Schertzer v. Bank of America, N.A.

• Court: District Court, S.D. California
• Decided: September 28, 2020
• Docket: 3:19-cv-00264
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 KRISTEN SCHERTZER, et al., on behalf Case No.: 19cv264 JM(MSB) of themselves and all others similarly 12 situated, ORDER ON MOTIONS TO DISMISS 13 Plaintiffs, 14 v. 15 BANK OF AMERICA, N.A, et al., 16 Defendants. 17 18 I. INTRODUCTION 19 Plaintiffs Kristen Schertzer, Meagan Hicks and Brittany Covell have brought this 20 putative class action case, on behalf of themselves and all others similarly situated, against 21 Bank of America, N.A., Cardtronics Inc., FCTI, Inc., and Cash Depot Ltd. (collectively 22 “Defendants”) essentially claiming deceptive, misleading, and unwarranted practices have 23 been employed in the charging and collecting of bank balance inquiry fees. 24 Presently before the court are four motions to dismiss filed pursuant to Federal Rules 25 of Civil Procedure 12(b)(1) and 12(b)(6). (Doc. Nos. 97, 98, 99, 100.) The motions have 26 been fully briefed and the court finds them suitable for submission on the papers and 27 without oral argument in accordance with Civil Local Rule 7.1(d)(1). 28 1 II. PROCEDURAL AND FACTUAL BACKGROUND 2 On February 5, 2019, Plaintiffs initiated this proposed (or putative) class action by 3 filing suit. (Doc. No. 1.) On May 31, 2019, a second amended complaint (“SAC”) was 4 filed alleging original jurisdiction under the Class Action Fairness Act (“CAFA”) of 2005 5 and, specifically under 28 U.S.C. § 1332(d)(2) and setting forth a total of thirteen claims 6 against the defendants individually and collectively. (Doc. No. 56, “SAC”.) On March 4, 7 2020, this court granted Defendants’ motions to dismiss with leave to amend. (Doc. No. 8 94.) 9 On March 24, 2020, the third amend complaint (“TAC”) was filed, again claiming 10 original jurisdiction under CAFA. (Doc. No. 96.) It alleges claims for: (1) violation of 11 California’s Unfair Competition Law (“UCL”), CAL. BUS. & PROF. CODE § 17200, et seq; 12 (2) breach of the covenant of good faith and fair dealing; and (3) unjust enrichment. (Id. 13 at 34-431.) 14 The allegations in the TAC can be divided into two categories. First, Plaintiffs assert 15 that the independent Automatic Teller Machine (“ATM”) operators Cardtronics, Inc. 16 (“Cardtronics”), Cash Depot, Ltd. (“Cash Depot”), and FCTI, Inc., (“FCTI”), (collectively, 17 the “ATM Defendants”) deceptively, unlawfully and systematically maximize the number 18 of out-of-network (“OON”) ATM balance inquiries bank accountholders performed by 19 placing misleading representations on the screens and on signs at ATMs they operate 20 regarding the fees that would be charged for balance inquiries. (Id. ¶¶ 1, 3, 4, 15, 16, 18- 21 20, 29, 30-44, 47-53, 55-67, 127-130, 138-143, 151-155.) Second, Plaintiffs allege Bank 22 of America (“BofA”) charged its customers unwarranted fees for OON ATM balance 23 inquiries. (TAC at ¶ 2, 5, 6, 15, 16, 69-80, 159-167.) 24 Attached to the TAC are the Deposit Agreement and Disclosures (Doc. No. 96-2, 25 Ex.1 “the Agreement”) and the Personal Schedule of Fees (Doc. No. 96-3, Ex.2 “Fee 26 27 1 Document numbers and page references are to those assigned by CM/ECF for the docket 28 1 Schedule”). No party disputes that these are the contract documents between BofA and 2 the Plaintiffs. The electronic bank services fee provision of the Agreement provides: 3 ATM Fees When you use an ATM that is not prominently branded with the Bank of America name and logo, you may be charged a fee by the ATM 4 operator or any network used and you may be charged a fee for a balance 5 inquiry even if you do not complete a fund transfer. We may also charge you fees. 6 Other Fees For other fees that apply to electronic banking services, please 7 review the Schedule of Fees for your account and each agreement or disclosure that we provide to you for the specific electronic banking service, 8 including the separate agreement for Online and Mobile Banking services and 9 the separate agreement for ATM and debit cards. 10 Id. at 35. The Fee Schedule that was in effect beginning May 18, 2018, allows for the 11 following ATM fees: 12 Fee Category Fee Name/Description Fee Other Important Information About This Fee 13 Amount 14 ATM Fees Withdrawals, deposits, transfers, No ATM fee • Deposits and payments may not be payments and balance inquiries at available at some ATMs. 15 Bank of America a Bank of America ATM Transaction fees may apply to ATM – an ATM some accounts. See account 16 that prominently descriptions in this schedule. displays the Bank Non-Bank of America ATM Fee $2.50 each • When you use a non-Bank of 17 of America name for: America ATM, you may also be and logo on the charged a fee by the ATM operator 18 ATM Withdrawals, transfers and or any network used and you may balance inquiries at a non-Bank of be charged a fee for a balance 19 Non-Bank of America ATM in the U.S. inquiry even if you do not complete America ATM – a funds transfer. 20 an ATM that • The non-Bank of America ATM does not fees do not apply at some ATMs 21 prominently located outside the United States… 22 display the Bank • See the disclosure information that of America name accompanied your card for other 23 and logo on the fees that may apply. ATM • Non-Bank of America ATM fees 24 are in addition to other account fees that may apply to the transaction, 25 such as a Withdrawal Limit Fee for savings. 26 • Preferred Rewards Platinum customers using a Bank of America 27 Debit or ATM card are not charged the non-Bank of America ATM fee 28 1 bfraolman cae n ionnq-uBirayn kp eorf s Atamteemriecnat AcyTcMle 2 in the U.S., and receive a refund of the ATM operator fee for one 3 withdrawal, transfer and balance inquiry per statement cycle from a 4 non-Bank of America ATM in the U.S. 5 • Preferred Rewards Platinum Honors customers using a Bank of 6 America Debit or ATM card are not 7 charged the non-Bank of America ATM fee for withdrawals, transfers 8 and balance inquiries from non- Bank of America ATMs in the U.S. 9 and receive a refund of the ATM operator fee for withdrawals, 10 transfers and balance inquiries from non-Bank of America ATMs 11 in the U.S. 12 Fee Schedule at 10. 13 On June 1, 2018, Plaintiff Schertzer used her BofA ATM Payment Card at a 14 Cardtronics ATM located at 645 Market St., San Diego, California, 92101, to withdraw 15 $60, for which she was charged a total of $8.75 in fees – $3.75 cash withdrawal fee by 16 Cardtronics, $2.50 OON fee by BofA for making a balance inquiry and $2.50 by BofA for 17 making a cash withdrawal. (TAC at ¶¶ 81, 84.) Ms. Schertzer is only challenging the fee 18 for the balance inquiry. (Id. at ¶ 84.) On May 29, 2018, Plaintiff Covell used her BofA 19 ATM Debit Card at a FCTI ATM at a Seven Eleven (7-11) convenience store located at 20 592 Santa Fe Drive, Encinitas, California, to withdraw $20, for which she was charged a 21 total of $10.50 in fees – $3.00 cash withdrawal fee by FCTI, $2.50 OON fee by BofA for 22 making a balance inquiry, $2.50 by BofA for making a cash withdrawal, and a second 23 balance inquiry fee of $2.50 by BofA. (Id. at ¶¶ 88, 91.) Ms. Covell is only challenging 24 the second “phantom” balance inquiry fee charged by BofA. (Id. at ¶ 91.) On June 2, 25 2018, Plaintiff Hicks, a BofA account holder, withdrew $20 from a Cash Depot ATM in 26 Walmart located at 4840 Shawline St., San Diego, California, 92111, for which she was 27 charged a total of $7.00 in fees – $2.50 cash withdrawal fee by Cash Depot, $2.50 fee by 28 1 BofA for making a balance inquiry and $2.50 by BofA for making a cash withdrawal. (Id. 2 at ¶¶ 95, 97.) Ms. Hicks is only challenging the balance inquiry fee. (Id. at ¶ 100.) 3 Plaintiff Schertzer seeks to represent the “California Cardtronics Class” consisting 4 of: 5 All holders of a checking account in California who, within the applicable statute of limitations preceding the filing of this lawsuit, were assessed one or 6 more out-of-network balance inquiry fees for purportedly undertaking a 7 balance inquiry as part of a cash withdrawal at a CARDTRONICS ATM. 8 Id. at ¶ 106. Plaintiff Hicks seeks to represent the “California Cash Depot Class” consisting 9 of: 10 All holders of a checking account in California who, within the applicable 11 statute of limitations preceding the filing of this lawsuit, were assessed one or more fees for purportedly undertaking a balance inquiry at the same time as a 12 cash withdrawal at a Cash Depot ATM. 13 Id. at ¶ 108. Plaintiff Covell seeks to represent the “California FCTI Class” and the 14 “National FCTI Class” consisting of: 15 All holders of a checking account who, within the applicable statute of limitations preceding the filing of this lawsuit, were assessed more than one 16 fee for purportedly undertaking a balance inquiry at the same time as a cash 17 withdrawal at a FCTI ATM (the “National FCTI Class”).

