2 UNITED STATES DISTRICT COURT 3 DISTRICT OF NEVADA 4 TIFFANY YIP, et al., Case No. 2:21-cv-01254-ART-EJY 5 Plaintiffs, ORDER CONSOLIDATING CASES 6 v. FOR PRETRIAL PURPOSES
8 Defendant.
9 A.H. Hamilton, an individual, on Case No. 2:22-cv-00374-ART-EJY 10 behalf of himself and all others similarly situated, 11 Plaintiff, 12 v.
14 Defendant.
15 Before the Court is Defendant Bank of America, N.A.’s Motion to 16 Consolidate (ECF No. 10) this class action with Yip v. Bank of America, N.A., 2:21- 17 cv-01254-ART-EJY, a collective action. The plaintiffs in this case and in Yip 18 together oppose consolidation and argue instead that Yip should be stayed until 19 the Court rules on the issue of class certification in this case. Because there is 20 significant overlap between the claims in this case and in Yip, the Court orders 21 these cases consolidated for the purposes of dispositive motions and discovery 22 on those claims. 23 I. BACKGROUND 24 The Yip plaintiffs filed the case on July 1, 2021. (ECF No. 1 in Yip.) On 25 December 22, 2021, this case was consolidated with another collective action, 26 Vance, et al. v. Bank of America, N.A., 2:21-cv-02149-RFB-BNW, pursuant to a 27 stipulation by the plaintiffs in both cases and Bank of America. (ECF No. 25 in 28 1 Yip.) Plaintiffs filed a First Amended Complaint (“FAC”) on March 21, 2022, with 2 the additional parties which now total 224 individuals. (ECF No. 31 in Yip 3 (“FAC”).) 4 According to the FAC, Bank of America was contracted to be the exclusive 5 provider of the Nevada Department of Employment, Training & Rehabilitation’s 6 benefit programs, including unemployment insurance, disability insurance, paid 7 family leave, pandemic unemployment assistance, and pandemic emergency 8 unemployment compensation benefits (collectively “DETR benefits”). (FAC at ¶ 9 16.) When bidding for the contract, Bank of America allegedly offered to provide 10 DETR benefits recipients with debit cards for the electronic distribution of DETR 11 benefits and made certain representations about Bank of America’s abilities to 12 protect benefits recipients from fraud and to provide efficient and widely 13 accessible customer service. (Id. at ¶¶ 13-21.) Notably, Bank of America allegedly 14 promised that debit cardholders would receive Bank of America’s “Zero-Liability 15 coverage” for cases of fraud. (Id. at ¶ 14.) 16 Bank of America allegedly issued debit cards for DETR benefits which 17 utilized only the magnetic stripe technology. Plaintiffs allege that the magnetic 18 stripe technology is weaker and more susceptible to fraud than the now-industry 19 standard chip technology, and that its use led to widespread unauthorized and 20 fraudulent transactions resulting in the loss of significant funds to debit 21 cardholder accounts. (Id. at ¶¶ 27-38, 42-47.) Bank of America allegedly failed to 22 adequately respond to these fraud claims, including, inter alia, by making fraud 23 difficult to report through long wait times and dropped calls, by denying fraud 24 claims without investigation or explanation, by automatically and indefinitely 25 freezing accounts when cardholders reported unauthorized transactions, and by 26 making assistance with these issues difficult to obtain. (Id. at ¶¶ 48-66.) The FAC 27 describes the harms experienced by each of the 224 individual plaintiffs, 28 including home evictions due to inability to pay rent for lack of access to their 1 DETR benefits. (Id. at ¶¶ 67-290.) 2 The FAC includes twelve causes of action: (1) violations of the Electronic 3 Funds Transfer Act (“EFTA”); (2) Due Process claims under the Fourteenth 4 Amendment of the U.S. Constitution; (3) Due Process claims under the Nevada 5 Due Process Clause; (4) violations of the Nevada Deceptive Trade Practices Act; 6 (5) negligence and negligence per se; (6) breach of contract; (7) breach of implied 7 contract; (8) breach of implied covenant of good faith and fair dealing; (9) breach 8 of fiduciary duty; (10) breach of contract as third-party beneficiaries; (11) breach 9 of implied covenant of good faith and fair dealing as third-party beneficiaries; and 10 (12) unjust enrichment and money had and received. 