CHECCHIA v. BANK OF AMERICA, N.A.

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

STEVEN CHECCHIA, on behalf of himself : Civil Action

and all others similarly situated, :

: No. 21-3585

Plaintiff, :

:

v. :

:

BANK OF AMERICA, N.A., :

:

Defendant. :

MEMORANDUM

SURRICK, J. February 16, 2023

Presently before the Court is Plaintiff’s Unopposed Motion for Preliminary Approval of

Class Settlement and for Certification of Class. (ECF No. 17.) For the following reasons,

Plaintiff’s Motion will be granted and the Court will schedule a Fairness Hearing.

I. BACKGROUND

A. Background Litigation

In this class action, Plaintiff Steven Checchia brings claims on behalf of himself and

others similarly situated against Defendant Bank of America, N.A. (BANA). Plaintiff alleges

that BANA breached its account agreements, violated the North Carolina Unfair and Deceptive

Trade Practices Act, N.C.G.S. § 75.1-1, et seq., and violated the Pennsylvania Unfair Trade

Practices and Consumer Protection Law, 73 P.S. § 201-1, et seq., by charging NSF Fees and OD

Fees on checks that were re-presented for payment after having initially been returned for non-

sufficient funds.

BANA removed the case to this Court on August 11, 2021. (Notice of Removal by Bank

of America, N.A.; ECF No. 1). The Parties extended the deadlines for BANA to respond to

Plaintiff’s complaint and for Plaintiff to file a motion to remand to participate in an early

mediation and engaged in informal discovery, including data analysis that now forms the basis of

the proposed class settlement. Following discovery, the Parties mediated the matter before Judge

Diane M. Welsh on February 18, 2022, and agreed on settlement terms. The parties filed a

notice of settlement on March 11, 2022, (ECF No. 11), and this Court directed Plaintiff to file the

instant Motion for Preliminary Approval. (Id.).

B. Settlement Agreement

Under the proposed Settlement Agreement, BANA agrees to (1) pay a total amount of

$8,000,000 into a settlement fund and (2) continue to not assess the disputed fees for at least five

years. (Settlement Agreement and Release at ¶¶ 1.36, 1.47, 2.1, 6.1.) The Settlement Fund will

be distributed to the Settlement Class—those who paid and were not refunded an NSF Fee and/or

OD Fee in certain situations from May 19, 2017 through the preliminary approval date—and

used to pay for settlement administration costs, attorney’s fees and potential costs awarded to

class counsel, and any service award this Court might award to the class representative. (Id. at

¶¶ 1.13, 3.1, 6.3, 6.6, 7.) Payments to Settlement Class Members will be made proportionately

based on BANA’s data on who was assessed the fees. (Id. at 7.1.) Any excess funds remaining

after 240 days will be distributed to those Settlement Class Members who cashed their initial

settlement checks or received a credit to their accounts. (Id. at 6.7.) Any remaining funds will

be distributed to a consumer protection or financial services organization with no reversion to

BANA. (Id. at ¶ 7.4.)

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The Settlement Administrator will be Epiq Class Action & Claims Solutions, Inc. Notice

shall be provided (1) by email to current accountholders who have agreed to receive emails from

BANA, (2) by postcard to current accountholders who have not agreed to receive emails from

BANA, current accountholders who cannot be reached by email, and former accountholders, and

(3) by long form notice on the settlement website and sent by mail to those who request it. (Id. at

¶ 5.2.) Every form of notice will include the material settlement terms, the opt-out deadline, the

objection deadline, the Final Fairness Hearing date and time, and the settlement website address.

(Id., Exhibits 1-3.)

Settlement Class Members may opt-out of or object to the settlement up to 30 days

before the Final Fairness Hearing. (Id. at ¶¶ 1.30, 9.1, 9.4.) Objections must include grounds for

the objection, any counsel for the objector, and any previous objections made by the objector or

the objector’s counsel. (Id. at ¶ 9.4.1.)

BANA agrees to Class Counsel’s application for attorneys’ fees and costs up to

$2,666,666.66. (Id. at ¶ 10.1.) BANA also does not oppose a request for a $5,000 service award

for the Class Representative. (Id. at ¶ 11.1.) However, this Court’s decision not to award either

attorneys’ fees or a service award would not prevent the Settlement from becoming effective.

(Id. at ¶ 8.1).

