Scott Credit Union argues that class certification should not be granted in a suit with similar claims as a class action in federal court alleging the financial institution engages in deceptive practices with its overdraft fee policy.
Scott Credit Union filed a response in opposition to plaintiff Ginger Darty’s motion for class certification on Sept. 25, arguing that the putative class “greatly exceeds the scope of the pleadings in her First Amended Complaint and the temporal scope of the account agreements at issue."
Darty seeks to certify an overdraft fee class and a multiple non-sufficient fund fee class.
The overdraft fee class is described as “all citizens of Illinois who were Scott Credit Union checking account holders on or after November 12, 2009 and who were charged overdraft fees on debit card transactions authorized on sufficient available funds.”
The non-sufficient fund fee class is described as “all citizens of Illinois who were Scott Credit Union checking account holders between November 12, 2009, and April 11, 2019, and who were charged more than one fee on an item.”
The defendant argues that Darty’s claims are factually and legally meritless “because the fee practices at issue are authorized by the express language of the relevant account documents.”
Scott Credit Union also argues that Darty fails to meet the requirements for class certification and fails to state a claim for relief for the purported class definition.
Further, the defendant accuses the plaintiff of focusing on “red herrings to distract from the fact she has not met her burden.”
“Plaintiff argues SCU’s corporate representatives admitted a breach of the Account Agreement with respect to the use of ‘current balance’ to assess overdraft fees, rather than ‘available balance.’ But this is irrelevant. There is no allegation in the complaint regarding use of available balance versus current balance,” the response states.
“Plaintiff does not allege any such breach or that she was harmed as a result,” it continues. “In fact, the current/ledger balance dispute is the basis of the pleadings in the concurrent federal class action.”
On Sept. 29, St. Clair County Circuit Judge Heniz Rudolf granted Darty an extension of time to file a reply in support of her class certification.
Darty filed her five-count putative class action against Scott Credit Union on Nov. 12. Her suit involves $27 overdraft fees and non-sufficient fund fees charged in connection with her checking account in 2018 and 2019.
According to the complaint, Scott Credit Union authorizes transactions using a debit card, which immediately reduces the amount of funds in the checking account and is reflected in the available balance. However, Darty claims that the credit union "sets aside funds in a checking account to cover" a transaction which means there are always sufficient funds apparently available.
"Despite putting aside sufficient available funds for debit card transactions at the time those transactions are authorized, Scott later assesses overdraft fees on those same transactions when they purportedly settle days later into a negative balance," the suit states.
It means that when "any subsequent, intervening transactions are initiated on a checking account, they are compared against an account balance that has already been reduced." Later transactions then attract overdraft fees.
"The Consumer Financial Protection Bureau ("CFPB") has expressed concern with this very issue, flatly calling the practice 'unfair' and/or 'deceptive,'" the suit states
Scott Credit Union answered the complaint on Aug. 11 through attorney Natalie Kussart of Sandberg Phoenix & von Gontard PC in St. Louis, denying liability.
According to its affirmative defenses, the defendant argues that the plaintiff and members of the purported class consented to the overdraft fees by opening their account and by the continued use and maintenance of the accounts.
The defendant also alleges the account holders consented to the defendant’s conduct by “knowingly and willingly overdrawing their accounts and paying fees assessed as a result.”
Scott Credit Union argues that the purported class members’ claims are limited by their own wrongful or improper conduct and that they would be unjustly enriched if awarded any compensation for the overdraft fees.
Darty filed a reply to the affirmative defenses on Sept. 1 through attorney David Cates of Cates Mahoney in Swansea. She denied each allegation.
Prior to answering the first amended class action, Scott Credit Union filed a motion to dismiss, stay or strike class allegations on May 14 through attorney Andrew Kasnetz of Sandberg Phoenix & von Gontard in St. Louis.
The defendant argued that since Darty filed the complaint, plaintiff Joanna Toth has initiated a separate purported class action against the defendant in the U.S. District Court for the Southern District of Illinois.
“Because all of plaintiff’s claims and class allegations are subsumed within the claims and class allegations of Toth, this present matter should be dismissed or stayed,” the motion stated.
In the alternative, the defendant argued that the class allegations should be stricken.
“The maintenance of a separate, less comprehensive set of class allegations is duplicative and gives rise to the possibility of conflicting determinations and adjudications, as named Plaintiff is a member of the Toth purported class for the same claims and damages, in addition to those beyond the allegations here,” the motion stated.
Darty filed a response to Scott Credit Union’s motion to dismiss on June 10.
She argued that her complaint was initiated more than four months before the federal court class action was filed. She added that her action is “moving quickly and efficiently toward a potential resolution.”
“Indeed, it appears that defendant is attempting to use Toth to try to forum shop this action to federal court, where it will inevitably proceed more slowly and duplicate work that has already been accomplished in this case because defendant perceives some advantage to proceeding in that forum and in rolling back the work that has already been accomplished in this court where discovery has already been exchanged, which would clearly prejudice plaintiff.
“The court should not reward defendant’s attempt to forum shop,” the response stated.
Scott Credit Union filed a reply in support of its motion to dismiss on June 15, arguing that Darty “erroneously asserts her claims and those in Toth are not the ‘same cause’ because her legal theories are different than those in Toth.”
“Identical individual transactions will be at issue in each case because those same transactions are the basis of the alleged breaches and tortious conduct in each matter,” the reply stated.
Scott Credit Union added that the allegations in the federal court case are “more extensive,” because it asserts that all overdraft fees were improper for a broader class of account holder plaintiffs.
St. Clair County Circuit Court case number 19-L-793