Court filing
Exhibit 1 — Bofa Ca Unemployment (Dkt. 513.3)
No. 3:21-md-02992-GPC-MSB · Doc. 513-3 · Docket on CourtListener
Summary
Exhibit 1, Document 513-3 in In re Bank of America California Unemployment Benefits Litigation, No. 3:21-md-02992-GPC-MSB, U.S. District Court for the Southern District of California, filed July 3, 2025. It reproduces Bank of America, N.A.'s redacted petition to the Ninth Circuit for leave to appeal the class certification order under Fed. R. Civ. P. 23(f). The petition states the district court docketed its sealed order granting class certification on June 16, 2025, and argues the certified classes include fraudulent claimants with no valid Electronic Funds Transfer Act claims. It contends the court erred under Rule 23(b)(3) by reading Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods LLC to permit a class without a method to identify uninjured members. Goodwin Procter LLP is counsel for the petitioner.
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EXHIBIT 1
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REDACTED
No. _______
———————————————
In the
United States Court of Appeals for the Ninth Circuit
———————————————
IN RE: BANK OF AMERICA CALIFORNIA
UNEMPLOYMENT BENEFITS LITIGATION,
BANK OF AMERICA, N.A.,
Defendant/Petitioner.
———————————————
On Petition for Leave to Appeal
from the United States District Court for the Southern District of California
No. 3:21-MD-02992-GPC-MSB (Curiel, J.)
———————————————
REDACTED PETITION FOR LEAVE TO APPEAL
UNDER FED. R. CIV. P. 23(f)
———————————————
Laura G. Brys James W. McGarry
GOODWIN PROCTER LLP Jordan Bock
601 S. Figueroa St., Ste. 4100 GOODWIN PROCTER LLP
Los Angeles, Cal. 90017 100 Northern Ave.
lbrys@goodwinlaw.com Boston, Mass. 02210
(213) 426-2500 jmcgarry@goodwinlaw.com
jbock@goodwinlaw.com
(617) 570-1000
William M. Jay
Keith Levenberg
GOODWIN PROCTER LLP
1900 N Street, N.W.
Washington, D.C. 20001
wjay@goodwinlaw.com
klevenberg@goodwinlaw.com
(202) 346-4000
Counsel for Petitioners
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CORPORATE DISCLOSURE STATEMENT
Pursuant to FRAP 26.1, Petitioners hereby disclose that Bank of America,
N.A. is an indirect, wholly owned subsidiary of Bank of America Corporation. Bank
of America Corporation is a publicly held company whose shares are traded on the
New York Stock Exchange (BAC). Bank of America Corporation has no parent
company and no publicly held corporation owns more than 10% of Bank of America
Corporation’s shares.
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TABLE OF CONTENTS
Page
JURISDICTION......................................................................................................... 4
BACKGROUND ....................................................................................................... 4
A. The schemes to steal pandemic benefits ..............................................4
B. The regulatory settlement .....................................................................6
C. Plaintiffs’ claims...................................................................................8
D. The class-certification order .................................................................9
QUESTION PRESENTED ......................................................................................12
ARGUMENT ...........................................................................................................12
I. The certification of an overinflated class seeking
in noncompensatory damages warrants review. .........13
II. The district court manifestly erred in concluding that Plaintiffs
satisfied Rule 23(b)(3). .............................................................................. 14
A. The certification decision fails to account for the impact of
individualized inquiries. .....................................................................14
1. The district court never required Plaintiffs to prove
predominance. .............................................................................14
2. The district court relied on a fail-safe class definition to
sidestep the class’s overwhelming predominance problem. .......18
B. The district court’s conclusion that the necessary evidence is
limited to BANA and EDD’s records is both wrong and
irrelevant.............................................................................................20
III. This case presents an important and continually recurring question
of class action law......................................................................................23
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TABLE OF AUTHORITIES
Page(s)
Cases
In re Bank of Am. Cal. Unemp. Bens. Litig.,
674 F. Supp. 3d 884 (S.D. Cal. 2023)................................................................... 8
Bowerman v. Field Asset Servs., Inc.,
60 F.4th 459 (9th Cir. 2023) ............................................................................... 22
Chamberlan v. Ford Motor Co.,
402 F.3d 952 (9th Cir. 2005) ........................................................................13, 14
Kamar v. RadioShack Corp.,
375 F. App’x 734 (9th Cir. 2010) .......................................................................19
Lab. Corp. of Am. Holdings v. Davis,
605 U.S. ___, 2025 WL 1583302 (2025) ...............................................13, 14, 23
Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods
LLC,