II. LEGAL STANDARD

Review of a proposed class action settlement proceeds in two steps: preliminary

approval and a subsequent fairness hearing. In re Nat’l Football League Players Concussion

Injury Litig., 775 F.3d 570, 574 (3d Cir. 2014). “The decision of whether to approve a proposed

settlement of a class action is left to the sound discretion of the district court.” In re Prudential

Ins. Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d 283, 299 (3d Cir. 1998). The court’s

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approval should not be construed as a commitment to approve the final settlement. Gates v.

Rohm and Haas Co., 248 F.R.D. 434, 438 (E.D. Pa. 2008). However, preliminary approval of a

proposed class action settlement “establishes an initial presumption of fairness . . . .” In re Gen.

Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig., 55 F.3d 768, 785 (3d Cir. 1995)

(citation omitted).

During preliminary review, counsel submit the proposed terms to the court, and the court

makes a preliminary fairness finding. In re Nat’l Football League, 775 F.3d at 581. A court’s

decision to preliminarily approve a proposed class action settlement “is a determination that

there are no obvious deficiencies and the settlement falls within the range of reason.” Gates, 248

F.R.D. at 438 (E.D. Pa. 2008) (citation omitted). In making that determination, the court

considers whether “(1) the negotiations occurred at arm’s length; (2) there was sufficient

discovery; (3) the proponents of the settlement are experienced in similar litigation; and (4) only

a small fraction of the class objected.” In re Linerboard Antitrust Litigation, 292 F.Supp.2d 631,

638 (E.D. Pa. 2003) (citing In re General Motors Corp. Pick-Up Truck Fuel Tank Products

Liability Litigation, 55 F.3d 768, 785–86 (3d Cir.1995).)1

In addition to reviewing the terms of settlement, a court at the preliminary approval stage

may conditionally certify the class for purposes of providing notice, with the final certification

decision to be made at the subsequent fairness hearing. In re Nat’l Football League Players’

Concussion Injury Litigation, 301 F.R.D. 191, 199-200 (E.D. Pa. 2014). To do so, the court must

1 These factors are distinct from the nine-factor test adopted by the Third Circuit to ultimately

approve settlements as fair, reasonable, and adequate under Rule 23(e). See Girsh v. Jepson, 521

F.2d 153, 157 (3d Cir. 1975). “At the preliminary approval stage . . . the Court need not address

these factors, as the standard for preliminary approval is far less demanding.” Gates, 248 F.R.D.

at 444 n.7.

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determine whether the proposed Settlement Class satisfies the requirements of Federal Rule of

Civil Procedure 23. When “[c]onfronted with a request for settlement-only class certification, a

district court need not inquire whether the case, if tried, would present intractable management

problems, for the proposal is that there be no trial.” Amchem Products, Inc. v. Windsor, 521 U.S.

591, 620 (1997) (citations omitted). However, even at the preliminary approval stage, the court

must determine whether the proposed class satisfied the requirements of Federal Rule of Civil

Procedure 23(a). Rule 23(a) requires a class representative to demonstrate “(1) the class is so

numerous that joinder of all members is impracticable; (2) there are questions of law or fact

common to the class; (3) the claims or defenses of the representative parties are typical of the

claims or defenses of the class; and (4) the representative parties will fairly and adequately

protect the interests of the class.” In re Nat’l Football League, 301 F.R.D. at 200.

Additionally, under Rule 23(b)(3), a class can be maintained only if “the court finds that

the questions of law or fact common to class members predominate over any questions affecting

only individual members, and that a class action is superior to other available methods for fairly

and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). The elements of Rule

23(b)(3) are known as the predominance and superiority requirements respectively, and consider

“(A) the class members’ interests in individually controlling the prosecution or defense of

separate actions; (B) the extent and nature of any litigation concerning the controversy already

begun by or against the class members; (C) the desirability or undesirability of concentrating the

litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class

action.” Fed. R. Civ. P. 23(b)(3)(A)-(D). The Third Circuit has also held that a class certified

under Rule 23(b)(3) must be “ascertainable,” meaning “(1) the class is defined with reference to

objective criteria, and (2) there is a reliable and administratively feasible mechanism for

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determining whether putative class members fall within the class definition.” Byrd v. Aaron’s

Inc., 784 F.3d 154, 163 (3d Cir. 2015) (internal quotation marks omitted).

Finally, a court “must direct notice in a reasonable manner to all class members who

would be bound by the proposal.” Fed. R. Civ. P. 23(e). For Rule 23(b)(3) classes, class

members must receive “the best notice that is practicable under the circumstances, including

individual notice to all members who can be identified through reasonable effort.” Fed. R. Civ.