18 All holders of a checking account in California who, within the applicable 19 statute of limitations preceding the filing of this lawsuit, were assessed more than one fee for purportedly undertaking a balance inquiry at the same time 20 as a cash withdrawal at a FCTI ATM (the “California FCTI Class”). 21 22 Id. at ¶ 107. All three Plaintiffs seek to represent a Nationwide BofA class and a California 23 sub-class of BofA checking account holders who were assessed one or more fees for 24 undertaking a balance inquiry as part of a cash withdrawal at a Cardtronics, FCTI or Cash 25 Depot ATM. (Id. at ¶¶ 109, 110.) 26 The prayer for relief seeks, amongst others, restitution, disgorgement, damages and 27 an order enjoining Defendants from “continuing to employ unfair methods of competition 28 and commit unfair and deceptive acts and practices alleged in this complaint.” (Id. at 44.) 1 On April 8, 2020, Defendants FCTI, Cash Depot, Cardtronics, and BofA separately 2 filed motions to dismiss. (Doc. Nos. 97, 98, 99, 100.) Plaintiffs filed their oppositions to 3 the motions, (Doc. Nos. 101, 102, 103, 104) and Defendants filed replies, (Doc. Nos. 105, 4 106, 107, 108). 5 III. LEGAL STANDARD 6 Under Federal Rule of Civil Procedure 12(b)(6), a party may bring a motion to 7 dismiss based on the failure to state a claim upon which relief may be granted. A Rule 8 12(b)(6) motion challenges the sufficiency of a complaint as failing to allege “enough facts 9 to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 10 544, 570 (2007). This is because a “pleading that offers ‘labels and conclusions’ or ‘a 11 formulaic recitation of the elements of a cause of action will not do.’” Ashcroft v. Iqbal, 12 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). Ordinarily, for purposes of 13 ruling on a Rule 12(b)(6) motion, the court “accept[s] factual allegations in the complaint 14 as true and construe[s] the pleadings in the light most favorable to the non-moving party.” 15 Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The 16 court must be able to “draw the reasonable inference that the defendant is liable for the 17 misconduct alleged.” Iqbal, 556 U.S. at 663. “Determining whether a complaint states a 18 plausible claim for relief … [is] a context-specific task that requires the reviewing court to 19 draw on its judicial experience and common sense.” Id. at 679. 20 Federal Rule of Civil Procedure 12(b)(1) allows a party to move to dismiss based on 21 the court’s lack of subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). “[T]hose who seek 22 to invoke the jurisdiction of the federal courts must satisfy the threshold requirement 23 imposed by Article III of the Constitution by alleging an actual case or controversy.” City 24 of L.A. v. Lyons, 461 U.S. 95, 101 (1983). Article III requires that: “(1) at least one named 25 plaintiff suffered an injury in fact; (2) the injury is fairly traceable to the challenged 26 conduct; and (3) the injury is likely to be redressed by a favorable decision.” Lujan v. 27 Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (quotation marks and citation omitted). 28 Plaintiff has the burden of establishing that the court has subject matter jurisdiction over 1 an action. Ass’n of Med. Colls. v. U.S., 217 F.3d 770, 778-79 (9th Cir. 2000). “For 2 purposes of ruling on a motion to dismiss for want of standing, both the trial judge and 3 reviewing courts must accept as true all material allegations of the complaint and must 4 construe the complaint in favor of the complaining party.” Maya v. Centex Corp., 658 F.3d 5 1060, 1068 (9th Cir. 2011) (quoting Warth v. Seldin, 422 U.S. 490, 501 (1975)). “At the 6 pleadings stage, general factual allegations of injury resulting from the defendant’s conduct 7 may suffice, for on a motion to dismiss we presume that general allegations embrace those 8 specific facts that are necessary to support the claim.” Id. (citation and internal quotation 9 marks omitted). 10 IV. DISCUSSION 11 The court will once again group the arguments for dismissal under the Rules by 12 which they were made. The Defendants primarily focus on Rule 12(b)(6), so the court 13 will begin its analysis there, before turning to the Rule 12(b)(1) arguments. 14 A. Motions to Dismiss Under Rule 12(b)(6) 15 All Defendants have moved for dismissal under Federal Rule of Civil Procedure 16 12(b)(6) contending that Plaintiffs have failed to plead the necessary elements of their 17 asserted claims. 18 1. Claims Brought Against the ATM Defendants Under the Fraud Prong of the UCL 19

20 Setting forth various arguments in support of their positions, the ATM Defendants 21 move to dismiss the UCL claims on the grounds that the Plaintiffs have failed to state 22 claims under the fraud prong of the statute. FCTI seeks dismissal of the UCL claim brought 23 against it arguing that Covell has failed to plead the claim with the requisite particularity, 24 has not pled fraudulent conduct and is not entitled to restitution under the UCL. (Doc. No. 25 97-1 at 9-15.) Cash Depot moves to dismiss the UCL claim Hicks brought against it 26 because non-restitutionary disgorgement is not an available remedy and Hicks has failed 27 to allege an element of the claim, namely causation. (Doc. No. 98-1 at 15-20.) Cardtronics 28 1 seeks dismissal of the UCL claim arguing Schertzer has not alleged that it has engaged in 2 any fraudulent conduct. (Doc. No. 99-1 at 9-14.) 3 The UCL protects California’s citizens by prohibiting any “unlawful, unfair or 4 fraudulent business act or practice.” CAL. BUS. & PROF. CODE §17200. “Because the 5 statute is written in the disjunctive, it is violated where a defendant’s act or practice violates 6 any of the foregoing prongs.” Davis v. HSBC Bank Nevada, N.A, 691 F.3d 1152, 1168 7 (9th Cir. 2012). “Unfair competition” under section 17200 has been defined very broadly 8 by the California Supreme Court to include “anything that can properly be called a business 9 practice and that at the same time is forbidden by law.” Chabner v. United of Omaha Life 10 Ins. Co., 225 F.3d 1042, 1048 (9th Cir. 2000) (citation and internal quotation marks 11 omitted). To pursue either an individual or a representative claim under section 17200, a 12 plaintiff “must have suffered an injury in fact and lost money or property as a result of such 13 unfair competition.” Hall v. Time Inc., 158 Cal. App. 4th 847, 849 (2008). 14 (i) Plaintiffs are entitled to Restitution under the UCL 15 The ATM Defendants argue that Plaintiffs are not entitled to restitution because they 16 did not have an ownership interest in the interchange fees2 paid to the ATM Defendants by 17 BofA. (Doc. No. 97-1 at 9-12; Doc. No. 98-1 at 15-17; Doc. No. 99-1 at 15-16.) 18 19 20 2 As the court explained in its previous order: 21 OON or “foreign” ATM transactions generate four fees: 22