31 F.4th 651 (9th Cir. 2022) (en banc) ...................................2, 15, 16, 18, 19, 24
Van v. LLR, Inc.,
61 F.4th 1053 (9th Cir. 2023) ............................ 14, 15, 16, 17, 18, 19, 21, 22, 24
Wal-Mart Stores, Inc. v. Dukes,
564 U.S. 338 (2011)......................................................................................11, 23
In re Wells Fargo Home Mortg. Overtime Pay Litig.,
268 F.R.D. 604 (N.D. Cal. 2010)........................................................................ 22
Statutes
15 U.S.C. § 1693a(12)(B) .......................................................................................... 9
15 U.S.C. § 1693f(e)(2) ...........................................................................................10
15 U.S.C. § 1693m(a)(1).......................................................................................... 10
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Other Authorities
12 C.F.R. § 1005.2(b)(1) ...................................................................................... 9, 20
12 C.F.R. § 1005.2(b)(3) ..........................................................................................20
81 Fed. Reg. 83968 (Nov. 22, 2016)........................................................................20
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This litigation arises from perhaps the largest epidemic of consumer financial
fraud in U.S. history. Thieves stole billions of dollars in COVID-19-related
unemployment benefits from taxpayers and the government.
Then they stole that too.
The victims of the fraud include the taxpayers, the California Employment
Development Department (EDD) (which paid the benefits), and Bank of America,
N.A. (BANA) (which issued the cards). The perpetrators of the fraud include an
unknown but significant portion of the certified classes, who now stand to triple
down on their frauds by collecting even more ill-gotten gains from BANA as
“damages.” Not surprisingly,
—
—has not been injured and does not have a valid claim in federal court.
The district court decided that the presence of these fraudulent claimants in the
certified class presented no obstacle to class treatment. That decision rested on
manifest errors of law and abuses of discretion that should be reversed. At the very
least, it should receive the thorough review Rule 23(f) permits, given the stakes of
the decision below—certification of a class seeking
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in damages (all non-compensatory), with no way of limiting the class to legitimate
claimants.
Plaintiffs’ primary theory of liability is that BANA violated the Electronic
Funds Transfer Act (EFTA) by using a filter to identify suspicious reports of
unauthorized card use before provisionally crediting funds back to cardholders. They
claim that their class of over a hundred thousand people were all flagged in error.
But the fact is that Plaintiffs have no idea how many of those flags were erroneous,
versus how many class members were correctly caught reporting their own
transactions as unauthorized.
The prospect of awarding windfall damages to people who were not victims
of any misconduct, but rather perpetrators of it, did not bother the district court
because it construed Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee
Foods LLC, 31 F.4th 651 (9th Cir. 2022) (en banc), to hold that there is no obstacle
to certifying a class containing numerous “uninjured” class members. A85-86. That
misinterprets both Olean and Rule 23. Because the Supreme Court has made clear
that no damages can be awarded to uninjured plaintiffs, Olean permits a class to be
certified only if there is some method for identifying uninjured class members before
judgment that will not devolve into hundreds of mini-trials.
No such method was proposed here. Plaintiffs’ explicit strategy was to argue
they didn’t need one, because BANA had already done it for them. They relied on
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BANA’s settlement of a related regulatory investigation,
Plaintiffs
argued that BANA wouldn’t have paid anyone under the settlement who wasn’t
entitled to it, so those same people must also be entitled to collect damages as class
members. That assumption was not remotely justified, as the record evidence here
shows.
A182-83.
So while the settlement means that everyone in the certified
classes has already received full compensation for any injuries or inconveniences, it
does not mean that the class excludes people who took part in the criminal fraud
against the State, the taxpayers, and BANA.
Neither Plaintiffs nor the court below has any method for figuring out which
class members are fraudsters ineligible for any recovery—and any such method
would involve individualized investigations and mini-trials, which under Rule
23(b)(3) makes this case unsuitable for class treatment.
In the context of a national emergency, there might have been good reasons
for EDD to prioritize getting money in people’s hands as fast as possible, even at the
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cost of paying fraudsters; in the context of a regulatory settlement,
; but in the context of a federal court
proceeding, this beneficence reaches its constitutional and legal limit. Article III and
Rule 23 do not countenance the use of the class-action device to pay criminals and
others with no valid claims. Granting class certification here was not just
inappropriate, but harmful.