P. 23(c)(2)(B). Notice must clearly convey in plain language certain material information about

the class proceedings as listed in Rule 23(c)(2)(B)(i)-(vii).

III. DISCUSSION

A. Preliminary Approval of the Settlement Terms

After review of the proposed Settlement Agreement and Notice of Pending Class Action,

we are satisfied that the proposed settlement meets the criteria for preliminary approval. In the

preliminary approval phase, we are tasked only with determining whether “the proposed

settlement discloses grounds to doubt its fairness or other obvious deficiencies such as unduly

preferential treatment of class representatives or segments of the class, or excessive

compensation of attorneys, and whether it appears to fall within the range of possible approval.”

In re Nat’l Football League, 301 F.R.D. at 198. The proposed settlement at issue here does not

raise any doubts as to fairness, or otherwise reveal any deficiencies, as it was the product of

arms-length negotiation by experienced counsel who have reached the settlement after extensive

litigation and discovery. See In re Linerboard, 292 F.Supp.2d at 638.

First, there is nothing to indicate that the proposed settlement is not the result of good

faith, arms-length negotiations. In his declaration, counsel for Plaintiff, Jeff Ostrow, Esq., stated

that discovery and data analysis lasted months and “was the subject of intensive discussion and

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negotiations between the Parties and numerous alterations and amendments to the analysis

occurred during this process.” (Ostrow Decl., ¶ 20.) In addition, settlement in this case was

aided by a mediator, which is compelling evidence that vigorous and arms-length negotiations

occurred. See, e.g. In re Nat’l Football League, 301 F.R.D. at 198-99 (finding good faith, arms-

length negotiations where the parties were guided by a mediator); Gates, 248 F.R.D. at 444

(same).

Secondly, counsel in this case has extensive experience in class action litigation,

including in cases specifically concerning NSF and OD fees. (Ostrow Decl. ¶ 35, Exhibits 1-3).

This case is unique in that it follows Morris et al v. Bank of America, N.A., No. 3:18-CV-157-

RJC-DSC (W.D.N.C), which concerned whether BANA was authorized to assess multiple NSF

and/or OD fees on electronic payments re-presented having been initially returned for

insufficient funds. Class counsel for the instant matter also litigated Morris, and therefore not

only has general class action experience but also the benefit of litigating similar issues in that

prior case, which included “tens of thousands of pages of documents and relevant information”

and “internal documents related to BANA’s NSF Fee and OD Fee practices including Account

agreements, marketing and internal studies on NSF/OD Fees, customer complaints about the

challenged fees, and transactional database excerpts showing how much money BANA made

from the challenged fees.” (Mot. for Prelim. App., at 4.)

Similar discovery took place in this case. Specifically, “the Parties engaged in an

extensive informal discovery effort that included a data analysis that lasted months. The analysis

was the subject of intensive discussion and negotiation between the Parties and numerous

alterations and amendments to the analysis occurred during this process.” (Id. at 5) (citations

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omitted). We find this discovery, combined with the information gathered from Morris, to

sufficiently satisfy the standards of preliminary approval.

The last element we must consider is whether “only a small fraction of the class

objected.” In re Linerboard, 292 F.Supp.2d at 638. As of the writing of this opinion, no class

members have yet objected. Therefore, all the elements having been met, we will preliminarily

approve this class settlement, which requires the parties to give notice to class members

regarding their ability to opt-out or object should they chose to do so.

B. Preliminary Class Certification

In addition to preliminarily approving the class settlement, we may also conditionally

certify the class at the preliminary approval phase. To do so, we must find pursuant to Federal

Rule of Civil Procedure 23(a) that the class is suitably numerous, there are questions of law and

fact common to the class, Plaintiffs claims are typical of the class, and Plaintiff will adequately

represent the entire class. Additionally, Rule 23(b)(3) requires that common issues predominate

over any individual claims, that a class action is the superior method of adjudication, and that the

proposed class is ascertainable. Finally, potential class members must be sufficiently notified of

the material terms of the settlement agreement. We find that Plaintiff has met these elements and

that the notification plan is sound and will therefore conditionally certify the class.

1. The Requirements of Rule 23(a)

In order to certify a class, Rule 23(a) requires the class representative to demonstrate that

“(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions

of law or fact common to the class; (3) the claims or defenses of the representative parties are

typical of the claims or defenses of the class; and (4) the representative parties will fairly and

adequately protect the interests of the class.” In re Nat’l Football League, 301 F.R.D. at 200.

