Exhibit 157 — In re Bank of America California Unemployment Benefits Litigation (Dkt. 386-7, S.D. Cal. No. 3:21-md-02992)

Record facts

U.S. District Court for the Southern District of California · No. 3:21-md-02992-GPC-MSB · Doc. 386-7 · 2024-12-02 · Docket on CourtListener

Full text

Exhibit 157 
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Class Plaintiffs’ Proposed Trial Plan 
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JOSEPH W. COTCHETT (SBN 36324) 
jcotchett@cpmlegal.com 
BRIAN DANITZ (SBN 247403) 
bdanitz@cpmlegal.com 
KARIN B. SWOPE (Pro Hac Vice) 
kswope@cpmlegal.com 
ANDREW F. KIRTLEY (SBN 328023) 
akirtley@cpmlegal.com 
VASTI S. MONTIEL (SBN 346409) 
vmontiel@cpmlegal.com 
COTCHETT, PITRE & McCARTHY, LLP 
840 Malcolm Road, Suite 200 
Burlingame, CA 94010 
Telephone: (650) 697-6000 
Fax: (650) 697-0577 
MICHAEL RUBIN (SBN 80618) 
mrubin@altber.com 
STACEY M. LEYTON (SBN 203827) 
sleyton@altber.com 
CONNIE K. CHAN (SBN 284230) 
cchan@altber.com 
KATHERINE G. BASS (SBN 344748) 
kbass@altber.com 
COLIN C. JONES (SBN 354301) 
cjones@altber.com 
ALTSHULER BERZON LLP 
177 Post Street, Suite 300 
San Francisco, CA 94108 
Telephone: (415) 421-7151 
Fax: (415) 362-8064 
Co-Lead Counsel for Plaintiffs and the Proposed Class 
UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF CALIFORNIA 
IN RE BANK OF AMERICA 
CALIFORNIA UNEMPLOYMENT 
BENEFITS LITIGATION 
Case No. 3:21-md-02992-GPC-MSB 
CLASS PLAINTIFFS’ PROPOSED 
TRIAL PLAN 
Ctrm: 
2D (2nd Floor) 
Judge: 
Hon. Gonzalo P. Curiel 
This Document Relates to All Actions 
Trial Date:  None set. 
REDACTED PUBLIC VERSION
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Class Plaintiffs’ Proposed Trial Plan 
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I. 
PROPOSED TRIAL PLAN 
Class Plaintiffs respectfully submit this trial plan to aid the Court in assessing the 
various options for conducting the trial in these MDL proceedings (in this Court or any 
transferor courts) against Bank of America, N.A. (“Defendant” or “Bank”) on behalf of the 
five proposed classes in an efficient and manageable manner. Class Plaintiffs may modify 
this plan prior to trial in light of further discovery and further orders in this case. Discovery 
conducted to date demonstrates that trial on a classwide basis presents no manageability 
issues. Instead, certification will enable a fair and efficient resolution of claims common to 
the approximately 109,000 class members. 
Plaintiffs envision that the trial will proceed as follows. In their case-in-chief, Class 
Plaintiffs will present common evidence of the Bank’s wrongdoing and the resulting 
classwide injury and damages. Plaintiffs will present their case through the Bank’s own 
documents and testimony, third-party documents and testimony, the testimony of class 
representatives, and expert testimony. The Bank will then present whatever defenses it is 
able to advance, after which Class Plaintiffs will present their rebuttal case. Plaintiffs 
anticipate the trial will take three weeks, including jury selection.  
As Plaintiffs will show, the Bank’s wrongdoing was accomplished through a series 
of uniform, classwide policies and practices, including: its use of the Claim Fraud Filter 
(“CFF”) and in particular Indicator 1 (“CFF-1”) to deny the class members’ unauthorized-
transaction claims, rescind the “permanent” credits the Bank had paid to class members, 
and freeze class members’ accounts; its decision to grossly understaff the Claims call 
center; and its failure to include EMV chips on EDD debit cards;. Plaintiffs’ presentation 
of evidence demonstrating the Bank’s common course of conduct with respect to these 
issues will not be overly complex. 
Classwide general damages are readily calculable based on the Bank’s own records, 
as explained in the accompanying expert report of Greg Regan. These damages include, 
for the Claim Denial, Credit Recission, and Account Freeze Classes, the amount of the 
withheld or rescinded credit and frozen funds and the cost of that deprivation (e.g., 
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Class Plaintiffs’ Proposed Trial Plan 
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interest). The Regan report also sets forth common methodologies for calculating classwide 
damages for the Customer Service Class, including the Bank’s wrongful profits through 
the Bank’s avoided costs. These damages are tailor-made for classwide adjudication.  
The availability of treble damages under EFTA, statutory damages under EFTA and 
the CCPA, and punitive damages for Class Plaintiffs’ due process and common law claims, 
may also be determined classwide based on the common facts presented at trial.  
Judgment may be entered based on the jury’s verdict and, because the identity of all 
class members and their relevant data are available from the Bank’s own records (and have 
already been produced in this case), an administrator will be able to use those Bank records 
to distribute damages payments to each individual class member based on the data and the 
methodologies presented. 
Class Plaintiffs recognize that, in addition to classwide liability and damages to be 
adjudicated in the class case, some class members experienced extraordinary damages as a 
result of the Bank’s conduct, such as consequential damages from eviction, foreclosure, 
repossession, physical injury and emotional distress. Information to date indicates the 
number of class members who might seek relief for those extraordinary damages will 
comprise a very limited portion of the approximately 109,000 class members.1 
There is no lack of procedural devices for the Court to efficiently adjudicate these 
cases. See, e.g., Betances v. Fischer, 304 F.R.D. 416, 432 (S.D.N.Y. 2015) (certifying class, 
noting the court could employ “‘a number of management tools available to a district court 
to address any individualized damages issues,’ such as bifurcation, the use of a magistrate 
or special master, alteration of the class definition, the creation of subclasses, or even 
decertification after a finding of liability.”) (quoting In re Nassau County Strip Search 
Cases, 461 F.3d 219, 231 (2d Cir. 2006)). 
 
