where an A TM operator posts an A TM transaction fee notice that is subsequently removed, damaged or altered, by anyone other than the A TM operator, there is no liability for failing to provide that fee notice. Section 1693h provides in pertinent par: (d) Exception for damaged notices If the notice required to be posted pursuant to section 1693 b( d)(3 )(B )(i) of this title by an automated teller machine operator has been posted by such operator in compliance with such section and 6 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 6 of 44 PageID #:25 the notice is subsequently removed, damaged, or altered by any person other than the operator of the automated teller machine, the operator shall have no liabilty under this section for failure to comply with section 1693b(d)(3)(B)(i) of this title. 15 U.S.C. § 1693h(d) (2007) (emphasis added). B. Burling Ban Canot be Held Liable Under the EFTA In his Class Action Complaint, the Plaintiff alleges that Burling Ban operates two A TMs located at 141 West Jackson Boulevard in Chicago, Ilinois. (Class Action Complaint, "Exhbit B," ~25.)3 The Plaintiff claims that he used one of Burling Ban's ATMs on August 23,2007 and was charged a $1.75 fee to withdraw money from that ATM. ("Exhibit B," i¡,- 11-12.) The Plaintiff also claims that there were no transaction fee notices posted on or near Burling Ban's ATMs when he made his withdrawaL. ("Exhbit B," ,- 10.) The Plaintiff thus argues that Burling Ban violated section 1693b of the EFTA and section 205.16 of Regulation E by charging him this ATM fee without complying with the applicable physical fee notice requirements. ("Exhibit B," ,-,-26-27.) This case should be dismissed, in accordance with federal statute, even ifthere was no notice posted on or near Burling Ban's A TMs when Plaintiff made his withdrawaL. Burling Ban posted A TM transaction fee notices on its A TM machines before Plaintiff made his withdrawaL. (Facts, ,- 4.) Burling Ban's notices complied with the requirements of section 1693b(d)(3)(A) and section 205.16 of Regulation E. (Facts, i¡4.) Likewise, Burling Ban never caused the A TM transaction fee notice to be removed, damaged or altered. (Facts, ,-5.) Therefore, in accordance with section 1693h( d), Burling Ban shall have no liability under the notice requirements of the EFT A. 3 Notably, the plaintiff alleges that Burling Ban operates two A TMs at 144 West Jackson, and that there was no sign on or near the machines at that address. ("Exhibit B," irir 9-10.) However, the Plaintiff also alleges that the ATM he withdrew money from was located at 14 i West Jackson, but he is silent on the existence of signage at the second, and correct address of Burling Bank's A TMs. Therefore, the Complaint also should be dismissed for failing to state a claim. 7 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 7 of 44 PageID #:26 Accordingly, Burling Ban is entitled to judgment as a matter oflaw under the applicable Rule 56 standard. Fed. R. Civ. P. 56(c). V. The Self-Inflcted Nature of Plaintiff's "Injury" Precludes Recovery of Actual Dama2es The preceding section of this Memorandum establishes that this case should be dismissed, in its entirety, because the EFT A precludes recovery against A TM operators that post the requisite signage. Assuming, arguendo, that the Cour does not agree, the claim for actul damages should be dismissed for the following reasons. A person that knowingly and wilingly agrees to pay an A TM fee, by pressing a click-through button accepting that fee, is not allowed to recover "actual damages." First, the EFT A requires that the A TM operator cause the plaintiff s loss or that the plaintiff detrimentally rely upon the A TM operator's violation of the Act, before the plaintiff can recover actual damages. Therefore, where a plaintiff is not hared directly as a result of the A TM operator's statutory violation, there are no actual damages. Second, the maxim valenti non fit injuria similarly prohibits a Plaintiff from recovering actual damages under the EFT A if the alleged injur was consented to in advance. For these additional reasons, the Plaintiff is not entitled to actual damages against Burling Ban, and the portion of the Complaint which seeks actual damages should be dismissed. A. There was no Detrimental Reliance or Causation Section 1693m(a)(I) of the EFTA provides, Except as otherwise provided by this section and section 1693h of this title, any person who fails to comply with any provision of this subchapter with respect to any consumer, except for an error resolved in accordance with section 1693f of this title, is liable to such consumer in an amount equal to the sum of- - (1) any actual damage sustained by such consumer as a result of such failure. 8 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 8 of 44 PageID #:27 15 U.S.C. § 1693m (2007) (emphasis added). This provision plainly requires a causal link between the actual damages alleged and the ATM operator's wrongdoing. Such causation does not exist in this case because the Plaintiff consented to the A TM fee. (Facts, iiii 7-8.) In a similar EFTA case, Brown v. Ban of Americ~ the cour explained, Here, Ban of America's A TMs all require that a customer consent to the assessment of a fee before the Ban will levy a charge. Each ATM is equipped with a "click-through" screen that notifies the user that he or she wil be charged a fee and requires that the user consent before the transaction wil proceed... Thus, even if Plaintiffs can establish that the on-machine notice is defective under state law, they canot establish loss causation because the click-through screen breaks the causal connection between the defective notice and the payment of the fee. In other words, the second notice obviates any har. Ban of America is entitled to sumar judgment. . .. 457 F. Supp. 2d 82,89 (D. Mass. 2006). The Brown court then concluded, "Given the electronic consent, Plaintiffs canot establish the causal link between an il-placed decal and monetar 10ss necessar to recover actual damages under the EFTA." Id. at 90. See also Marz v. PNC Ban, 2006 WL 3840354 at *5-6 (W.D. Pa. 2006) (Acknowledging Brown's holding that recovery of actul damages under the EFT A requires a causal link which is destroyed by clicking a consent button, but denying dismissal at the initial stages of the case only because the defendant's ATMs did not all operate the same way.) Here, as in Brown, the Plaintiff canot recover actual damages because the A TM screen informed the Plaintiff of a transaction fee, and the Plaintiff affirmatively pressed the click-through button and accepted the ATM fee. (Facts, iiii 7-8.) The Plaintiffs express consent to the fee thus breaks the causal link between the allegedly missing signage and Burling Ban charging a fee. For these reasons, the Plaintiff s claim for actual damages should be dismissed. 9 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 9 of 44 PageID #:28 B. "To a Wiling Person, No Injur is Done" The maxim valenti non fit injuria, which has a long history in the common law, also serves to deny the Plaintiff actual damages. Literally translated, this Latin phrase means, "to a willing person, no injur is done." The cour in Gover v. Central Vermont Ry. Co. sumarzed the doctrne, stating, If one, knowing and comprehending the danger, voluntarily exposes himself to it, though not negligent in so doing, he is deemed to have assumed the risk and is precluded from a recovery for an injur resulting therefrom. The maxim is predicated upon the theory of knowledge and appreciation of the danger and voluntar assent thereto. 