Madison County Circuit Judge Don Weber reluctantly dismissed a check cashing fee class action complaint against First Banks on Nov. 14.
"It seems to be unwise policy to allow a bank to charge a fee to cash a check drawn on the bank," Weber wrote. "However unwise this policy seems, it appears to be the law."
"Although the court is of the opinion that there should be a cause of action when a bank charges a fee for cashing a check drawn on the bank, that is, apparently not the law," he wrote.
The Lakin Law Firm filed suit March 9, 2004, on behalf of Darryl Johnson of Collinsville.
Attorney Gail Renshaw complained that Johnson paid $5 each time he cashed a check drawn on First Banks, because he had no account there.
Renshaw claimed that by charging a fee the bank wrongfully dishonored the check.
She moved to certify a class action, with Johnson representing thousands who had paid the fee in the United States.
For First Banks, attorney Troy Bozarth of the Hepler Broom law firm of Edwardsville moved to dismiss the complaint on May 21, 2004.
Bozarth wrote to Circuit Judge Phillip Kardis, who was assigned the case before his retirement, that Johnson lacked standing to sue because he was not a customer.
Bozarth wrote that Johnson had no claim because he paid voluntarily.
Weber ruled that the voluntary payment doctrine does not apply because the act to refuse to honor a check drawn on the bank under these circumstances is coercive.
"A reasonable consumer should be able to cash a check drawn on First Bank at First Bank without a fee," Weber wrote.
Weber said that the holder of the check is a third party beneficiary to the contract between the bank and the payor of the check.
As to whether Johnson was a "customer" Weber relied on the appellate court case Kronemeyer v. U.S. Bank, a case in which Johnson was also a named plaintiff and which the justices unanimously ruled the word "customer" has two opposite meanings in this context.
"This is not a nut easily cracked," Weber wrote.
In the other case, Kenneth Kronemeyer of New Memphis and Darryl Johnson of Collinsville, also represented by the Lakin Law Firm, sought to establish a nationwide class of individuals who paid US Bank a fee when presenting for payment a check drawn on a US Bank account
They claimed that US Bank charged $10 to cash checks drawn by the bank's depositors and payable to them. They charged consumer fraud, wrongful dishonor and unjust enrichment.
The Illinois Appellate Court reversed Madison County Circuit Court Judge Nicholas Byron's decision to deny US Bank's motion to dismiss the 2003 class action lawsuit. The July 7 decision, which effectively dissolves the case, asserted the plaintiffs "do not have standing."
Weber said the Kronemeyer case held that the payee of a check lacks standing to bring a claim for wrongful dishonor when a bank charges a fee and also points out federal regulations authorize the fee and therefore federal preemption precludes this suit based on the check cashing fee.
Steve Korris contributed to this report