1 For example, fewer than 400 individual cases against the Bank are pending in this MDL 
(most of which were stayed at the outset of these proceedings by the JPML). Moreover, of 
the 132 individual cases that are currently not stayed, only a minority are brought by 
members of one or more of the five proposed classes. 
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Class Plaintiffs’ Proposed Trial Plan 
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Class member plaintiffs asserting special damages beyond classwide damages could 
choose to opt out of the class upon receiving class notice and to proceed individually, 
although those individuals would lose the benefit of the Court’s subsequent rulings and the 
jury’s verdicts on common issues in the class case (at least absent a Rule 23(c)(4) 
certification). To ensure that judicial efficiency and the interests of justice are best served, 
the preferable approach would be to permit class members who do not opt out to adjudicate 
in Phase II proceedings any claims they may have for special damages (after having 
provided timely notice of their intent to do so). See Arthur Young & Co. v. U.S. Dist. Ct., 
549 F.2d 686, 697 (9th Cir. 1977)  (“[W]e find it permissible to separate the individual 
damage issues from trial of the class issues, particularly where, as here, the damage issues 
reserved are a discrete aspect of the case as a whole.”); Barnes v. District of Columbia, 278 
F.R.D. 14, 20-22 (D.D.C. 2011) (approving a trial plan under which general damages 
would be tried on a classwide basis in a post-liability phase and any special damages claims 
would be adjudicated in later, individual proceedings); Betances, 304 F.R.D. at 431 
(certifying a § 1983 class in which general damages would be assessed on a classwide basis 
while special damages would require individualized adjudication); see also Manual For 
Complex Litigation (Fourth) § 21.5 (2004) (“In jury cases, the court may consider trying 
common issues first, preserving individual issues for later determination.”).2  
Trial plans in mass tort cases often propose a similar approach where, after group-
wide liability is established, damages are adjudicated in phased trials with groups of 
plaintiffs claiming similar categories of damages.  See, e.g., In re Exxon Valdez, 270 F.3d 
1215, 1225 (9th Cir. 2001) (affirming as “masterful” multi-phase trial plan in which the 
jury first determined cohesive classwide compensatory damages and punitive damages for 
 
