ATM Fee-Notice Litigation, Part II: Moving To Dismiss For Lack Of Standing (Including Updates)

Update I On June 4, 2012, a federal district court found that a plaintiff lacked constitutional standing to bring a claim for alleged violations of the fee-notice requirement under EFTA. In Charvat v. First National Bank of Wahoo (link here), the United States District Court for the District of Nebraska held that the plaintiff lacked standing because he did not allege an injury in fact.1 The court also stayed all proceedings in the case pending the U.S. Supreme Court's decision in First American Financial Corp. v. Edwards, discussed below.

Update II On June 28, 2012, the United States Supreme Court decided First American Financial Corp. v. Edwards. Although expected to be an important decision in the development of standing jurisprudence, First American was largely a nonevent. The Supreme Court dismissed the case, stating without any explanation that "[t]he writ of certiorari [had been] improvidently granted" (link here). The upshot: for now, lower courts will be left to decide standing challenges—including those made in litigation under Electronic Fund Transfer Act (EFTA)—without additional guidance from the Supreme Court. In addition, the Ninth Circuit's decision holding that a plaintiff had constitutional standing to bring a claim under the Real Estate Settlement Procedures Act (RESPA) remains intact. Update III On August 2, 2013, the Eighth Circuit reversed the lower court's ruling in Charvat. According to the Eighth Circuit:

[W]e conclude Charvat . . . had standing to pursue his [EFTA] claims against Appellees based on the informational injury that he allegedly sustained. The district court concluded that because Charvat failed to allege some injury beyond the failure to receive an "on machine" notice, he had not suffered a cognizable injury in fact. We disagree. Decisions by this Court and the Supreme Court indicate that an informational injury alone is sufficient to confer standing, even without an additional economic or other injury.[34]

Other courts that have rejected standing arguments made by defendants in EFTA litigation include: " Alicea v. Citizens Bank of Pennsylvania (W.D. Pa.)[35] " Mabary v. Hometown Bank, N.A. (S.D. Tx.)[36] " Bell v. First Bank Richmond (S.D. Ind.)[37] " Frey v. eGlobal ATM (N.D. Tx.)[38] " Zabienski v. ONB Bank & Trus (N.D. Okla.)[39] " Johnson v. Rustad & Associates, Inc. (D. Minn.) [40]

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February 23, 2012 Advisory Introduction In this installment of our advisory, we discuss the strategy of moving to dismiss a fee-notice litigation on the grounds that a plaintiff lacks constitutional standing to bring suit under EFTA. After explaining the standing doctrine, we argue that a plaintiff who has prior notice of an ATM fee cannot establish an injury in fact or causation. Next, we analyze two contrary cases decided under EFTA and propose a response to them based on controlling precedents. Finally, we look at First American Financial Corp. v. Edwards, a case pending before the United States Supreme Court, and recommend that defendants consider moving in the alternative for a stay of litigation. Standing Doctrine Under Article III of the Constitution, federal courts can hear only disputes that raise an actual case or controversy between the parties. The purpose of this requirement is to restrict judicial power "to the traditional role of Anglo-American courts, which is to redress or prevent actual or imminently threatened injury to persons caused by private or official violation of law."2 To have standing, a...