11 Plaintiff A.M. Hamilton filed his putative class action complaint on March 12 1, 2022. (ECF No. 1 (“Hamilton Complaint”).) The Hamilton Complaint begins by 13 describing Bank of America’s contract with DETR and how the Covid-19 14 pandemic placed a massive strain on the unemployment system. (Hamilton 15 Complaint at ¶¶ 11-22.) The Hamilton Complaint then sets forth allegations 16 concerning Bank of America’s policies and actions after Bank of America ceased 17 its role administering DETR benefits in June 2021. (Id. at ¶¶ 23-27.) Hamilton 18 describes how he applied for unemployment in 2020, received a debit card from 19 Bank of America, and “had no problem with the program” before he accepted a 20 job offer and destroyed his debit card. (Id. at ¶¶ 28-33.) He then allegedly received 21 a Form 1099 from DETR showing that he had been paid $3,000 by DETR in 22 January of 2022. Bank of America failed to notify Hamilton of the payment 23 despite having his contact information. (Id. at ¶¶ 34-35.) After Hamilton was 24 unable to access to his Bank of America account, he filed a fraud claim with 25 DETR, but never heard back from DETR or Bank of America and cannot access 26 his account. (Id. at ¶¶ 36-43.) 27 The Hamilton Complaint sets forth two proposed classes: the Zero Liability 28 Class and the Remainder Funds Class. (Id. at ¶ 44.) The Zero Liability Class is 1 defined as “All Nevada unemployment insurance debit card account customers 2 of Bank of America who suffered a loss based upon an unauthorized transaction.” 3 (Id. at ¶ 45.) The Remainder Funds Class is defined as “All Nevada unemployment 4 insurance debit card account customers of Bank of America who had funds 5 remaining in their account as of the date of filing of the Class Action Complaint.” 6 (Id. at ¶ 46.) The Hamilton Complaint provides examples of stories posted on 7 internet forums by debit cardholders, including examples where accounts were 8 frozen by Bank of America after fraud was reported. (Id. at ¶ 51.) The Hamilton 9 Complaint brings four claims: (1) breach of contract for the Zero Liability Class; 10 (2) breach of contract for the Remainder Funds Class; (3) unjust enrichment and 11 money had and received for both classes; and (4) violations of the EFTA for the 12 Zero Liability Class. 13 On April 11, 2022, Bank of America filed a Motion to Consolidate for 14 pretrial purposes in both this case and Yip (ECF No. 10; ECF No. 32 in Yip.) 15 Plaintiffs in both this case and Yip oppose consolidation and proposed the 16 alternative of staying Yip until the issue of class certification is decided in 17 Hamilton. (ECF No. 14.) The parties in both cases have stipulated that Bank of 18 America’s anticipated motion or motions to dismiss are due 30 days after this 19 Court decides the instant Motion to Consolidate. (ECF No. 12; ECF No. 33 in Yip.) 21 Under Fed. R. Civ. P. 42, if actions before the court involve a common 22 question of law or fact, the court may: (1) join for hearing or trial any or all matters 23 in the actions; (2) consolidate the actions; or (3) issue any other orders to avoid 24 unnecessary cost or delay. The Court has “broad discretion” under Rule 42(a) in 25 determining whether to consolidate cases pending in the same district. Inv'rs 26 Research Co., et al. v. U.S. Dist. Ct. for the Cent. Dist. of Cal., 877 F.2d 777, 777 27 (9th Cir. 1989 (citing 9 C. Wright & A. Miller, Federal Practice and Procedure § 28 2383 (1971)). The Court should balance the savings of time and effort that 1 consolidation will produce against any inconvenience, delay, confusion, or 2 prejudice that may result. Huene v.
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2 UNITED STATES DISTRICT COURT 3 DISTRICT OF NEVADA 4 TIFFANY YIP, et al., Case No. 2:21-cv-01254-ART-EJY 5 Plaintiffs, ORDER CONSOLIDATING CASES 6 v. FOR PRETRIAL PURPOSES
8 Defendant.
9 A.H. Hamilton, an individual, on Case No. 2:22-cv-00374-ART-EJY 10 behalf of himself and all others similarly situated, 11 Plaintiff, 12 v.