2 In the class action context, courts have recognized “‘bifurcating liability and damage trials 
with the same or different juries’” is one of the “management techniques available to deal 
with the individualized issues of damages.” In re Live Concert Antitrust Litig., 247 F.R.D. 
98, 149 (C.D. Cal. 2007) (quoting In re Visa Check/MasterMoney Antitrust Litig., 280 F.3d 
124, 141 (2d Cir. 2001)). The decision to bifurcate is within the discretion of the trial court 
and “the exercise of that discretion will be set aside only if clearly abused.” United States 
v. 1,071.08 Acres of Land, 564 F.2d 1350, 1352 (9th Cir. 1977). 
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all affected individuals, while reserving for a later phase determination of individual 
compensatory damages for uniquely situated class members).   
Based on the current record, Plaintiffs propose the following approach to 
adjudicating the common issues of liability and classwide damages (including 
compensatory damages, treble damages under EFTA, restitution, and punitive damages), 
while accommodating the small number of class members who seek to pursue additional 
special damages on top of their common classwide recoveries: 
• Phase 1: Adjudicate liability on class claims and classwide damages, including 
general and statutory damages, disgorgement, restitution (in the alternative), and 
entitlement to punitive and treble damages. 
• Phase 2: Adjudicate special damages in individual cases to be determined either 
with claim forms, by a special master, or in other individualized adjudications. 
• Phase 3: At the conclusion of trial proceedings, the Court may (1) adjust punitive 
damages as necessary to ensure compliance with due process; and (2) deduct 
already-paid amounts. See Exxon Valdez, 270 F.3d at 1225 (trial plan under which 
the court would deduct from the jury’s damages awards the amount of “released 
claims, settlements, and payments by the Trans-Alaska Pipeline Liability Fund”). 
II. 
PRESENTATION OF COMMON PROOF 
The Class Plaintiffs intend to rely on common proof, mostly obtained directly from 
the Bank’s own witnesses and documents, as well as from third parties and class 
representatives, to establish liability and classwide restitution and damages (including 
EFTA treble damages and punitive damages for many claims). Class Plaintiffs presently 
intend to establish the Bank’s liability on several class claims, including for its violations 
of EFTA/Reg E, in a post-certification motion for summary judgment or adjudication 
because the underlying material facts are undisputed—thereby streamlining the eventual 
trial proceedings even more. 
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Class Plaintiffs’ Proposed Trial Plan 
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Class Plaintiffs’ case-in-chief will establish foundational facts common to each of 
the classes and to all class claims, including that:  
• The Bank had an exclusive contract with EDD to distribute unemployment 
insurance, disability insurance, and paid family leave benefits to Californians 
through Bank-issued EDD debit cards.   
• The Bank made multiple contractual promises about the services it would provide to 
EDD cardholders, including with regard to: card and account security, prevention of 
transaction fraud, compliance with EFTA and its implementing Regulation E’s 
(“Reg E”) error resolution procedures, and customer service. 
• The Bank knew that cardholders receiving unemployment benefits were some of the 
most vulnerable customers the Bank would have. 
• The Bank had, since 2014, issued its consumer and business account customers debit 
cards embedded with industry standard EMV chips but chose to issue its EDD debit 
cardholders less secure “magnetic-stripe only” cards.  
• The Bank determined that the incremental cost of adding EMV chips was $
 per 
card.  
• The Bank knew, prior to the pandemic, that its unencrypted mag-stripe only EDD 
debit cards would attract ATM fraud through skimming and counterfeiting.  
• The Bank used the vulnerability of these cards 
 
 
. 
• The Bank’s mag-stripe only EDD debit cards predictably became magnets for fraud 
during the pandemic as criminals drained tens of millions of dollars from EDD debit 
card holder accounts, including at ATMs. 
• In the Fall of 2020, the Bank’s 
 
a claim fraud filter to systemically deny, without investigation or payment of 
provisional credit, all EDD cardholder claims meeting certain criteria, thereby 
.  
• The Bank held 
 
 
 