23 The cardholder must pay two of these fees – one to the ATM owner for use of the ATM (known as the “surcharge”) and one to the card- 24 issuing bank (known as a “foreign ATM fee”). The card-issuing 25 bank also pays two of these fees – one to the ATM network that routed the transaction (known as a “switch fee”) and one to the 26 ATM owner (known as an “interchange fee”). 27 In re ATM Fee Antitrust Litig., 686 F.3d 741, 745 (9th Cir. 2012). . . . 28 1 UCL actions are equitable in nature, thus damages cannot be recovered. Korea 2 Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1144 (2003). “Disgorgement of 3 money obtained through an unfair business practice is an available remedy in a 4 representative action only to the extent that it constitutes restitution.” Id. at 1145. An order 5 of restitution has been defined as “compelling a UCL defendant to return money obtained 6 through an unfair business practice to those persons in interest from whom the property 7 was taken, that is, to persons who had an ownership interest in the property or those 8 claiming through the person.” Id. at 1144 (quoting Kraus v. Trinity Mgmt Servs., Inc., 9 23 Cal. 4th 116, 126-127 (2000)). 10 Here, Plaintiffs seek restitution for money lost in the form of OON transaction fees 11 paid to BofA. Defendants cite Korea Supply Co. v. Lockheed Martin Corp., 29 Cal 4th 12 113, 1144 (2003), to argue that restitution cannot be recovered because “the money did not 13 flow from the plaintiff to the defendant.” (Doc. No. 97-1 at 11; Doc. No. 98-1 at 15-17.) 14 In other words, they assert restitution can only be recovered from funds paid directly to 15 Defendant. But, the ATM Defendants’ arguments related to the request for restitution are 16 not persuasive.3 “By stating that Defendant unjustly benefitted by its UCL violations, even 17 though those funds were received indirectly, Plaintiff has provided sufficient underlying 18 facts to sustain allegations in a Rule 12(b)(6) challenge.” Loomis v. Slendertone 19

20 21 costs of the interchange fees through the foreign ATM fees.” See., e.g., In re ATM Fee Antitrust Litigation, 686 F.3d at 750. 22

23 Doc. No. 94 at 32.

24 3 In its earlier order, the court expressed its concern about the inadequacies of the 25 allegations that the assessment of the OON balance inquiry fee assessed by BofA and the related interchange fees the ATM Defendants receive from BofA were a type of 26 “kickback.” (Doc. No. 94. at 31-32.) Plaintiffs’ no longer assert anything nefarious in the 27 charging of the interchange fee (see generally TAC). The court’s earlier order did not, as Cardtronics suggest, require Schertzer “allege a conspiracy between banks and ATM 28 1 Distribution, Inc., 420 F. Supp. 3d 1046, 1078 (S.D. Cal. 2019). See also Cabebe v. Nissan 2 of N. Am., Inc., No. 18-cv-000144-WHO, 2018 WL 5617732, at *5 (N.D. Cal. Oct. 26, 3 2018) (“In Schersher v. Superior Court, the California Court of Appeal held that Korea 4 Supply does not limit UCL restitution claims to direct purchases as a matter of law.”); 5 Ferrington v. McAfee, No. 10-CV-01455-LHK, 2010 WL 3910169, at *8 (N.D. Cal. Oct. 6 5, 2010) (the distinction between restitutionary disgorgement and non-restitutionary 7 disgorgement does not depend on whether plaintiff paid money directly to defendant, rather 8 it turns “on whether the profits sought to be disgorged would merely ‘restore the status quo 9 by returning to the plaintiff funds in which she has an ownership interest’ or would achieve 10 something broader.”) (quoting In re First Alliance Mortg. Co., 471 F.3d 977, 996 (9th Cir. 11 2006)). 12 Although the OON balance inquiry fees about which Plaintiffs complain are paid 13 directly to BofA and are fees charged not by Cardtronics, Cash Depot or FCTI, but by 14 BofA under the terms of the Agreement, (see generally the Agreement), Plaintiffs have 15 now tied the ATM Defendants to the OON balance inquiry fees by alleging; 16 For each $2.50 fee assessed, BofA pays an “interchange fee” of approximately $0.25 directly to the ATM Defendant who owns the ATM machine where the 17 balance inquiry was conducted. BofA also pays a “Switch Fee” to the network 18 provider (for example, “Plus” or “Star” networks). Therefore, both BofA and the ATM Defendants profit from the accountholder’s out-of-network balance 19 inquiries. BofA collects the out-of-network ATM fee from its accountholder 20 ($2.50) and the ATM Defendant collects the interchange fee from BofA ($0.25). 21

22 TAC at ¶ 2. Plaintiffs also allege that “immediately after collecting the [OON] fee, BofA 23 then paid $0.25 of the $2.50 fee directly back to the ATM Defendants in the form of an 24 “interchange fee,” (id at ¶ 15), and “[b]ased on this interchange fee, the ATM Defendants 25 received a directly traceable and standardized amount of money from BofA…each time 26 they misled Plaintiffs…,” (id. at ¶ 16). Plaintiffs further expand on these allegations by 27 referencing the annual interchange reimbursement schedule published by Visa and a 28 graphic published by the Federal Reserve Bank of Kansas City to illustrate the link between 1 the OON fee charged by a card issuing bank and the interchange fee earned by the ATM 2 Defendants. (Id. at ¶¶ 16-19.) 3 The TAC also contains multiple supporting allegations linking the OON fee charged 4 by BofA and the interchange fee earned by the ATM Defendants to the actions of Plaintiffs. 5 The TAC alleges that all three Plaintiffs were assessed an OON ATM balance inquiry fee 6 by BofA in the amount of $2.50 and that BofA, in turn, paid an interchange fee of $0.25 to 7 the ATM Defendants as a direct result. (See TAC at ¶¶ 36, 48, 53, 86, 93, 99.) Plaintiffs 8 seek restitution of the interchange fees the ATM Defendants earned “because they are 9 directly traceable to the fraudulently induced balance inquiries purportedly performed.” 10 (Id. at ¶¶ 45, 54, 68, 131, 144, 156.) 11 Taking these allegations as true, Plaintiffs have sufficiently alleged that the ATM 12 Defendants’ unlawful business practices caused Plaintiffs to pay money to BofA in the 13 form of OON balance inquiry fees. Plaintiffs have also alleged that a portion of those OON 14 balance fees were then passed on to the ATM Defendants and that the ATM Defendants 15 unjustly benefited from the UCL violation. This is all that is required at the pleadings 16 stage. The court, therefore, concludes that Plaintiffs may pursue their claim for 17 restitutionary relief. 18 (ii) Claims Pled with Sufficient Particularity 19 The ATM Defendants all argue that Plaintiffs have failed to state claims under the 20 fraud prong of the statute. (Doc. No. 97-1 at 12-15; Doc. No. 98-1 at 15-20; Doc. No. 99- 21 1 at 9-14.) 22 For UCL claims brought under the “fraud prong” a plaintiff need only “‘show that 23 members of the public are likely to be deceived’ by the business practice or advertising at 24 issue.” Kowalsky v. Hewlett-Packard Co., 771 F. Supp. 2d 1156, 1159 (N.D. Cal. 2011) 25 (quoting In re Tobacco II Cases, 46 Cal. 4th 298, 312 (2009)). To state a valid claim under 26 the UCL, a plaintiff must allege that the defendant’s misrepresentation is likely to deceive 27 a reasonable consumer. See Davis 691 F.3d at 1161-62 (“The reasonable consumer is the 28 “ordinary consumer acting reasonably under the circumstances.”) (citation and internal 1 quotation marks omitted). “To the extent Plaintiff[s] assert[] a UCL claim that is based or 2 grounded in fraud, it must meet the requirements of Rule 9(b).” Clark v. Countrywide 3 Home Loans, Inc., 732 F. Supp. 2d 1038, 1050 (E.D. Cal. 2015) (citing Kearns v. Ford 4 Motor. Co., 567 F.3d 1120, 1124-1127 (9th Cir. 2009)). In other words, Plaintiffs must 5 plead with particularity, the who, what, when, where and how of any allegedly fraudulent 6 conduct. Kearns, 567 F.3d at 1125. 7 The ATM Defendants point to the Fee Agreement arguing that BofA warned 8 Plaintiffs that a fee would be assessed for a balance inquiry and contend that the simple 9 and straightforward screen prompts on the ATMs were not likely to confuse consumers. 10 (See Doc. No. 97-1 at 13; Doc. No. 98-1 at 18-20; Doc. No. 99-1 at 13-15.) While the 11 court found the SAC difficult to decipher, that Plaintiffs had not sufficiently pled that a 12 reasonable consumer would be deceived by the singular question “Would you like your 13 available Account Balances on a receipt? Main Menu or Yes Continue,” and that the claim 14 was not stated with the requisite particularity, (see Doc. No. 94 at 41-42), the TAC does 15 not suffer from the same inadequacies. 16 The Plaintiffs each provide details regarding the date and location of the ATM that 17 they used, how they were confused when confronted with the specific screen prompts on 18 each of the ATM machines used, and how they were surprised to learn of the assessment 19 of the OON balance inquiry fees. (TAC at ¶¶ 81-84, 88-91, 95-97.) The TAC alleges that 20 each of the ATM Defendants employed a misleading series of screen prompts at the ATM 21 machines to trick Plaintiffs, and other accountholders, into engaging in OON balance 22 inquiries. (Id. at ¶¶ 20, 127, 151.) In support of their allegations, Plaintiffs point to 23 customers’ experiences and reasonable expectations in utilizing ATM machines, including: 24 (1) having to affirmatively opt-in to performing balance inquiry transactions; (2) receiving 25 a receipt at the conclusion of every cash withdrawal transaction at a BofA ATM, free of 26 charge; and (3) receiving a receipt after they performed a funds transfer, free of charge (Id. 27 at ¶¶ 21-28.) It is alleged that the ATM Defendants preyed on the “reasonable expectations 28 of Plaintiffs and members of the Classes by systematically implementing prompts and other 1 || disclosures at ATM machines that are misleading in order to generate great fee revenue 2 || from balance inquiries.” (/d. at § 29.) Further, the TAC alleges how the ATM Defendants’ 3 ||adoption of the industry wide practice of Balance Inquiry at Start has manipulated 4 ||customers into performing unintended balance inquiries. (/d. at {9 43, 44, 52, 57, 58.) 5 Plaintiff Schertzer alleges that Cardtronics’ screen prompts were deceptive and 6 || misleading because consumers are tricked into performing a balance inquiry by consenting 7 || to receive a receipt in conjunction with a cash withdrawal. (/d. at § 30.) Schertzer alleges 8 after entering her PIN, the following screen prompt appears: 9 .

