[00:00:05] Speaker 01:
Good morning, Honors.

[00:00:10] Speaker 01:
My name is Eddie J. Kim from the law firm of Lynch Carpenter, and I represent this.

[00:00:17] Speaker 01:
Let me just say that the outset

[00:00:35] Speaker 01:
ATM defendants that were once a part of this case.

[00:00:39] Speaker 01:
Council, are you going to reserve any of your time?

[00:00:42] Speaker 01:
If I may, I'd like to reserve three minutes for a rebuttal.

[00:00:45] Speaker 03:
Very well, and keep track of that time for you.

[00:00:51] Speaker 01:
This consumer class action seeks to stop one of the most abusive systematic practices relating to excessive

[00:01:03] Speaker 01:
What happened to plaintiff Cavell is an example that's both typical and shocking.

[00:01:08] Speaker 01:
Miss Cavell was a Bank of America customer at the time when she walked into a 7-Eleven, went to an ATM machine to withdraw $20.

[00:01:15] Speaker 01:
Those ATM machines are all operated by an independent ATM operator called FCTI Inc., which was once a defendant in this case.

[00:01:26] Speaker 01:
When you insert your debit card into the machine,

[00:01:56] Speaker 01:
The first prompt is, would you like to check your account balance?

[00:02:01] Speaker 01:
And you're given two button options on the screen, yes or no.

[00:02:04] Speaker 01:
And you agree that that's a balancing query?

[00:02:06] Speaker 01:
And we agree that's a, well, not yet.

[00:02:08] Speaker 01:
Plaintiff will press the yes button.

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to use checking or savings.

[00:02:17] Speaker 01:
And at that point, when she selected checking, a balancing query occurred.

[00:02:22] Speaker 01:
We understand that.

[00:02:23] Speaker 01:
We recognize that's a valid one.

[00:02:26] Speaker 01:
A transmission is made by the ATM machine to Ms.

[00:02:30] Speaker 01:
Cuddle's home bank, Bank of America, the electronic transmission for a balancing query request.

[00:02:36] Speaker 01:
B of A then sends back her available balancing information for her checking account.

[00:02:45] Speaker 01:
And so, when that

[00:03:15] Speaker 01:
and you're only given two button options.

[00:03:18] Speaker 01:
One is cancel, and if you press cancel, the entire session ends and you can't get to the intended cash withdrawal or anything else.

[00:03:27] Speaker 01:
If you press continue, that's the only option to proceed with your intended cash withdrawal.

[00:03:34] Speaker 01:
And so that's what Brittany Covell did.

[00:03:37] Speaker 01:
She pressed yes continue, oh, yes continue.

[00:03:55] Speaker 01:
that later, but she then proceeds to make her cash withdrawal.

[00:04:00] Speaker 01:
And so, excuse me, what happens when she presses the continue button is even though all she's doing is printing the information that she already paid for and she already has inquired and it's just printing that information on a receipt and continue to the rest of her transactions, the machine sends

[00:04:35] Speaker 03:
And does it lay out this particular situation where the ATM itself is sending balance inquiries to the bank?

[00:04:46] Speaker 01:
So we believe that the contract expressly sets forth everything we need to know to understand what they should be expecting.

[00:04:57] Speaker 01:
So it specifically

[00:05:02] Speaker 01:
They will operate the bank will operate based on instructions you give at the ATM.

[00:05:08] Speaker 01:
It doesn't say We operate based on instructions

[00:05:46] Speaker 01:
drafted by Bank of America that every customer must agree to in order to be a customer at.

[00:05:51] Speaker 01:
Where do you think the district court went wrong in saying what Bank of America did was okay?

[00:06:01] Speaker 01:
I think one thing, you know, I mentioned earlier at the outset that this case once involved multiple defendants.

[00:06:07] Speaker 01:
And I think the district court got caught up – one of the things that got caught up was a lot of the language and arguments we used, primarily with respect to a different ATM defendants – ATM means Cartronics, which is the largest independent ATM operator in the country – we had used certain language that – about

[00:06:28] Speaker 01:
balance inquiries, but I think the thing that we wanted to make clear in this appeal is that from the very outset of the case, from the Third Amendment complaint, that is the operative complaint, through all the briefs that we have filed in the underlying motions, we have made clear that our theory as to our claims against B of A, these contract claims, with respect to their customers' use of FCTI screens, had nothing to do with subjective intent, because our argument is,

[00:07:16] Speaker 01:
in this case.

[00:07:17] Speaker 01:
I think that was one aspect of it.

[00:07:19] Speaker 01:
But I think another aspect of it is that I think the trial court is letting B of A off the hook because B of A itself was not the originator of this deceptive, or the Spain switch prompt.

