In Re: Checking Account Overdraft Litigation

RESPONSE in Opposition re MOTION to Stay Litigation Pending Appeal

S.D. Fla.October 11, 2011

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION CASE NO. 1:09-MD-02036-JLK ) IN RE: CHECKING ACCOUNT ) OVERDRAFT LITIGATION ) ) MDL No. 2036 ) ________________________________________________) ________________________________________________ ) THIS DOCUMENT RELATES TO: ) ) SECOND TRANCHE ACTION ) ) Gordon v. Branch Banking & Trust Company ) S.D. Fla. Case No. 1:09-cv-23067-JLK ) N.D. Ga. Case No. 1:09-cv-01744-CAP ) ________________________________________________) PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANT’S MOTION TO STAY LITIGATION PENDING APPEAL Plaintiff Faith Gordon hereby files her Response in Opposition to Defendant Branch Banking & Trust Company’s (“BB&T”) Motion to Stay Litigation Pending Appeal. [DE # 1899]. Far from being worthy of a stay, BB&T’s position is baseless and nearly sanctionable. I. Introduction Despite having its previous motion to compel arbitration in this matter denied, having its motion to reconsider denied, losing its appeal to the Eleventh Circuit, having its petition for rehearing and/or rehearing en banc denied, and having its motion to stay the mandate denied, BB&T saw fit to file a “renewed” motion to compel arbitration that did not advance any new legal theories or case law than that previously raised before this Court and the Eleventh Circuit. This Court was correct to reject BB&T’s implicit suggestion that it can ignore the mandate from the Eleventh Circuit and simply renew arguments that have already been rejected. Now, by taking an appeal from this Court’s denial of its renewed motion, BB&T seeks yet another stay to preclude this case from moving forward. While Plaintiff’s counsel has stipulated to a stay with regard to the appeals taken from this Court’s September 1, 2011 Order denying renewed motions Case 1:09-md-02036-JLK Document 1970 Entered on FLSD Docket 10/11/2011 Page 1 of 9 2 to compel in the Barras, Powell-Perry, Buffington, Hough, and Given cases, BB&T is not entitled to a stay in this matter because not only was its renewed motion frivolous, but its second appeal to the Eleventh Circuit on the same issue is also frivolous and will surely fail. II. Relevant Procedural History On May 22, 2009, Ms. Gordon filed her complaint in the Superior Court of Fulton County, Georgia alleging that BB&T improperly assessed overdraft fees. See Exh. A to DE # 1 in Case No. 1:09-CV-23067-JLK.1 On June 29, 2009, BB&T removed the case to the District Court for the Northern District of Georgia. [DE # 1]. On July 7, 2009, BB&T filed its motion to compel arbitration along with its answer. [DE # 5, 7]. On October 2, 2009, U.S. District Judge Charles Pannell entered an order denying BB&T’s motion to compel arbitration. [DE # 18]; see also 666 F. Supp. 2d 1347 (N.D. Ga. 2009). Relying largely on the Eleventh Circuit’s decision in Dale v. Comcast Corp., 498 F.3d 1216 (11th Cir. 2007), the district court found BB&T’s arbitration clause to be substantively unconscionable and unenforceable. [DE # 18 at 11-13]. On July 16, 2009, the JPML conditionally transferred Gordon to MDL No. 2036. On August 14, 2009, BB&T objected to transfer. On October 13, 2009, the MDL panel denied BB&T’s motion to vacate and ordered that Gordon be included in MDL No. 2036. Following the transfer of Gordon to this Court, on October 16, 2009, BB&T moved for reconsideration of Judge Pannell’s order as to arbitration. [DE # 23, 24]. In support of reconsideration, BB&T filed additional declarations and new evidence. [DE # 25]. BB&T also attempted to argue for the first time that the question of arbitrability should be determined by the arbitrator, not the Court. Id. On November 5, 2009, Ms. Gordon filed her response to reconsideration. [DE # 125 in Case No. 1:09-md-2036-JLK]. Ms. Gordon took issue with BB&T’s attempt to introduce new evidence in support of reconsideration because the evidence in question was previously available to BB&T. Id. at 3-6. On November 6, 2009, this Court denied