be required to pay to EDD cardholders under EFTA. 
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• The Bank’s “
” option was a new tool the Bank called the Claim 
Fraud Filter (“CFF”), which it implemented on September 28, 2020 and continued 
to use until enjoined by the District Court in June 2021.  
• The Bank summarily denied claims without human review based solely upon 
application of its CFF. 
• The Bank’s “systemic denial” of EDD cardholder claims based on the CFF was 
unprecedented and contrary to its longstanding policies and procedures for 
conducting EFTA-compliant claims investigations. 
• The Bank used CFF Indicator-1 as the sole basis for summarily denying, without 
investigation, every EDD cardholder claim involving an unauthorized ATM 
withdrawal (“Claim Denial Policy”).  
• The Bank used CFF Indicator-1 as the sole basis to summarily rescind permanent 
credits previously paid on EDD cardholders’ claims of unauthorized ATM 
withdrawals (“Credit Rescission Policy”).  
• The Bank used CFF Indicator-1 to automatically freeze the EDD debit card accounts 
of all EDD cardholders who submitted claims of unauthorized ATM withdrawals, 
cutting off their access to existing and continuing benefits and denying them any 
opportunity to regain access to their accounts through the Bank, instead requiring 
those cardholders to call and re-verify their identities with EDD. 
• The Bank’s challenged policies were grossly inconsistent with industry standards 
for investigating claims and handling suspicious accounts. 
• The Bank knowingly understaffed its Claims call center, at the same time it 
implemented its CFF policies, thereby subjecting EDD cardholders seeking to 
submit claims or seeking reconsideration of their CFF-1 denied claims or rescinded 
credits to call wait times rarely, if ever, seen in the call center industry. 
A. 
Class Plaintiffs Will Prove with Common Evidence that the Bank 
Violated EFTA by Denying EDD Cardholder Claims Without 
Investigation Based Solely on CFF-1. 
Common evidence, including the Bank’s own documents, testimony, and discovery 
responses, will prove the Bank violated the EFTA rights of Claim Denial class members 
by summarily denying their claims based solely on CFF Indicator 1 without conducting a 
reasonable investigation of their claims as required under EFTA, in violation of 15 U.S.C. 
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§§ 1693f(a)-(d), 1693g and 12 C.F.R. § 1005.11. See ECF 126 at 19 (“MTD Order”). 
Common evidence will confirm the existence and operation of the Bank’s CFF-1 and its 
use as the sole basis for “systemically” denying all class members’ ATM transaction 
claims, and will identify which claims were denied pursuant to this policy.  
B. Class Plaintiffs Will Prove with Common Evidence that the Bank 
Violated EFTA by Rescinding Permanent Credits Based Solely on 
CFF-1. 
Common evidence, including the Bank’s own documents, testimony, and discovery 
responses, will prove that the Bank violated the EFTA and Reg E rights of Credit 
Rescission class members by using CFF Indicator 1 as the sole basis for rescinding class 
members’ “permanent” credits, in violation of 15 U.S.C. §§ 1693f(a)-(d), 1693g and 12 
C.F.R. § 1005.11. Common evidence will confirm the existence and operation of the 
Bank’s Credit Rescission Policy and will identify which credits were rescinded pursuant 
to this policy.  
C. 
Class Plaintiffs Will Prove with Common Evidence Class Members 
Are Entitled to Treble Damages Under EFTA. 
EFTA provides three independent scenarios in which “the consumer shall be entitled 
to treble damages”: the financial institution: (1) failed to timely issue provisional credit and 
“did not make a good faith investigation of the alleged error,” (2) failed to timely issue 
provisional credit and “did not have a reasonable basis for believing that the consumer’s 
account was not in error,” or (3) “knowingly and willfully concluded that the consumer’s 
account was not in error when such conclusion could not reasonably have been drawn from 
the evidence available to the financial institution at the time of its investigation.” Id. § 
1693f(e). Common evidence, including the Bank’s own documents, testimony, and 
discovery responses, will prove that the Bank unreasonably and willfully implemented and 
persisted in its CFF Policies despite knowing these policies were contrary to the Bank’s 
own past practices and industry norms, that CFF-1 had an extremely high false positive 
rate and would harm vulnerable EDD cardholders who were legitimate victims of fraud. 
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D. 
Class Plaintiffs Will Prove with Common Evidence that the Bank 
Violated Their Due Process Rights 
To establish a due process violation, Plaintiffs must establish the Bank (1) deprived 
class members of a constitutionally protected property or liberty interest (2) without 
adequate procedural safeguards, (3) acting under color of state law. See Brewster v. Bd. of 
Educ. of Lynwood Unified Sch. Dist., 149 F.3d 971, 982 (9th Cir. 1998). Common 
evidence, including the Bank’s own documents, testimony, and discovery responses, will 
prove the Bank violated the due process rights under the 14th Amendment (enforceable 
through 42 U.S.C. § 1983) and Article I, § 7 of the California Constitution by seizing 
previously awarded permanent credits from class members’ EDD debit card accounts 
(Credit Rescission Class) and freezing those accounts (Account Freeze Class) based solely 
on CFF-1, without providing pre-deprivation notice or a meaningful opportunity to be 
heard, or even reasonable post-deprivation procedures. See MTD Order at 66-74. 
Common evidence will show that the Bank accounts at issue held EDD-deposited 
benefits payments exclusively; and as Judge Burns ruled, the Bank “can’t seriously dispute 
that Plaintiffs have a constitutionally protected property interest in the EDD benefits for 
which they were approved.” MTD Order at 70. Common evidence will also establish on 
a classwide basis that the Bank rescinded credits and froze accounts pursuant to uniform 
policies and procedures and that cardholders whose credits were rescinded immediately 
lost access to their funds, while cardholders whose accounts the Bank froze lost access to 
all funds in their frozen accounts and also lost access to future benefits, which EDD was 
unable to deposit. Common evidence will show that the Bank knew that CFF-1, on which 
it relied in freezing accounts and rescinding credits, had a very high false positive rate, 
resulting in an extreme risk of erroneous deprivation. Common evidence will also identify 
the many alternative procedures the Bank could have adopted to minimize criminal fraud 
while protecting the interests of legitimate EDD cardholders and reducing the risk of 
erroneous deprivation. Class Plaintiffs will establish state action based on common 
evidence about the scope of the Bank’s authority and its relationship with EDD. 
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E. 
Class Plaintiffs Will Prove with Common Evidence that the Bank 
Breached Its Fiduciary Duties. 
To prevail on their breach of fiduciary duty claims on behalf of each class, Plaintiffs 
must prove “the existence of a fiduciary duty, its breach, and damages resulting therefrom.” 
Youngevity Int’l v. Smith, No. 16-CV-704-BTM-JLB, 2019 WL 1131876, at *2 (S.D. Cal. 
Mar. 11, 2019) (citing City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 
68 Cal.App.4th 445, 483 (1998)).  
Common evidence, including the Bank’s own documents and testimony, will prove 
that the Bank entered into a “special relationship” with EDD Cardholders and thereby 
incurred fiduciary obligations. See MTD Order at 59 (quoting Copesky v. Superior Ct., 229 
Cal.App.3d 678, 687 n.7, 691 n.12 (1991)). For example, common evidence will show that 
the Bank held “the exclusive right to provide electronic benefits payment services for 
EDD,” and “Plaintiffs couldn’t seek similar services elsewhere (eliminating competition),” 
establishing the parties’ unequal bargaining positions. Id.  
Common evidence, including the Bank’s own documents and testimony, will 
establish that the Bank breached its fiduciary duties by implementing and maintaining its 
Claim Denial, Credit Rescission, and Account Freeze Policies, and did so despite knowing 
that those policies were contrary to the Bank’s own past practices and industry norms, and 
would harm vulnerable EDD cardholders who were legitimate victims of fraud and who 
depended on their EDD benefits, denying them critical funds access for weeks and months 
on end. Common evidence based on the Bank’s own documents and testimony will further 
establish the Bank implemented and maintained each of these policies principally to protect 
its own economic self-interest at the expense of Class members’ needs and interests.  
Common evidence, including the Bank’s own documents and testimony, will 
establish that the Bank breached its fiduciary duty by failing to include industry standard 
EMV chips on EDD debit cards. Common evidence will show that EMV chip-embedded 
cards were the industry standard for payment card security, that the Bank had embedded 
EMV chips in its non-prepaid consumer debit cards since 2014, and that by 2020, the Bank 
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was aware of the vulnerability to fraud, including ATM fraud, of its mag-stripe only EDD 
cards. Common evidence will also establish that the Bank made a deliberate, profit-driven 
decision in early 2020 not to include EMV chips in EDD debit cards, despite knowing that 
(1) EDD cardholders were falling victim to fraud that EMV chips would prevent, (2) EDD 
cardholders are a vulnerable population, and (3) the incremental cost of adding EMV chips 
to EDD debit cards was merely $
 per card, and the return on that investment would 
have yielded net savings for the Bank. Internal Bank communications will show the Bank 
tried to 
 