10 □□

13 14 15 16 || Ud. at 30.) She alleges the prompt is deceptive and misleading because it: (1) improperly 17 || binds the balance inquiry with the receipt, misleading the customer into believing that they 18 |} will receive a free receipt at the end of the intended cash withdrawal transaction and; 19 contorts the definition of the word receipt in the context of a balance inquiry because 20 receipts are traditionally provided at the end of a transaction. (/d. at 31-40, 127, 128.) 21 || Additionally, Schertzer alleges that the use of color coded screen prompts are designed to 22 ||manipulate customers into pressing buttons that lead to the transmission of unintended 23 balance inquiries to the retail banks, with the Green Button being used “as a strong and 24 |/immediate visual trigger indicating ‘go’ or ‘proceed’ as opposed to the Red Button used as 25 ||a visual trigger to indicate ‘stop’...” (Ud. at § 41; see also id. at § 44.) She alleges that 26 ||combined, the use of the word “continue” in the green button, the color schemes and the 27 || competing button options misdirected account holders into understanding that pressing the 28 || green button would result in a free printed receipt and arrival at the main menu whereupon

1 cash withdrawal could be performed. (/d. at §§] 40-44.) Schertzer also alleges that all of 2 these “subtle and not-so-subtle tricks” were designed by Cardtronics to exploit customers 3 ||into making a balance inquiry. (/d. at 4 44.) 4 Additionally, Plaintiff Hicks alleges that Cash Depot prominently displays the 5 message: “Prevent Overdraft Fees Check Your Balance For Free.” (/d. at § 47.) She 6 || alleges that this representation is deceptive and misleading because Cash Depot knows that 7 ||a majority of its customers will be charged an OON ATM balance inquiry fee for checking 8 ||their balance. (d. at J 48, 49, 140.) Hicks also complains that Cash Depot knows that 9 ||nearly every bank in California charges their account holders OON balance inquiry fees. 10 || Ud. at 4/49, 139.) Further, Hicks alleges that she read this representation, relied on it and 11 || was “lured into making a balance inquiry that [she] reasonably believed was free based on 12 ||Cash Depot’s misrepresentation.” (/d. at 4] 53; see also id. at J] 52, 97,141.) In light of 13 these allegations, and those Hicks makes surrounding the link between the OON balance 14 |/inquiry fee BofA assessed and the interchange fee paid to Cash Depot, (see e.g., id. at Jf 15 || 2, 15, 16, 53, 99, 144), the court is not persuaded by Cash Depot’s argument that Hicks has 16 || failed to allege her injury was caused by Cash Depot. (Doc. No. 98-1 at 18-20.) 17 Plaintiff Covell brings a slightly different claim against FCTI. She alleges that FCTI 18 || wrongfully imposed a second balance inquiry fee while conceding that FCTI was within 19 |/its right to assess one balance inquiry fee. Covell alleges that after encountering the 20 || Balance Inquiry at Start screen and seeing her account balance on the screen, she was 21 || prompted with the following: 9 Connectea Convenien¢ 23 eee eS Pl a eee SS ee 24 Ca he □□□ dad ae Ee Es 35 palais repre Seely sys rh daa