14 Defendant.
15 Before the Court is Defendant Bank of America, N.A.’s Motion to 16 Consolidate (ECF No. 10) this class action with Yip v. Bank of America, N.A., 2:21- 17 cv-01254-ART-EJY, a collective action. The plaintiffs in this case and in Yip 18 together oppose consolidation and argue instead that Yip should be stayed until 19 the Court rules on the issue of class certification in this case. Because there is 20 significant overlap between the claims in this case and in Yip, the Court orders 21 these cases consolidated for the purposes of dispositive motions and discovery 22 on those claims. 23 I. BACKGROUND 24 The Yip plaintiffs filed the case on July 1, 2021. (ECF No. 1 in Yip.) On 25 December 22, 2021, this case was consolidated with another collective action, 26 Vance, et al. v. Bank of America, N.A., 2:21-cv-02149-RFB-BNW, pursuant to a 27 stipulation by the plaintiffs in both cases and Bank of America. (ECF No. 25 in 28 1 Yip.) Plaintiffs filed a First Amended Complaint (“FAC”) on March 21, 2022, with 2 the additional parties which now total 224 individuals. (ECF No. 31 in Yip 3 (“FAC”).) 4 According to the FAC, Bank of America was contracted to be the exclusive 5 provider of the Nevada Department of Employment, Training & Rehabilitation’s 6 benefit programs, including unemployment insurance, disability insurance, paid 7 family leave, pandemic unemployment assistance, and pandemic emergency 8 unemployment compensation benefits (collectively “DETR benefits”). (FAC at ¶ 9 16.) When bidding for the contract, Bank of America allegedly offered to provide 10 DETR benefits recipients with debit cards for the electronic distribution of DETR 11 benefits and made certain representations about Bank of America’s abilities to 12 protect benefits recipients from fraud and to provide efficient and widely 13 accessible customer service. (Id. at ¶¶ 13-21.) Notably, Bank of America allegedly 14 promised that debit cardholders would receive Bank of America’s “Zero-Liability 15 coverage” for cases of fraud. (Id. at ¶ 14.) 16 Bank of America allegedly issued debit cards for DETR benefits which 17 utilized only the magnetic stripe technology. Plaintiffs allege that the magnetic 18 stripe technology is weaker and more susceptible to fraud than the now-industry 19 standard chip technology, and that its use led to widespread unauthorized and 20 fraudulent transactions resulting in the loss of significant funds to debit 21 cardholder accounts. (Id. at ¶¶ 27-38, 42-47.) Bank of America allegedly failed to 22 adequately respond to these fraud claims, including, inter alia, by making fraud 23 difficult to report through long wait times and dropped calls, by denying fraud 24 claims without investigation or explanation, by automatically and indefinitely 25 freezing accounts when cardholders reported unauthorized transactions, and by 26 making assistance with these issues difficult to obtain. (Id. at ¶¶ 48-66.) The FAC 27 describes the harms experienced by each of the 224 individual plaintiffs, 28 including home evictions due to inability to pay rent for lack of access to their 1 DETR benefits. (Id. at ¶¶ 67-290.) 2 The FAC includes twelve causes of action: (1) violations of the Electronic 3 Funds Transfer Act (“EFTA”); (2) Due Process claims under the Fourteenth 4 Amendment of the U.S. Constitution; (3) Due Process claims under the Nevada 5 Due Process Clause; (4) violations of the Nevada Deceptive Trade Practices Act; 6 (5) negligence and negligence per se; (6) breach of contract; (7) breach of implied 7 contract; (8) breach of implied covenant of good faith and fair dealing; (9) breach 8 of fiduciary duty; (10) breach of contract as third-party beneficiaries; (11) breach 9 of implied covenant of good faith and fair dealing as third-party beneficiaries; and 10 (12) unjust enrichment and money had and received. 11 Plaintiff A.M. Hamilton filed his putative class action complaint on March 12 1, 2022. (ECF No. 1 (“Hamilton Complaint”).) The Hamilton Complaint begins by 13 describing Bank of America’s contract with DETR and how the Covid-19 14 pandemic placed a massive strain on the unemployment system. (Hamilton 15 Complaint at ¶¶ 11-22.) The Hamilton Complaint then sets forth allegations 16 concerning Bank of America’s policies and actions after Bank of America ceased 17 its role administering DETR benefits in June 2021. (Id. at ¶¶ 23-27.) Hamilton 18 describes how he applied for unemployment in 2020, received a debit card from 19 Bank of America, and “had no problem with the program” before he accepted a 20 job offer and destroyed his debit card. (Id. at ¶¶ 28-33.) He then allegedly received 21 a Form 1099 from DETR showing that he had been paid $3,000 by DETR in 22 January of 2022. Bank of America failed to notify Hamilton of the payment 23 despite having his contact information. (Id. at ¶¶ 34-35.) After Hamilton was 24 unable to access to his Bank of America account, he filed a fraud claim with 25 DETR, but never heard back from DETR or Bank of America and cannot access 26 his account. (Id. at ¶¶ 36-43.) 27 The Hamilton Complaint sets forth two proposed classes: the Zero Liability 28 Class and the Remainder Funds Class. (Id. at ¶ 44.) The Zero Liability Class is 1 defined as “All Nevada unemployment insurance debit card account customers 2 of Bank of America who suffered a loss based upon an unauthorized transaction.” 