# BEAMAN v. BANK OF AMERICA, N.A.

> District Court, D. New Jersey · June 28, 2024

URL: https://www.frixlaw.com/law-library/cases/10656145

## Case

- **Court:** District Court, D. New Jersey
- **Decided:** June 28, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

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## How later opinions describe it (automated extraction)

- holding a court is “not bound to accept as true a legal conclusion couched as a factual allegation”

## Opinion text

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

CASSANDRA VALERIE BEAMAN,
STEFAN BROOKS, and LAURA
ROSELLI, individually and on behalf of
others similarly situated,
Case No. 2:21-cv-20561 (BRM) (LDW)
Plaintiffs,
OPINION
v.

BANK OF AMERICA, N.A.,

Defendant.

MARTINOTTI, DISTRICT JUDGE
Before the Court is Defendant Bank of America, N.A.’s (“BOA”) Motion to Dismiss (ECF
No. 55) the Third Amended Class Action Complaint (“TAC”) (ECF No. 52), filed by Plaintiffs
Cassandra Valerie Beaman (“Beaman”), Stefan Brooks (“Brooks”), and Laura Roselli (“Roselli”)
(collectively, “Plaintiffs” or “Class Representatives”), individually and on behalf of all others
similarly situated. Plaintiffs filed an Opposition. (ECF No. 56.) BOA filed a Reply. (ECF No. 57.)
Having reviewed the parties’ submissions filed in connection with the Motion and having declined
to hold oral argument pursuant to Federal Rule of Civil Procedure 78(b), for the reasons set forth
below and for good cause having been shown, BOA’s Motion to Dismiss (ECF No. 55) is
GRANTED IN PART and DENIED IN PART.
I. BACKGROUND1
For the purpose of this Motion to Dismiss, the Court accepts the factual allegations in the
TAC as true and draws all inferences in the light most favorable to Plaintiffs. See Phillips v. Cnty.
of Allegheny, 515 F.3d 224, 228 (3d Cir. 2008). The Court also considers any “document integral

to or explicitly relied upon in the [TAC].” In re Burlington Coat Factory Sec. Litig., 114 F.3d
1410, 1426 (3d Cir. 1997) (quoting Shaw v. Digit. Equip. Corp., 82 F.3d 1194, 1220 (1st Cir.
1996)).
A. Factual Background
Plaintiffs are residents of the State of New Jersey, who lost their jobs during the COVID-
19 pandemic (the “Pandemic”), and who received and relied upon New Jersey Department of
Labor & Workforce Development2 (“LWD”) unemployment and other public benefits,
administered through their respective BOA accounts, and accessible by a BOA LWD debit card.
(ECF No. 52 ¶¶ 1, 9–11.) BOA is a Delaware corporation and financial institution with an
exclusive contract to administer unemployment benefits and other payments through LWD debit
cards and accounts (the “Contract”). (Id. ¶ 12.) Pursuant to the Contract, Plaintiffs and Class
Members, which include all others similarly situated to Plaintiffs, received periodic payments

through the BOA-issued prepaid debit cards, which are linked to individual BOA depository
accounts, to access their benefits. (Id. ¶ 2.)

1 The factual background and procedural history of this matter are well known to the parties and
were previously recounted by the Court in the July 27, 2023 Opinion. (ECF No. 44.) The Court
has amended and supplemented these sections to the extent necessary.

2 The TAC identifies LWD as an agency of the State of New Jersey responsible for administering
various benefit programs, including for New Jersey residents who are low-income or unemployed,
like unemployment insurance benefits, pandemic unemployment assistance benefits, pandemic
emergency unemployment compensation benefits, disability insurance benefits, and paid family
leave benefits. (ECF No. 52 ¶ 14.)
Plaintiffs submit, upon information and belief, BOA and LWD entered into the Contract
some time prior to 2020. (Id. ¶ 15.) At all relevant times thereafter, LWD distributed benefits
pursuant to the Contract, through BOA-issued and administered debit cards. (Id. ¶ 17.) Under the
terms of the Contract, BOA would disperse to each claimant the entire amount authorized by LWD,

