Kinder v. Forcht Bank

Filing 12

MEMORANDUM OPINION & ORDER: Plt shall SHOW CAUSE w/in 14 days why class allegations shall not be dismissed. Signed by Judge Joseph M. Hood on 10/28/2011.(STB)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
NANCY KINDER,

)
)
)
)
)
)
)
)
)
)

Plaintiff,
v.
FORCHT BANK,
Defendant.

**

**

**

Civil Action No. 11-233-JMH

MEMORANDUM OPINION AND ORDER

**

**

This matter is before the Court upon its own motion, in
keeping

with

Fed.

R.

Civ.

P.

23(c)(1)(A),

with

respect

to

Plaintiff’s Class Action Allegations as set forth in her Complaint
[Compl. ¶¶ 19-30].
I.

BACKGROUND
As alleged in her Complaint [DE 1], Plaintiff Nancy Kinder

conducted transactions at two different ATM machines operated by
Defendant Forcht Bank on December 16, 2010, May 11, 2011, and June
11, 2011.

The ATMs were located at “58 Broadway, Day Ridge,

Kentucky” and “230 Violet Road, Crittenden, Kentucky.”

She did

not, at that time, maintain any accounts with Defendant. She avers
that she was charged a fee of $2.50 in connection with each of
these transactions but that no notice of the fee to be imposed for
using the ATM was posted “on or at” either ATM.
She argues that the absence of a notice “on or at” these ATMs

was a violation of the Electronic Funds Transfer Act (“EFTA”), 15
U.S.C. § 1693, et seq., which requires any ATM operator who imposes
fees on consumers in connection with electronic fund transfers to
provide notice of the fact that the fee is being imposed and the
amount of the fee.

15 U.S.C. § 1693b(d)(3)(A).

Section 1693b(d)(3)(B)(ii) and (ii) provide that the notice
must

be

posted

“on

or

at”

the

machine

“in

a

prominent

and

conspicuous location . . . at which the electronic fund transfer is
initiated by the consumer” and “on the screen of the automated
teller machine, or on a papers notice issued from such a machine,
after the transaction is initiated and before the consumer is
irrevocably committed to completing the transaction.”
C.F.R. § 205.16(c)(1) and (2).

See also 12

If notice is not provided to the

consumer as required in 15 U.S.C. § 1693b(d)(3)(A) and described in
§ 1693b(D)(3)(B), “[n]o fee may be imposed . . . in connection with
any electronic fund transfer initiated by a consumer.” Pursuant to
15 U.S.C. § 1693m, she requests statutory damages, costs, and the
payment

of

a

reasonable

1693m(a)(1)-(2)(A)

attorney’s

(providing

for

fee.

either

See

15

U.S.C.

§

actual

or

statutory

damages in amounts between $100 and $1,000 available for individual
violations); 15 U.S.C. § 1693m(a)(2)(B) (providing for statutory
damages of up to $1,000 per class member with a cap of the lesser
of $500,000 or one percent of the net worth of defendant in a class
action).

2

In her Complaint, Plaintiff purports to bring a class action
on behalf of “herself and all other similarly situated” persons
pursuant to Fed. R. Civ. P. 23(b)(3).

She seeks to proceed as the

representative of a class, as follows:
All persons who: 1) were charged a “terminal
owner fee” at an ATM operated by Defendant
when such persons made an electronic fund
transfer and/or balance inquiry where, 2) no
notice indicating that such fee was to be
charged was posted on the outside of the ATM
machine.
[Compl. ¶ 20.] Effectively, she wishes to represent the interests
of all consumers who used any ATM operated by Defendant at any time
with respect to any transaction fees charged where the required
notice was not posted.
In a Memorandum Opinion and Order dated October 24, 2011, the
Court denied a Motion to Certify Class on a strikingly similar
request for class certification by Plaintiff Kinder in Kinder v.
Central Bank and Trust Company.
11-234-JMH, DE 20.]

[See Lexington Civil Action No.

The Court will now require her to show cause

why her class allegations should not be dismissed in this matter
for the same reasons.
II.

DISCUSSION
A.

