Wednesday, September 27, 2023
Courthouse News Service
Wednesday, September 27, 2023 | Back issues
Courthouse News Service Courthouse News Service

SCOTUS Quashes Hopes |in Two Wells Fargo Cases

(CN) - The Supreme Court on Monday declined to hear two Wells Fargo challenges to federal court rulings on its overdraft fees and foreclosure policies.

In Wells Fargo Bank v. Gutierrez a class of consumers claimed the San Francisco-based banking giant charged them too much in overdraft fees related to debit-card purchases.

After paying hundreds of dollars in fees on relatively small overdrafts, lead plaintiffs Veronica Gutierrez and Erin Walker sued Wells Fargo to get their money back and stop the "high-to-low" practice, which the bank started in California more than a decade ago.

The bookkeeping method processes account debits in the order of the highest amount to the lowest, emptying customer accounts by multiplying overdraft fees that the bank then collects in the billions of dollars.

In 2012 , U.S. District Judge William Alsup sided with the plaintiffs, ordering the bank to pay $203 million in restitution to consumers and enjoining it from utilizing the accounting practice. The Ninth Circuit reversed the ruling and remanded the case, but Alsup reinstituted the penalty and the appeals court ultimately upheld his decision.

The second case, Kakarala v. Wells Fargo Bank, began as a state-level challenge to a foreclosure filed by a naturalized U.S. citizen who was foreclosed upon while visiting her native country of India.

Anne Mercy Kakarala had argued that the foreclosure action was invalid because she had received assurances from the bank that she would not be foreclosed upon while abroad is she made her mortgage payments before she left.

Kararala petitioned the Supreme Court to overturn a Ninth Circuit ruling that remanded her case back to a state court in Arizona.

As is their custom, the justices in the majority did not explain their rationale for not taking up the cases.

In the latter case, however, Justice Clarence Thomas dissented on the grounds that he believes that with 28 U.S.C. §1447(d), Congress "unambiguously deprived federal courts of jurisdiction to review an order remanding a case from federal to state court."

28 U.S.C. §1447(d) is the federal law governing review of orders remanding a case from federal to state courts.

In his dissent, Thomas maintains the current decision to deny certiorari is predicated upon what he sees an erroneous earlier decision by the court in Thermtron Products Inc. v. Hermansdorfer.

In that case, he says, the high court wrongly concluded that Congress only barred to review of some remand orders.

Thomas says this interpretation by the court has led to an "unworkable" situation that "has spawned a number of divisions in the lower courts over whether certain remains are based on jurisdictional or nonjurisdictional grounds, and how to determine which is which."

"The petition in this case presents an opportunity to reconsider Thermtron," Thomas writes. "I would grant review in this case and any other that would allow us to revisit our mistaken approach to §1447(d)."

Categories / Uncategorized

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.