without commingling the benefits with any other funds, and without any alteration or adjustment.
(Id. ¶ 20.) In exchange, BOA agreed to fully protect LWD debit cardholders in the event they
became victims of fraud. (Id. ¶ 18.) Specifically, BOA agreed to comply with all Electronic Fund
Transfers Act (“EFTA”) requirements and timelines with respect to error resolution, and BOA
extended their “Zero Liability protection on disputed claims” to the transactions. (Id. ¶ 18.) The
Contract between LWD and BOA was contingent on BOA’s description of their error resolution
process. (Id. ¶ 19.)
However, Plaintiffs allege BOA failed to secure Plaintiffs’ and Class Members’ personally
identifiable information and other sensitive debit card and account information in a reasonably
secure manner. (Id. ¶ 21.) Specifically, BOA issued LWD cards without industry-standard, fraud-

preventing Europay, Mastercard, and Visa (“EMV”) chips, which BOA has used on all of its
regular consumer debit cards since 2014. (Id. ¶ 2.) Further, BOA failed to take reasonable steps to
ensure that the Plaintiffs’ and Class Members’ personably identifiable information was
appropriately handled by BOA’s subcontractors, employees, and agents with access to said
information. (Id.) As a result, both Plaintiffs’ and Class Members’ cardholder information has been
obtained by unauthorized third parties in a series of security breaches, resulting in unauthorized
transactions on their accounts and access to their personal information. (Id. ¶¶ 22–23.)
1. Evolution of Fraud-Combatant Technology Standards
Plaintiffs assert that from the 1960s until approximately ten years ago, banks used magnetic
stripes to store consumer information on debit and credits cards in the United States. (Id. ¶ 25.)
However, because the stripes are static and easily readable, they are also highly susceptible to
fraud. (Id. ¶ 26.) Through a process called “skimming,” third parties can access and use
information from the card to clone it and conduct unauthorized transactions. (Id.) Skimming has

resulted in hackers capturing the personal data of over tens of millions of people. (Id. ¶ 27.)
To combat the fraud enabled by magnetic stripes, banks have adopted EMV chip
technology as the industry standard. (Id. ¶ 28.) EMV chips are “dynamic” and create a unique
signature for every transaction, rendering debit card data from past purchases useless to hackers.
(Id.) BOA, specifically, began using EMV chips in corporate credit cards for customers who
regularly traveled outside of the United States in 2011. (Id. ¶ 29.) In 2014, BOA announced it
would use chip technology on all new and reissued consumer debit cards to “increas[e] card
security.” (Id. ¶ 30.) By 2015, banks, generally, began a shift toward EMV chip cards, and by
2017, the cards became the industry norm. (Id. ¶ 31.) On BOA’s website, BOA acknowledges that
EMV chip technology is the security standard, is more secure, and makes a card more difficult to

counterfeit or copy. (Id. ¶ 33.) Still, BOA issued LWD debit cards without EMV chips to hundreds
of thousands of New Jerseyans—Plaintiffs and Class Members—which Plaintiffs allege resulted
in predictable and rampant fraud. (Id. ¶ 34.)
2. BOA’s Representations to Cardholders
In a Cardholder Agreement on BOA’s website, BOA represented they would be
responsible for unauthorized transactions on their LWD debit cards or accounts because of the
bank’s “zero liability” policy. (Id. ¶ 35.) BOA also represented they were available twenty-four
hours a day, seven days per week, to receive reports of any unauthorized transactions, and would
promptly investigate the transaction to determine whether it was unauthorized within ten business
days. (Id.) If the bank took longer than ten business days to investigate, BOA would credit the
account for the amount believed to be in error. (Id.) Plaintiffs allege this agreement was in effect
at the time Plaintiffs received their benefits and has been effective over the duration relevant to
this case. (Id. ¶ 36.)

3. Third-Party Fraud of LWD Debit Card Accounts
In the spring of 2020, the Pandemic resulted in hundreds of thousands of workers losing
their jobs, and the state’s unemployment rate skyrocketed to record heights. (Id. ¶ 37.) Since the
start of the Pandemic in 2020, LWD received over 200,000 claims for unemployment benefits, and
BOA issued thousands of LWD debit cards to New Jersey residents. (Id. ¶ 38.) Tens of thousands
of those debit cardholders have been victims of fraud during the Pandemic, and tens of millions of
dollars have been stolen from their accounts. (Id. ¶ 39.) The reported fraud has occurred in various
forms, including massive ATM withdrawals, thousand-dollar charges at luxury vendors, and
repeated transactions with food delivery services. (Id. ¶ 40.) Criminals have also exploited the
security vulnerabilities to misappropriate cardholder information. (Id. ¶ 41.) Plaintiffs claim the

increase in fraud during the Pandemic was foreseeable, but BOA nonetheless failed to take
reasonable measures to prepare for and prevent the fraud. (Id. ¶ 42.)
4. BOA’s Pre-Suit Response to Fraud

