Sorour v. PNC Bank, N.A.

Background

Sally Sorour sued PNC Bank, Wells Fargo, and Bank of America in California state court. She alleged that the defendants failed to properly investigate a transaction she made after receiving a fraudulent phone call asking her for money. Her claims included breach of contract, violations of California’s Unfair Competition Law and Consumer Legal Remedies Act, and a claim under the federal Electronic Funds Transfer Act.

The defendants removed the case to federal court based on the federal Electronic Funds Transfer Act claim. They also asserted that the federal court could hear the related state-law claims. Each defendant moved to dismiss all of Sorour’s claims for failure to state a legally sufficient claim. Sorour opposed the motions and sought to separate and return the state-law claims to state court.

Federal Claim

The court held that Sorour failed to state a claim under the Electronic Funds Transfer Act. That law requires banks to investigate certain errors, including an unauthorized electronic fund transfer. The statute defines an unauthorized transfer as one initiated by someone other than the consumer, without actual authority, and from which the consumer receives no benefit.

The court found that Sorour alleged she withdrew the funds herself. Based on that allegation, the transaction did not qualify as an unauthorized transfer under the statute, even though the recipient may have been a fraudster. The court further held that amendment would be futile because any amended claim would have to remain consistent with the allegations in the original complaint. It therefore dismissed the Electronic Funds Transfer Act claim without leave to amend; the final order states that the claim was dismissed with prejudice.

State-Law Claims and Disposition

The remaining claims arose under state law, and the opinion states that neither party identified an independent basis for federal jurisdiction over them. Because the case was at an early stage and the state claims involved elements distinct from the federal claim, the court declined to exercise supplemental jurisdiction, meaning jurisdiction over related state claims connected to a federal claim. The final order states that the state-law claims were dismissed without prejudice.

The opinion states that this made Sorour’s motion to remand moot. The order’s title refers to remanding the state claims, but the body and final disposition state that those claims were dismissed without prejudice. The court vacated the scheduled hearing and entered the stated dismissals.