118 A. 874, 877 (Vt. 1922). The Gover cour went on to explain that the maxim applied in cases where the plaintiffwas able to make an "intellgent decision," and where he neverteless acted of his own free wil in the face of har. Id. The maxim valenti non fit injuria has been recognized by the Supreme Cour since the 19th Centu. See e.g., Fitzpatrick v. Flanagan, 106 U.S. 648, 659 (1882), and Marshall v. City of Vicksburg, 82 U.S. 146, 150 (1872) ($5.00 wharfage charge not recoverable where claimant was member of city council who encouraged the new wharfage charge and ordinance passed out of his pushing the council for it.) The Seventh Circuit has also recognized the maxim for well over one hundred years. See e.g., Kingman & Co. v. Stoddard, 85 F. 740 (7th Cir. 1898) (".. . and no one acting with full knowledge canjustly say that he has been deceived by false representations. Valenti nanfit injuria. ") In a similar EFT A case fied by this Plaintiffs counsel, Judge Milton Shadur recently ruled that valenti non fit injuria prohibited the plaintiff from recovering actual damages under the EFT A because the plaintiff actually pressed the click-though button and voluntarly accepted the A TM fee. 10 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 10 of 44 PageID #:29 Mowr v. J.P. Morgan Chase Bank, N.A., No. 06-C-4312. (September 27, 2006 Transcript of Proceedings, "Exhibit C.") Judge Shadur even issued a Memorandum in that case, sua sponte, on August 11, 2006, questioning how the plaintiff could proceed with his actual damages claim where he consented to the A TM fee, in light of the maxim valenti non fit injuria. (Memorandum of August 11,2006, "Exhibit D.") On September 27,2006, Judge Shadur ruled that the plaintiff in Mowr could not recover actual damages under the EFT A because he accepted the A TM fee by pressing the button, and dismissed that portion of the plaintiffs claim. ("Exhbit C.") Judge Shadur explained, "And I recognize the (EFTA) provision says you can't make a charge. But the point is that when you talk about the damage that results from that, the damage as I have said is directly the product of the plaintiffs' own action." ("Exhibit C," p. 5.) Here, like in the Mowr case, "(The Plaintiff seeks) to catch the brass ring (or rather the gold ring) ofmajor damages and corresponding attorneys' fees..." ("Exhbit D.") But it is also clear, as in Mowr, that the Plaintiff had the opportunty to decline the A TM transaction fee before pressing the button and accepting the fee. (Facts, iiii 7-8.) Under valenti nanfit injuria, this Cour should not permit the plaintiff to knowingly and wilingly cause himself an alleged "injur," and then sue Burling Bank for exorbitant "actual damages" and attorney's fees. The Plaintiff and his attorneys should not be awarded the "gold ring" for a lawsuit the Plaintiff could easily have engineered, and instead, the claim for actual damages should be dismissed.4 4 Burling Bank's investigation has uncovered that the Plaintiffs counsel and his associates have fied approximately fourteen class action cases under the EFT A, and possibly many more in other jurisdictions, prompting the question whether these cases are a result of champert, barratr or lawyer-driven litigation, in light of the need for a "plaintiff' to voluntarily incur "damages" to create a cause of action. 11 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 11 of 44 PageID #:30 Vi. Conclusion The Plaintiffs Complaint should be dismissed in its entirety because Burling Ban canot be held liable to the Plaintiff under the EFT A for actual or statutory damages. Burling Ban posted the requisite notices on its ATMs prior to the Plaintiffs transaction, and at no time did Burling Ban cause the notices to be removed, altered or damaged. The EFT A provides an absolute shield to liability under these facts, and consequently the Plaintiff s entire suit, for both actual and statutory damages, should be dismissed. Dismissal should additionally be entered with respect to the Plaintiff s claim for actual damages, because the Plaintiff is not entitled to recover for "damages" he voluntarily incured. The EFTA requires a causal link between Burling Ban's "violation" of the Act and the Plaintiffs damages. Since the Plaintiff was notified on the A TM screen that there would be a fee for his requested transaction and since the Plaintiff pressed a button and accepted that fee, the causal link between the allegedly missing signage and the Plaintiffs injur was severed. Likewise, the plaitiff canot recover actual damages because the maxim valenti non fit injuria prohibits a plaintiff from recovering "damages" that he voluntarily incured with full knowledge. Therefore, for these additional reasons, dismissal is appropriate on the Plaintiff s claim for actual damages. WHEREFORE, Burling Ban prays that its Motion to Dismiss is granted, for all of the reasons set forth in its Motion to Dismiss and herein. Respectfully Submitted, Burling Ban /~ By: One of its attorneys 12 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 12 of 44 PageID #:31 John K. Kneafsey Donald C. Shine Thomas M. Lombardo Nisen & Ellott, LLC 200 West Adams, Suite 2500 Chicago, IL 60606 312-346-7800 13 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 13 of 44 PageID #:32 Authorities without official reporter citations Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 14 of 44 PageID #:33 weš Slip Copy Slip Copy, 2006 WL 3840354 (W.D.Pa.) (Cite as: 2006 WL 3840354 (W.D.Pa.)) H Marz v. PNC Bank, N.A. W.D.Pa.,2006. Only the Westlaw citation is currently available. United States District Cour,W.D. Pennsylvania. Paul A. MARTZ, individually and on behalf of all others similarly situated, Plaintiff, v. PNC BANK, N.A., Defendant. No. CIV A 06-1075. Nov. 30,2006. Alfred G. Yates, Jr., Gerald L. Rutledge, Law Of- fices of Alfred G. Yates, Jr., Pittsburgh, PA, Guri Ademi, John D. Blythin, Richard A. Lily, Robert K. O'Reily, Ademi & O'Reily, Cudahy, WI, Mar- vin A. Miler, Miler Faucher and Caffert, Chica- go, ll for Plaintiff. Michael H. Sampson, Thomas L. Allen, Reed Smith, Pittsburgh, PA, for Defendant. REPORT AND RECOMMENDATION MITCHELL, Magistrate 1. I. Recommendation: *1 It is respectfully recommended that the defend- ant's motion to dismiss Count II of the complaint and to partially dismiss Count I to the extent the plaintiff seeks actual damages (Document No. 18) be granted as to Count II and denied in all other re- spects. II. Report: Presently before the Court is the defendant's motion to dismiss Count II of the complaint in its entirety (alleging unjust enrichment) and to partially dis- miss Count I (alleging violations of 15 U.S.C. § 1693, et seq. and 12 C.F.R. § 205, et seq.) to the ex- tent the plaintiff seeks actual damages. For reasons discussed below, the defendant's motion to dismiss Page I should be granted in part and denied in par. The plaintiff, Paul A. Martz, commenced this pur- ported class action by fiing a two-count complaint against defendant PNC Ban, N.A. ("PNC"). The plaintiff complains that PNC violated the Electronic Fund Transfers Act, 15 U.S.C. § 1693, et seq. (the "Act"), and regulations promulgated thereunder, 12 C.F.R. § 205, et seq., (collectively, "EFTA") (Count I), for which it was unjustly enriched (Count II). The Court has jurisdiction of this matter pursu- ant to 28 U.S.C. §§ 133 I and 1367. The plaintiff alleges that PNC violated EFTA, be- cause its automated teller machines ("A TMs") did not provide him notice that a fee wil be charged and collected as part of his transaction; rather, its A TMs informed him that a charge may be assessed, even though PNC then assessed a fee and collected it as part of the electronic fud transfer. Alleging that PNC's A TMs do not provide defmitive notice to consumers that a fee wil be charged, the plaintiff brings this action "based upon the fact that the de- fendant imposed a fee without providing an accur- ate notice as required under the Act."