26 ace! COIS | 27 28

1 (TAC at ¶ 59.) It is alleged that trying to simply execute a balance withdrawal, Covell 2 “reasonably selected ‘Continue.’” (Id. at ¶ 60.) Covell’s transaction was then terminated 3 by FCTI and she was forced to reinsert her ATM card and re-enter her PIN in order to 4 proceed with her intended cash withdrawal whereupon she was asked if she would like a 5 receipt for “this transaction.” (Id. at ¶¶ 61-63.) After Covell choose yes, she was directed 6 to the main menu, where she proceeded to make a cash withdrawal, she received her cash, 7 a receipt was printed, and her card was returned. It is alleged that “after the initial request 8 asking the customer if they would like to view their account balance, the customer was 9 never asked for their consent to a second balance inquiry. They were only asked if they 10 would like a receipt.” (Id. at ¶ 65.) Covell claims she had no reason to suspect that she 11 had committed to a second balance inquiry by simply agreeing to receive a receipt, but that 12 she was charged two separate OON balance inquiry fees by BofA after performing one 13 balance inquiry and one cash withdrawal. (Id. at ¶¶ 67, 152.) 4 14 Accepting these factual allegations as true and construing them in the light most 15 favorable to Plaintiffs, the court finds that Plaintiffs have alleged, with enough 16 particularity, a claim under the fraud prong of the UCL. Accordingly, the ATM 17 Defendants’ motions to dismiss the UCL claims on Rule 12(b)(6) grounds are DENIED. 18 19 4 Covell is not arguing, as FCTI seems to suggest, (see Doc. No. 97-1 at 12), that the 20 Electronic Fund Transfer Act, “Regulation E”, 15 U.S.C. § 1693 et seq. nor the Act itself 21 requires that an ATM operator disclose to customers that it will receive an interchange fee. Regulation E requires financial institutions to initially disclose “any fees imposed by the 22 financial institution for electronic fund transfers or the right to make transfers,” 12 C.F.R. 23 § 205.7(b)(5), and requires them to disclose ATM fees by providing “notice that a fee may be imposed by an automated teller machine operator as defined in § 205.16(a)(1), when the 24 consumer initiates an electronic fund transfer or makes a balance inquiry, and by any 25 network used to complete the transaction,” id at § 205.7(b)(11). If an ATM operator imposes a fee when the consumer initiates an electronic fund transfer or makes a balance 26 inquiry, notice must be given to the customer of the ATM fee. 12 C.F.R. § 205.7(16)(b). 27 Nowhere in the TAC do Plaintiffs make such an argument. Plaintiff Covell is also not attempting to set forth an aiding and abetting scheme between BofA and FCTI. 28 1 2. Unjust Enrichment Claim 2 All of the Defendants move to dismiss the unjust enrichment claim. BofA seeks 3 dismissal of the claim on the ground that the claim cannot lie because there is a contact 4 between the parties. (Doc. No. 100-1 at 15-16.) The ATM Defendants argue the unjust 5 enrichment claim falls with the predicate UCL claims, Plaintiffs have failed to allege they 6 are entitled to recover in restitution, and Plaintiff Schertzer was not authorized to include 7 it in the TAC5. (Doc. No. 97-1 at 16-17; Doc. No. 98-1 at 21-22; Doc. No 99-1 at 16-17.) 8 “Unjust enrichment is an action in quasi-contract, which does not lie when an 9 enforceable, binding agreement exists defining the rights of the parties.” Paracor Fin., 10 Inc. v. GE Capital Corp., 96 F.3d 1151, 1167 (9th Cir. 1996); see also Durell v. Sharp 11 Healthcare, 183 Cal. App. 4th 1350, 1370 (2010) (“As a matter of law, an unjust 12 enrichment claim does not lie where the parties have an enforceable express contract.”). 13 Thus, “when a plaintiff alleges unjust enrichment, a court may “construe the cause of action 14 as a quasi-contract claim seeking restitution.” Astiana v. Hain Celestial Grp., Inc., 15 783 F.3d 753, 762 (9th Cir. 2015). (citation and internal quotation marks omitted). In 16 order for a plaintiff to successfully plead an unjust enrichment claim, he/she must show 17 that a benefit was conferred on the defendant through mistake, fraud, coercion, or request. 18 Nebbi Bros., Inc. v. Home Fed. Sav. & Loan Ass'n, 205 Cal. App. 3d 1415, 1422 (1988). 19 Here, as explained in detail above, Plaintiffs have adequately pled UCL claims based 20 on the allegations that they were “lured” and “tricked” into making balance inquiries by 21

22 23 5 Cardtronics’ argument that the court should dismiss this new cause of action is not persuasive. (Doc. No. 99-1 at 17-19.) Although the court did not authorize Plaintiffs to 24 file an amended complaint to include an additional cause of action, it did not specifically 25 limit the scope of the TAC as Cardtronics suggest. The court also notes that the TAC has been significantly streamlined from the 14 claims contained in the preceding version to the 26 five currently pled. Finally, the unjust enrichment claim is based on the same underlying 27 conduct previously alleged, therefore, no party will suffer prejudice by inclusion of this claim. Consequently, the court DENIES Cardtronics’ motion to dismiss the unjust 28 1 the deceptive screen prompts on the screens of the ATMs belonging to the ATM 2 Defendants. Additionally, in setting forth their UCL claims against the ATM Defendants, 3 Plaintiffs allege that they are entitled to relief under a quasi-contract cause of action 4 because Defendants engaged in conduct that was “unfair, unconscionable and oppressive” 5 while providing financial services to Plaintiffs, and that the ATM Defendants were 6 “unjustly enriched” as a result. (See TAC at ¶ 172.) At the pleadings stage, these 7 statements are sufficient to state a quasi-contract cause of action. See Astiana, 783 F.3d at 8 762. Accordingly, the court DENIES the ATM Defendants’ motions to dismiss the unjust 9 enrichment claim. 10 However, the dispute between Plaintiffs and BofA is covered by a valid and 11 enforceable written agreement, the existence of which Plaintiffs do not deny. The unjust 12 enrichment claim specifically incorporates by reference all of the preceding allegations, 13 including those related to breach of contract. (TAC at ¶ 170.) The claim for unjust 14 enrichment against BofA, therefore, fails. See, e.g., Klein v. Chevron U.S.A., Inc., 202 Cal. 15 App. 4th 1342, 1389-90 (2012) (plaintiffs precluded from asserting unjust enrichment 16 claim because “plaintiffs' breach of contract claim pleaded the existence of an enforceable 17 agreement and their unjust enrichment claim did not deny the existence or enforceability 18 of that agreement.”); Yeiser Research & Dev. LLC v. Teknor Apex Co., 282 F. Supp. 3d 19 1021, 1053 (S.D. Cal. 2017) (“Before reaching the elements of an unjust enrichment claim, 20 a court must satisfy itself that no contract already governs the relevant relationship between 21 the parties.”); World Surveillance Grp. Inc. v. La Jolla Cove Investors, Inc., Case No. 22 13– cv–03455–WHO, 2014 WL 1411249, at *2 (N.D. Cal. Apr. 11, 2014) (court 23 dismissing with prejudice plaintiff’s unjust enrichment claim because it had explicitly pled 24 the existence of enforceable agreements between the parties). Accordingly, the court 25 GRANTS BofA’s motion to dismiss with prejudice the unjust enrichment claim. 26 /// 27 /// 28 /// 1 3. Breach of Contract Claim Related to the Assessment of OON Fees for Balance Inquiry Fees 2