, which 
failed. Expert testimony will establish that the Bank’s failure to issue EMV chip cards to 
class members enabled the unauthorized ATM transactions to which they fell victim and 
that these and other damages can be readily calculated on a classwide basis using the 
Bank’s own data and records.  
F. 
Class Plaintiffs Will Prove with Common Evidence that the Bank 
Was Negligent 
The elements of a negligence claim are duty, breach, causation, and injury. Vasilenko 
v. Grace Fam. Church, 3 Cal.5th 1077, 1083 (2017). Plaintiffs’ negligence claim rests on 
common issues as to whether the Bank owed Plaintiffs and class members a duty of care 
under the “special relationship” exception to the economic-loss rule, and whether the Bank 
negligently caused harm to members of the five classes. Whether the Bank and EDD 
Cardholders had a “special relationship” is an issue of law and fact that will result in the 
same answer for every EDD Cardholder. Common evidence that largely mirrors the 
evidence for the fiduciary duty claim will prove that the Bank breached its duty of care to 
class members and that those breaches caused resulting damages. The same is true of 
Plaintiffs’ EMV-related negligence per se theories under the California Consumer Privacy 
Act (“CCPA”) and Gramm-Leach-Bliley Act (“GLBA”). For example, common evidence, 
including the Bank’s own documents and testimony, and expert testimony, will show that 
EMV chips were the industry standard for debit card security, and that including EMV 
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chips in cards would have prevented unauthorized “disclosure” and “use” of cardholder 
Personal Information through card skimming and counterfeiting, in violation of Cal. Civ. 
Code § 1798.100(e). 
G. 
Class Plaintiffs Will Prove with Common Evidence that the Bank 
Breached the Covenant of Good Faith and Fair Dealing 
Common evidence, including the Bank’s own documents and testimony, and the 
testimony of experts on industry norms, will prove that the Bank’s challenged conduct was 
an objectively unreasonable exercise of its discretionary contractual authority under the 
form contracts in this case. Where a party to a contract “is invested with a discretionary 
power affecting the rights of another,” that party breaches the covenant when it fails to 
“exercise such power in good faith and through ‘objectively reasonable conduct.’” 3500 
Sepulveda, LLC v. Macy’s W. Stores, Inc., 980 F.3d 1317, 1324 (9th Cir. 2020) (citation 
omitted); MTD Order at 56.  
Claim Denial and Credit Recission Classes. Common evidence will establish that 
the Bank’s form EDD Cardholder Agreement included a guarantee that the class members 
would “incur no liability for unauthorized use of [their] Card” and gave the Bank 
discretionary authority to deny claims if “for any other reason [the Bank] conclude[s] that 
the facts and circumstances do not reasonably support a claim of unauthorized use.” 
Common evidence, including the Bank’s internal communications and expert testimony, 
will prove that the Bank did not exercise discretionary authority in a good faith and 
objectively reasonable manner, including by conducting a reasonable investigation of the 
class members’ claims. Instead, common evidence will prove that the Bank applied a 
uniform policy of automatically denying all Claim Denial class members’ claims and 
automatically rescinding all Credit Rescission class members’ previously issued claim 
credits based solely on the results of a single factor—CFF-1—without considering any 
other evidence available to the Bank, and with knowledge that CFF-1 has a very high false 
positive rate and would harm vulnerable EDD cardholders who were legitimate victims of 
fraud. 
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Account Freeze Class. Common evidence will establish the EDD Cardholder 
Agreement gave the Bank discretionary authority if it “suspect[ed] irregular, unauthorized, 
or unlawful activities may be involved with [an] Account” to “‘freeze’ (or place a hold on) 
the balance pending an investigation of such suspected activities.” The implied covenant 
required the Bank to exercise this discretionary authority in “good faith,” to freeze a class 
member’s account only based on an “objectively reasonable” suspicion, and to maintain 
that freeze only pending a reasonable investigation. Common evidence, including the 
Bank’s own documents and testimony, will prove the Bank implemented a uniform policy 
from September 28, 2020 until March 17, 2021 of automatically freezing class members’ 
accounts based solely on CFF-1 and maintaining those freezes for indefinite periods while 
purposefully obstructing cardholders’ ability to regain access to their accounts.  
Customer Service Class. Common evidence will establish that the Cardholder 
Agreement instructed class members to contact the Bank by calling the telephone numbers 
listed on the back of their cards to report unauthorized transactions and that the Bank knew 
that its call centers were the “main avenue” through which the “vast majority” of such 
cardholder claims were submitted. Common classwide evidence, including the Bank’s call-
center records, internal communications, and expert testimony, will prove that the Bank 
deliberately reduced its call-center staffing in Fall 2020 to inject “friction,” i.e., increased 
difficulty—to discourage class members from pursuing claims, and the Bank kept call 
center staffing levels far below what was needed to provide reasonable service to 
cardholders seeking assistance with their unauthorized-transaction claims.  
Common evidence, including expert testimony, will establish that each of the Bank’s 
challenged policies and practices was grossly inadequate to meet industry standards and 
was objectively unreasonable. The Bank’s own documents and testimony establish a lack 
of good faith, as they show that the Bank’s principal motivation in implementing these 
policies and practices was to protect its own financial interests at the expense of Class 
members’ rightful access to their public benefits.   
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H. 
Class Plaintiffs Will Prove with Common Evidence that the Bank 
Violated the California Consumer Privacy Protection Act. 
The CCPA imposes civil liability on any business whose customers’ “[1] 
nonencrypted and nonredacted [2] personal information…[3] is subject to an unauthorized 
access and exfiltration, theft, or disclosure [4] as a result of the business’s violation of the 
duty to implement and maintain reasonable security procedures and practices appropriate 
to the nature of the information ….” Cal. Civ. Code § 1798.150(a)(1) (brackets added).  
Common evidence, including the Bank’s own documents and testimony and expert 
testimony, will establish that the Bank failed to implement “reasonable” data security 
practices to protect EDD Cardholder’s personal information in that: all EDD debit cards 
issued by the Bank during the class period were nonencrypted, mag-stripe only cards that 
lacked industry standard EMV chips; the information encoded without encryption on the 
mag stripes was “personal information” (“PI”) under the CCPA (Cal. Civ. Code § 
1798.81.5(d)(1)(A)(iii)); and the Bank’s issuance of mag-stripe only cards made class 
members’ PI “subject to an unauthorized access and exfiltration, theft, or disclosure” 
through card “skimming” and counterfeiting. Common evidence will also show that the 
Bank’s failure to issue industry-standard EMV chips on EDD debit cards caused criminals 
to specifically target Bank ATMs and EDD debit cards with skimmers, which subjected 
class members to unauthorized access, disclosure and theft of their PI. 
I. Class Plaintiffs Will Prove with Common Evidence that the Bank 
Violated the California Unfair Competition Law (UCL). 
California’s UCL broadly defines “unfair competition” as “any unlawful [or] unfair 
… business act or practice,” and authorizes restitution to any person who has “lost money 
or property as a result of such unfair competition.” Cal. Bus. & Prof. Code §§ 17200, 
17203-04.3 Common evidence, including the Bank’s own documents and testimony, and 
expert testimony, will prove that the Bank’s uniform policies and practices of using CFF-
 