(Complaint at irir 3, 5 6). In 12 C.F.R. § 205.16(b), it is provided: General.An automated teller machine operator that imposes a fee on a consumer for initiating an elec- tronic fud transfer or a balance inquir shall: (1) Provide notice that a fee wil be imposed for providing electronic fund transfer services or a bal- ance inquir; and (2) Disclose the amount of the fee. More specifically, 12 C.F.R. § 205.16(c) provides: Notice requirement. To meet the requirements of paragraph (b) of this section, an automated teller machine operator must comply with the following: ~ 2008 Thomson/West. No Claim to Orig. U.S. Govt. Works. Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 15 of 44 PageID #:34 Slip Copy Slip Copy, 2006 WL 3840354 (W.D.Pa.) (Cite as: 2006 WL 3840354 (W.D.Pa.)) (1) On th e ma chine. Post in a prominent and con- spicuous location on or at the automated teller ma- chine a notice that: (i) A fee wil be imposed for providing electronic fud transfer services or for a balance inquir; or (ii) A fee may be imposed for providing electronic fud transfer services or for a balance inquir, but the notice in this paragraph (c)(1 )(ii) may be substi- tued for the notice in this paragraph (c)(1 )(i) only if there are circumstances under which a fee wil not be imposed for such services; and (2) Screen or paper noticeProvide the notice re- quired by paragraphs (b)(l) and (b)(2) of this sec- tion either by showing it on the screen of the auto- mated teller machine or by providing it on paper, before the consumer is committed to paying a fee. *2 In 12 C.F.R. § 205.16(e), regulations promul- gated under the Act provide: Imposition of fee. An automated teller machine op- erator may impose a fee on a consumer for initiat- ing an electronic fund transfer or a balance inquir only if (1) The consumer is provided the notices required under paragraph (c) of this section, and (2) The consumer elects to continue the transaction or inquir after receiving such notices. The plaintiff contends that on April 4 and April 14, 2006, and on May 11 and May 17, 2006, he used a PNC A TM in Pennsylvania to conduct an electronic fuds transfer involving the withdrawal of cash; that in each of those transactions, the defendant's A TM screen informed him that he "may" be charged an A TM fee, not that he "will" be charged an A TM fee; and that he was charged a fee of between $ I .00 and $2.00 for each such electronic fuds transfer without the defendant providing him requisite notice under EFTA. (Complaint at irir 41-43). Page 2 Based on these complained-of acts, the plaintiff al- leges in Count I that PNC violated EFTA by failing to comport with the Act's notice and fee require- ments. (Complaint at irir 53, 55). In Count II, the plaintiff asserts a claim for unjust enrichment, claiming that PNC was unjustly enriched at the ex- pense of consumers such as himself by imposing A TM surcharge fees and deducting them from con- sumers' accounts in violation of EFTA. (Complaint at ~ir 57-58). The plaintiff brigs these claims on behalf of a purported class consisting of: (a) all consumers in the states of Pennsylvania, Vir- ginia, Ohio, Kentucky, and the District of Columbia (b) who initiated an electronic fuds transfer at a PNC A TM located in the states of Pennsylvania, New Jersey, Virginia, Ohio, Kentucky, and the Dis- trict of Columbia, (c) the screen of which gave a notice stating in part that the PNC A TM 'may charge a fee ...' (d) and were charged a fee for with- drawing cash from the PNC A TM, (e) on or after a date one year prior to the fiing ofthis action. (Complaint at ir 44). In response to the complaint, PNC has moved to dismiss the unjust enrichment claim in Count II for failure to state a viable claim. It also moves to par- tially dismiss the alleged EFT A violations in Count I to the extent the plaintiff seeks actual damages. In reviewing a motion to dismiss, all well-pleaded al- legations of the complaint must be accepted as tre and viewed in a light most favorable to the non- movant. Estelle v. Gamble, 429 U.S. 97, 97 S.Ct. 285, 50 L.Ed.2d 25 i (1976); Shaev v . S aper, 3 20 F.3d 373, 375 (3d Cir.2003). In Count II, the plaintiff contends that PNC was un- justly enriched by profiting from A TM surcharge fees which it imposed on consumers in violation of EFTA. In moving to dismiss Count II in its entirety, PNC argues that the plaintiffs unjust enrichment fails, as his relationship with it is based in contract. It also argues that the unjust enrichment claim is preempted by EFTA, since the plaintiffs prayer for damages in Count II is premised on the disgorge- ~ 2008 Thomson/West. No Claim to Orig. U.S. Govt. Works. Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 16 of 44 PageID #:35 Slip Copy Slip Copy, 2006 WL 3840354 (W.D.Pa.) (Cite as: 2006 WL 3840354 (W.D.Pa.)) ment of all revenues obtained by it through A TM surcharge fees, which is inconsistent with the rem- edies provided by EFT A. *3 Under Pennsylvania law, "the quasi-contractual doctrine of unjust enrichment is inapplicable when the relationship between the parties is founded on a written agreement or express contract."Hershey Foods Corp. v. Ralph Chapek, Inc., 828 F.2d 989, 999 (3d Cir.1987) (citations omitted). Also see, Wilson Area Sch. Dist. v. Skepton, 586 Pa. 513, 895 A.2d 1250, 1254 (Pa.2006) ("it has long been held in this Commonwealth that the doctrine of unjust enrichment is inapplicable when the relationship between parties is founded upon a written agree- ment or express contract"). Here, PNC avers it had a contractual relationship with the plaintiff, insist- ing that when a consumer undertakes and completes an A TM transaction, as the plaintiff alleges here, he contracts with the A TM operator. The plaintiff does not deny that he entered into an express contract with PNC when he undertook and completed his electronic fund transfers at its ATM. Indeed, the Act expressly states that a "consumer contracts for an electronic fund transfer service". I 5 U.S.C. § 1693c(a) (emphasis added). To ilustrate the transactions that may have oc- curred in this instance, PNC has submitted the de- claration of Harr C. Cornell, its Assistant Vice President and technical project manager for its A TM fleet,N1Mr. Cornell avers that after a non- PNC account-holder inserts an A TM card into a PNC A TM and before a fee can be assessed, a PNC A TM displays a screen stating that a fee "may" be charged. (Cornell declaration at ir 2). In such a scenario, the A TM screen provides in its entirety as follows: FNI. See, Harr Cornell's declaration, which is attached as Exhibit I to the de- fendants' memorandum in support of its motion to dismiss. Our review of Mr. Cor- nell's declaration does not convert the de- fendant's present motion to one for sum- Page 3 mar judgment, for "a defendant may sup- plement the complaint by adding exhibits such as public records and other indis- putedly authentic documents underlying the plaintiffs claims."Sentinel Trust Co. v. Universal Bonding Ins. Co., 316 F.3d 213, 216 (3d Cir.2003). THIS PNC TERMINAL MA Y CHARGE A $X.xX FEE FOR A CASH WITHDRAWAL. THIS FEE IS IN ADDITION TO ANY FEE THAT MAYBE ASSESSED BY YOUR FINANCIAL INSTITU- TION. DO YOU WISH TO CONTIN THIS TRANS- ACTION? IF YES PRESS TO ACCEPT FEE IN (sic) NO PRESS TO DECLIN FEE (Cornell declaration at ir 2). Mr Cornell explains that depending on the location of the A TM, the fee amount displayed on the screen (represented by "X.xX") varies. (Cornell declara- tion at ir 3). If the user presses the button to accept the fee, the user proceeds with the transaction. (Cornell declaration at ir 4). If the user presses the button to decline the fee, the operation is cancelled, and the user is not assessed a fee. (Cornell declara- tion at ir 5). The plaintiff does not dispute PNC's assertion that a contract is formed when the A TM user presses the "yes" button on the screen, thereby agreeing to con- tinue with the transaction and accept the fee. Rather, in opposing PNC's motion to dismiss his unjust enrichment claim, the plaintiff argues that his contract with PNC is void and unenforceable, as it violates the notice and fee provisions of EFT A. Under Pennsylvania law, it is generally the rule that "an agreement which violates a provision of a stat- ute, or which cannot be performed without viola- tion of such a provision, is ilegal and void."Dippel v. Brunozzi, 365 Pa. 264, 74 A.2d 112, 114-115 ~ 2008 Thomson/West. No Claim to Orig. U.S. Govt. Works. Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 17 of 44 PageID #:36 Slip Copy Slip Copy, 2006 WL 3840354 (W.D.Pa.) (Cite as: 2006 WL 3840354 (W.D.Pa.)) (Pa.l950). Having alleged that PNC violated EFTA during his transactions at its A TM involving the withdrawal of cash (complaint at irir 41-43, 53, 55-58), the plaintiff argues that the parties' contract is void, such that his claim for unjust enrichment may go forward. We disagree. *4 The approved Restatement (Third) of Restitution and Unjust Enrichment § 32 (T.D. No.3, 2004), which both parties cite to buttess their position, provides in pertinent par: A person who renders performance under an agree- ment that is ilegal or otherwise unenforceable for reasons of public policy may obtain restitution from the recipient in accordance with the following rules: (1) Restitution wil be allowed, whether or not ne- cessar to prevent unjust enrichment, if restitution is required by the policy of the underlying prohibi- tion. (2) Restitution wil also be allowed, as necessar to prevent unjust enrichment, if the allowance of resti- tution wil not defeat or frstrate the policy of the underlying prohibition. There is no unjust enrich- ment if the claimant receives the counterperform- ance specifed by the parties' unenforceable agree- ment.(Emphasis added).FN2 FN2. Tentative Draft No. 3 of the Restate- ment (Third) of Restitution and Unjust En- richment was approved at the 2004 Annual Meeting of the American Law Institute. ht- tp:/ali.orglali/70 103-ActionsTaken.htm (March 28, 2005). The admonition that "(t)here is no unjust enrich- ment if the claimant receives the counterperform- ance specified by the parties' unenforceable agree- ment", Id, comports with Pennsylvania law. That is, the Pennsylvania Supreme Court has stated: "If (the parties) have fully executed their unlawful con- tract, the law wil not disturb them in the possession of what each has acquired under it."Dippel,supra, Page 4 74 A.2d at 114, quoting City of Pittsburg v. Gos- horn, 230 Pa. 212, 79 A. 505, 510 (pa.1911). Here, the plaintiff received the benefit of the parties' contract by obtaining cash at PNC's A TM in completing his electronic fund transfers. Thus, even if the contract is deemed void due to PNC's alleged violation of EFT A, the plaintiff cannot state a claim for unjust enrichment, as the contract was fully ex- ecuted, and the plaintiff received the counterper- formance specified therein when he withdrew cash at the defendant's ATM. Accordingly, Count II of the complaint should be dismissed in its entirety, because the paries' rela- tionship is founded on an express contract, which renders the plaintiffs claim for unjust enrichment inapplicable. See, Hershey Foods,supra, 828 F.2d at 999;Wilson Area Sch. Dist. , supra, 895 A.2d at 1254. Furthermore, to the extent the paries' con- tract is deemed unenforceable due to PNC's alleged violation of EFT A, there is no unjust enrichment, as the plaintiff received the benefit of the fully ex- ecuted contract by obtaining cash at PNC's ATM. See, Restatement (Third) of Restitution and Unjust Enrichment § 32 (T.D. No.3, 2004); Dippel, 74 A.2d at i 14.FN3 FN3. Having found that the unjust enrich- ment claim in Count II should be dis- missed for failure to state a viable claim, we do not address the defendant's alternate argument that the remedy sought by the plaintiff in his claim for unjust enrichment, Le.-the disgorgement of fees-is inconsist- ent with the remedies allowed by EFT A and therefore preempted by it. PNC also moves to parially dismiss Count I of the complaint to the extent the plaintiff seeks actual damages. In cases involving civil liabilty, as here, the Act only permits a consumer to recover actual damages, statutory damages, costs and reasonable attorney fees. Specifically, 15 U.S.C. § 1693m(a) provides: ~ 2008 Thomson/West. No Claim to Orig. U.S. Govt. Works. Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 18 of 44 PageID #:37 . , . Slip Copy Slip Copy, 2006 WL 3840354 (W.D.Pa.) (Cite as: 2006 WL 3840354 (W.D.Pa.)) (a) Individual or class action for damages; amount of award Except as otherwise provided by this section and section 1693h of this title, any person who fails to comply with any provision of this subchapter with respect to any consumer, except for an error re- solved in accordance with section 1693f of this title, is liable to such consumer in an amount equal to the sum of- *5 (1) any actual damage sustained by such con- sumer as a result of such failure; (2)(A) in the case of an individual action, an amount not less than $100 nor greater than $1,000; or (B) in the case of a class action, such amount as the court may allow, except that (i) as to each member of the class no minimum recovery shall be applic- able, and (ii) the total recovery under this subpara- graph in any class action or series of class actions arising out of the same failure to comply by the same person shall not be more than the lesser of $500,000 or I per centu of the net worth of the defendant; and (3) in the case of any successful action to enforce the foregoing liabilty, the costs of the action, to- gether with a reasonable attorney's fee as determ- ined by the court. PNC moves to dismiss Count I to the extent the plaintiff seeks actual damages. It argues that the plaintiff has not pled a right to actual damages, as he has not alleged he incured actual damages "as a result of' its alleged failure to comply with EFTA. As set forth above, the Act provides that a plaintiff may recover "any actual damage sustained by such consumer as a result of (the defendant's) failure" to comply with EFTA. 15 U.S.C. § I 693m(a)(1) (emphasis added). Based on this statuory provi- sion, PNC avers that to recover actual damages, a plaintiff must plead detrimental reliance on a de- fendant's alleged failure to comply with EFTA. Page 5 The few reported cases that have discussed the ac- tual damages provision of EFTA have found that to recover actual damages, a plaintiff must establish causation of harm in the form of detrimental reli- ance. See, Brown v. Bank of America, 2006 WL 298903 I, *6 (D.Mass., Oct.7, 2006) (finding that plaintiffs must "establish causation of har in the form of detrimental reliance" to recover actual damages under EFT A, relying on case law inter- preting the identical actual damages provision in the Truth in Lending Act); also see, e.g., Polo v . Goodings Supermarkets, Inc., 232 F.R.D. 399, 408 (M.D.Fla., 2004) (stating that plaintiff "offers no authority for his inference that EFTA excuses plaintiffs from proving that their actual damages flowed from a detrimental reliance on erroneous fee postings", and observing that to certify a class ac- tion, the court would have to determine "whether (each) consumer actually saw and relied on an im- proper notice in deciding to proceed with the A TM transaction"). In Brown,supra, the cour held the plaintiffs could not establish causation of har in the form of detri- mental reliance to recover actual damages under EFT A, explaining: Even if the on-machine notice provided to custom- ers was not properly placed, an A TM user must al- ways affiratively consent to being charged a fee on (the defendant Bank's) 'click through' screen be- fore the Defendant levies a fee. Given this electron- ic consent, Plaintiffs canot establish the causal lin between an il-placed decal and monetary loss necessar to recover actual damages under EFT A. *62006 WL 2989031, at *6. Similarly here, PNC argues that the plaintiff canot establish detrimental reliance on its alleged failure to comply with EFTA notice requirements, because as par of his A TM transactions in withdrawing cash, he had to have pressed the "Yes" button on its A TM screen and thereby agreed to accept the fee that was charged for obtaining cash. In support of this argument, PNC relies on the declaration of ~ 2008 Thomson/West. No Claim to Orig. U.S. Govt. Works. Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 19 of 44 PageID #:38 . , . Slip Copy Slip Copy, 2006 WL 3840354 (W.D.Pa.) (Cite as: 2006 WL 3840354 (W.D.Pa.)) Harr Cornell concerning the above-recited text of its A TM screen, which purortedly allows a con- sumer to decline the fee if desired. In response to this argument, and in opposing PNC's motion to parially dismiss Count I, the plaintiff asserts: Mr. Cornell and PNC have made a determination as to which PNC A TM the plaintiff used, and then made factual representations about how that ma- chine operates. If all of the machines were uniform, then this would not be objectionable. However, it appears that PNC is intimating that some of its A TMs operate differently from others. Clearly, Plaintiff is entitled to explore these differences, and to allow the adversarial process to develop a factual record as to how the various A TM machines oper- ate.FN4 FN4. See, plaintiffs sur-reply brief at p. I. At the pleading stage of the case, where the plaintiff alleges that PNC "imposed a fee without providing an accurate notice as required under the Act" (Complaint at ir 6), we agree that it would be premature to conclude that the plaintiff cannot re- cover actual damages under EFTA. Thus, at this juncture, PNC's motion to partially dismiss Count I should be denied. Therefore, it is recommended that the defendant's motion to dismiss Count II of the complaint and to partially dismiss Count I to the extent the plaintiff seeks actual damages (Document No. 18) be gran- ted as to Count II and denied in all other respects. Within thirteen (13) days after being served with a copy, any part may serve and fie written objec- tions to this Report and Recommendation. Any par opposing the objections shall have seven (7) days from the date of service of objections to re- spond thereto. Failure to fie timely objections may constitute a waiver of any appellate rights. W.D.Pa.,2006. Marz v. PNC Bank, N.A. Slip Copy, 2006 WL 3840354 (W.D.Pa.) END OF DOCUMENT ~ 2008 Thomson/West. No Claim to Orig. U.S. Govt. Works. Page 6 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 20 of 44 PageID #:39 Exhibit A Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 21 of 44 PageID #:40 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION CARL BOECHERER, individually and on behalf ) of all others similarly situated, ) )Plaintiff, ) )v. ) )BURLING BANK, ) )Defendant. ) Case No. 08 cv 1332 Judge Blanch Maning Magistrate Judge Schenkier AFFIDA VIT Ms. Dora Asmussen, being duly sworn on oath, deposes and state as follows: 1. I am Vice President and Cashier of Burling Bank, and I am authorized to make this affdavit on behalf of Burling Ban. 2. The contents of this Affidavit are based on my personal knowledge of the subjects contained herein, and if called as a witness I can competently testify hereto. 3. I understand that this Affidavit is being submitted on behalf of Burling Ban in connection with a Motion to Dismiss the Complaint in the above-captioned case. 4. I reviewed the depository accounts caried on behalf of customers of Burling Ban and there is none listed for a Carl Boecherer. 5. Burling Ban operates two ATMs in the lobby of 141 West Jackson Boulevard in Chicago, Ilinois. 6. Burling Ban never operated an ATM at 144 West Jackson Boulevard in Chicago, Ilinois. 7. The existing ATMs at 141 West Jackson are side-by-side one another, and were installed in Februar of2006. Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 22 of 44 PageID #:41 8. At the time of their installation, Burling Bank caused a transaction fee notice to be posted on each of the two ATMs. The notices were affixed to the machines with adhesive. The notices provided: FEE NOTICE A fee may be imposed for a cash withdrawaL. This fee is added to the amount of your transaction and is in addition to any fees that may be charged by your financial institution. 9. At no time since the ATM transaction fee notices were installed did Burling Ban cause the notices to be removed, damaged or altered. 10. Before any Burling Bank ATM consumer was charged with an ATM transaction fee in August of2007, the ATM screen notified the consumer: Burling Ban wil charge u.s. cardholders a $1.75 fee for this transaction. This fee is in addition to any fees which may be charged by your financial institution. Do you wish to continue? Yes (Fee wil be assessed) ------------;: No (Cancel, Fee wil not be assessed) -;: 11. A Burling Ban A TM consumer must press a click through button and consent to the ATM transaction fee before the fee is charged to the consumer. Furher Affiant Sayeth Not Om4~ Dora Asmussen Signed and Sworn to before me this 11 day of , 2008. f. J~ + "OFFICIAL L" + : Luz E. Nunez- Mend~z~ + 2 + Notary Public, State of illinois : : My Commission Expires Oang/iO i :+++......++............. Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 23 of 44 PageID #:42 Exhibit B Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 24 of 44 PageID #:43 " Case 1 :08-cv-01332 Document 1 Filed 03/05/2008 Page 1 of 5 - '~ IN THE UNED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLIOIS EASTERN DIVSION CAR BOECHERER, individually and on behalf ) of all others similarly situated, ) )Plaintiff ) )v. ) )BURLING BANK, ) )Defendanl ) 08cv1332 Judge: Manning Mag. Judge: Schenkier JUY DEMAED CLASS ACTION COMPLAl~ Carl Boecherer ('¡Plaitiff'), by rns attorneys, The Consuer Advocacy Center, P.C., states as follows for his Class Açtion Complait agaist Burling Banc einefendant"). The ParUes 1. PJaintiffis an llinois citizen and resides in this distct 2. Defendant is a ban with its pricipal place of bus mess in Clcago) Ilinois. Jurisdiction and Venue 3. This Court bas federal question jursdiction pursuant to 28 V.S.C. § 1331, because this action is brought pursuant to the Electronic Funds Transfer Act, 15 U.S.C. § 1693 et seq.~ and Regulation E, 12 C.F.R. § 205.1 etseq. 4. Venue is proper in this distrct pursuant to 28 U.S.C. § 1391(b), because the transactions at issue occurred in ths distrct, Plaintiff resides in ths distrct and Defendant resides in this distrct FilED' MAR 0 I) 2008 TG MICHAEL W. DOBSINS ClERK, U.S. DISTRICT CQURT Case: 1:08-cv- 1332 Document #: 14 Filed: 05/19/08 Page 25 of 44 PageID #:44 Case 1 :08-cv-01332 Document 1 Filed 03/05/2008 Page 2 of 5 Statutorv/Ree:ulatol' Authority S. The Electronic Funds Transfer Act, 15 U.S.C. § 1693 er ,seq. ("EFTA"), and its implementing Regulation E, 12 C.F.R. § 205.1 et seq.! require an automated teller maclúe ('lA TM'") operator to provide notice to consumers that the operator wil impose a fee on consumers for conducting a transaction at an A TM and the amount of such a fee. 6. Speoifically, 15 D.S.C. § 1693b(d)(3) and 12 C.F.R. § iOS.16(c) requi that an ATM operator disclose (a) on the ATM! that a fee will be imposed and (b) on the ATM screen, that a fee wil be imposed and the amount of such a fee. 7. The EFTA, 15 U.s.C. § 1693b(d)(3)(C), and Regulation E! 12 C.F.R. § 205.16(e), prohibit the imposition of a fee for using an ATM if the foregoing notice requirements ar not met. Fads Related To Carl Boecberer 8. . On August 23,2007, Plaintiff went to use an automa.ted teller machie ("ATM!!) located near his curent place of employment at the Chcago Board of Tmde. 9. In the lobby of 144 W. Jackson Boulevard, Defendant mataed two ATM machines located side by side one another. 