JURISDICTION
This petition is timely because the district court docketed the sealed order
granting class certification on June 16, 2025.
BACKGROUND
A. The schemes to steal pandemic benefits
In March 2020, the COVID-19 crisis prompted the federal government to fund
a unique benefits program, Pandemic Unemployment Assistance, open to people not
eligible for traditional unemployment benefits (e.g., the self-employed, contract
workers, and gig workers). Focusing on delivering relief as fast as possible to the
massive numbers of potential recipients, both the federal government and EDD
loosened requirements for verifying eligibility—for example, eliminating the need
to document prior employment history. A159-60. The result was a vulnerable target
for fraudsters and thieves. A120-21.
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Studies showed that upwards of $400 billion of PUA benefits were paid to
ineligible claimants defrauding the system. ECF 350-16 at 2.1 The Department of
Labor reported in August 2023 that more than a third of PUA payments was lost to
fraud. ECF 350-15 at 6. California identified up to $31 billion in fraud losses as of
January 2021, blaming 95% on the loosened verification requirements. See
ECF 350-14 at 5. Some criminals were collecting EDD benefits under dozens of
fraudulent identities. A115, A159-60.
A162-
63. The credit-back process is governed by EFTA. Most card issuers, including
BANA, implement that law’s requirements by
That works fine in ordinary circumstances, but
against the tsunami of fraudulent activity at issue here,
1
Except where otherwise noted, ECF citations refer to the district court docket, No.
3:21-md-02992 (S.D. Cal.).
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A159.
Id.
BANA responded by launching new antifraud procedures in September 2020
to investigate claims and identify cardholders who were likely submitting fraudulent
transaction disputes. See ECF 350-15 at 29-30. A fraud filter became the first layer
of the investigation process, flagging accounts and transactions satisfying an array
of criteria BANA’s antifraud experts identified as reliable indicators of fraud,
including and
disputed ATM withdrawals (which require the cardholder’s personal PIN). A127-
28; A164-65; A201-14. This last criterion—the current focus of Plaintiffs’ class
claims—reflected
A126-27; A162-63.
and
BANA gave every cardholder flagged by the filter the ability to seek manual
reconsideration.
A165.
B. The regulatory settlement
Notwithstanding the above, the CFPB launched an investigation into the fraud
filter, which BANA resolved in a July 2022 settlement. ECF 106 at 2.
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A182.
Id.
A183-84.
A182-83; A287.
A287-88.
A172.
See A183; A201-14; A281-85.
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C. Plaintiffs’ claims
The lead case in this MDL, Yick v. Bank of Am., N.A., No. 3:21-CV-00376
(N.D. Cal.), was filed on January 14, 2021. Only vestigial traces of its original claims
and theories remain. The original complaint was that BANA didn’t do enough to
protect cardholders from unauthorized transactions. The current complaint is that it
did too much.
ECF 304, ¶ 89.
At the Rule 12(b)(6) stage, the district court dismissed 83 plaintiffs based on
failures to plead assorted elements of their EFTA claims so varying and specific to
each individual Plaintiff that the court had to append a table clarifying who was
being dismissed and on what grounds. See In re Bank of Am. Cal. Unemp. Bens.
Litig., 674 F. Supp. 3d 884 (S.D. Cal. 2023). The court emphasized that each
plaintiff’s claim would turn on BANA’s records on each “particular account in
question.” Id. at 911-12 (quoting 12 C.F.R. § 1005, Supp. I at 11(c)(4)).
Plaintiffs amended their complaint, but, faced with the prospect of having to
produce discovery and testify under oath about their claims, 109 plaintiffs
voluntarily dismissed themselves. Compare ECF 136 with ECF Nos. 149, 193, 206,
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216, 230, 235, 253, 263. On July 16, 2024, Plaintiffs filed a second amended
complaint, reducing the number of individually named plaintiffs to 133 and naming
only 21 as putative class representatives. See ECF 304.
D. The class-certification order
Plaintiffs moved to certify classes of cardholders who received payments
under the CFPB settlement for disputed ATM transactions that BANA flagged
“based solely” on Indicator 1 of the fraud filter. A236, A243-45, A248, A250. They
do not dispute that the settlement payments already gave all class members full
compensation for any harm; rather, they expressly acknowledged that they filed this
action to take advantage of EFTA’s provision for treble damages. A242; see also
A86-87. Plaintiffs argued that these claims were suitable for class treatment because
their claims all turned on whether BANA’s “procedures” complied with EFTA’s
investigation requirements. A243-44.
