NOTICE Defendant Bank of America, N.A.'s Discovery Position Statement by Bank of… — Bofa Ca Unemployment (Dkt. 58)

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U.S. District Court for the Southern District of California · No. 3:21-md-02992-GPC-MSB · Doc. 58 · 2021-07-29 · Docket on CourtListener

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DEFENDANT BANK OF AMERICA, N.A.’S  
DISCOVERY POSITION STATEMENT 
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CASE NO. 21-MD-02992-LAB-MSB 
 
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LAURA A. STOLL (SBN 255023)
LStoll@goodwinlaw.com 
GOODWIN PROCTER LLP 
601 South Figueroa Street, 41st Floor 
Los Angeles, California 90017 
Tel.: +1 213 426 2500 
Fax: +1 213 623 1673 
 
JAMES W. MCGARRY (admitted pro hac vice) 
JMcGarry@goodwinlaw.com 
YVONNE W. CHAN (admitted pro hac vice) 
YChan@goodwinlaw.com 
GOODWIN PROCTER LLP 
100 Northern Avenue 
Boston, MA 02210 
Tel.: +1 617 570 1000 
Fax: +1 617 523 1231 
 
THOMAS M. HEFFERON (admitted pro hac vice)
THefferon@goodwinlaw.com 
GOODWIN PROCTER LLP  
1900 N St. NW  
Washington, DC 20036  
Tel: +1 202 346 4000  
Fax: +1 202 346 4444 
Attorneys for Defendant  
BANK OF AMERICA, N.A. 
UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF CALIFORNIA –  
SAN DIEGO DIVISION 
IN RE: BANK OF AMERICA
CALIFORNIA UNEMPLOYMENT 
BENEFITS LITIGATION 
Case No. 21-MD-02992-LAB-MSB
 
DEFENDANT BANK OF 
AMERICA, N.A.’S DISCOVERY 
POSITION STATEMENT  
Courtroom: 14A – 14th Floor 
Judge: Hon. Michael S. Berg 
 
 
 
Case 3:21-md-02992-GPC-MSB     Document 58     Filed 07/29/21     PageID.146     Page 1
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DEFENDANT BANK OF AMERICA, N.A.’S  
DISCOVERY POSITION STATEMENT 
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CASE NO. 21-MD-02992-LAB-MSB 
 
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Pursuant to the Court’s July 21, 2021 Order (Dkt. No. 51), Defendant Bank 
of America, N.A. (“BANA”) submits its discovery position statement.  Simply put, 
no discovery is needed for “urgent relief and timely payment of unemployment 
benefits.”  Id. at 2.  That is so because virtually every cardholder is presently able to 
access their accounts and seek payment of any unauthorized transaction “claims” 
they have made.   
The crux of Plaintiffs’ case is the freezing or blocking of cardholder accounts 
or unauthorized transaction claims being disallowed as a result of suspected 
fraudulent activity.  Neither presents the type of urgent circumstance that justifies 
the burdensome discovery Plaintiffs seek. 
The vast majority of currently frozen accounts were frozen at EDD’s request, 
and Plaintiffs have stated many times that such freezes are not part of their case.   
The limited number of remaining, currently frozen accounts were frozen by BANA 
because its investigation or law enforcement information revealed ties to criminal 
networks or other fraudulent behavior, or because of legal process (e.g., seizure 
warrants).  BANA also “blocks” accounts based on suspected fraudulent activity, 
including concerns about identity theft or account compromise.  A cardholder 
whose account is blocked may contact BANA (either by phone or by visiting a 
branch) to verify their identity; once verified, the account is immediately unblocked 
and the cardholder’s use of the card is restored.   
As for Plaintiffs’ attack on BANA’s handling of claims, BANA no longer 
uses the automated claims fraud filter to close claims of allegedly unauthorized 
transactions (“Claims”).  Virtually every such Claim that was previously closed 
based solely on the claims fraud filter has been addressed:  either already paid, or 
reopened and investigated, or allowed reconsideration under the Yick preliminary 
injunction procedures.  As of July 26, 2021, over 29,000 Claims have been 
reconsidered and paid, and over 17,000 Claims have been reconsidered and denied.   
Thus, discovery is not needed to achieve any “need for urgent relief” because 
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DEFENDANT BANK OF AMERICA, N.A.’S  
DISCOVERY POSITION STATEMENT 
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CASE NO. 21-MD-02992-LAB-MSB 
 
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current processes provide that relief.  Specifically, all cardholders have or can 
restore access to their accounts unless (a) they cannot prove their identity, or 
(b) EDD identified them as fraudulent, they have ties to criminal networks or other 
suspicious behavior, or they are subject to legal process.  And almost all 
cardholders with Claims that were closed or denied based on the claims fraud filter 
are subject to the reconsideration processes in the preliminary injunction.   
 