3 BofA seeks dismissal of the breach of contract claim, contending that the court 4 already held that its disclosures “unambiguously allowed for its assessment of the 5 challenged balance inquiry fees.” (Doc. No. 100-1 at 11.) 6 As explained previously, to successfully bring a breach of contract claim in 7 California, “a plaintiff must show: (1) the existence of a contract, (2) plaintiff’s 8 performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting 9 damages to the plaintiff.” Oasis W. Realty, LLC v. Goldman, 51 Cal. 4th 811, 821 (2001). 10 The determination as to whether a contract is or is not ambiguous is a question of law for 11 the court. Han v. Mobil Oil Corp., 73 F.3d 872, 877 (9th Cir. 1995). “A contract or a 12 provision of a contract is ambiguous if it is reasonably susceptible of more than one 13 construction or interpretation.” Castenada v. Dura-Vent Corp.¸648 F.2d 612, 619 (9th Cir. 14 1981). 15 The court held in its earlier order that the Fee Schedule clearly provides notice that 16 a BofA account holder will be charged $2.50 for each withdrawal, transfer and balance 17 inquiry at an OON ATM, regardless of whether or not a funds transfer is completed, or a 18 withdrawal has taken place. See Fee Schedule at 10, the Agreement at 12. Based on these 19 provisions, the court concluded there was no ambiguity in the Agreement’s meaning. (Doc. 20 No. 94 at 26.) 21 In discussing the breach of contract claim this court stated: 22 For the breach of contract inquiry, Plaintiffs’ contention [that they did not knowingly make a balance inquiry] misses the mark because regardless of 23 how they were induced, once Plaintiffs selected yes on the ATM screens 24 balance inquiries were performed. The relevant question is, therefore, whether the contract documents provide for the charging of the OON balance 25 inquiry fees. 26 Id. at 25. 27 28 1 BofA asserts this earlier finding applies to the TAC regardless of whether the 2 allegations regarding the ATM Defendants’ deceptive screen prompts have materially 3 changed. (Doc. No. 100-1 at 11-13.) It also argues that Plaintiffs’ contention that their 4 experience at the ATMs imbues a latent ambiguity in the Agreement as to when an OON 5 fee will be charged is without merit. (Id. at 13-14.) In opposition, Plaintiffs counter that 6 they have plausibly alleged that the contract term “balance inquiry” is a disputed term, is 7 ambiguous on its face or, alternatively, is latently ambiguous. (Doc. No. 101 at 17-28.) 8 The TAC alleges that the Agreement fails to define the term, “balance inquiry,” 9 thereby reserving exclusive discretion in the hands of BofA to determine when its 10 accountholders have consented to an OON balance inquiry. (TAC at ¶¶ 73, 161.) The 11 TAC also alleges: 12 The word “inquiry” means: an act of asking for information.” In the absence of any explicit definition or disclosure, accountholders, including Plaintiffs, 13 reasonably assumed that they would only be assessed an out-of-network fee 14 if they took an explicit and definite action to directly request their available checking account balance at a non-BofA ATM machine; not in the 15 circumstances presented by the ATM Defendants’ conduct. 16 17 TAC at ¶ 73; see also ¶¶ 164. Absent a definition to the contrary, Plaintiffs claim the 18 Agreement reasonably only authorizes fees for actions accountholders “knowingly,” 19 “explicitly” and “intentionally” undertake. (Id. at ¶ 74.) Further, Plaintiffs allege that 20 BofA has abused its discretion and adopted an automated process that “blindly accepts the 21 ATM owners’ electronic communication that a balance inquiry has been requested by the 22 accountholder. (Id. at ¶ 75; see also ¶¶ 166-67.) Plaintiffs allege that as a result of 23 Plaintiffs’ experiences at the ATM Defendants’ ATMs, a latent ambiguity is imbued into 24 the Agreement with respect to when an OON balance inquiry fee will be charged in 25 connection with the use of a foreign ATM. (Id. at ¶ 78.) Finally, Plaintiffs allege that 26 BofA was aware of industry practice, so it knew ATM users would be charged with 27 undertaking balance inquiries they did not request. (Id. at ¶ 79.) 28 1 Essentially, Plaintiffs are asking the court to re-examine the contract, this time 2 focusing on the term “balance inquiry.” A court’s fundamental goal when interpreting an 3 agreement “is to give effect to the mutual intention of the parties.” Powerine Oil Co., Inc. 4 v. Super. Ct., 37 Cal. 4th 377, 390 (2005); CAL. CIV. CODE § 1636. In order “[t]o avoid 5 future disputes and to provide predictability and stability to transactions, courts attempt to 6 interpret the parties’ intentions from the writing alone, if possible.” Abers v. Rounsavell, 7 189 Cal. App. 4th 348, 356 (2010) (citing CAL. CIV. PROC. CODE § 1636). See also Am. 8 Alt. Ins. Corp. v Super. Ct., 135 Cal. App. 4th 1239, 1245-46 (2006) (“if contractual 9 language is clear and explicit and does not involve an absurdity, the plain meaning 10 governs.”); Winet v. Price, 4 Cal. App. 4th 1159, 1166 (1992) (“It is the outward expression 11 of the agreement, rather than a party’s unexpressed intention, which the court will 12 enforce.”) As this court has written before: 13 An agreement is not ambiguous merely because the parties (or judges) disagree about its meaning.” Abers, 189 Cal. App. 4th at 356. Instead, “words 14 still matter” and “written agreements whose language appears clear in the 15 context of the parties' dispute are not open to claims of ‘latent’ ambiguity.” Id. 16 17 LF Centennial Ltd. v. Z-Line Designs, Inc., Case No., 16cv0929 JM(NLS), 2017 WL 18 6945088, at * 2 (S.D. Cal. Aug 10, 2017). “Even if a contract appears unambiguous on its 19 face, a latent ambiguity may be exposed by extrinsic evidence which reveals more than one 20 possible meaning to which the language of the contract is yet reasonably susceptible.” Wolf 21 v. Super. Ct., 114 Cal. App. 4th 1343, 1350-51 (2004). 22 Plaintiffs are correct that the term “balance inquiry” is not expressly defined within 23 the contract documents. See generally the Agreement & Fee Schedule. The question 24 before the court is, therefore, whether the term “balance inquiry” is a key term in dispute 25 that is open to opposing reasonable interpretations. See Lloyd v. Navy Fed. Credit Union, 26 Case No. 17-cv-1280-BAS-RBB, 2018 WL 1757609, at *9 (S.D. Cal. Apr. 12, 2018) 27 (contract was ambiguous when it failed to define key term, therefore, preventing dismissal 28 of breach of contract claim at the motion to dismiss stage); Ramirez v. Baxter Credit Union, 1 Case No. 16-cv-03763-SI, 2017 WL 1064991, at *5 (N.D. Cal. Mar. 21, 2017) (a bank 2 contract with an account holder that contains no provisions defining a key term in dispute 3 is open to two reasonable interpretations). 4 Plaintiffs argue that they have plausibly alleged that the contract contains a disputed 5 term because their interactions with ATM Defendants’ ATMs could not reasonably be 6 considered a “balance inquiry” under the BofA contract. (Doc. No. 101 at 10-17.6) 7 Plaintiffs contend that “the sine qua non of all bank account activity is knowing 8 accountholder instruction.” (Id. at 17.) In support of their position, they point to the two 9 other instances where accountholders are charged fees, withdrawals and transfers, to 10 illustrate how consent is a necessary precondition for these transactions, claiming it was, 11 therefore, reasonable for an accountholder to expect consent to also be required for a 12 balance inquiry. (Id). Further, Plaintiffs claim that no reasonable person would have 13 understood the term to have the expansive meaning BofA has attributed to it because a 14 Disclaimer contained in the Agreement informs that a fee may be charged “when you use 15 a non-Bank of America ATM,” thus confirming that the agency of the account holder is 16 the factor triggering imposition of fees. (Id. at 17-18.) Relatedly, Plaintiffs argue that the 17 term “balance inquiry” is susceptible to two different meanings, with BofA reading the 18 term expansively to encompass any time an accountholder knowingly consents to a balance 19 inquiry and all other times when they did not, while account holders only intended that 20 authorized balance inquiries would be assessed fees. (Id. at 23.) 21 22 23 24 6 Specifically, Plaintiffs argue that: (1) Covell’s second interaction with the FCTI ATM 25 could not reasonably be considered a “balance inquiry” under the Agreement; (2) after reading the signage above the Cash Depot ATM, Hicks reasonably did not understand that 26 her interaction with the ATM would be considered a balance inquiry under the Agreement; 27 and (3) the deceptive screen prompts and design patterns used by Cardtronics meant that Schertzer could not reasonably understand that her interaction with the Cardtronics ATM 28 1 The screen shots of the ATM prompts provided in the TAC illustrate that Plaintiffs 2 ||Schertzer and Covell were not directly asked if they would like to perform a balance inquiry 3 the traditional sense of the word. In Schertzer’s case, it is conceivable that as pled, the 4 || question “would you like your available Account Balances on a receipt?” led her to believe 5 she was affirming her choice to receive a “free” receipt at the end of her intended cash 6 || withdrawal transaction. (TAC at §§ 32-40.) BofA charged Schertzer $2.50 for this 7 || “receipt,” interpreting her “yes” as consenting to an OON Balance Inquiry. Similarly, after 8 || affirmatively performing a balance inquiry, Covell was presented with the question “would 9 || you like to print your Balance and continue the Transaction?” (Jd. at 459.) Allegedly 10 |/thinking that selecting continue would allow her to move onwards with her cash 11 || withdrawal, the transaction ended. Covell had to reenter her PIN and was presented with:

13 _— 14 Ps eel TM 77 oad se 16 eo i roms 17 aa : one ae 18 —

19 || Ud. at § 62.) Covell selected yes and BofA charged her $2.50, or a second OON balance 20 ||inquiry, for this “receipt.” (/d. at §§| 63, 66, 67.) At bottom, Plaintiffs Schertzer and Covell 21 asking the court to determine if the term “balance inquiry" incorporates consenting to 22 || the printing of a receipt for a transaction at OON ATMs. 23 BofA, in turn, reasonably asserts the terms “when you use” an OON ATM and 24 || “balance inquiry” introduce no ambiguity about whether balance inquiries were limited to 25 || only those knowingly performed. (Doc. No. 105 at 8.) Further, it reasonably contends that 26 plain language of “when you use” simply describes the initial action account holders 27 || take when they “transact” with an OON ATM and that the term “balance inquiry” refers to 28 exactly what it sounds like, an inquiry into a BofA account balance.