But an EFTA claim requires more. As a threshold matter, someone who
obtained the account by means of fraud or for criminal purposes does not have an
“Account” (a regulatory term of art) covered by EFTA. See 12 C.F.R.
§ 1005.2(b)(1). Separately, someone trying to defraud a card issuer by cashing in
(potentially stolen) benefits and then
does not have an EFTA claim because there is no unauthorized
transfer. See 15 U.S.C. § 1693a(12)(B). And because Plaintiffs seek treble damages,
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but still erroneously—held (i) that it was BANA’s burden to prove that identifying
uninjured class members would pose predominance problems, rather than Plaintiffs’
burden to prove that it wouldn’t, and (ii) that BANA hadn’t carried that burden,
A61-62. Finally, the court
committed all these errors under the faulty assumption that Plaintiffs only had to
satisfy Rule 23 as far as their “prima facie case,” and not their case as a whole. A54-
55. All of these errors, and others, warrant appellate review.
QUESTION PRESENTED
Whether this Court should review a class-certification grant that puts
at stake and allows criminals to share in a class
recovery without proposing any mechanism for removing these ineligible plaintiffs
from the class.
ARGUMENT
This case satisfies all three Rule 23(f) criteria: “(1) there is a death-knell
situation for [the] defendant that is independent of the merits of the underlying
claims, coupled with a class certification decision by the district court that is
questionable; (2) the certification decision presents an unsettled and fundamental
issue of law relating to class actions, important both to the specific litigation and
generally, that is likely to evade end-of-the-case review; or (3) the district court’s
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class certification decision is manifestly erroneous.” Chamberlan v. Ford Motor Co.,
402 F.3d 952, 959 (9th Cir. 2005).
I. The certification of an overinflated class seeking
in noncompensatory damages warrants review.
Appellate review is appropriate where “a grant of certification may ‘force a
defendant to settle rather than incur the costs of defending a class action.’”
Chamberlan, 402 F.3d at 957 (citation omitted). Because Plaintiffs here are seeking
, “a doubtful class certification” ruling will put
immense pressure on BANA to proceed based not on whether it has a “meritorious
claim or defense,” but on the stakes at trial. Id. at 957-58 (explaining that Rule 23(f)
provides a “mechanism through which appellate courts, in the interest of fairness,
can restore equilibrium when a doubtful class certification ruling would virtually
compel a party to abandon a potentially meritorious claim or defense before trial”)
(quoting Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288, 293 (1st Cir.
2000)).
That risk is all the more acute here because of the particular defect with this
certification ruling. “Classes that are overinflated with uninjured members raise the
stakes for businesses that are the targets of class actions.” Lab. Corp. of Am.
Holdings v. Davis, 605 U.S. ___, 2025 WL 1583302, at *3 (2025) (Kavanaugh, J.,
dissenting). In that circumstance, the “[o]verbroad and incorrectly certified
class[] … threaten[s] massive liability” and “coerce[s] businesses into costly
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settlements.” Id. This case thus presents the exact circumstance that shows “why
Rule 23(f)’s interlocutory appeal procedure was established in 1998.” Id.
II. The district court manifestly erred in concluding that Plaintiffs satisfied
Rule 23(b)(3).
The district court’s application of the requirement that common issues must
predominate over individualized ones was “manifestly erroneous,” and therefore
warrants review under Rule 23(f) “even absent a showing of another factor.”
Chamberlan, 402 F.3d at 959. The court made two fundamental errors. First, it
committed the same error this Court identified in Van v. LLR, Inc., 61 F.4th 1053
(9th Cir. 2023): Despite significant evidence that identifying all the uninjured class
members would require extensive individualized evaluations, the district court never
required plaintiffs to prove that class issues predominate. A62, A67, A69, A84.
Second, the district court concluded that any individualized inquiry could not defeat
predominance where the inquiry would look at evidence in the defendant’s
possession. A63-64. Either error warrants reversal.
A. The certification decision fails to account for the impact of
individualized inquiries.
1. The district court never required Plaintiffs to prove
predominance.
Once “a defendant substantiates … an individualized issue,” the district court
“must determine whether the plaintiff has proven by a preponderance of the evidence
that the questions of law or fact common to class members predominate over any
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questions affecting only individual members.” Van, 61 F.4th at 1069. The district
court never made this determination: the court deemed it unnecessary on the basis
that it could certify a class with a de minimis number of uninjured class members,
or even “more than a de minimis number of uninjured class members.” A62. That
was manifest error.