Given the lack of urgency, conducting discovery before the Court rules on 
BANA’s motion to dismiss would be particularly inefficient and unnecessarily 
burdensome.  Plaintiffs should not be permitted to conduct discovery regarding 
frozen or blocked cards, for example, when the cardholder agreement expressly 
permits BANA to freeze accounts if BANA “suspect[s] irregular, unauthorized, or 
unlawful activities.”  Discovery about BANA’s claims investigation practices also 
should not be permitted until the Court has ruled on, among other things: 
(i) whether Plaintiffs’ accounts are covered by EFTA/Reg E; (ii) whether Plaintiffs 
have adequately pled an EFTA/Reg E violation or breach of contract (where many 
have been fully reimbursed, and others do not even allege they experienced 
unauthorized transactions); and (iii) the scope of any remaining claim.  
The remaining legal claims in the case (and the discovery served in Yick) 
focus on three main areas:  the use of magnetic stripe versus chip cards, an alleged 
data breach, and customer service issues.  None of this discovery is urgent and all 
of it relates to claims that will be subject to a motion to dismiss.  There is no legal 
support for the novel theory that the magnetic stripe cards that EDD specified in its 
contract as a technology requirement violate the California Consumer Privacy Act 
or any other legal duty owed by BANA; Plaintiffs have alleged no facts whatsoever 
to support their theory that a data breach occurred; and BANA’s customer service 
obligations are rooted solely in its agreement with EDD, which Plaintiffs have no 
right to enforce as they are not third-party beneficiaries under California law.   
BANA looks forward to discussing these issues with the Court on August 5.  
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DEFENDANT BANK OF AMERICA, N.A.’S  
DISCOVERY POSITION STATEMENT 
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CASE NO. 21-MD-02992-LAB-MSB 
 
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Dated:
July 29, 2021
 
Respectfully Submitted, 
By: /s/ Yvonne W. Chan 
LAURA A. STOLL (SBN 255023) 
LStoll@goodwinlaw.com 
GOODWIN PROCTER LLP 
601 South Figueroa Street 
41st Floor 
Los Angeles, California 90017 
Tel.: +1 213 426 2500 
Fax: +1 213 623 1673 
 
JAMES W. MCGARRY (pro hac vice) 
JmcGarry@goodwinlaw.com 
YVONNE W. CHAN (pro hac vice) 
YChan@goodwinlaw.com 
GOODWIN PROCTER LLP 
100 Northern Avenue 
Boston, MA 02210 
Tel.: +1 617 570 1000 
Fax: +1 617 523 1231 
 
THOMAS M. HEFFERON (pro hac vice) 
THefferon@goodwinlaw.com 
GOODWIN PROCTER LLP  
1900 N St. NW  
Washington, DC 20036  
Tel: +1 202 346 4000  
Fax: +1 202 346 4444  
 
JANICE P. BROWN (SBN 114433) 
jbrown@meyersnave.com  
ARLENE R. YANG (SBN 297450) 
ayang@meyersnave.com 
MEYERS NAVE  
600 B Street, Suite 1650 
San Diego, CA 92101 
Tel: +1 619 330 1700 
Fax: +1 619 330 1701 
BARRY W. LEE (SBN 088685) 
bwlee@manatt.com  
MANATT PHELPS & PHILLIPS LLP  
One Embarcadero Center, 30th Floor  
San Francisco, CA 94111 
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DEFENDANT BANK OF AMERICA, N.A.’S  
DISCOVERY POSITION STATEMENT 
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CASE NO. 21-MD-02992-LAB-MSB 
 
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Tel.: +1 415 291 7450  
Fax: +1 415 291 7474 
Attorneys for Defendant 
BANK OF AMERICA, N.A. 
 
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DEFENDANT BANK OF AMERICA, N.A.’S  
DISCOVERY POSITION STATEMENT 
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CASE NO. 21-MD-02992-LAB-MSB 
 
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CERTIFICATE OF SERVICE 
I hereby certify that I electronically filed the foregoing with the clerk of the 
court for the United States District Court for the Southern District of California by 
using the CM/ECF system on July 29, 2021.  I further certify that all participants in 
the case are registered CM/ECF users and that service will be accomplished by the 
CM/ECF system.  I certify under penalty of perjury that the foregoing is true and 
correct. 
 
 
Executed:
July 29, 2021
/s/ Yvonne W. Chan
 
 
 
 
Case 3:21-md-02992-GPC-MSB     Document 58     Filed 07/29/21     PageID.151     Page 6
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