3 Plaintiffs bring their UCL claim in the alternative to their legal claims for damages for 
the Claim Denial, Credit Rescission, and Account Freeze Classes. 
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1 to deny claims, rescind credits, and freeze accounts were “unfair” under the UCL. 
Common evidence includes Bank records of how long class members were deprived of 
access to benefits, testimony showing the Bank knew EDD Cardholders were “some of the 
most vulnerable customers we would have,” evidence that the Bank applied the CFF 
Policies only to EDD Cardholders, despite contrary promises it made to EDD, and despite 
knowing that CFF-1 had a very high false positive rate and was adversely impacting tens 
of thousands of legitimate cardholders. Common evidence will also prove that the CFF 
Policies were contrary to the Bank’s own adequate investigation procedures and standard 
practices in the payment card industry, and that those Bank Policies violated declared 
public policy under EFTA and Reg E, state and federal statutes governing EDD benefits, 
and due process.  
J. Class Plaintiffs Will Prove Damages with Common Evidence.  
Common evidence will prove that Plaintiffs’ actual damages under their EFTA, due 
process, and common law claims, and restitution under the UCL, can efficiently be 
calculated using common methodologies and the Bank’s databases containing detailed 
information about the amount of each CFF-1-denied claim and CFF-1-rescinded credit of 
each Claim Denial and Credit Rescission class member, the amount frozen in each Account 
Freeze class member’s CFF-1-frozen account, the length of time each class member was 
deprived of their benefits, and the number of times each Customer Service class member 
called during the relevant time period, among other relevant data.  
Actual Damages. As set forth is the accompanying expert report of Greg Regan, the 
principal damages suffered by Claim Denial and Credit Rescission class members is the 
amount of each class member’s claim that the Bank denied, or each permanent credit that 
the Bank rescinded, based on CFF Indicator 1. Consequential damages resulting from loss 
of access to this principal amount can be calculated on a classwide basis using a compound 
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interest rate. Alternatively, consequential damages can be calculated based on classwide 
formulas based on a conservative measure of the cost of borrowing replacement funds.4 
The principal damages suffered by Account Freeze class members is the amount of 
funds in each class member’s account that was frozen based on CFF Indicator 1. This 
amount is readily determined from the Bank’s records, as is the length of time the accounts 
remained frozen. Consequential damages resulting from the length of time class members 
were deprived of access to their funds will be calculated in the same manner as for the 
Claim Denial and Credit Rescission classes. Account Freeze class members also incurred 
additional time-value-of-money costs when EDD became unable to disburse continuing 
benefits to them through their Bank-frozen EDD debit card accounts. These additional 
damages can again be measured using a common methodology based on records showing 
the length of the delay in receipt of benefits caused by the Bank’s account freeze.  
The principal damages suffered by Customer Service class members is lost time 
which will be calculated from the Bank’s records reflecting how many times each class 
member called during the relevant time period, multiplied by the average length of time 
they waited on hold in excess of an industry standard average, multiplied by the applicable 
minimum wage (or other reasonable metric).  
EFTA Treble Damages. If liability is established, calculating treble damages will be 
a matter of simple arithmetic.  
Statutory Damages. EFTA provides for statutory damages of up to $500,000 “in any 
class action … arising out of the same failure to comply [with EFTA] by the same person 
….” 15 U.S.C. § 1693m(a)(2)(B). Similarly, the CCPA provides for statutory damages of 
$100 to $750 per violation per consumer, or actual damages, whichever is greater. Cal. 
Civ. Code § 1798.150(a). These calculations can be performed using the Bank’s data. 
Punitive Damages. Plaintiffs’ entitlement to punitive damages will be established 
through common evidence about the Bank’s conduct and motives, including Bank 
 