As this Court explained in both Van and Olean, the question is not the
potential number of uninjured class members, but rather how those class members
will be identified. See Van, 61 F.4th at 1067 n.11; Olean, 31 F.4th at 667. Regardless
of “whether a great number of plaintiffs will win or lose at trial on the individualized
issue … the district court must assess the necessity and manageability of the
potential class-member-by-class-member discovery process and trial.” Van, 61 F.4th
at 1067 n.11. If identifying uninjured class members will require assessing
“thousands of claims one at a time, then the individualized issue will weigh heavy
in the predominance balancing”—regardless of the ultimate results of that
individualized inquiry. Id.
This Court applied these principles to reverse a certification grant in Van. The
district court had found predominance because it thought “the number of proposed
class members for whom it can presently be determined [were uninjured] is de
minim[i]s.” Id. at 1068. As this Court explained, the defendant had “substantiated
the individualized issue—that is, [the defendant’s] exhibits demonstrated that at least
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some [class members] lack meritorious claims because they were … uninjured.” Id.
at 1068 n.13. Once the defendant made that showing, the district court could not
simply end the predominance analysis because only a handful of uninjured plaintiffs
had been identified so far: the “court was required to assess whether [the plaintiff]
had met her burden of proving that the question of law or fact common to class
members predominate[d] over any questions affecting only individual members.” Id.
The district court committed precisely the same error here. In the district
court’s view, the maximum number of fraudsters in the putative class was “
,” meaning there were only “a de minimis number of uninjured class members.”
A62. On that basis, the court concluded that BANA had “not sufficiently
demonstrated with evidence that individual issues will predominate on the EFTA
claim.” Id. But BANA showed all that it was required to show—namely, that “at
least some class members lack meritorious claims” because they were uninjured,
“thus summoning the spectre of class-member-by-class-member adjudication.” Van,
61 F.4th at 1069. At that point, Plaintiffs were required to “prove[] by a
preponderance of the evidence that the questions of law or fact common to class
members predominate” over the necessary individualized adjudication. Id.
The district court did not hold Plaintiffs to this burden. Plaintiffs never put
forth any “method or methods” they “propose[d] to use” to establish that “the
prerequisites of Rule 23(b)(3) are satisfied.” Olean, 31 F.4th at 666 (internal citation
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and quotation marks omitted). Despite that, the court repeatedly faulted BANA for
failing to “sufficiently demonstrate[] with evidence that individual issues will
predominate on the EFTA claim.” A62; see also A63 (“BANA has not shown, with
evidence, that individual inquiries will predominate over common ones.”). But
BANA provided “evidence that [] individualized issues bar recovery on at least some
claims.” A62. The district court in fact recognized as much. See id. At that point—
irrespective of how many uninjured class members BANA had identified so far—
Plaintiffs had the burden to show that individualized inquiries into who was
uninjured would not predominate. See Van, 61 F.4th at 1067 n.11 (when assessing
the “manageability of [a] potential class-member-by-class member” evaluation, “the
district court should keep in mind that the plaintiff bears the burden of proving that
class issues predominate over individual issues”). The district court’s failure to
allocate the burden correctly was a manifest error.
Finally, while not ultimately necessary to the Rule 23(f) analysis, it is worth
noting that the district court fundamentally misconstrued the record. The district
court concluded that a maximum of engaged in fraud out of the
104,300 members of the primary class. A62. That conclusion confused a sample with
a ceiling.
A173,
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Id.
A174. The district court was therefore wrong to base its
analysis on the notion that represents the maximum number of fraudsters in the
class.
This “clearly erroneous” “factual error” was “insignificant compared to the
legal error” discussed above. Van, 61 F.4th at 1068 n.13. Even had the district court
correctly assessed the record, it still manifestly erred by sidestepping any inquiry
into the required individualized analysis. See id. (noting that, whether defendant
“provided two or eighteen examples, [defendant] had substantiated the
individualized issue”). But if nothing else, the district court’s misunderstanding of
the factual record highlights its failure properly to evaluate the issues at hand.
2. The district court relied on a fail-safe class definition to
sidestep the class’s overwhelming predominance problem.