Plaintiff’s Motion for Class Certification

Fed. R. Civ. P. 23(a) provides as follows:
One or more members of a class may sue or be
sued as representative parties on behalf of
all members only if:
3

(1) the class is so numerous that
joinder of all members is impracticable;
(2) there are questions of law or fact
common to the class;
(3) the claims or defenses of the
representative parties are typical of the
claims or defenses of the class; and
(4) the representative
fairly
and
adequately
interests of the class.

parties
protect

will
the

If the threshold criteria of Rule 23(a) are met, the plaintiff
must then show that an action may be maintained under Fed. R. Civ.
P. 23(b).

Kinder requests class certification in this instance

under Fed. R. Civ. P. 23(b)(3) which provides for certification
where:
. . . the court finds that the questions of
law
or
fact
common
to
class
members
predominate over any questions affecting only
individual members, and that a class action is
superior to other available methods for fairly
and efficiently adjudicating the controversy.
In making this finding, the Court considers:
(A)
the
class
members'
interests
in
individually controlling the prosecution or
defense of separate actions;
(B) the extent and nature of any litigation
concerning the controversy already begun by or
against class members;
(C) the desirability or undesirability of
concentrating the litigation of the claims in
the particular forum; and
(D) the likely difficulties in managing a
class action.
4

Fed. R. Civ. P. 23(b)(3).
This Court will not consider the merits of Kinder’s claims in
whether class certification is appropriate, but Kinder bears the
burden

of

establishing

certification.
Cir. 1976).

each

prerequisite

in

order

to

obtain

Senter v. Gen. Motors Corp. 532 F.2d 511, 522 (6th

Further, the Court is mindful that it “should defer

decision on certification pending discovery if the existing record
is inadequate for resolving the relevant issues.”

In re Am. Med.

Sys., Inc., 75 F.3d 1069, 1086 (6th Cir. 1996) (holding that
certification of class was improper without further inquiry into
whether commonality and typicality existed with respect to claims
of injury by a number of different of penile implants as averred by
named plaintiffs).

See also Vinole v. Countrywide Home Loans,

Inc., 571 F.3d 935, 942 (9th Cir. 2009) (explaining that "often the
pleadings

alone

will

not

resolve

the

question

of

class

certification and... some discovery will be warranted"); Mills v.
Foremost Ins. Co., 511 F.3d 1300, 1309 (11th Cir. 2008) ("In some
instances the propriety vel non of class certification can be
gleaned from the face of the pleadings," while, at other times,
discovery is necessary because "the parties' pleadings alone are .
. . not sufficient to establish whether class certification is
proper.").

In

this

instance,

however,

Plaintiff’s

Complaint

provides the Court with sufficient information upon which to base

5

its decision with respect to certification. No amount of discovery
will change the fact that Plaintiff does not aver that she ever
visited any other ATMs operated by Defendant or was charged a fee
for any transaction at other ATMs.
called

for

before

this

Court

No discovery is, therefore,

evaluates

the

issue

of

class

certification.
Plaintiff proposes a class made up of every individual who has
used an ATM allegedly operated by Forcht Bank at any time, and who
was charged a fee when no notice of such a fee was posted on the
outside of the ATM.

Plaintiff has made, however, no averment that

she visited any ATMs owned by Forcht Bank, other than the two
described in her Complaint, or that any ATM other than the two
identified in her Complaint lacked the posted notice on the date
that she used them.
with

respect

to

Thus, she does not aver a common set of facts

the

absence

of

notice

or

the

assessment

of

transaction fees at any other ATM operated by Defendant because
Plaintiff never used any other ATM operated by Forcht Bank.

See,

e.g., Polo v. Goodings Supermarkets, Inc., 232 F.R.D. 399, 406
(M.D. Fla. 2004) (concluding that certification of class was
inappropriate because fact issues were not common to all proposed
members where not all proposed members used same ATM as plaintiff
within same time period). Cf. Hart v. Guardian Credit Union,
2:10-CV-855, 2011 WL 2434201 (M.D. Ala. June 16, 2011) (certifying
class of all persons charged fee for use of two ATMs where

6

plaintiff alleged that he was wrongly charged a fee); Flores v.
Diamond Bank, No. 07-C-6403, 2008 WL 4861511 (N.D. Ill. Nov. 7,
2008) (certifying class of all persons charged fee for use of one
of defendant’s ATMs); Burns v. First Am. Bank, No. 04-C-7682, 2006
WL 3754820 (N.D. Ill. Dec. 19, 2006) (certifying class defined as
all persons using two of defendant’s ATMs); Riviello v. Tobyhanna
Army Depot Fed. Credit Union, 3:11-cv-59, 2011 WL 3439215 (M.D. Pa.
Aug. 5, 2011) (denying motion to dismiss class allegations where
class was defined as those persons using one of defendant’s ATMs).
Nor has she alleged that Forcht Bank “systematically failed to post
proper disclosures at its various machines or had a policy of doing
so,” which might support a finding of commonality.

