August 21, 2001

Jonathan Hutson, TLPJ, 202-797-8600 x 246
Leslie A. Brueckner, 202-797-8600 x 222
Michael J. Quirk, 202-797-8600 x 241

TLPJ CHALLENGES PROPOSED NATIONAL CLASS ACTION SETTLEMENT OF CREDIT CARDHOLDERS’ CLAIMS AGAINST BANK OF AMERICA

Trial Lawyers for Public Justice (TLPJ) has formally challenged a proposed national class action settlement of credit cardholders’ overcharge claims against Bank of America as an abuse of both the class action device and class members. The proposed settlement in Boehr v. Bank of America provides no automatic payments to class members, paying them nothing unless they can prove "by documentary evidence" that the Bank received their payments on or before noon on the date they were due. It guarantees, however, a payment of at least $500,000 to the Bank of America’s own Consumer Education Fund.

"This is an outrageous example of class action abuse," said TLPJ Staff Attorney Leslie A. Brueckner, co-counsel for the objectors. "There is no justification for demanding that class members prove the precise hour that the bank received their payments on the due date. How could any cheated cardholder possibly expect to prove what time of day their payment was processed? It appears that the Bank of America will shift at least $500,000 from its left pocket to its right to win a full release of their claims."

The Boehr class action, currently pending in the United States District Court for the District of Arizona, was filed on behalf of 8 million current and former Bank of America credit cardholders whose payments the bank did not credit on the date of receipt, resulting in improper finance charges and/or late fees. The settlement creates a fund of $1,316,700 to be distributed among five charitable organizations, with the biggest award of $500,000 slated to go to the "Bank of America Consumer Education Fund." The settlement also creates a $1.875 million "damages fund" to be distributed among class members who can prove "by documentary evidence" that the bank received their payments before a certain hour on the date the payment was due. A maximum of $30 can be recovered by any class member, regardless of how much he or she was actually overcharged. Any money in the "damages" fund that is not awarded to class members will also be distributed to the five designated charities, including the Bank’s own Consumer Education Fund.

TLPJ’s court submission charges that the claims process imposes an impossible burden on class members, virtually ensuring that they will receive little or no monetary relief. It also challenges the settlement’s attempt to bar the class and future cardholders from filing any related lawsuits against Bank of America for the next two years and release claims not encompassed in the class complaint. In addition, TLPJ contends that the notice provided to the class members was inadequate and that the $1,583,300 in attorneys’ fees sought by class counsel is excessive.

"Bank of America’s attempt to strip cardholders of their rights to obtain any meaningful compensation for their injuries renders the settlement unfair, unreasonable, and inadequate on its face," says TLPJ Consumer Rights Fellow Michael J. Quirk, who assisted with the objections. "This settlement would allow the Bank of America to take money that allegedly belongs to consumers to fund a charity that bears its name and enhances the Bank’s image in the public’s eye. While the benefit to the Bank of America is clear, there is no meaningful benefit to its wronged customers."

TLPJ’s objections further charge that the settlement lacks any meaningful non-monetary benefits for the class. Although the class notice trumpets the fact that Bank of America has agreed to change the cut-off time for receiving cardholder payments from 9:00 a.m. to noon, thereby allegedly saving current cardholders nearly $2 million over the next two years, the settlement makes clear that this change merely constitutes a continuation of the bank’s existing policy.

"The bank should not be permitted to take credit for merely promising to continue its current practices," said Brueckner. "This settlement effectively does nothing for the class, and should be rejected."

TLPJ’s objections, filed yesterday in Arizona federal court, were submitted on behalf of two class members from California and New Jersey. TLPJ also provided formal notice that it intends to appear and oppose approval at the hearing on the fairness of the proposed settlement, currently scheduled for September 10, 2001, in Phoenix.

TLPJ’s objections to the settlement in Boehr – available at www.publicjustice.net – were filed as part of its Class Action Abuse Prevention Project, a nationwide campaign dedicated to monitoring, exposing, and fighting class action abuse nationwide. In addition to Brueckner and Quirk, TLPJ’s legal team includes Richard P. Traulsen of Begam, Lewis, Marks & Wolfe, P.A., in Phoenix.

###

Trial Lawyers for Public Justice is the only national public interest law firm dedicated to using trial lawyers’ skills and resources to advance the public good. Founded in 1982, TLPJ utilizes a nationwide network of more than 2,400 outstanding trial lawyers to pursue precedent-setting and socially significant litigation. It has a wide-ranging litigation docket in the areas of consumer rights, environmental protection, toxic torts, worker safety, civil rights and liberties, and access to the courts. TLPJ is the principal project of The TLPJ Foundation, a not-for-profit membership organization. It has offices in Washington, DC, and Oakland, CA. TLPJ’s State Coordinator for Arizona is Stanley J. Marks, tel. 602-254-6071.