The district court’s predominance analysis rested on a separate, significant
legal error. Plaintiffs argued—and the district court agreed—that there was no
predominance problem because “the proposed Class definition already excludes any
person who … has previously engaged in fraudulent Program conduct.” A59. In
other words, the district court erroneously created “a ‘fail safe’ class that is defined
to include only those individuals who were injured by the allegedly unlawful
conduct.” Olean, 31 F.4th at 669 n.14 (internal citation and quotation marks
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omitted). “Such a class definition is improper because a class member either wins
or, by virtue of losing, is defined out of the class and is therefore not bound by the
judgment.” Id. (internal citation omitted). Fail-safe classes are impermissible
because of “the obvious problems that exist when the class itself is defined in a way
that precludes membership unless the liability of the defendant is established.”
Kamar v. RadioShack Corp., 375 F. App’x 734, 736 (9th Cir. 2010).
The relevant question under Rule 23 is how plaintiffs and the district court
will ensure that anyone who “has previously engaged in fraudulent Program
conduct” is “exclude[d]” from the class. A100. Simply referring to the class
definition does nothing to accomplish this. As Olean establishes, Plaintiffs had to
identify some method for weeding out class members who committed fraud without
“individualized inquiries about such matters.” 31 F.4th at 668. The court’s reliance
on the class definition, as if it were self-executing in the absence of such a method,
was manifestly erroneous.
If predominance could be resolved simply by defining uninjured class
members out of the class, there would be no need to consider whether individualized
issues predominate. That is not the law. This Court has repeatedly directed district
courts to assess the necessity of “a class-member-by-class-member assessment of
the individualized issue.” Van, 61 F.4th at 1069. And excluding fraudsters from the
class only once BANA identifies them gets the issue backwards. Each additional
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fraudster BANA identifies should tip the scales toward denying class certification—
not granting it.
The above, if anything, understates the amount of individualized factfinding
necessary. The district court repeatedly misunderstood the degree to which EFTA
requires Plaintiffs to shoulder individualized proof.2 Those legal rulings—which are
reviewed de novo on appeal—compound the district court’s manifestly erroneous
treatment of predominance.
B. The district court’s conclusion that the necessary evidence is
limited to BANA and EDD’s records is both wrong and irrelevant.
The district court ultimately stated that “[e]ven if fraudulent claimants need
to be sorted out, the process of fact-intensive analysis will come from BANA and
EDD’s records and not any evidence that a class member will need to present.” A63.
Thus, the court said, “many mini-trials will not overwhelm the proceedings.” Id.
That is wrong twice over.
2
To take one example, the district court incorrectly concluded that class members
need not show that their accounts were “created for personal, family or household
purposes”—rather than for fraudulent or criminal purposes—because EDD accounts
are “prepaid accounts.” A52-53. But as the CFPB explained when it removed the
phrase “established primarily for personal, family, or household purposes” from the
regulation governing prepaid accounts (12 C.F.R. § 1005.2(b)(3)), the phrase was
“unnecessary here as it already appears in the main definition of account in [12
C.F.R.] § 1005.2(b)(1) and prepaid accounts are expressly included as a subcategory
within that broader definition.” Prepaid Accounts Under the Electronic Fund
Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z), 81 Fed.
Reg. 83968 (Nov. 22, 2016).
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First, a wave of mini-trials is precisely what this “process of fact-intensive
analysis” will involve. Id. If BANA’s records show that a class member should be
disqualified, that class member would need an opportunity to contest the finding,
and the district court would have to resolve that dispute. On the flip side, BANA is
entitled to test whether each proposed class member was entitled to unemployment
benefits and submitted a bona fide unauthorized transaction claim. See supra, pp. 9-
10. Notably, when faced with the prospect of testifying under oath about their claims,
more than one-third of the individual plaintiffs dismissed themselves from the case.
See Background, supra, Part C. This process, too, will require the district court to
conduct individualized adjudications. Sorting out uninjured class members will thus
involve precisely the “months of trial” that defeat predominance. Van, 61 F.4th at
1069.
Second, it is not true that the evidence needed for these mini-trials is
While BANA has found some smoking guns, certain other
critical information is . It is simply
not the case that “[i]ndividual inquiries to EDD cardholders will not be necessary.”
A63 (recognizing that EDD has information regarding cardholders’ entitlement to
benefits).
Even limiting the universe of relevant materials to BANA’s records, the
review process will still involve “class-member-by-class-member adjudication.”
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Van, 61 F.4th at 1069.