[00:07:38] Speaker 01:
And that is to say, B of A did not design FCTIs interface.

[00:07:43] Speaker 01:
B of A did not have

[00:07:50] Speaker 01:
And so I think the district court felt bad about trying to impute the conduct of a third party to B of A. But I think where that's an error is that these claims are under breach of contract, unlike common law fraud, which has never been asserted against B of A in this case.

[00:08:27] Speaker 01:
ahead and assess out-of-network fees for balancing queries went through prompts that aren't even balancing queries.

[00:08:34] Speaker 01:
Let me ask you this.

[00:08:35] Speaker 03:
Let's say that if we were to agree on your breach of contract claim and we were to remand, what impact does that have on your breach of implied covenant claim?

[00:09:03] Speaker 01:
of its conduct that the covenant of good faith and fair dating applies to the application of that discretion.

[00:09:11] Speaker 01:
And in here, B of A makes clear in at least two instances that we may charge you the fee.

[00:09:17] Speaker 01:
It doesn't say that we will always charge you the fee.

[00:09:20] Speaker 01:
We may.

[00:09:21] Speaker 01:
We exercise discretion.

[00:09:22] Speaker 01:
And in fact, they actually don't charge the fee at all.

[00:09:39] Speaker 01:
They have to apply it with good faith, and then now we get to kind of the other things we're talking about.

[00:09:44] Speaker 01:
We go to the fact that whether they intended or were motivated at all in trying to make extra money from this scheme that FCTI was doing, what we know is that they took 90% of the profits from those fees, only less than 25 cents ultimately went to the ATM operator, so they're the ones

[00:10:36] Speaker 01:
Our primary claim is that a breach of good faith is not our primary claim.

[00:11:05] Speaker 01:
accept that as a result.

[00:11:10] Speaker 03:
Did you have any other question, John?

[00:11:14] Speaker 03:
I don't.

[00:11:14] Speaker 03:
Do you have any other point or do you want to reserve the rest of your time?

[00:11:19] Speaker 01:
I see I've got four minutes.

[00:11:20] Speaker 01:
I'm just going to make a couple sort of broad picture points.

[00:11:27] Speaker 01:
There was the thing that we're battling here is that

[00:11:41] Speaker 01:
additional evidence that we're able to procure about the ATM networks, other ATM, other banks that have all believe, asserted that this is not a balancing group problem.

[00:11:51] Speaker 01:
These fees are assessed in error.

[00:11:53] Speaker 01:
There's a, the case that we were able to derive all this

[00:12:10] Speaker 01:
My point is that nobody thinks, nobody in industry thinks that this is a valid balance inquiry.

[00:12:17] Speaker 01:
And that's the additional information we got.

[00:12:19] Speaker 01:
But my last point I want to make is that what we're babbling here is just pure speculation on the part of B of A. There's been no evidence that any single individual has testified that they thought this was a valid balance inquiry prompt.

[00:12:45] Speaker 05:
be with Winston and Strawn for Bank of America.

[00:12:50] Speaker 05:
Contrary to what plaintiff has just argued, she is actually trying to shoehorn a consumer fraud claim into this case in order to make Bank of America liable for ATM screens it does not control or design or have any visibility into.

[00:13:06] Speaker 05:
And by making Bank of America contractually liable for anything that happens at those

[00:14:00] Speaker 05:
inquiries come through the ATM network through an electronic message and that is the case regardless of what is being shown on the ATM screen.

[00:14:14] Speaker 03:
Okay well I guess answer his question or answer his point.

[00:14:19] Speaker 03:
His point is hey I've paid for let's assume that we agree that as soon as they select over

[00:14:29] Speaker 03:
So at that point the deposit agreement says yes, you're gonna get charged Because of this balance inquiry 250 okay, but then when you get to the other screen and it shows

[00:15:06] Speaker 05:
consumer in place, as Plaintiff well knows.

[00:15:10] Speaker 03:
I'm sorry, you're not answering my question.

[00:15:12] Speaker 03:
Go back to my question.

[00:15:13] Speaker 03:
My question is, or let me ask a different question.

[00:15:16] Speaker 03:
Maybe I wasn't clear.

[00:15:18] Speaker 03:
In the deposit agreement, where does it spell out that the consumer has to pay this additional fee?

[00:15:27] Speaker 03:
Can you tell me that?

[00:15:29] Speaker 05:
Yes, Your Honor.

[00:15:30] Speaker 05:
It says that when you use

[00:15:45] Speaker 05:
The contract also provides that you authorize us to act on the instructions you give us through the ATMs.

[00:15:54] Speaker 05:
And I think that's really important, Your Honor, the through ATMs.