10. On August 23, 2007, there were no notices posted on or near either of Defendant's ATM machines located in the lobby of 144 W. Jackson Boulevard that disolosed that users would be charged any fee for their use. i 1. On August 23, 2007, Plaintiff used one of Defendants ATMs located at 141 West Jackson Boulevard, Chicago, illinois. 12. On August 23, 2007, Plaintiff was charged a Si.75 fee to withdraw money frm Defendant' s ATM. 2 Case: 1:08-cv- 1332 Document #: 14 Filed: 05/19/08 Page 26 of 44 PageID #:45 Case 1 :08-cv-01332 Document 1 Filed 03/05/2008 Page 3 of 5 13. Inspection of Defendant's ATMs shows that there were no signs or indicia that either of Defendant's ATMa previously had notices of an ATM fee disclosed on or near the surface of either A TM located at 14 1 West J a.ckeon Boulevardt Chicago, Ilinois. COUN I VIOLATION OF EFTA AN REGULATION E 14. PlaintiffincorporatcB herein by referece pargraphs 1-13. 15. Plaintiff brings this Count on behalf of hiself and a Class or aU pen;ons who were charged a transaction fee for the use Dcfendanes ATMs loeated in the Board of Trade Building at 141 West Jac1cson Boulevardt Chicagot ilois. 16. Pursuant to Fed. R. Civ. P. 23, a class action is appropriate and preferable becauset on infonnation I:d belieft the putative class consists of hundrds of persons and is so iiwnerous that joinder of all putative class members. whether otherwise required or pcnnitted. is impracticable. The actual number of putative class members is in the exclusive control of Defendant. 17. Pursuant to Fed. R. Civ. P. 23, a class acton is appropriate and preferable because questions of law and fact conuon to the Class predominate over any questions affectig only individual puta.tive class members, includig: (a) Whether, puruent to 15 D.S.C. § 1693b(d)(3)(A) and 12 C.F.R. § 205.16. Defendant was an A TM operator at all releva.nt ties durig the class period that imposed a fee on conswners for providing host trsfer seivices to those consumers; a.nd '(b) Whether, at all relevant ties durng the class period, Defendant failed to comply with the notice requirments of 15 U.S.C. § 1693b(dX3) and 12 C.F.R. § 205.16(c). 18. Pursuant 10 Fed. R, Ciy, P. 23, a class action is appropnate and preferable because Plaintiffs claims are typical oftlie claims oftle putative class members, includig: 3 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 27 of 44 PageID #:46 Case 1 :08-cv-01332 Document 1 Filed 03/05/2008 Page 4 of 5 (a) Plaintiff and all putative class members used an ATM operated by Defendant; (b) Defendant failed to provide notices compliant with 15 U.S.C. § 1693b(d)(3) and 12 C.F.R. § 205.16(0) to Plaintiff and all putative class member; and (c) Defendant ilegally imposed a fee on Plaintiff and all putative class members for their respective use of Defendant's ATMs located at 141 West Jackson Boulevard, Chicago, ilinois. 19. Pursuant to Fed. R. Civ. P. 23, a class action is appropriate and preferable, because Plaintiff wil fairly and adequately protect the interets of the Class and Plaintiff has hired counsel able and experienced in class aotion litigation. 20. Pursuant to Fed. R. Civ. P. 23(b)(3), class certification js a.ppropate because questions of law or fact common to the Class predominate over any questons affecting only individual putative class members, and 8 class action is superior to other available methods for the full and effcient adjudication of the controversy. 2 i . Pursuant to Fed. R. Civ. P, 23(b )(3)t class certfication is appropriate because ths Court and the paries would enjoy economies in litigatig common issues on a class-wíde basis instead ofa repetitive individual basis. 22. Pursuant to Fed. R. Civ. P. 23(b)(3), class cerfication is appropriate because the size of each putative class member's actual damages is too small to make individual litigation an eoonomical1y viable option. 23. Pursuant to Fed. R. Civ. P. 23(b)(3), class certification is appropriate because no unusual diffculties wil likely occur in the management of the Class as all questioIl of law or fact to be litigated at the liabilty stage are common to the putative class an all compensatory relief is concomitant with a liabilty fmding and can be calculated by automated and objective meas. 4 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 28 of 44 PageID #:47 Case 1 :08-cv-01332 Document 1 Filed 03/05/2008 Page 5 of 5.. . - .. 24. Puruant to 15 U.S.C. § 1693b(d)(3)(D)(i) and 12 C.F.R. § 205.16(a), Defendant was an A TM operntor at nIl times relevant to tlùs action. 25. At all relevant ties to ths action, Defendant was the A TM operator of the Burling Bank A TMs located in J 41 West Jackson Boulevard, Chicago, Illiois. 26. Defendant tàiled to comply with the notice requirements of 15 V.S.C. § 1693b(d)(3) and 12 C.F.R. § 20S.16(c) when providig ATM services to Plaintif and all putative class membe. 27. Pursuant to 15 V.S.C. § 1693b(d)(3)(C) and 12 C.F.R. § 20S.16(e), Defendant, therefore, ilegally imposed a fee on Plaintiff and al putative class members for their respective use of De fendant s A TM/:. WHEREFORE, Plaintiff, individually and on behalf of the putative class, requests that tius Court enter judgment in lú:: favor and against Burling Ban and award the following: A. Actual and statutory damages as set fort in the EFT A and Regulation H; B. Attorneys! fees and costs of suit; and C. Such other relief as ths CoW1 deems proper. Plaintiff Demands A TrIal By Jury By: Dated: MarchS- , 2008 Lance A. Raphael Stacy M. Bardo Allson Knttiom The Consumer Advocacy Center, P.C. 180 W. Washington St., Ste. 700 Chicago, IL 60602 312.782.5808 5 Case: 1:08-cv- 1332 Document #: 14 Filed: 05/19/08 Page 29 of 44 PageID #:48 Exhibit C Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 30 of 44 PageID #:49 I. 10 I'.:. . I. : I, B".'¡d r.... I I.,. .'. I l r 10 I (.' I I..'....... . , l~ l.,. i f'.-1\0 I,. L~: I. 1 2 21 22 2 2 i 1 2 IN TI UNImD sSmSDIS':CT COURT NORT' DISTRCT OF ILLINOIS EATE DIVSION BRYA MOWR, ET AL., ) DOCKT NO. 06 C 4312 ) piain:f;i.:fs, ) )V'. ) )J1 MORG CH BA, N.A., ) Chcago, Illinois ) Septemer 27, 2.006 De£endat.) 9:00. o'cioc1 a.m. 10 11 TRSCR'l OF PROCEINGS BEFOR TH HONORALE MILTON I. SHAUR, Judge 14 APPEACES: For the piairtiffs: 1 MR. ANONr FA and '.M. ROBEl' K. O'REILLY 1 1 For the Defendat: 'MR. lm. BLOC an MR. JORD GINSBG: an MR. GRGOY D. ISBLL JESSE :ARE OfficiaJ CoUrt RepC?rter - U. S. District Court 219 S. Dearoi: Street: Chcago, Illinois 60604 (312) 435-6899 '" It '" '" '" * Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 31 of 44 PageID #:50 ¡: 10 I I I" (, ¡ , fQ I 1 ¡,~; f'" , ' ¡:" ' I l I~ t,:.::' ',"./.~-~., /. 1 2 2 TH COURT: 06 C 4312, Mowr against ,j Morgan Chase. MR. FATA: Good morning, your Honor. Ant:ony Fata, F-a-t-a, on bebaif of t:e plainti£fs. MR. 0 'RELLY: Aiong wit: Atto.rey Robert 0 'Reilly on beha.lf of t:e plai. tiff. MR. BLOcK: Good ~orning, your Honor. Mark ~locker, B-l-o-c-k-e-r, on behalf o:E defendant: ,j Morga Cbase. JP Morgan. 1 MR. GINSBEBp: Jorda Girsberg on behal:E o£ de:Eendat MR. ISBELL: Gregory Isbeii, your Honor, for JP Chase. TH COu.T: Is t:e meter ruing enough with five of MR. ISBLL: I am in-bouse, your Ronor. 