A172. Whether
or not plaintiffs need to be involved in this exercise, it is exactly the type of
individualized inquiry that defeats predominance. Van, 61 F.4th at 1069; see also
Bowerman v. Field Asset Servs., Inc., 60 F.4th 459, 469 (9th Cir. 2023)
(decertification appropriate where evaluation of “individualized injury” would
render class treatment “prohibitively cumbersome”).
The district court essentially decided these mini-trials were irrelevant by
holding that Plaintiffs only needed to satisfy Rule 23 when it comes to their “prima
facie case.” A55. “Such a view is directly at odds with the way the Ninth Circuit has
interpreted Rule 23(b)(3). The important inquiry is not whether common issues
predominate with respect to plaintiff’s prima facie case, but rather will common
issues predominate in the entire litigation.” In re Wells Fargo Home Mortg.
Overtime Pay Litig., 268 F.R.D. 604, 612 (N.D. Cal. 2010) (citing Zinser v. Accufix
Research Inst., Inc., 253 F.3d 1180, 1186 (9th Cir. 2001)). “Simply because the
plaintiff may be able to establish the prima facie case using some form of common
proof does not mean that defendant is limited to common proof when asserting
relevant defenses.” Id.
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Nor can Plaintiffs sidestep predominance on the basis that BANA will
shoulder the burden of identifying uninjured class members. It is the nature of the
burden, not the party on which it rests, that determines whether individual issues
predominate. “[A] class cannot be certified on the premise that [the defendant] will
not be entitled to litigate its statutory defenses to individual claims.” Wal-Mart, 564
U.S. at 367. That applies regardless of which side furnishes the evidence. The district
court erred by failing even to consider whether BANA’s litigation of these defenses
would predominate.
III. This case presents an important and continually recurring question of
class action law.
While the district court manifestly erred, it was faced with a challenging task.
The proper approach to the predominance inquiry in cases with uninjured class
members raises important legal questions that have split the circuits, as shown by
the Supreme Court’s recent grant of certiorari to resolve one such issue.3 More
guidance is needed within the Ninth Circuit as well.
To start, while both Olean and Van confirmed that the district court must
evaluate whether individualized issues predominate, neither panel had occasion to
3
The Supreme Court ultimately dismissed that petition as improvidently granted for
procedural reasons specific to that case. Lab. Corp., 605 U.S. at __, 2025 WL
1583302, at *1-2. But the certiorari papers, merits briefing, and argument
underscore the complexity of this issue and the range of approaches that have
developed.
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conduct the analysis necessary when a class contains uninjured members. See Olean,
31 F.4th at 682 (explaining that plaintiffs had demonstrated injury at “the class
certification stage for all class members”); Van, 61 F.4th at 1069 (remanding for the
district court to “re-assess whether Van has met her burden of proving by a
preponderance of the evidence that common issues predominate over questions
affecting only individual members”). The district court therefore had minimal
guidance on how to assess whether individualized inquiries predominate when all
agree the class contains some number of uninjured class members. This analysis is
critical for ensuring proper application of Rule 23(b)(3), a recurring issue of critical
importance in the district courts.
Relatedly, this case provides an opportunity to address how a class definition
can—and cannot—address predominance problems like these. The district court’s
effort to define away the predominance problem was understandable, but legally
improper. It would be highly beneficial for the Court to provide further guidance on
how the rule against fail-safe class definitions applies in this context.
* * *
This is a textbook case for Rule 23(f) review. Plaintiffs are seeking
in damages, and BANA has provided ample evidence that the
class contains at least some criminal fraudsters with no injury. Plaintiffs bore the
burden of devising a method to identify them before final judgment that would not
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descend into individual mini-trials. The district court did not make them carry it. It
just relied on the notion that it could define fraudsters out of the class—but with no
way to identify who those people are, or disqualify them from getting paid.
The district court committed multiple manifest errors, on important and
recurring issues, in an enormous, high-stakes litigation. BANA respectfully requests
that the Court grant this petition and allow BANA to brief the errors in the district
court’s analysis before it is potentially required to distribute to
criminals.