reconsideration. [DE # 44]. BB&T appealed the initial order and the order denying reconsideration. [DE # 38, 49]. Before the Eleventh Circuit, briefing was completed in February of 2010. Following the conclusion of briefing, the parties filed numerous notices of supplemental authority pursuant to 1 Unless otherwise noted, all docket entry citations refer to filings in Case No. 1:09-cv-23067- JLK, as the majority of the previous filings in this case were entered in this underlying case number prior to the Court’s instructions to file all items under Case No. 1:09-cv-2036-JLK. Case 1:09-md-02036-JLK Document 1970 Entered on FLSD Docket 10/11/2011 Page 2 of 9 3 Federal Rule of Appellate Procedure 28(j). Among the notices filed by BB&T was a notice of the Supreme Court’s decision in Rent-A-Center West, Inc. v. Jackson, 130 S. Ct. 2772 (2010), and the Eleventh Circuit’s decision in Cappuccitti v. DirecTV, Inc., 623 F.3d 1118 (11th Cir. 2010). Each notice summarized the decision and argued its application to the Gordon appeal. Following oral argument, the Eleventh Circuit issued an order affirming the denial of arbitration. Gordon v. Branch Banking & Trust Co., 2011 WL 1111718 (11th Cir. March 28, 2011). In Gordon, the Eleventh Circuit held the arbitration clause unconscionable under Georgia law. 2011 WL 1111718 at *3. In reaching this conclusion, the Eleventh Circuit reaffirmed its ruling in Dale, stating that under Georgia law, “the enforceability of a particular class action waiver in an arbitration agreement must be determined on a case-by-case basis, considering the totality of the facts and circumstances.” Id. at *2 (also noting that in “addressing the enforceability of a class action waiver” under Georgia law the courts have “not adopted a bright- line rule”). BB&T petitioned for rehearing. While the petition was pending, the Supreme Court issued its decision in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011). Thereafter, BB&T filed several notices of supplemental authority arguing that Concepcion precludes a finding that the arbitration clause was unconscionable and unenforceable and invited the court to vacate its decision. However, the Eleventh Circuit rejected the bank’s argument and, on June 3, 2011, denied rehearing. See June 3, 2011 Order (Exh. A to DE # 1749). Not a single judge requested a poll of the Court. Id. Subsequently, BB&T sought to stay the issuance of the mandate by filing a motion to stay that relied almost exclusively on Concepcion. This motion was also denied by the Eleventh Circuit. See July 1, 2011 Order (Exh. B to DE # 1749). Remarkably, despite all of this procedural history, on July 12, 2011, BB&T took the position that it can ignore all of the previous decisions and simply file a renewed motion to compel arbitration. [DE # 1721]. In response to BB&T’s renewed motion, Plaintiff filed a motion to strike this improper submission and a conditional response in opposition. [DE # 1749]. BB&T subsequently filed a reply in further support of its renewed motion to compel and a response in opposition to Ms. Gordon’s motion to strike. See DE # 1789, 1792. On August 15, 2011, Plaintiff filed a reply in further support of her motion to strike. [DE # 1797]. On September 8, 2011, this Court denied BB&T’s renewed motion. [DE # 1859] (“September 8th Order”). In denying BB&T’s renewed motion, this Court concluded that “Defendant has shown Case 1:09-md-02036-JLK Document 1970 Entered on FLSD Docket 10/11/2011 Page 3 of 9 4 no basis for reconsideration of its Renewed Motion, which was ruled upon and denied by U.S. District Judge Charles Pannell, this Court (DE # 135), and the Eleventh Circuit.” Id. at 1. At the same time BB&T was pursuing a renewed arbitration motion before this Court, BB&T filed a Petition for Writ of Certiorari in the Supreme Court of the United States in this matter. See Exhibit A to DE # 1856. BB&T’s pursuit of a writ from the Supreme Court, while simultaneously attempting to re-litigate the same issues that are the subject of its Petition before this Court, further illustrates the frivolous nature of BB&T’s renewed