4 Damages for the EMV Class will be calculated in the same manner as for the Claim 
Denial and Credit Rescission classes. 
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documents and testimony showing that: (1) the Bank knew its decision not to include EMV 
chips in EDD debit cards made EDD cardholders vulnerable to fraud, including 
unauthorized ATM transactions, (2) the Bank knew that CFF Indicator 1, which simply 
identified whether a claim involved an ATM withdrawal, was inaccurate and not a basis 
for a definitive finding of fraud; (3) the Bank knew that relying on Indicator 1 as the sole 
basis for auto-denying claims, auto-rescinding credits, and auto-freezing accounts would 
result in the erroneous deprivation of benefits for many legitimate EDD cardholders; (4) 
the Bank knew that “[p]eople that are receiving unemployment benefits are probably some 
of the most vulnerable customers we would have,” and would suffer extreme hardship were 
they prevented from accessing EDD funds; (5) the Bank, as a sophisticated financial 
institution, had reasonably available alternatives for addressing fraud that would have been 
less harmful to EDD cardholders; (6) the Bank’s senior executives nevertheless chose to 
implement the hastily-contrived CFF policy which made no attempt to differentiate 
fraudsters from legitimate cardholders and was the “
” approach that would 
yield the greatest cost savings to the Bank by enabling it to avoid paying EFTA-required 
credits.  
Restitution. Plaintiffs seek restitution under the UCL’s “unfair” prong, as an 
alternative to their legal claims for damages, to recover the money lost by members of the 
Claim Denial, Credit Rescission, and Account Freeze Classes as a result of the Bank’s 
challenged policies affecting those classes. The restitution sought comprises (1) money in 
which class members have a vested ownership interest but which the Bank wrongfully 
withheld from class members (i.e., the amount of the denied claims, rescinded credits, 
and frozen funds), see Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134, 
1148-49 (2003); (2) prejudgment interest of 7% per annum for the periods the Bank 
wrongfully withheld from class members the money attributable to denied claims, 
rescinded credits, and frozen accounts, cf. Espejo v. Copley Press, Inc., 13 Cal.App.5th 
329, 375-76 (2017) (awarding 7% prejudgment interest as component of restitution under 
UCL); Wallace v. Countrywide Home Loans, Inc., No. SACV-08-1463-JST (MLGx), 
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2013 WL 1944458, at *8 (C.D. Cal. Apr. 29, 2013) (same); and (3) restitutionary 
disgorgement of the float revenue that the Bank earned on wrongfully withheld funds, see 
Aguayo v. U.S. Bank, 200 F.Supp.3d 1075, 1076-77 (S.D. Cal. 2016) (UCL permits 
restitutionary disgorgement “where defendant’s profits stem from money unlawfully 
obtained from the plaintiffs”). Calculation of such restitution is readily ascertainable from 
the Bank’s records.  
Disgorgement. Plaintiffs seek disgorgement of the Bank’s unjustly earned profits 
attributable to the Bank’s breach of fiduciary duty, breach of the implied covenant, and 
negligence. The Bank earned a profit on all funds on deposit with the Bank, and thus on 
the amounts it wrongfully withheld from Plaintiffs and class members. The Bank also 
earned profits, in the form of avoided costs, by deliberately understaffing its Claims call 
center and issuing cards without EMV chips. Calculation of these profits is readily 
ascertainable from the Bank’s own records.  
 