[00:15:58] Speaker 05:
There is no other way for this to work, for customers to transact out of

[00:16:28] Speaker 05:
undisputed that Bank of America has no relationship to FCTI.

[00:16:33] Speaker 05:
That is not the way the ATM ecosystem works.

[00:16:39] Speaker 05:
And essentially what plaintiff is trying to do is to charge through the contract Bank of America with this duty to oversee essentially all of the screens that's in place on these out of network ATMs.

[00:16:58] Speaker 05:
There is simply no ability for it to do that.

[00:17:00] Speaker 05:
And the interpretation that she urges on this court results in a contract that Bank of America did not and could not have made.

[00:17:07] Speaker 05:
She made the point earlier that intent does not matter because this is a breach of contract, but it does.

[00:17:14] Speaker 05:
Contract formation matters.

[00:17:16] Speaker 05:
The intent of the parties matter.

[00:17:20] Speaker ?:
And there is simply no way that Bank of America would have agreed

[00:17:26] Speaker ?:
That's not the way it works.

[00:17:30] Speaker 04:
I understand.

[00:17:31] Speaker 04:
Let's assume that the agreement between the ATM and other network people in the bank or sites that every time you press any button, you know, well, first of all, just checking your savings.

[00:17:42] Speaker 04:
I don't want to check.

[00:17:43] Speaker 04:
How much do you want to check?

[00:17:57] Speaker 04:
thought he was making one balance inquiry.

[00:18:01] Speaker 05:
What it is not is a breach of contract claim against her issuing bank.

[00:18:05] Speaker 05:
What it is, if there's problems with the screens, that needs to be taken up with the designers of those deceptive screens and those who have insight and control over them, perhaps the sponsoring bank as well.

[00:18:18] Speaker 04:
I'm sure the IT departments of the Bank of America could have instructed

[00:18:30] Speaker 04:
$2.50.

[00:18:58] Speaker 05:
second one, both times it comes through as an electronic message to Bank of America.

[00:19:29] Speaker 03:
your definition in the agreement, and you call it a balance inquiry, you don't define it, do you?

[00:19:38] Speaker 03:
You don't say this could include many charges for the same balance, for example.

[00:19:47] Speaker 05:
Well, Your Honor, no it doesn't, but it doesn't need to, because the language is clear of what

[00:20:18] Speaker 04:
for inquiries?

[00:20:20] Speaker 05:
For certain products, that is true, but not for the account at issue here.

[00:20:27] Speaker 04:
Right, but it shows that the bank can program its internal things to not generate a $2.50 fee for balance inquiries if it wants for certain accounts.

[00:20:38] Speaker 05:
Respectfully, Your Honor, I don't believe that that is in the record.

[00:20:45] Speaker 05:
The Bank of America's ability to issue refunds after the fact does not constitute a breach at the time of formation of the contract.

[00:20:56] Speaker 03:
And your position is that we're entitled to charge that amount, regardless if it was a mistake of the ATM?

[00:21:07] Speaker 05:
Under a breach of contract claim, yes, Your Honor.

[00:21:18] Speaker 05:
says is not an objective balance inquiry.

[00:21:21] Speaker 05:
Customers are not left without a remedy.

[00:21:23] Speaker 05:
They can, as plaintiff's counsel has already done, bring consumer protection claims against the ATM operators for deception, which is what they've done, but that is not this case.

[00:21:34] Speaker 05:
And whatever claims she has about these screens should not be adjudicated through a breach of contract claim with her issuing bank.

[00:21:42] Speaker 05:
And that is provided by the terms of the contract itself, but it's only bolstered by the extrinsic evidence in this case.

[00:21:51] Speaker 05:
And that is that requests for balance information comes through via the network with standardized messages that say nothing about the screen environment.

[00:22:00] Speaker 05:
And so Bank of America cannot make a determination about what is on the screen.

[00:22:07] Speaker 05:
Bank of America is not allowed under the network

[00:22:22] Speaker 05:
site or insight into its screens.

[00:22:25] Speaker 05:
These are not Bank of America ATMs.

[00:22:28] Speaker 05:
And Bank of America is not the sponsoring bank who is charged under the network rules with ensuring out of network ATM operators like FCTI complies with them.

[00:22:39] Speaker 05:
So in that

[00:23:02] Speaker 05:
balancing for me well your honor the the plaintiffs the plaintiffs should as her agreement requires she should report instances of fraud or activity that she disputes and she did not do that there are remedies in place if the plaintiffs did not expect to be charged that fee

[00:23:41] Speaker 02:
Is there a definition of balance inquiry that says it can include an inquiry made by the ATM without a human decision?