1 Both parties have set forth reasonable, opposing interpretations of the Agreement. 2 Resolving the alleged ambiguity is not appropriate on a motion to dismiss. Moreover, 3 under California law “even if a contract appears unambiguous on its face, a latent 4 ambiguity may be exposed by extrinsic evidence which reveals more than one possible 5 meaning to which the language of the contract is yet reasonably susceptible.”7 Wolf, 114 6 Cal. App. 4th at 1351. See also A Kemp Fisheries, Inc. v. Castle & Cooke, Inc., Bumble 7 Bee Seafoods Div., 852 F.2d 493, 496, n. 2 (1989) (“courts may not dismiss on the 8 pleadings when one party claims that extrinsic evidence renders the contract ambiguous.”); 9 cf. Skilstaf, Inc., v. CVS Caremark Corp., 669 F.3d 1005 1017 (9th Cir. 2012) (“A party's 10 assertion of ambiguity does not require the district court to allow additional opportunities 11 to find or present extrinsic evidence if the court considers the contract language and the 12 evidence the parties have presented and concludes that the language is reasonably 13 susceptible to only one interpretation. That conclusion can be reached on a motion for 14 summary judgment or … on a motion to dismiss if the evidence can properly be considered 15 under Rule 12(b)(6).”). Applying the liberal standards, “balance inquiry” is at least 16 plausibly susceptible to the meaning alleged by Plaintiffs Schertzer and Covell. 17 Accordingly, the court DENIES BofA’s motion to dismiss the breach of contract claim in 18 relation to Schertzer and Covell. 19 However, the screen that confronted Hicks when she used Cash Depot’s ATM 20 contained a straightforward question: 21 22 23 24 25

26 27 7 The TAC includes citations to articles discussing how Balance Inquiries at Start have been used to increase the number of transactions performed at OON ATM’s, leading to 28 1 2 ala NeoPM UIA, 3 Sree any ool egtonchechay OUD ala noes 5 No ; 6 7 g || (TAC at ¥ 50). By selecting yes, regardless of the advertising on the outside of the ATM, g || Hicks consented to a balance inquiry being performed and the contract documents provide 10 ||for the charging of the OON balance inquiry fees. Accordingly, the court GRANTS 11 || BofA’s motion as to Hicks, and dismisses with prejudice her breach of contract claim. 12 i. Breach of Covenant of Good Faith and Fair Dealing Claim 13 14 The implied covenant of good faith and fair dealing is present in all contracts. Marsu 15 ||B.V. v. Walt Disney Co., 185 F.3d 932, 937 (9th Cir. 1999). “In essence, the covenant is 16 || implied as a supplement to the express contractual covenants, to prevent a contracting party 17 ||from engaging in conduct which (while not technically transgressing the express 18 || covenants) frustrates the other party’s rights to the benefits of the contract.” Love v. Fire 19 || Ins. Exch., 221 Cal. App. 3d 1136, 1153 (1990) (emphasis in original). The covenant of 20 || good faith “finds particular application in situations where one party is invested with a 21 || discretionary power affecting the rights of another. Such power must be exercised in good 22 faith.’ Carma Developers (Cal.) v. Marathon Dey. Cal., Inc., 2 Cal. 4th 342, 372 (1992) 23 || (citations omitted). 24 The covenant of good faith and fair dealing “cannot impose substantive duties or 25 ||limits on the contracting parties beyond those incorporated in the specific terms of their 26 ||agreement.” Guz v. Bechtel Nat’l Inc., 24 Cal. 4th 317, 349 (2000); see also L.A. 27 || Equestrian Ctr v. City of L.A., 17 Cal. App. 4th 432, 447 (1993) (“If there exists a 28 || contractual relationship between the parties . . . the implied covenant is limited to assuring

