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The money that’s riding on the appeal in a class action against Bank of America is almost unfathomable. Consider the stakes: A San Francisco judge awarded $284 million in compensatory damages and restitution to the class represented by The Sturdevant Law Firm and the Brandi Law Firm � plus statutory damages likely to surpass $1 billion. Not to mention another $12 million or so in interest. And that’s saying nothing of the potential attorneys’ fees. Then there are the potential copycat suits that could attack others in the banking industry for seizing money from customer accounts where government benefits get directly deposited. Already, class counsel James Sturdevant, a past president of the Consumer Attorneys of California, says his firm has filed a second suit in San Francisco against Bank of America on behalf of a later class, and yet another one in San Diego against Wells Fargo. As Walter Dellinger, head of O’Melveny & Myers’ appellate practice and a lawyer for Bank of America, told the First District Court of Appeal on Wednesday, “This practice is one that every bank in California, and every bank in the United States, engages in every day � and has done so for as long as anyone can remember.” Miller v. Bank of America, A110137, began when lead plaintiff Paul Miller � a longtime bank customer who had been rendered mentally disabled because of a head injury � had arranged to have his government benefits directly deposited into his checking account. In 1998, the bank mistakenly credited his account, and when the bank realized its error three months later � after the money was spent � it tried to unilaterally debit the account. Miller eventually sued, arguing that government benefits like Social Security can’t be seized to cover mistaken bank payments or bounced check fees. Dellinger received occasionally pointed questions from Justices Joanne Parrilli and Peter Siggins, though fewer than they directed at Sturdevant. Justice William McGuiness remained nearly silent throughout. Justices Parrilli and Siggins both seemed concerned about how the lower court’s ruling would apply to overdrafts. Sturdevant began to respond that the class had sought no damages or injunctive relief based on those particular transactions, but Siggins pressed him a bit further, noting that the judge’s jury instructions specifically mentioned overdrafts. “What are we to make of that?” he asked. His implication seemed to be that state law may treat overdrafts differently than other debts. Sturdevant replied by emphasizing that overdrafts were not mentioned in the injunction his side secured, and by noting that the jury instructions were not part of the bank’s appeal. One of Bank of America’s most strenuous arguments centered on the idea that Miller is factually distinct from a case Superior Court Judge Anne Bouliane cited in her ruling. The judge had relied on a 1974 case which concluded that Wells Fargo couldn’t seize unemployment and disability money from a customer’s account to cover her debt on a Wells Fargo credit card. That, Bank of America now argues, is much different than the case at hand, because the seizing here is done to make up for money owed under the same account � what Dellinger kept referring to as internal account balancing. The plaintiffs have disputed that distinction, arguing the case law is “intended to protect public benefits � exempt funds � from the bank’s right of setoff,” as Sturdevant wrote in one brief. While Bank of America is arguing for a complete reversal of the lower court’s decision, Dellinger added some just-in-case arguments suggesting Bouliane’s damage calculations were way off. He suggested, for one thing, that the trial judge over-counted the class members who should qualify for the $1,000-a-head statutory damages. “You may not think this is a consequential error,” Dellinger told the justices on Wednesday. “But we’re talking about $100 million.” The plaintiff lawyers have also cross-appealed, arguing that the $12 million in interest Bouliane awarded them was too low. They’re seeking more than $100 million more, Sturdevant said. The amount of attorneys’ fees on the line is still a bit of a mystery. Sturdevant said that issue has been deferred until the end of the case, and when asked to give an estimate, he would only offer: “It’s not insubstantial.”

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