[00:23:53] Speaker 05:
That is not in there, but the language that the bank is authorized to rely on the instructions provided through the ATM is the link, Your Honor.

[00:24:17] Speaker 02:
Thanks, customer.

[00:24:25] Speaker 05:
It says, you authorize us to act on the instructions you give us through the ATMs.

[00:24:32] Speaker 05:
And I think the critical part there, Your Honor, is the through the ATMs.

[00:24:37] Speaker 05:
The only way for this to work for a customer that goes out of network and

[00:24:45] Speaker 05:
It has to go through the ATM network.

[00:24:49] Speaker 05:
And again, the standardized messages say nothing about the screen, whether it was tricky, whether it was or was not a balance inquiry, as plaintiff now says.

[00:25:21] Speaker 03:
the 250.

[00:25:24] Speaker 05:
Right, Your Honor, because in that situation, again, it is the difference between plaintiff's definition or desired definition of bank balance inquiry, which is everything that happens on the screen.

[00:25:37] Speaker 05:
That information is not knowable.

[00:25:39] Speaker 05:
It cannot be knowable the way it works.

[00:25:43] Speaker 03:
Well, there's smart people in IT that can figure those things out, don't you think, Counsel?

[00:25:47] Speaker 05:
No, Your Honor, it's not.

[00:25:52] Speaker 05:
network and how the messages go through and what the standardized message contains.

[00:25:58] Speaker 05:
And it's nothing about the screen environment.

[00:26:00] Speaker 05:
Maybe on your end.

[00:26:03] Speaker 05:
There's nothing in the contract, Your Honor, that would insert that contractual term into the agreement.

[00:26:11] Speaker 04:
Okay.

[00:26:11] Speaker 04:
It's ambiguous what a balance inquiry is.

[00:26:15] Speaker 04:
Wouldn't you still lose because the language would be construed against the bank as the drafter of the document?

[00:26:21] Speaker 05:
No, Your Honor.

[00:26:29] Speaker 05:
Well, it shows that plaintiff's desire to read the contract requires Bank of America to know the unknowable.

[00:27:01] Speaker 05:
the way ATM operators can participate in the network.

[00:27:06] Speaker 05:
It is not Bank of America's role or any other issuing bank's role to monitor the activity of the out-of-network ATM.

[00:27:16] Speaker 05:
And Your Honor, if a contract is capable, to answer your question, of two constructions, courts are bound to give an interpretation that will make it lawful, operative, definite, reasonable

[00:27:31] Speaker 05:
carried into effect.

[00:27:33] Speaker 05:
And plaintiff's definition of balance inquiry, which is what happens on these screens that Bank of America doesn't see or control, it's not reasonable or capable of being carried into effect.

[00:27:44] Speaker 05:
And instead, balance inquiry can only be defined as the electronic message that traveled through the ATM network that was triggered from her selections as

[00:28:03] Speaker 05:
Again, I just want to say that to the extent that there are concerns that the customer is left without a remedy, again, I will just reiterate that that is not the case.

[00:28:12] Speaker 05:
For false or misleading screens, everything is working as it should against FCTI, the maker of these screens.

[00:28:19] Speaker 05:
The consumer is not remedialess.

[00:28:21] Speaker 05:
But what plaintiff does not have here is a breach of contract claim against the issuing bank.

[00:29:05] Speaker 01:
notify them of the order as soon as it had come out.

[00:29:08] Speaker 01:
I just want to give the case site, so in case the court's interested, it's Povey versus FCTI 2000.

[00:29:36] Speaker 02:
claim, wouldn't we necessarily want to remand to the district court to address your class claim?

[00:29:47] Speaker 01:
Your honor, the district court denied our motion for class certificate

[00:30:07] Speaker 01:
against anything.

[00:30:08] Speaker 01:
Nobody has presented any evidence that anyone thinks that this was a valid balance inquiry.

[00:30:14] Speaker 01:
You didn't directly answer Judge Gould's question.

[00:30:16] Speaker 01:
You would want us to remand the class.

[00:30:19] Speaker 01:
We would want to remand, but I would go a step further and request this court to just reverse the trial court's decision on classroom and grant it.

[00:30:27] Speaker 01:
But at the very least, of course, we can.

[00:30:32] Speaker 02:
court denied certification and it also denied the basic claim.

[00:30:39] Speaker 02:
Yes, it did.

[00:31:07] Speaker 01:
to address that in this appeal as well.

[00:31:11] Speaker 01:
Thank you, Kills.

[00:31:12] Speaker 01:
And then just one last point.

[00:31:16] Speaker 03:
I'll sit.

[00:31:17] Speaker 03:
All right, just one second.

[00:31:19] Speaker 03:
Judge Cole, do you have any other questions?