Court: District Court, M.D. Florida; January 1, 2013; Federal District Court
Defendant Regions Bank's Motion to Dismiss is under consideration following Plaintiffs Derek Pereira and Camila De Freitas's opposition. The case revolves around Plaintiffs cashing checks at a Regions Bank branch, incurring fees that led to them receiving less than the checks' face value, allegedly resulting in the checks being settled "at less than par." Plaintiffs' complaint, filed on August 7, 2012, includes two claims: (1) violation of Florida Statute 655.85 regarding check settlement at par, and (2) unjust enrichment under Florida common law.
Regions Bank removed the case to federal court, citing jurisdiction under the Class Action Fairness Act (CAFA) and federal question jurisdiction. Federal jurisdiction requires that the matter in controversy exceed $5 million and meet specific criteria, including minimal diversity and a large number of affected plaintiffs. Plaintiffs do not dispute that these criteria are met, with Defendants certifying nearly $9 million in income from the contested fees.
The legal standard for a motion to dismiss under Rule 12(b)(6) requires the court to accept Plaintiffs' factual allegations as true and to infer in favor of the Plaintiffs. A complaint must present enough factual content to establish a plausible claim for relief, allowing reasonable inference of the defendant's liability.
Federal law preempts Florida Statute 655.85, which prohibits banks from charging check cashing fees. Plaintiffs argue that this statute forbids banks from deducting fees when cashing checks, but the Defendant counters this interpretation by analyzing the statute and its legislative history. Additionally, the Defendant argues against the Plaintiffs' claims based on federal preemption, violation of the dormant commerce clause, and the absence of a private right of action in the statute. The Court finds that federal preemption is sufficient to dismiss the claims.
Recent rulings, including Baptista v. JP Morgan Chase Bank, establish that regulations from the Office of the Comptroller of the Currency (OCC) under the National Bank Act (NBA) preempt Florida Statute 655.85 for federally-chartered banks, based on the Supremacy Clause. Federal law can preempt state law through express, field, or conflict preemption, with the Dodd-Frank Act highlighting that state laws interfering with national bank operations are preempted. The Court concludes that Florida Statute 655.85 conflicts with federal regulations to such a degree that it is preempted under the Dodd-Frank Act's standards. Importantly, the NBA and OCC regulations apply only to national banks, allowing them to impose fees, meaning the Baptista decision does not imply that the Florida statute is preempted for state-chartered banks.
Federal banking law, specifically the Riegle-Neal Amendments Act of 1997, preempts Florida’s par value statute as it relates to banks chartered by states other than Florida. This Act, signed into law by President Clinton, clarifies that the laws of a host state apply equally to branches of out-of-state state banks and federally-chartered banks. Section 2(a) of the Act amends 12 U.S.C. § 1831a(j)(1), stating that host state laws, including those concerning community reinvestment and consumer protection, are applicable to branches of out-of-state state banks in the same manner as they apply to national banks.
The Court interprets this statute to mean that Congress intended to preempt host state banking laws for non-Florida state-chartered banks to the same extent as for federally-chartered banks. Plaintiffs contend that § 1831a(j)(1) only addresses the applicability, not enforceability, of state laws against banks and argue that Florida Statute 655.85 is enforceable only against state-chartered banks due to this preemption. However, the Court asserts that a state law conflicting with the National Banking Act can still be enforced against state banks, as the Act does not govern them.
The plaintiffs' interpretation of § 1831a(j)(1) is criticized for violating statutory construction principles. The Court highlights that the plaintiffs misinterpret the statute by suggesting it requires state laws to be neutral between state and national banks; this misreading ignores broader statutory context and fails to adhere to established principles of statutory interpretation, such as considering the relationship of words within the statute and recognizing that no single word can determine legislative intent.
Interpreting "shall apply to the same extent" as merely indicating "facial neutrality" is illogical, as laws cannot apply in varying degrees based solely on mention of bank types. The term "extent" is more sensibly viewed as referring to the degree of impact a state statute has on a bank, consistent with the Defendant's interpretation. The Supreme Court's ruling in Watters v. Wachovia Bank, N.A. supports this broader understanding, where it clarified that state laws apply to subsidiary banks in the same manner as to their parent banks, ensuring that state law cannot significantly restrict the powers of a national banking entity. This interpretation indicates that out-of-state state banks should be treated equivalently to out-of-state national banks under Florida Statute 655.85.
Additionally, legislative history from the Riegle-Neal Amendments Act indicates that Congress aimed to lessen host state regulation of out-of-state state banks. The original language of § 1831a(j)(1) emphasized the application of host state laws to out-of-state state bank branches in the same manner as local state banks, which has since shifted to comparing their treatment to that of out-of-state national banks. This change reflects Congress's intent to differentiate the regulatory treatment of out-of-state state banks. The interpretation advocated by the Plaintiffs contradicts this intent, as they overlook key legislative statements and evidence that support the notion of parity between state-chartered and national banks, as articulated by Rep. Roukema and others during the legislative process.
Proper interpretation of 12 U.S.C. § 1831a(j)(1) indicates that Congress intended to preempt host-state banking laws, such as Florida Statute 655.85, as they apply to out-of-state state banks, similar to their application to out-of-state national banks. Since Florida Statute 655.85 does not apply to national banks under the NBA and related OCC regulations, it is also inapplicable to out-of-state state banks. This leads to the conclusion that Alabama law governs, allowing the Defendant to charge fees for cashing checks under Ala. Code § 5-5A-18(2), 2012. Consequently, the Plaintiffs' claims under Florida Statute 655.85 are dismissed.
Additionally, the Plaintiffs' unjust enrichment claims fail as they do not present new factual allegations beyond those in their earlier claims. Under Alabama law, the Defendant is authorized to collect the fees contested, preempting these claims by federal law. The Court references Eleventh Circuit precedent in Baptista, which highlights the necessity of proving all elements of an unjust enrichment claim, including the inequity of retaining a benefit without compensation. Here, the Defendant provided immediate cash for checks in exchange for a fee, thus negating the unjust enrichment claim since adequate consideration was given.
In conclusion, the Defendant's Motion to Dismiss is granted, the Plaintiffs' Motion to Stay is denied as moot, and the Motion for Sanctions is also denied. All claims against the Defendant are dismissed with prejudice, and the case is ordered to be closed.
Plaintiffs have requested class action certification, but the court will not address this issue as it is not currently before it. The court has jurisdiction under the Class Action Fairness Act (CAFA), making it unnecessary to consider the defendant's arguments regarding federal question jurisdiction under 28 U.S.C. § 1331. Previous court opinions indicated that a federally-chartered bank could charge check cashing fees under Florida law, while a Florida appellate court later ruled that a state-chartered bank could not impose such fees without referencing the federal court's decision. The court notes it is not bound by state court interpretations of federal law and emphasizes that federal law preempts the Florida statute in question. The Riegle-Neal Amendments Act aims to create parity between national and state-chartered banks regarding out-of-state operations, allowing state banks to exercise powers granted by their home state in other states, provided these powers align with those of national banks. Additionally, the Act clarifies that state-chartered banks operating outside their chartering state can disregard local laws if national banks can do the same.