1 compliance with the express terms of the contract, and cannot be extended to create 2 obligations not contemplated in the contract.”) (citation omitted). “It is universally 3 recognized the scope of conduct prohibited by the covenant of good faith is circumscribed 4 by the purposes and express terms of the contract.” Carma. 2 Cal. 4th at 373. 5 Here, the Agreement clearly states that when using an OON ATM, customers “may 6 be charged a fee by the ATM operator” for a balance inquiry even if a funds transfer is not 7 completed and also warns that BofA “may” also charge fees. (See the Agreement at 35.) 8 But, the basis of Plaintiffs’ claim is that the terms of the contract did not expressly allow 9 BofA to charge for OON Balance Fees under the circumstances which they have alleged. 10 Specifically, Plaintiffs allege that “BofA has breached the covenant of good faith and fair 11 dealing in the contract through its assessment of out-of-network balance inquiry fees where 12 customers and Plaintiffs did not knowingly or affirmatively consent to a balance inquiry.” 13 (TAC at ¶ 164.) Plaintiffs also allege that BofA applied its discretion and assessed OON 14 balance inquiry fees without taking steps to ensure that its account holders had actually 15 engaged in a balance inquiry transaction. (Id. at ¶ 166.) Further, Plaintiffs allege two ways 16 that BofA applied its discretion and defined “balance inquiry” in ways a reasonable 17 consumer would not have anticipated. First, Plaintiffs allege that requesting a free receipt 18 in conjunction with a cash withdrawal could not reasonably be anticipated to be a “balance 19 inquiry.” (Id. at ¶ 167.) Second, Plaintiffs allege BofA defines “balance inquiry in 20 circumstances where the out-of-network ATM owners it contracts with deceptively and 21 fraudulently register balance inquiry information to BofA.” (Id. at ¶ 167.) 22 Thus, Plaintiffs have established a claim for breach of the covenant of good faith and 23 fair dealing. Although they have not pled this separately, it can be read to exist alongside 24 the breach of contract claim. To the extent the charging of the OON balance inquiry fee 25 may not have been prohibited by the Agreement, or that the breach of contract claim 26 ultimately flounders, Plaintiffs may be able to show that BofA’s conduct was “nevertheless 27 contrary to the contract's purposes and the parties' legitimate expectations.” Carma, 28 1 2 Cal.4th at 373. Accordingly, the court DENIES BofA’s motion to dismiss the implied 2 covenant of good faith and fair dealing claim. 3 B. The Rule 12(b)(1) motions 4 FCTI and Cash Depot move for dismissal under Rule 12(b)(1), asserting this court 5 lacks subject matter jurisdiction because Plaintiffs have not met the Article III standing 6 requirements. They both argue that Plaintiffs Hicks and Covell have not sufficiently 7 alleged any real and immediate threat of repeated injury by FCTI or Cash Depot to warrant 8 prospective injunctive relief. (Doc. No. 97-1 at 14-15; Doc. No. 98-1 at 11-15.) Although 9 not officially labeled a Rule 12(b)(1) motion, Cardtronics also challenge Schertzer’s 10 standing to seek injunctive relief. (Doc. No. 99-1 at 18-19.) Finally, FCTI attacks Covell’s 11 standing to bring claims on behalf of a nationwide class. (Doc. No. 97-1 at 15-16.) 12 As the court previously explained, “[t]here is no subject matter jurisdiction without 13 standing, and the “irreducible constitutional minimum” of standing consists of three 14 elements.” Romero v. Securus Technologies, Inc., 216 F. Supp. 1078, 1085 (2016). A 15 plaintiff must have “(1) suffered an injury in fact, (2) that is fairly traceable to the 16 challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable 17 judicial decision.” Spokeo, Inc. v. Robbins, 136 S. Ct. 1540, 1547 (2016). In a class action 18 at least one of the named plaintiffs must meet the Article III standing requirements. Bates 19 v. United Parcel Servs., Inc., 511 F.3d 974, 985 (9th Cir. 2007). Defendants’ arguments 20 implicate the second and third elements. 21 1. Plaintiffs’ Standing to Seek Prospective Injunctive Relief 22 Defendant FCTI moves to dismiss Plaintiff Covell’s claim for injunctive relief for 23 the alleged violation of the UCL under Federal Rule of Civil Procedure 12(b)(1), 24 contending that Covell lacks standing to seek such relief because she has not demonstrated 25 a likelihood that she will suffer a repeated injury by FCTI’s alleged conduct. (Doc. No. 26 97-1 at 14-15.) Cash Depot and Cardtronics seek dismissal of Hicks’ and Schertzer’s UCL 27 claims on similar grounds. (Doc. No. 98-1 at 11-15; Doc. No. 99-1 at 18-19.) Schertzer, 28 Hicks and Covell contend that they can properly seek injunctive relief that is public in 1 nature and that the new allegations in the TAC adequately allege an actual or imminent 2 risk of future harm. (Doc. No. 102 at 24-25; Doc. No. 103 at 16-18; Doc. No. 104 at 15- 3 17.) 4 The court’s previous order set forth the pleading requirements necessary for a 5 plaintiff to demonstrate standing to seek prospective relief, so the court need not repeat 6 them here. Suffice it to say, Plaintiffs have alleged an actual and imminent threat of future 7 injury for purposes of Article III standing. They have expressly alleged their intention to 8 continue to use the ATM machines owned by Cardtronics, FCTI and Cash Depot in the 9 future and are therefore: 10 seeking an injunction to prevent herself and other[s] from being misled in the future by the [ATM Defendant’s name]’s screen prompts. Because ATM 11 transactions are so common, the likelihood of [Plaintiff’s name] falling victim 12 to this improper business practice persists in the future. 13 TAC at ¶¶ 87, 94, 105; see also id. at ¶¶ 130, 143, 155. See Bates, 511 F.3d at 985 (the 14 likelihood of repetition of the wrong requirement is met by plaintiff establishing a “real 15 and immediate threat of repeated injury.”); see also Ervine v. Desert View Reg’l. Med. Ctr. 16 Holdings, LLC., 753 F.3d 862, 868 (9th Cir. 2014) (Article III standing to seek injunctive 17 relief is determined by the “imminent prospect of future injury.”) (citations omitted). Thus, 18 Plaintiffs have demonstrated “a sufficient likelihood that [they] will again be wronged in a 19 similar way.” Lyons, 461 U.S. at 111. Therefore, Plaintiffs Schertzer, Hicks and Covell 20 have standing to seek injunctive relief. Accordingly, the motions to dismiss the claims for 21 injunctive relief under the UCL are DENIED. 22 2. Plaintiff Covell’s Claims on Behalf of the Proposed Nationwide Class 23 FCTI argues that the claims of absentee class members from outside of California 24 should be dismissed for lack of standing.8 (Doc. No. 97-1 at 13-14.) It contends that 25 26 27 8 In her opposition, Covell conceded that she will not bring her unjust enrichment claim on 28 1 Plaintiffs who are not California residents and did not conduct a transaction at an ATM 2 located in California do not have standing to assert a California UCL claim. Plaintiff 3 Covell counters that she has standing to pursue a UCL claim on behalf of a nationwide 4 class because the conduct about which she complains emanates from FCTI’s headquarters 5 in California. (Doc. No. 104 at 18-19.) 6 Courts have allowed extension of the California Supreme Court’s statement in In re 7 Tobacco II Cases, 46 Cal. 4th 298, 93 (2009) that the UCL’s focus is “on the defendant’s 8 conduct rather than the plaintiff’s damages, in service of the statute’s larger purpose of 9 protecting the general public against unscrupulous business practices,” to permit 10 application of the UCL where the fraudulent activity emanated from California. See e.g., 11 Junod v. NWP Servs. Corp., Case No. SACV 14-1734-JLS (JCGx), 2015 WL 12712309, 12 at *2 (C.D. Cal., Apr. 2, 2015) (“While there is a presumption against extraterritorial 13 application of the UCL, it may nevertheless, ‘be applied extraterritorially where the 14 unlawful conduct that forms the basis of the out-of-state plaintiff’s claim occur[ed] in 15 California.”) (quoting Fontenberry v. MV Transp., Inc., 984 F. Supp. 2d 1062, 1067 (E.D. 16 Cal, 2013)); In re iPhone 4S Consumer Litig., No. C 12-1127 CW, 2012 WL 3829653, at 17 87 (N.D. Cal. July 23, 2013) (“California courts have concluded that state statutory 18 remedies may be invoked by out-of-state parties when they are harmed by wrongful 19 conduct occurring in California.”) (citation and internal quotation marks omitted). See also 20 Ehret v. Uber Techs., Inc., 68 F. Supp. 3d 1121, 1130-31 (N.D. Cal. 2014) (acknowledging 21 “[a] rule permitting application of the UCL or CLRA where the alleged fraudulent activity 22 emanated from California is consistent with the California Supreme Court’s statement in 23 In Re Tobacco II Cases….) (collecting cases); LSH CO et al. v. Transamerica Life Ins. Co., 24 Case No. 2:18-CV-09711-SJO-KS, 2019 WL 3064422, at *13 (C.D. Cal. Mar. 20, 2019) 25 (Generally, the UCL cannot be applied extraterritorially, but “an exception exists where 26 the unlawful conduct that forms the basis of the out-of-state plaintiff’s claim occurs in 27 California.”) (citation and internal quotation marks omitted). 28 1 Drawing comparisons between this case and the issues before the court in Junod, 2 Plaintiff Covell would have the court presume at the motion to dismiss stage that FCTI’s 3 fraudulent billing practices were conducted from the company’s California headquarters. 4 (Doc. No. 104 at 18.) Covell argues that FCTI’s “practice of miscommunicating to banks 5 that consumers conducted two balance inquires when they only conducted one logically 6 emanated from its California headquarters.” (Id.) In response, FCTI argues that Plaintiff’s 7 response defies logic because “all communications between the ATM and card-issuing 8 bank are conducted from the ATM itself over a network,” and therefore, “if the ATM is 9 not in California, the communication does not “emanate” from California, nor does the 10 conduct occur in California.” (Doc. No. 106 at 7- 8.) 11 While there are no facts alleged in the TAC to support Covell’s contention, there is 12 equally nothing to support Defendant’s position. The court finds that any analysis on 13 whether FCTI’s conduct emanated from California is not appropriate at the pleading stage. 14 Accordingly, the motion to dismiss the nationwide class for lack of standing is DENIED. 15 V. CONCLUSION 16 For the reasons set for above, the Court orders as follows: 17 1. The motion to dismiss the first claim for violation of the UCL brought against 18 Cardtronics on behalf of the California class on Rule 12(b)(6) or 12(b)(1) grounds 19 is denied; 20 2. The motion to dismiss the second claim for violation of the UCL brought against 21 Cash Depot on behalf of the California class on either Rule 12(b)(6) or 12(b)(1) 22 grounds is denied; 23 3. The motion to dismiss the third claim for violation of the UCL brought against 24 FCTI on behalf of the National FCTI Class and the California FCTI class on 25 either Rule 12(b)(6) or 12(b)(1) grounds is denied; 26 4. The motion to dismiss the fourth claim for breach of contract and breach of the 27 covenant of good faith and fair dealing brought against BofA on behalf of the 28 National Class and California Class on Rule 12(b)(6) grounds is granted in part 1 and denied in part. Ms. Hicks’ breach of contract claim is dismissed without 2 leave to amend: and 3 5. The ATM Defendants’ Rule 12(b)(6) motions to dismiss the fifth claim for unjust 4 enrichment are denied. BofA’s motion to dismiss the unjust enrichment claim 5 on Rule 12 (b)(6) grounds is granted without leave to amend. 6 Defendants must file their answers to the TAC within 20 days of the filing of this 7 || order. 8 IT IS SO ORDERED. 9 || Dated: September 28, 2020 10 hlkssgh tae ll on. Jeffrey/T. Miller nited States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28