arbitration motion and its second appeal. III. Argument As the Eleventh Circuit established in Blinco v. Green Tree Servicing, LLC, upon filing of a motion to stay, “either the court of appeals or the district court may declare that the appeal is frivolous, and if it is the district court may carry on with the case.” 366 F.3d 1249, 1252 (11th Cir. 2004) (quoting Bradford-Scott Data Corp. v. Physician Computer Network, Inc., 128 F.3d 504, 506 (7th Cir. 1997)). Defendant’s appeal here is completely without merit and this Court’s well-reasoned September 8th Order will be affirmed on appeal. Therefore, a stay is inappropriate. Ms. Gordon’s case against BB&T need not be stayed if this Court deems that the appeal of the arbitration ruling is frivolous. Blinco, 336 F.3d at 1252. While courts have used somewhat varied language in making this determination, the basic idea is that an appeal can be found frivolous if it lacks colorable support or is contrary to recent controlling case law. See, e.g., Nagle v. Alspach, 8 F.3d 141, 145 (3d Cir. 1993); In re Britton, 950 F.2d 602, 607 (9th Cir. 1991); Amwest Mortg. Corp. v. Grady, 925 F.2d 1162, 1165 (9th Cir. 1991); Bahena v. American Voyager Indem. Ins. Co., 2008 WL 874851, at *1 (M.D. Fla. March 27, 2008) (“the existing case law does not support [the appellant’s] position”); Kirleis v. Dickie, McCamey & Chicolte, PC, 2007 WL 3023950, at *3 (W.D. Pa. Oct. 12, 2007) (denying motion to stay because appeal lacked “colorable support”); also Hill v. Peoplesoft USA, Inc., 341 F. Supp. 2d 559, 561 (D. Md. 2004) (finding that recent appellate court ruling “renders the Defendant’s appeal questionable, if not frivolous”); Bailey v. Ameriquest Mortgage Co., 2002 WL 1835642, at *1 (D. Minn. Aug. 5, 2002). Applying this standard here, it is clear that the appeal filed by BB&T is frivolous because the arguments raised by the bank have already been considered and rejected by this Court and the Case 1:09-md-02036-JLK Document 1970 Entered on FLSD Docket 10/11/2011 Page 4 of 9 5 Eleventh Circuit. Moreover, BB&T’s simultaneous pursuit of a writ of certiorari from the Supreme Court further reveals the impropriety of the renewed motion and second appeal. Just as it did in its renewed motion, BB&T’s justification for its request for a stay is its contention that it has two seminal Supreme Court decisions to support its appeal, namely Rent-A- Center West, Inc. v. Jackson, 130 S. Ct. 2772 (2010), and AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011). See Motion to Stay, p. 4. However, as Ms. Gordon pointed out previously, and this Court noted in its Order, BB&T’s attempt to rely on these decisions is merely a ruse because it had every opportunity to raise these issues in support of its initial motion to compel arbitration and either failed to do so, or had such arguments rejected by the Eleventh Circuit. See Motion to Strike, pp. 4-7 [DE # 1749]; Sept. 8th Order, pp. 1-2. BB&T’s final argument in support of a stay – that all of the cases against BB&T are in the same procedural posture and should remain so to promote efficiency – is an unfortunate misrepresentation to this Court. This case is not in the same procedural posture as Barras and Powell-Perry as neither of those cases have a decision from the Eleventh Circuit affirming the denial of arbitration and subsequent orders from the Eleventh Circuit denying a petition for rehearing and the bank’s motion to stay the mandate. Ms. Gordon’s case has been pending for two-and-a-half years. The bank’s continued delay tactics are unfortunate and bordering on sanctionable. It is high time that Ms. Gordon be allowed to proceed to develop her case. IV. Conclusion Therefore, BB&T’s motion to stay should be promptly DENIED and this case added to the Court’s next scheduling order. Case 1:09-md-02036-JLK Document 1970 Entered on FLSD Docket 10/11/2011 Page 5 of 9 6 Dated: October 11, 2011. Respectfully submitted, /s/ Aaron S. Podhurst Aaron S. Podhurst, Esquire Florida Bar No. 063606 apodhurst@podhurst.com Robert C. Josefsberg, Esquire Florida Bar No. 40856 rjosefsberg@podhurst.com