BofA Stolen Unemployment Benefits Suits Consolidated


The Judicial Panel on Multidistrict Litigation has consolidated 10 suits filed against Bank of America that all similarly claim the financial institution failed to protect unemployment benefit recipients from fraudsters and unlawfully froze or denied access to their accounts.

Unemployment recipients sued Bank of America — which has an exclusive contract with California's Employment Development Department to issue debit cards containing unemployment benefits — for poorly handling the aftermath of fraudsters suddenly draining the account funds.

The five-person panel in its June 4 order slammed the bank's request for "informal coordination" among the various suits and called Bank of America's argument unpersuasive given there are 20 similar cases across four different district courts.

"Although the actions in the Northern District of California have been consolidated under Rule 42, there are still eight actions pending outside of the Northern District, and seven competing groups of firms represent the various plaintiffs in this litigation," the panel wrote.

"The claims and proposed classes overlap extensively but with substantive differences that will make informal coordination unwieldy. Plaintiffs anticipate significant discovery on the involved state agency, which is a non-party in all actions but one, posing a further obstacle to informal coordination," it added.

The suits will now be heard in the U.S. District Court for the Southern District of California.

In one of the cases opened by San Francisco real estate agent and property manager Jennifer Yick as the lead plaintiff, she said in the complaint that the bank's "zero liability" policy is supposed to protect benefit recipients from fraud, but that when she needed help, she could not reach the bank's customer service via phone.

Brian Danitz of Cotchett Pitre & McCarthy LLP, counsel for Yick, told Law360 in an emailed statement Friday that centralizing should increase efficiencies and move the case forward in a timely manner.

"As the earliest filed case in the Northern District of California and the petitioner to the JPML, we are pleased with the JPML's decision to centralize the Bank of America EDD litigation," Danitz wrote. "We look forward to appearing before the Honorable Larry Alan Burns on behalf of EDD debit cardholders."

Yick alleges in her suit that the bank additionally froze her other accounts that were not impacted by the fraud, did not compensate her with provisional credit after the money disappeared and did not conduct a full review of the malpractice.

U.S. District Judge Vincent Chhabria in May granted provisional certification for the class members, while granting their preliminary injunction request in a strongly worded order that said the "continued denial of these benefits will seriously hinder the ability of many class members to feed their families and keep a roof over their heads."

In early June, he additionally ordered Bank of America to reopen and investigate the suspicious activity claims filed by California unemployment benefit recipients who had their accounts frozen.

Representatives for Bank of America declined to comment Friday.

Yick is represented by Andrew F. Kirtley, Anne Marie Murphy, Brian Danitz, Joseph W. Cotchett Jr., Karin Bornstein Swope and Kevin Jones Boutin of Cotchett Pitre & McCarthy LLP, and Altshuler Berzon LLP.  (To read the entire article, please click HERE)


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