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BANA does not oppose certification, and we find that Plaintiff’s proposed class meets these

elements.

(i) Numerosity

While there is no minimum number of plaintiffs required to satisfy the numerosity

requirement, it is generally understood that a potential number of plaintiffs greater than 40 is

enough to maintain a class action. Stewart v. Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001).

Here, class counsel estimates that “the Settlement Class consists of hundreds of thousands of

current and former BANA Accountholders,” (Mot. for Prelim. App., at 19), easily satisfying the

numerosity requirement.

(ii) Commonality

The commonality element requires that “the proposed class members share at least one

question of fact or law in common with each other.” In re Warfarin Sodium Antitrust Litig., 391

F.3d 516, 527-28 (3d Cir. 2004). This question of fact or law must be “of such a nature that it is

capable of classwide resolution—which means that determination of its truth or falsity will

resolve an issue that is central to the validity of each one of the claims in one stroke.” In re Nat’l

Football League, 301 F.R.D. at 200 (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350

(2014)).

Plaintiff alleges here that “[t]here are multiple questions of law and fact – centering on

BANA’s charging of Class Fees and whether such fees were authorized by binding contract

documents – that are common to the Settlement Class, that are alleged to have injured all

Settlement Class Members in the same way, and that would generate common answers central to

the viability of the claims were the Action to proceed to trial.” (Mot. for Prelim. App., at 19-20.)

We agree. It is clear that whether BANA charged fees to the class members, and was authorized

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to do so, is a common question of law and fact between them. Indeed, this Court has previously

found that the “common course of conduct” stemming from assessed banking fees satisfies the

commonality requirement. See Krimes v. JPMorgan Chase Bank, N.A., 2016 WL 6276440, at *4

(E.D. Pa. 2016) (“Each class member could access their funds upon release only through a BOP

debit card. Each was also subject to the same fees Chase charged in connection with the cards.

Also, Chase's principal defenses, such as government immunity, are common to all class

members.”).

(iii) Typicality

The class representative’s claims must be “typical” of the claims of the class, meaning

that “the named plaintiffs have incentives that align with those of the absent class members so as

to assure that the absentees’ interests will be fairly represented.” In re National Football

League, 301 F.R.D. at 200 (quoting Baby Neal v. Casey, 43 F.3d 48, 57-58 (3d. Cir. 1994)).

“The typicality criterion is intended to preclude certification of those cases where the legal

theories of the named plaintiffs potentially conflict with those of the absentees by requiring that

the common claims are comparably central to the claims of the named plaintiffs as to the claims

of the absentees.” Baby Neal, 43 F.3d at 57. “[C]ases challenging the same unlawful conduct

which affects both the named plaintiffs and the putative class usually satisfy the typicality

requirements irrespective of the varying fact patterns underlying the individual claims.” Id. at

58.

Plaintiff’s claim here is “based on the same legal theories . . . and arise[s] from the same

alleged wrongful conduct,” In re National Football League, 301 F.R.D. at 201, as the claims of

the putative class. Indeed, it seems that Plaintiff’s interests are perfectly aligned with those of

the other class members, and we can envision no circumstance where “the legal theories of the

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named plaintiffs potentially conflict with those of the absentees . . . .” Baby Neal, 43 F.3d at 57.

Furthermore, any minor factual differences, if they exist, in how the class members were

assessed the disputed fees pale in comparison to “relatively pronounced factual differences” in

other cases which still did not preclude a finding of typicality. See id. at 58 (citing De La

Fuentes v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983). Plaintiffs claim is typical

of the class.

(iv) Adequacy of Representation

Rule 23(a)(4) requires the class representative to “fairly and adequately protect the

interests of the class.” Fed. R. Civ. P. 23(a)(4). This requirement “serves to uncover conflicts of

interest between the named parties and the class the seek to represent.” Windsor, 521 U.S. at

625. To assess the adequacy of the class representative, courts first inquire into the

“qualifications of counsel to represent the class,” and second, assess whether there are “conflicts

of interest between named parties and the class they seek to represent.” In re Prudential Ins. Co.

of Am. Sales Practice Litig., 148 F.3d 283, 312 (3d Cir. 1998).

As discussed above, class counsel is more than qualified to represent the class. (See

Ostrow Decl. ⁋ 35, Exhibit 1-3.) In addition, Plaintiff’s claim is purely coextensive with those of

the proposed class, who have equal interest in the relief offered by the Settlement Agreement.