1 -- although you know' it dic:' t conform to the one-day THE COURT: Well" look. I have received, as I -tst 1 read-time-notice requrements -- but because it was comig on 1 now I assume that the reason :Eor liaving filed .t:e motion' on 1 t:e defeidåt, a motion', to. dismss or strike the 2i have read it? 2 cia:l for actual dåages was served, yesterday, and I assume you 22 2 MR. F.TA: 2'at is correct, your Honor. t:e view t:at I had suggested in my origial meo that I issued THE COURT: Well, you know it really echoes I t:iI 2 SUa sponte when'I got the t:ing, you know you might quarrel Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 32 of 44 PageID #:51 I . I:.:o I. ¡ f' I' I: i ! rl: ! ( I., t.._ l r t. ~ I ~I .' '\10 t", , 3 1 with my having resorted to the ancient voienti non :fit injuria and say, "Weii, that was created :for a different context." But the :fact is that: if you thii: about it, when you t: about it: in term of proximte cause or the notion that you can't ascribe whatever daage may be asserted to the vioia tion itseif, because of the :fact that tbe peopie were certaiziy on notice that if they continued they were subject tQ the -- even w:ith the use of t:e word ".my" -- they were subjéct. to t:e pCitëi tiai they were going to pay a $2 charge far usi.g :this ADif'. Now that being the case, I don't: see any prospect for. t:e actuai daaçtes aspect o:f this thi.g. I read your memo as well. But: when you taik about dages, wlie, YQU talk about 14. injury, the incidet has to be the consequence of tbe otler side's action. In th~s case, you know you can slice ita whole group of. di:f:ferent 'ways. You can say t:ere was an indePendent and intêrvenng ciause, 'to coin another phrase t:a't' s laW'ru in the laW', and th~ i.teriening clause was that t:e customer, the plaintiffs here, when tley see tle t:ng on the screen and recog:ze tha t they are a t risk at a miniwi go ahead and do i t: any event. And t:a t 's of coarse wha t liappened liere. Now don''t misunders'tand. I am not suggesti.g, and I that Cbase didn't suggest, that there wasn't a tei of the maer in wb.ich the reg read, and Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 33 of 44 PageID #:52 fb i I.. r."! i ( ...:~J ¡ ,0 ¡ ¡ L ¡..... .. I L ': r kJ t. :'; -".,~,':' ~c ~ ~l I: i 4 therefore a statutory v:oiation because of the fact that: t:e ianguage is different: in the two subsections, and t1at: oniy one of t:em is incozporat:ed int:o what goes on t:e screen. But: . 1:a't's a different issue. The fac't of 1:e vioia tion is a di££eren't issue :from 1:e notiön of damges. And accordingJ., you know whet:er :you caii ita dismssa'i or s'triking of 1:è cia:i for actuai cfges, my det~rm.;"ation is that: you are reiega'ted basicaiiy, to statutory dages, not: tIe aqtua. daages. 10 MR. 0 'REILLY: Your Honor, I certa~iy respect t:e 11 Court's view. I wou.d simiy say t1a't 1:ere is a federai 12 s'tatii'te and reguation on point. And that federai reguiation and" s'tatute st.at.és t1at. if the ATM operator doès not provide 1:e proper not:ice it: may not. charge a fee. We are -- THE CO~i': Weii, I am we.i aware of t1a t. ~. OitaILLY: Exceiient. I just: wat our case t:o be made. ~e haven' t submi t.ted a répiy. TH COURi': Well, you made your case, how~ver, in : your memorandu regarding tle actual c:ges. I .mean you anticipated the issue, and properiy so, because I had said "Let:'s hear about: that:. " So I read tlat. I read whatever aut1orit.ies you deai t: wi t1 . But again I think tha t you are - - I won' t: characterize it as "confusing the issue, rr but reaiiy you are Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 34 of 44 PageID #:53 i fO ¡' ! r.." ". ¡. I r..... i,'" f\ ¡ rO I. f. ¡, l ¡,.,,::: . . r l L~ f t'" L:¡ r , 5 i cont~iating two matters: One o:f them is the existence o:f vi02ation which I wii2 :find based on your ailegation and your i charge. But the point is that .when yaa ta2 about the subss~on is established. And actul2y I don't read the de:fezdat as having quarreled wit1 that. That is, they are sayig -- I don't know if they wat to give that up forever, but in any event for 1:is purose t1~y are saying, "We look a t the coçlain t. 'We acknowledge that that. establ~shes vioiation o:f the provision. " And I recognze that t1e provision says you can't 11 daage that results from that, the daage as I have said is 12. directiy the product: of the piainti:f:fs' own action. They characterize .it in a nmier of di£erent ways -- you ~ow,' aSS1tion o:f risk -- you know drawing on a lot o:f otber areas of the law. But the point is t:at -- and voiwit:ar pàyment -- howE¡ver you character.ize it in te~ o:f doctrine, the answer is still t:e same. Aid that is, t1at you canot iay the cla. of dage at: thli t;e£endat's doorstep. They may have a violation, 1 but the dage res~ted :from the piainti:f:fs' action. 2 .Anç( .actuaiiy havig been forewarned, incidèbtaiiy, 21 the oniy conceivable contention that could be ,made to .t1e 22 contrary is, "Weii, gee, we were terribiy inconvenenced," you know, because we were there at the machie, and t1ere:fore, "Yes, 'maybe we took our chances. Aid isn't .i.t horribie that we 2 got st:ck wi.t1 a $2 charge." Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 35 of 44 PageID #:54 ( f.' , ),10 ¡ ¡,. . .. i r..... . I . 1. .' ¡ r.D f' i (' ( . L.: I.. t..: (0 W...,;....,~~i~... t.... 6 1 But come on. In reai W'orid ter you go into your 2 iocai supe.rrket, you got an A!f, you knoW' the idea of saying that soml5oW' ha:r is attached to the fact that sO.iebody may be stationïad at a mac1e and is put .to the terribie pressure of "Gee, am I going to get my money out of ths one or another one, rr f:a t 'again in the real worid doesn't: persuade. So I am granting the motion to ii: t -- I don' t know W'bether to charact~rize it as strild:ng t:è claim as kind 'of and odd locution -- I am. gzaT1f:g the möt:ion to lii t the 10. recoverable 4ages, the statutoJ: dages. Defendat has no 11 qaarrei Wlth that. 12 So 'my next question is what: kind of f:e do$s the de:fendØ t need to fiie an anSTier to the Coçlaint? 'MR. 0 'REILLY: I c! sarry, to inter.rpt:, your :Honor. Just: for tht3 sake of coçletenes's t1eir motion actually request:ed two thngs. Thé second Was to dismss Counts 2 of tle coiiaint, whicb is a count for unjust: enic1i~nt. I assume that: you are going in the same venue. .Bt: just: for the sake of complet:ene~s I th you sbould :finsh t~at. THE COURi': Yes. I appreciate that:. Yes. Tbe charact:eri.zation .of "unjust enicIent" o:f course is anotler one o:f tlose labels. And it's a iabel for a si f:ua tiori iri whicI the standards are the ones t:1it are set out in the motiori., And I tbink that the same analysis wouid knock out th~ comion law 2 claim they have relied on. !ley have relied for tha t purpose Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 36 of 44 PageID #:55 l ) i10 ¡ I ¡ : r..'-" ( ¡ ¡ ¡ if) ( I \ , i L ¡Ud ¡ I L" (0 ( t:-¡.1f.~; 7 i on iocai iaw ra tber tban federai iaw, and I tbin the same 2 anaIysis appiies. So t:ba t:. means t:a tit's an answer, and t:ank YOtI for raising t:at. It's an answer to Count i and what kind of 't~e are YOtI going to need? MR. BLOCKR: Your Honor, we can answer in i4 days. THE COUR: Okay. I wiii grant you i4 days. Now t:s is I t1:i iikeiy t:o be iargeiy a paper case. I don't: know -- you bow Ruié 26 (a) as you know says advance discIosure nave to be made. And I am fran.Jdy not exactiy sure wha t the io advance disciosures wouid bave to be in this situation. Tbere 11 is reaJiy not å quarrei about what .hppened and t:e circustances, and t:e fact: t:at I gat1er tbat t:his muc.å be the tiiversai sif:uation in 'term of the C1ase AT.. Am I. rigbt about t1at? MR. BLOC: Your Honor, counei and I t:aiked about . a scbedaie as your Honor's order required tIS f:o do. OUr stIggestion was act:aiiy going to be to hoid off on d9irig -any . discovery unt.:i your Honor resoived the issuing of actuai daages. 