3 (Id. at ¶ 45.) The Remainder Funds Class is defined as “All Nevada unemployment 4 insurance debit card account customers of Bank of America who had funds 5 remaining in their account as of the date of filing of the Class Action Complaint.” 6 (Id. at ¶ 46.) The Hamilton Complaint provides examples of stories posted on 7 internet forums by debit cardholders, including examples where accounts were 8 frozen by Bank of America after fraud was reported. (Id. at ¶ 51.) The Hamilton 9 Complaint brings four claims: (1) breach of contract for the Zero Liability Class; 10 (2) breach of contract for the Remainder Funds Class; (3) unjust enrichment and 11 money had and received for both classes; and (4) violations of the EFTA for the 12 Zero Liability Class. 13 On April 11, 2022, Bank of America filed a Motion to Consolidate for 14 pretrial purposes in both this case and Yip (ECF No. 10; ECF No. 32 in Yip.) 15 Plaintiffs in both this case and Yip oppose consolidation and proposed the 16 alternative of staying Yip until the issue of class certification is decided in 17 Hamilton. (ECF No. 14.) The parties in both cases have stipulated that Bank of 18 America’s anticipated motion or motions to dismiss are due 30 days after this 19 Court decides the instant Motion to Consolidate. (ECF No. 12; ECF No. 33 in Yip.) 21 Under Fed. R. Civ. P. 42, if actions before the court involve a common 22 question of law or fact, the court may: (1) join for hearing or trial any or all matters 23 in the actions; (2) consolidate the actions; or (3) issue any other orders to avoid 24 unnecessary cost or delay. The Court has “broad discretion” under Rule 42(a) in 25 determining whether to consolidate cases pending in the same district. Inv'rs 26 Research Co., et al. v. U.S. Dist. Ct. for the Cent. Dist. of Cal., 877 F.2d 777, 777 27 (9th Cir. 1989 (citing 9 C. Wright & A. Miller, Federal Practice and Procedure § 28 2383 (1971)). The Court should balance the savings of time and effort that 1 consolidation will produce against any inconvenience, delay, confusion, or 2 prejudice that may result. Huene v. United States, 743 F.2d 703, 704 (9th Cir. 3 1984). Perfect identity between all claims in any two cases is not required, so long 4 as there is some commonality of issues. Zimmerman v. GJS Grp., Inc., 2018 WL 5 1512603, at *1 (D. Nev. Mar. 27, 2018). Consolidation is permitted as a matter of 6 convenience and economy in administration, but does not merge the suits into a 7 single cause, change the rights of the parties, or make those who are parties in 8 one suit parties in another. Hall v. Hall, 138 S. Ct. 1118, 1127 (2018). 9 Here, there is significant overlap in law and fact between the claims in this 10 case and in Yip. The Zero Liability Class in Hamilton would include all of the 11 Plaintiffs in Yip. The Hamilton Complaint asserts breach of contract, unjust 12 enrichment, and EFTA claims for the Zero Liability Class. These claims are also 13 asserted in Yip. Efficiency would be gained by consolidating the cases for the 14 purposes of dispositive motions and discovery on these claims. However, as the 15 parties acknowledge, the claims in Yip go beyond those in Hamilton. In particular, 16 the negligence claim regarding the magnetic stripe technology may require 17 discovery beyond that required for the claims in Hamilton. Also, this case 18 presents constitutional claims and a Nevada statutory claim that are not present 19 in Hamilton. 20 The plaintiffs in both Yip and Hamilton oppose consolidation on the 21 grounds that in Yip, Plaintiffs are proceeding individually, while Hamilton is a 22 class action. Although consolidation of an individual action with a class action 23 will not automatically be denied on that basis, in the instant matter the Court 24 finds that this is a factor that weighs against full consolidation. The choice of 25 whether to proceed individually or as a class is one of the more significant 26 strategic choices that plaintiffs and their attorneys make in actions such as these. 27 Some plaintiffs may have unique experiences which may merit further discovery 28 and for which individual litigation may appear better suited. If the Zero Liability 1 || Class is certified in Hamilton, that class would ostensibly cover the Plaintiffs in 2 || Yip. These individuals would have the right to opt out of the class in Hamilton 3 || and pursue their claims individually and under the broader legal theories present 4 || Yip. There is efficiency gained by preserving the separate character of Yip for those 5 || who do wish to opt out of Hamilton. 6 The Court finds that pretrial consolidation is warranted for the purposes of 7 || the overlapping claims, namely: (1) breach of contract; (2) unjust enrichment and 8 || money had and received; and (3) violations of the EFTA. In its anticipated motions 9 || to dismiss, Bank of America may address the overlapping claims jointly.! Bank 10 || of America must clearly identify which arguments are directed at which claim. 11 || Discovery on the overlapping claims will occur jointly. 12 || III. CONCLUSION 13 It is hereby ordered that this case be partially consolidated for pretrial 14 || purposes as described above. 15 16 17 DATED THIS 18t# day of October 2022. 18 19 en 2 Ave Hows a1 UNITED STATES DISTRICT JUDGE 22 23 24 25 26 27 _ 1 To be clear, Bank of America should file separate motions to dismiss in both cases. The sections 28 || for the overlapping claims may be identical.