June 30, 2025 Respectfully submitted,
s/ William M. Jay
Laura G. Brys James W. McGarry
GOODWIN PROCTER LLP Jordan Bock
601 S. Figueroa St., Ste. 4100 GOODWIN PROCTER LLP
Los Angeles, CA 90017 100 Northern Ave.
lbrys@goodwinlaw.com Boston, MA 02210
(213) 426-2500 jmcgarry@goodwinlaw.com
jbock@goodwinlaw.com
(617) 570-1000
William M. Jay
Keith Levenberg
GOODWIN PROCTER LLP
1900 N Street, N.W.
Washington, DC 20001
wjay@goodwinlaw.com
klevenberg@goodwinlaw.com
(202) 346-4000
Counsel for Petitioners
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Case 3:21-md-02992-GPC-MSB Document 513-3 Filed 07/03/25 PageID.29731
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CERTIFICATE OF COMPLIANCE
This Petition complies with the type-volume limitation of Circuit Rules 5-2
and 32-3(2) because, according to the word count of Microsoft Word, the word-
processing system used to prepare the Petition, it contains 5,570 proportionately
spaced words, excluding the parts of the Petition exempted by F ED. R. APP. P.
32(a)(7)(B)(iii).
This Petition complies with the typeface requirements of FED. R. APP. P.
32(a)(5) and the type style requirements of FED. R. APP. P. 32(a)(6) because it has
been prepared in a proportionally spaced typeface in 14-point, Times New Roman
font.
s/ William M. Jay
Laura G. Brys James W. McGarry
GOODWIN PROCTER LLP Jordan Bock
601 S. Figueroa St., Ste. 4100 GOODWIN PROCTER LLP
Los Angeles, CA 90017 100 Northern Ave.
lbrys@goodwinlaw.com Boston, MA 02210
(213) 426-2500 jmcgarry@goodwinlaw.com
jbock@goodwinlaw.com
(617) 570-1000
William M. Jay
Keith Levenberg
GOODWIN PROCTER LLP
1900 N Street, N.W.
Washington, DC 20001
wjay@goodwinlaw.com
klevenberg@goodwinlaw.com
(202) 346-4000
Counsel for Petitioners
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Case 3:21-md-02992-GPC-MSB Document 513-3 Filed 07/03/25 PageID.29732
Page 33 of 34
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
Form 15. Certificate of Service for Electronic Filing
Instructions for this form:
http://www.ca9.uscourts.gov/forms/form15instructions.pdf
9th Cir. Case Number(s) _____________________________________________
I hereby certify that I electronically filed the foregoing/attached document(s) on this
date with the Clerk of the Court for the United States Court of Appeals for the Ninth
Circuit using the Appellate Electronic Filing system.
Service on Case Participants Who Are Registered for Electronic Filing:
[ ] I certify that I served the foregoing/attached document(s) via email to all
registered case participants on this date because it is a sealed filing or is submitted
as an original petition or other original proceeding and therefore cannot be served
via the Appellate Electronic Filing system.
Service on Case Participants Who Are NOT Registered for Electronic Filing:
[ X ] I certify that I served the foregoing/attached document(s) on this date by hand
delivery, mail, third party commercial carrier for delivery within 3 calendar days, or,
having obtained prior consent, by email to the following unregistered case
participants (list each name and mailing/email address): See next page.
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Case 3:21-md-02992-GPC-MSB Document 513-3 Filed 07/03/25 PageID.29733
Page 34 of 34
Cotchett, Pitre & McCarthy, LLP
• Joseph W. Cotchett – jcotchett@cpmlegal.com
• Brian Danitz – bdanitz@cpmlegal.com
• Vasti Montiel – vmontiel@cpmlegal.com
• Caroline Yuen – cyuen@cpmlegal.com
• Karin B. Swope – kswope@cpmlegal.com
• Blair V. Kittle – bkittle@cpmlegal.com
• David Gregory Hollenberg – dhollenberg@cpmlegal.com
• Kevin Jones Boutin – kboutin@cpmlegal.com
Altshuler Berzon LLP
• Michael Rubin – mrubin@altber.com
• Stacey M. Leyton – sleyton@altber.com
• Matthew Murray – mmurray@altber.com
• Connie K. Chan – cchan@altber.com
• Colin Clemente Jones – cjones@altshulerberzon.com
• James Baltzer – jbaltzer@altshulerberzon.com
• Caroline C. Hunsicker – chunsicker@altshulerberzon.com
• Katherine Grace Bass – kbass@altshulerberzon.com
Description of Document(s) (required for all documents):
[Redacted] Petition for Leave to Appeal Under Fed. R. Civ. P. 23(f); and
[Redacted] Appendix in Support of Defendant’s Petition for Leave to Appeal
Under Fed. R. Civ. P. 23(f)
Signature s/ William M. Jay__________________ Date June 30, 2025_________
(use “s/[typed name]” to sign electronically-filed documents)
-28-
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