Bruin v. Bank Of America, N.A.

Background

Tami Bruin and Eline Barokas brought a proposed class action against Bank of America, N.A. They alleged that each paid a $3 Automated Clearing House transfer fee when moving money from a Bank of America account to an account at another financial institution. According to the complaint, Bank of America’s online banking materials presented fee-based outbound transfers as the available way to move the money, while failing to explain that the receiving institution could initiate a no-fee transfer by pulling the funds.

The plaintiffs asserted claims under the North Carolina Unfair and Deceptive Trade Practices Act, the New York Deceptive Practices Act, the New Jersey Consumer Fraud Act, and a claim for unjust enrichment. Bank of America moved to dismiss under Federal Rules of Civil Procedure 12(b)(2), which concerns personal jurisdiction, and 12(b)(6), which concerns whether a complaint states a legally sufficient claim.

Personal Jurisdiction Over Bruin

The court held that it lacked both general and specific personal jurisdiction over Bruin’s claims. The opinion states that Bruin was a citizen of North Carolina, that her allegations concerned conduct outside New York, that she did not live in New York, and that she did not bank with Bank of America in New York. It also states that Bank of America was neither incorporated nor principally based in New York.

Bruin asked the court to sever her claims and transfer them to the Western District of North Carolina. The court declined to do so. The action invoked the Class Action Fairness Act, and the court found that the complaint satisfied that statute’s initial requirements for the existing case, including the amount in controversy, minimal diversity, and proposed class size. But the court concluded that Bruin’s claims, as pleaded, could not be brought in the Western District of North Carolina because both Bruin and Bank of America were identified as being from North Carolina, eliminating the required minimal diversity for that proposed class action.

The court therefore dismissed Bruin’s claims under Rule 12(b)(2). Because Bruin’s North Carolina consumer-protection claims related only to her, the court also stated that those claims were dismissed.

New York Deceptive Practices Act Claim

The court denied the motion to dismiss the New York Deceptive Practices Act claim. That statute requires allegations of consumer-oriented conduct, materially misleading conduct, and injury resulting from the alleged deception. Bank of America argued that it could not have misled customers because it disclosed the fees for the transfer options it offered.

The court rejected that argument at the pleading stage. It held that the plaintiffs were not claiming that Bank of America failed to disclose its fee schedule. Instead, they alleged that Bank of America misleadingly omitted the no-fee “pull” transfer option and presented its own fee-based transfer options in a way that suggested they were the only available choices. The court found that the plaintiffs had alleged enough facts for a reasonable consumer to potentially find the conduct misleading and had alleged an injury because they paid fees they allegedly would have avoided by using the no-fee method.

New Jersey Consumer Fraud Act Claim

The court also found that the plaintiffs adequately pleaded a claim under the New Jersey Consumer Fraud Act. The statute requires an unlawful practice, an ascertainable loss, and a causal connection between the two. The court focused on whether the plaintiffs had adequately alleged an unlawful practice and concluded that their allegations of deception, misrepresentation, and concealment of a material fact were sufficient.

The court explained that a statement need not be literally false to qualify as an actionable misrepresentation under the New Jersey statute; the issue can be whether it had the capacity to mislead an average consumer. Because reasonableness questions are generally factual questions better addressed after the record is developed, the court allowed the claim to proceed.

Unjust Enrichment

The court granted the motion to dismiss the unjust-enrichment claim. Applying New York law, the court concluded that the claim duplicated the consumer-protection claims because all of the claims arose from the same alleged failure to disclose the no-fee transfer option. The court reasoned that if the consumer-protection claims succeeded, the unjust-enrichment claim would be duplicative, and if they failed, an unjust-enrichment claim would not cure the same underlying deficiency.

Disposition

In the conclusion, Judge Andrew L. Carter, Jr. stated that Bank of America’s motion to dismiss was denied in part and granted in part. The court dismissed Bruin, the North Carolina consumer-protection claim, and the unjust-enrichment claim. It denied the motion as to the remaining claims. The parties were ordered to submit a joint status letter about next steps within fourteen days, and the clerk was directed to terminate Bruin and close the motion.