This Court concludes that there are no conflicts of interests between the named parties and the

class members.

2. The Requirements of Rule 23(b)(3)

In addition to satisfying the requirements of Rule 23(a), a class representative must also

meet one of the requirements of Rule 23(b). These include, inter alia, that “the court finds that

the questions of law or fact common to class members predominate over any questions affecting

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only individual members, and that a class is superior to other available methods for fairly and

efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). The predominance inquiry of

Rule 23(b)(3) “tests whether proposed classes are sufficiently cohesive to warrant adjudication

by representation.” Windsor, 521 U.S. at 623. The superiority requirement “asks the court to

balance, in terms of fairness and efficiency, the merits of a class action against those of

alternative methods of adjudication.” In re Warfarin, 391 F.3d at 533-34.

Plaintiff here satisfies the predominance inquiry because questions of law and fact

common to the settlement class substantially outweigh any individual issues. The claims of all

the class members are based on the same legal theories and uniform conduct of BANA, and it is

difficult to imagine any individual issues that would outweigh these common claims. In

addition, resolution of these claims in a class action is superior to individual lawsuits because it

promotes consistency and efficiency of litigation. It is also the only feasible way for many class

members to litigate their presumably relatively small claims. See Krimes, 2016 WL 6276440, at

*5 (“since the individual claims are relatively small, without the class, individuals might lack

incentive to pursue their claims.”).

The Third Circuit also requires that a class certified under Rule 23(b)(3) be ascertainable.

“The ascertainability requirement is two-fold, requiring a plaintiff to show that: (1) the class is

defined with reference to objective criteria, and (2) there is a reliable and administratively

feasible mechanism for determining whether putative class members fall within the class

definition.” Byrd, 784 F.3d at 163. We are satisfied that the proposed method of using BANA

business records to identify those who were assessed fees during the Class Period is a suitably

objective, reliable, and feasible method of determining the class in this case. We therefore find

that the class meets all requirements of Rule 23(b)(3).

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C. Approval of the Notice Plan

Rule 23(e) of the Federal Rules of Civil Procedure provides that a court “must direct

notice in a reasonable manner to all class members who would be bound by the proposal . . . .”

Fed. R. Civ. P. 23(e)(1)(B). For classes certified under Rule 23(b)(3), such as this proposed

class, class membered must receive “the best notice that is practicable under the circumstances,

including individual notice to all members who can be identified through reasonable effort.”

Fed. R. Civ. P. 23(c)(2)(B). In addition, due process requires that notice be “reasonably

calculated, under all the circumstances, to apprise interested parties of the pendency of the action

and afford them an opportunity to present their objections.” In re National Football League, 301

F.R.D. at 202 (quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314

(1950)). To that end, “the notice must clearly and concisely state in plain, easily understood

language:”

(i) the nature of the action;

(ii) the definition of the class certified:

(iii) the class claims, issues, and defenses;

(iv) that a class member may enter an appearance through an attorney if the member so

desires;

(v) that the court will exclude from the class any member who requests exclusion;

(vi) the time and manner for requesting exclusion; and

(vii) the binding effect of a class judgment on members under Rule 23(c)(3).

Fed. R. Civ. P. 23(c)(2)(B).

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The parties have proposed several forms of notice in their motion, including (1) emails to

current accountholders who have agreed to receive emails from BANA, (2) postcards to current

accountholders who have not agreed to receive emails from BANA, current accountholders who

cannot be reached by email, and former accountholders, and (3) long form notice on the

settlement website and sent by mail to those who request it. (Settlement Agreement and Release,

at ¶¶ 5.2.1, 5.2.2.) We find that these methods of notice are “reasonably calculated” to notify all

class members identified through BANA’s business records. Moreover, having reviewed the

proposed notices, we conclude that they satisfy the requirements of Rule 23(c)(2)(B).

IV. CONCLUSION

The proposed settlement is the product of good-faith negotiation by experienced counsel

with the help of a mediator after extensive litigation and discovery. Moreover, the proposed

class meets all requirements of Federal Rule of Civil Procedure 23(a) and 23(b)(3), and the

parties’ notice plan is reasonably calculated to provide notice to the prospective class.

Accordingly, Plaintiff’s Unopposed Motion for Preliminary Approval of Class Settlement and

for Certification of Class is granted. A Fairness Hearing is scheduled for July 24, 2023

An appropriate Order follows.

BY THE COURT:

/s/ R. Barclay Surrick___________

R. BARCLAY SURRICK, J.

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