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Morris v. Bank of America, N.A.

United States District Court, W.D. North Carolina, Charlotte Division

March 29, 2019

LISA MORRIS, MICHAEL BUI, and TUMIKA WILLIAMS, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
BANK OF AMERICA, N.A., Defendant.

          ORDER

          ROBERT J. CONRAD, JR. UNITED STATES DISTRICT JUDGE.

         THIS MATTER comes before the Court on Defendant's Motion to Dismiss Plaintiffs' Second Amended Complaint (“the Motion”), (Doc. No. 22), and the parties' associated briefs and exhibits; the Memorandum and Recommendation (“M&R”) of the United States Magistrate Judge, (Doc. No. 38), recommending that the Court grant Defendant's Motion in part and deny Defendant's Motion in part; Defendant's Partial Objection to the M&R, (Doc. No. 39); and Plaintiffs' Response in Opposition to Defendant's Partial Objection, (Doc. Nos. 40-41). The Motion is ripe for adjudication.

         I. BACKGROUND

         Neither party has objected to the Magistrate Judge's statement of the factual and procedural background of this case. Therefore, the Court adopts the facts as set forth in the M&R.

         II. STANDARD OF REVIEW

         A district court may assign dispositive pretrial matters, including motions to dismiss, to a magistrate judge for “proposed findings of fact and recommendations.” 28 U.S.C. § 636(b)(1)(A) and (B). The Federal Magistrate Act provides that “a district court shall make a de novo determination of those portions of the report or specific proposed findings or recommendations to which objection is made.” Id. at § 636(b)(1)(C); Fed.R.Civ.P. 72(b)(3); Camby v. Davis, 718 F.2d 198, 200 (4th Cir. 1983).

         III. DISCUSSION

         Defendant partially objects to the M&R, asking the Court to reject the portion of the M&R recommending that the Court allow Plaintiffs' claims based on the Oklahoma, Georgia, and North Carolina consumer protection statutes to proceed based on choice of law concerns. Defendant makes two specific arguments: (1) the Oklahoma and Georgia consumer protection acts contain exemptions for alleged conduct in regulated industries, and therefore, no choice-of-law analysis is needed on these claims, and (2) Plaintiffs' North Carolina Unfair and Deceptive Trade Practices Act claim should be dismissed on choice of law grounds. The Court agrees with Defendant's first argument but disagrees with its second. The Court addresses each in turn.

         A. The exemption provisions of the consumer protection laws of Oklahoma and Georgia apply to Defendant's alleged conduct.

         Plaintiffs pled claims under North Carolina law, but also pled claims under the consumer protection statutes of the states in which they reside in the alternative. Defendant contends that the Court need not even engage in a choice-of-law inquiry regarding the consumer protection claims under Oklahoma and Georgia law because both statutes “exempt from coverage the subject matter of Plaintiffs' allegations-rules related to the application and collection of bank fees for overdraft protection.” (Doc. No. 39 at 5). The Court agrees.

         Regarding the claim arising under Oklahoma law, the Oklahoma Consumer Protection Act (“OCPA”), 15 Okla. Stat. § 751 et seq., exempts from coverage “[a]ctions or transactions regulated under laws administered by . . . regulatory bod[ies] or officer[s] acting under statutory authority of this state or the United States.” Okla. Stat. tit. 15, § 754(2). Plaintiff contends that, for this exemption to apply, the specific conduct at issue must be regulated by state or federal law. Here, Plaintiff claims that Defendant engages in four distinct practices to increase fee revenue at the expense of its customers:

1. BANA charges multiple $35 insufficient funds fees (“NSF Fees”) and $35 overdraft (“OD Fees”) (collectively NSF and OD Fees are referred to herein as “Fees”) on the same transactions when it repeatedly re-processes them, even though the Bank's agreements authorize only one fee (and only one type of fee) per charge;
2. BANA assesses Fees on payments or attempted payments to itself, even when it knows such transaction attempts will be futile and its contracts do not authorize such fees;
3. BANA deducts Fees prematurely and from already-empty accounts, and prior to the time promised (after deposits) in its contractual agreements to ensure that even ...

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