Respectfully submitted, 
Dated:  August 29, 2024  
 
COTCHETT, PITRE & McCARTHY, LLP 
 
By:  /s/ Brian Danitz 
 
 
JOSEPH W. COTCHETT  
BRIAN DANITZ  
KARIN B. SWOPE  
ANDREW F. KIRTLEY 
VASTI S. MONTIEL 
 
Co-Lead Counsel for Plaintiffs and the 
Proposed Class  
 
 
Dated:  August 29, 2024  
 
ALTSHULER BERZON LLP 
 
By:  /s/ Michael Rubin  
 
 
 
 
 
  
 
MICHAEL RUBIN  
STACEY M. LEYTON  
CONNIE K. CHAN 
 
 
 
 
 
 
KATHERINE G. BASS 
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COLIN C. JONES 
 
Co-Lead Counsel for Plaintiffs and the 
Proposed Class  
 
 
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SIGNATURE ATTESTATION 
Pursuant to section 2(f)(4) of the Electronic Case Filing Administrative Policies and 
Procedures Manual, I, Brian Danitz, attest that the other signatories listed, and on whose 
behalf this filing is submitted, concur in the filing content and have authorized this filing. 
 
Dated: August 29, 2024  
 
 
/s/ Brian Danitz 
 
 
    Brian Danitz 
 
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