You Are The Downdraft Above My Wings

I may represent banks, but I learn from whatever source I can, even [shudder] from those dreaded nemeses of community banks known as "credit unions." Rob Rutkowski's That Credit Union Blog is a case in point. Without Rob (and a h/t to NAFCU Compliance Blog), I never would have learned of the most pleasing strategy employed by one financial institution for thwarting a common enemy of all right-minded financial institutions, regardless of charter: class action attorneys. The instance discussed by Rob involves a lawsuit filed against a credit union for a violation of the Electronic Funds Transfer Act because the ATM sign was missing. Rob cites a line I've heard before about how it's natural to suspect that class action lawyers are running around at night prying the signs off of ATMs, then finding a lead plaintiff (which is not hard to do) to use as the propr to file a class action complaint against the financial institution. Now, I'm sure that now upstanding member of the bar would countenance the stealing of a sign merely to provide the pretext for filing the type of case where the lead plaintiff gets some cash, the class action plaintiffs' lawyers get a huge wad of cash, and the rest of the class gets a pack of Juicy-fruit and the promise of a new tomorrow. Here, in Rob's words, is the method used by the unnamed financial institution to derail the class action freight train: In essence, a defendant can take the wind out of the sails of a putative class action plaintiff by making an Offer of Judgment 10 days prior to the plaintiff's Motion for Class Certification. Clear as mud? Let's take a hypothetical. Anthrax Research Federal Credit Union owns an ATM attached to one of its branches. One night, the EFTA notice concerning ARFCU's $1.00 for non-member withdrawals mysteriously vanishes. Felix Filcher then makes a withdrawal the next day and a week later, Attorney Benny Bumbles sues the credit union for the EFTA violation for not having a sign on the ATM. The credit union makes an Offer of Judgment for $1000.00 for the statutory violation. Attorney Bumbles has 10 days to move for class action status and if he fails to do that, it's game over for Filcher. Take a look at Stilz v. Global Cash Network, Inc., No. 10 CV 1998 (N.D.Ill., Oct. 7, 2010) (2010 WL 3975588) if you want to see this concept in action. Chalk one up for the forces of righteousness. If this keeps up, class action attorneys who specialize in suing banks might be reduced to sending their kids to public school and buying their spouses Yugos.

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