Polo, 232

F.R.D. at 406 (M.D. Fla. 2004) (citing Cox v. American Cast Iron
Pipe

Co.,

784

F.2d

1546,

1557

(11th

Cir.

1986);

Murray

v.

Auslander, 244 F.3d 807, 812 (11th Cir. 2011)).
To

reach

the

conclusion

that

Plaintiff’s

claim

has

the

requisite commonality with those potential claims of other members
of the proposed class, this Court would have to assume what she
never purports to have experienced and what is not averred in the
complaint – that any other ATMs were operated by Defendant without
the required notice posted on or at the machine and that fees were
charged to customers who visited those ATMs.

Assuming that Forcht

Bank operates ATMs other than the two identified in her Complaint,
this Court declines to do so.

7

For the same reason, the Court is not persuaded that Plaintiff
can demonstrate that her claim is typical of the experience of the
large swathe of customers for which she wishes to serve as a
representative. As taught in Beattie v. CenturyTel, Inc., 511 F.3d
554 (6th Cir. 2007):
”A claim is typical if “it arises from the
same event or practice or course of conduct
that gives rise to the claims of other class
members, and if his or her claims are based on
the same legal theory.” In re Am. Med. Sys.,
Inc., 75 F.3d 1069, 1082 (6th Cir. 1996). In
Sprague,
the
Court
explained
that
“[t]ypicality determines whether a sufficient
relationship exists between the injury to the
named plaintiff and the conduct affecting the
class, so that the court may properly
attribute
a
collective
nature
to
the
challenged conduct.” [Sprague v. Gen. Motors
Corp.,] 133 F.3d [388,] 399 [(6th Cir 1998)
(en banc)] (citing In re Am. Med. Sys., Inc.,
75 F.3d at 1082). On the other hand, the
Sprague
Court explained, the typicality
requirement is not satisfied when a plaintiff
can prove his own claim but not “necessarily
have proved anybody's else's claim.” Id.
Lastly, for the district court to conclude
that the typicality requirement is satisfied,
“a representative's claim need not always
involve the same facts or law, provided there
is a common element of fact or law.” Senter v.
Gen. Motors Corp., 532 F.2d 511, 525 n. 31
(6th Cir. 1976).
511 F.3d 554, 561 (6th Cir. 2007).
Here, assuming that Plaintiff can prove that she was injured
because she was charged a transaction fee in the absence of posted
notice at the two ATMs visited, then she could also prove that
anyone else who used those two ATMs within the same period was

8

injured if those persons were also charged a transaction fee.
There would be a common element of fact and law as it relates to
the use of those two particular ATMs.

Her claim would not,

however, be typical of anyone using any other ATM operated by
Defendant.
Much as in Polo, the question of whether Defendant complied
with the notice requirements of EFTA is not susceptible to classwide proof as the class is proposed. If Defendant failed to comply
with the EFTA’s notice requirement at the ATMs visited by Plaintiff
on any given date, it would demonstrate nothing with respect to
whether Defendant met the notice requirement at any other ATM that
it operated on any particular date.

Similarly, a demonstration

that Defendant failed to comply with EFTA’s notice requirement at
another ATM on any given date – other than at the ATMs visited by
Plaintiff on or about the date that she visited them – would not
dispose of the same issue as to Plaintiff.

Answering the common

question for Kinder would not determine the issue with respect to
other putative class members if the Court certified the class
proposed.

This Court is of the opinion that Plaintiff cannot

demonstrate commonality and typicality on the facts averred, and
the Court is inclined to dismiss her class allegations.

9

III. CONCLUSION
Accordingly, IT IS ORDERED that Plaintiff shall SHOW CAUSE
within fourteen (14) days of entry of this order why her class
action allegations shall not be dismissed.
This the 28th day of October, 2011.

10