Peter Prieto, Esquire Florida Bar No. 501492 pprieto@podhurst.com Stephen F. Rosenthal, Esquire Florida Bar No. 0131458 srosenthal@podhurst.com John Gravante, III, Esquire Florida Bar No. 617113 jgravante@podhurst.com PODHURST ORSECK, P.A. City National Bank Building 25 W. Flagler Street, Suite 800 Miami, FL 33130-1780 Tel: 305-358-2800 Fax: 305-358-2382 /s/ Bruce S. Rogow Bruce S. Rogow, Esquire Florida Bar No. 067999 brogow@rogowlaw.com Bruce S. Rogow, P.A. Broward Financial Center 500 E. Broward Boulevard Suite 1930 Fort Lauderdale, FL 33394 Tel: 954-767-8909 Fax: 954-764-1530 Co-Lead Counsel for Plaintiffs /s/ Robert C. Gilbert Robert C. Gilbert, Esquire Florida Bar No. 561861 rcg@grossmanroth.com Stuart Z. Grossman, Esquire Florida Bar No. 156113 szg@grossmanroth.com David Buckner, Esquire Florida Bar No. 60550 dbu@grossmanroth.com Seth E. Miles, Esquire Florida Bar No. 385530 sem@grossmanroth.com GROSSMAN ROTH, P.A. 2525 Ponce de Leon Boulevard Eleventh Floor Coral Gables, FL 33134 Tel: 305-442-8666 Fax: 305-779-9596 Coordinating Counsel for Plaintiffs Case 1:09-md-02036-JLK Document 1970 Entered on FLSD Docket 10/11/2011 Page 6 of 9 7 /s/ E. Adam Webb E. Adam Webb, Esquire Georgia Bar No. 743910 Adam@WebbLLC.com Matthew C. Klase, Esquire Georgia Bar No. 141903 Matt@WebbLLC.com G. Franklin Lemond, Jr., Esquire Georgia Bar No. 141315 FLemond@WebbLLC.com WEBB, KLASE & LEMOND, L.L.C. 1900 The Exchange, S.E. Suite 480 Atlanta, GA 30339 Tel: 770-444-9325 Fax: 770-444-0271 /s/ Russell W. Budd Russell W. Budd, Esquire Texas Bar No. 03312400 rbudd@baronbudd.com Bruce W. Steckler, Esquire Texas Bar No. 00785039 bsteckler@baronbudd.com Mazin A. Sbaiti, Esquire Texas Bar No. 24058096 msbaiti@baronbudd.com BARON & BUDD, P.C. 3102 Oak Lawn Avenue Suite 1100 Dallas, TX 75219 Tel: 214-521-3605 Fax: 214-520-1181 /s/ Michael W. Sobol Michael W. Sobol, Esquire California Bar No. 194857 msobol@lchb.com Roger N. Heller, Esquire California Bar No. 215348 rheller@lchb.com Jordan Elias, Esquire California Bar No. 228731 jelias@lchb.com LIEFF CABRASER HEIMANN & BERNSTEIN L.L.P. Embarcadero Center West 275 Battery Street, 30th Floor San Francisco, CA 94111 Tel: 415-956-1000 Fax: 415-956-1008 /s/ David S. Stellings David S. Stellings, Esquire New York Bar No. 2635282 dstellings@lchb.com LIEFF CABRASER HEIMANN & BERNSTEIN L.L.P. 250 Hudson Street 8th Floor New York, NY 10013 Tel: 212-355-9500 Fax: 212-355-9592 Case 1:09-md-02036-JLK Document 1970 Entered on FLSD Docket 10/11/2011 Page 7 of 9 8 /s/ Ruben Honik Ruben Honik, Esquire Pennsylvania Bar No. 33109 rhonik@golombhonik.com Kenneth J. Grunfeld, Esquire Pennsylvania Bar No. 84121 kgrunfeld@golombhonik.com GOLOMB & HONIK, P.C. 1515 Market Street Suite 1100 Philadelphia, PA 19102 Tel: 215-985-9177 Fax: 215-985-4169 /s/ Ted E. Trief Ted E. Trief, Esquire New York Bar No. 1476662 ttrief@triefandolk.com Barbara E. Olk, Esquire New York Bar No. 1459643 bolk@triefandolk.com TRIEF & OLK 150 E. 58th Street 34th Floor New York, NY 10155 Tel: 212-486-6060 Fax: 212-317-2946 Plaintiffs’ Executive Committee Case 1:09-md-02036-JLK Document 1970 Entered on FLSD Docket 10/11/2011 Page 8 of 9 9 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO. 09-MD-02036-JLK IN RE: CHECKING ACCOUNT OVERDRAFT LITIGATION MDL No. 2036 CERTIFICATE OF SERVICE I hereby certify that on October 11, 2011, I electronically filed the foregoing document with the Clerk of the Court using CM/ECF. I also certify that the foregoing document is being served this day on all counsel of record or pro se parties identified on the attached Service List in the manner specified, either via transmission of Notices of Electronic Filing generated by CM/ECF or in some other authorized manner for those counsel or parties who are not authorized to receive electronically Notices of Electronic Filing. /s/ Robert C. Gilbert Robert C. Gilbert, Esquire Florida Bar No. 561861 GROSSMAN ROTH, P.A. 2525 Ponce de Leon Boulevard Eleventh Floor Coral Gables, FL 33134 Tel: 305-442-8666 Fax: 305-779-9596 Case 1:09-md-02036-JLK Document 1970 Entered on FLSD Docket 10/11/2011 Page 9 of 9