'We perhaps naiveiy didn't anticipate t1at: you wouid ruie on t:at today. Having done that:, we thought: .we wouid starf: discovery after your Honor's ruiing. However, I guess wha t I wouid recommend, your .Honor, is maybe t:e part:ies shou1d si t: down an decide wbere We are at Honor's ruiing on wha t ne.eds to be done.. Because as. 2 said, I do t:in you are probabiy correct: it's a Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 37 of 44 PageID #:56 I10 ¡ ('. f':, (. fO l r i \' ". v'c.... l' ¡ L. ¡ L) t.,,; ...... ';~.J ¡ ( d 8 1 paper case. And as your Honor corrected. THE COURT: A paper Chase? MR. -BLOC: Yes. And at ieast at 1;his point we have £or puxos.es of the motion to' dismss, we didn' t contest that there was a vioiation. But: we .wou.d iüe t:o sit: do.wn and.. t:all with the piain t:i:E£s and see if there is way 1;0 resoi ve this, you know promtiy. THE COURT: Ali right. -.Why don' t: we do th.s t:en. Suppose t:at: I set: t:his out: £or'maybe about: t:ee weeks. Let: 10 me t:ake a look here. How are you perhaps si tua t:ed at: 8: 45 on 11 Oct:ober 16th, a Monday? Because t:e problem is .t:e £oiiowing 12 week I going be away. We have a Sevent: Circuit: workshop t:o days, and then I will be si t1;ing wi t: the Ninth Circui t. And so if we cian' 1; .~kff it in tha t week, I t:ir I could do it eit1er -- yes 8:45 t1e 16th might be best. HoW'is that £or bot: sides? MR. 0 ' R/ILLY: Tha t: works, sir. THE COURT: Aliright:. St:.atus then at: 8:45. Ja. .:BLOCl: Your Honor, I don' 1; wa t: to upset t:e appie cart:. Somebody couId aiways att:ençl in my st:ead. But I know I have depositions in washing t:ough that entire week. Is it possibie we could do it before .that time? THE COURf': . Weii, it's reaiiy wha t: you teii me. I mean you want the opport: 1;1" t:o con£~r. 2 MR. BLOCK: Yes. Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 38 of 44 PageID #:57 In.. j f" I i.. ¡...-..... ¡ ¡ r'J I l ¡ r t, ¡ L f l (:) I." L.... 9 1 TH COUP'r: I don' t know bow much 'time you need for 2 tha t . .M. BLOCK: Weii-- 'rIl COUP'r: I can do it eariier, . for exa.ie on Friday the 13th maybe at 9 0' ciock . MR. ¡BLOCK: ~at wouid be better for me, :if it' s acceptabie to pia:in tiffs' . cowisei . "THE COURT: Ali right. status then 9 o'ciock On October 131:. 1 MR. BLOCK: Okay. 11 TH CO'C: Let me make a note here. 12 Okay. T.an you aii. MR. O'!ØILLY: ~an. you, your Honor. TIf COri7!: I don' t have a probiem deferring :i t. ;let. me ask you -with next weak, again I am aJso going to triai, but I shouid be though with that -- we1i, it may spiii over into the beginning o;e .t:e following week, because rememer. I am . starting on .the 3d, I am starting on !lesd.y. And then we have got a holidLy, as you know, COiumUB Day observed on the 9th. So On maybe it .would be -- let's see. 'We bave a sentenc.ig on the 11tb at 11 ,,'clock -- at 1:15, rat:er? THE CLE: David camos. THE COURT: Okay. If you want to do it on t:e llt:, 2 Weåes~y -- w~l, I'd bètter not. I am triIgto be sure witb.. 2 the trial. How about the 12th. The 12th is clear, isn't it? Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 39 of 44 PageID #:58 ( I10 ¡ ¡ I.' r L i fO í l L: L. l. ¡ lJ ¡, b" ¡ 2 1 MR. :FTA: That's fine-- THE COURT: SO we wiii set: i. t for 1: 15 on Tlursday tIe 12th. J4. FATA: Than you vez: much. MR. BLOCK: T1ai you, your Honor. (WICI :WE ALL OF 'J PROCIPINGS HA :A TH BEG OF '1 ABOVE-ENITLE CAUSE ON TH DAY AN DA AFORESAD.) CERTIFICATE I HEY CEIFY 'tat tle foregoin is a t.re an correct: . trancript: rromt: report of prociæedigs in th above-~ti tied cause. JESSE 1lS, CSR OFFICIA COURT REO.RmR riTED STA'S DIS~CT COURT -NORTH DISTRICT OF ILLINOIS 'EATE DIVSION ii:' Feb.ra. 26, 2007 2 10 '., Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 40 of 44 PageID #:59 Exhibit D Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 41 of 44 PageID #:60 IN THE UNITED STA'l8S D1S'lRIC'l COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION BRYAN MOWRY, et a1. , ) )Plaj,ntlff, ) ) v. ) No. 06 C 4312 ) JP MORGAN CHASh; BANK, N. A., ) ) Defendant. ) MEMORANDUM This Court has just received the chambers copy of a newly- filed putative class action brought against JP Morgan Chase Bank, N. A. ("ChaseU). Each of three plaintiffs (who are also the proposed class representatives) complains there that he used a Chase ATM and was charged a $2 fee for that use. As might be expected by anyone familiar with actions of this nature, plaintiffs seek to catch the brass ring (or rather the gold ring) of maj Or damages and corresponding attorneys' fees in a presently unascertainable amount. This Court is contemporaneously issuing its customary initial scheduling order, but this additional memorandum is being issued to apprise both (1) the putative class counsel and their clients and (2) Chase and its counsel of a question that this Court perceives as being posed by the 1.i ti gaUon. What plaintiffs point to in the Complaint is a difference in language wi thin portions of the Federal Reserve System's Regulation E appe¿iring in 12 C.F.R. (cited "Reg. E §__U), whiçh Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 42 of 44 PageID #:61 has been promulgated to implement the Electronic Fund Transfers Act ("ActU).1 Based on that difference in language, plaintiffs' contention is that the information that appears on Chase's ATM screens must say that it will (not that it ma-) impose a fee for use of the ATM (attached to this memorandum are pages of the Complaint that reproduce (1) Reg. E §205.16(b), (c) and (e), (2) Section 1693 (b) (d) (3) (C) and (3) the two forms of notice that are provided by Chase--one being affixed to the ATM itself, the other being displayed on the ArM screen before anyone such as plaintiffs (that is, any person not holding a Chase card) implements the contemplated cash wi thdrawal) . No opinion is of course expressed here as to the substantive merit of plaintiffs' legal contention, a question to be resolved after the parties tilt their legal lances on the subj Bct. What is said here is instead j.ntended to apprise counsel of a question that they should be prepared to address as part of thei r input, assuming for that purpose that plaintiffs are correct in urging their legal position as to the noncompliance of the on-screen notification with the language of Reg. E. In those terms it seems clear from Complaint 'J30 that anyone \..ho sees the "may çhargelr notice, and who therefore asserts uncertainty as to whether he Or she wiii in fact be charged a Citations to the Act will take the form "Section __I U similarly eliminating òny need for repeated references to 15 O. s. C. 2 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 43 of 44 PageID #:62 . .. fee, then na s the express option to proceed or not to proceed with the withdrawal of funds. If that is indeed so, counsel should be prepared to provide authority as to whether or not the decision to proceed might be viewed as a self-inflicted wound of the type that has long been characterized in the law by the maxim "valenti non fit inj uria. U That question appear.s to be relevant in part because of the special class-action provisions as to civil liability, as set out in Section 1693m, which speaks of such liability: in any amount equal to the sum of (1) any actual damage sustained by such consumer as a result of such failure; ... * * (2) (B) in the case of a class action, such amount as the court may allow, except that (I) as to each member of the class no minimum recovery shall be applicable. . .; and (3) in the case of any successful action to enforce the foregoing 1 iabil i ty, the costs of the action, together with a reasonable attorney' 8 fee as determined by thG court. Again, the subject touched on here is one that counsel should be prepared to discuss at the time of the initial status hearing as tablished by this Court's contemporaneous memorandum order. C7W4. Ç) ~.~.. Milton I, Shadur Senior United States District Judge Date: August 11, 2006 3 Case: 1:08-cv-01332 Document #: 14 Filed: 05/19/08 Page 44 of 44 PageID #:63