After the increase in fraudulent activity, BOA failed to employ reasonable procedures for
monitoring, detecting, stopping, and notifying Plaintiffs and Class Members about suspicious
transactions; failed to answer customer service phone lines it advised LWD cardholders to call;
established “customer service” procedures that frustrated Plaintiffs’ and Class Members’ efforts
to file fraud claims; closed fraud claims without a reasonable and good faith investigation; reversed
“permanent” credits previously granted for unauthorized transitions without good faith basis and
without notice to LWD cardholders; failed to extend provisional credit to LWD cardholders; and
indefinitely froze and blocked accounts of the cardholders who reported third-party fraud on their
accounts. (Id. ¶ 43.) This is due, in part, to BOA’s failure to adequately staff its call centers and
provide reasonable levels of assistance to the predictably large number of cardholders seeking

assistance during the pandemic. (Id. ¶ 44.)
Since October 2020, BOA had a policy and practice of automatically and summarily
denying fraud claims of LWD debit cardholders without adequate investigation or explanation,
using the bank’s automated fraud filter (“Claim Fraud Filter”). (Id. ¶ 45.) When a LWD debit
cardholder reported an unauthorized transaction, the Claim Fraud Filter flagged the report and,
within a day or two of the complaint, sent a form letter closing the cardholder’s claim before
investigating the claim. (Id.) LWD debit cardholders who have called the bank for further
information have been given erroneous instructions or told they could not be helped, even after
providing detailed documentation in support of their claims. (Id. ¶ 46.) Even those whose claims
were reopened for investigation were not issued provisional credit pending completion of BOA’s

investigation. (Id.) BOA’s practice of automatically denying fraud claims of LWD debit
cardholders allowed the bank to circumvent its obligations under EFTA and Regulation E, which
require the bank to issue provisional credit if an investigation is not completed in ten days, and to
complete the investigation in no more than forty-five days. (Id. ¶ 47.) Further, BOA retroactively
rescinded funds that were “permanently” credited to LWD debit cardholder victims by debiting
the amount from their accounts without notice or explanation, and sometimes leaving the
cardholders with a negative balance. (Id. ¶ 48.) This would leave those cardholders without access
to benefits because the LWD benefit payments paid off the negative balance and were not available
for use. (Id.)
Around the same time, BOA began implementing another policy and practice of
automatically and indefinitely freezing or blocking accounts without notice, explanation, or
opportunity to be heard, based upon the results of the bank’s Claim Fraud Filter. (Id. ¶ 49.) When
an account is frozen, the cardholder cannot access any funds in the account, and further, LWD

benefits payments are not accepted in the account. (Id.) As a result, the cardholders who are victims
of third-party fraud are then also deprived of access to their benefits at the hands of BOA. (Id.)
Many accounts were frozen for months without additional information. (Id. ¶ 50.) If a LWD debit
cardholder wanted to re-access their frozen LWD account, BOA required the cardholder to re-
establish their identity and re-verify their eligibility before re-opening the account. (Id. ¶ 51.) Even
after cardholders complied with these requirements, BOA still failed to unfreeze some accounts.
(Id. ¶ 52.)
LWD debit cardholders whose fraud claims have been denied or whose accounts were
frozen have been unable to reach BOA’s customer service hotline. (Id. ¶ 53.) BOA failed to
appropriately staff its call centers in a manner that would provide reasonable levels of assistance

to the predictably large volume of cardholders seeking assistance during the Pandemic. (Id. ¶ 54.)
The service agents who were hired were not adequately trained and were not empowered to
investigate or resolve fraud claims. (Id.) Instead, cardholders were repeatedly kept on hold,
sometimes for hours, waiting to speak to a live agent, or they were disconnected, hung up on, or
treated rudely by overwhelmed agents. (Id. ¶ 55.) BOA representatives also provided erroneous
information regarding the cardholders’ accounts. (Id. ¶ 56.)
Further, BOA has failed to notify their cardholders within twenty-one days of any changes
to their ability to initiate electronic fund transfers from their LWD debit card accounts. (Id. ¶ 64.)
Plaintiffs and Class Members allege BOA decreased their access to their accounts because of
freezes and/or holds placed on those accounts, but were not given written notice of those changes.
(Id. ¶¶ 65–66.) BOA continues to freeze and/or block thousands of cardholders’ accounts without
notice, depriving Class Members of their benefits. (Id. ¶ 67.)
Furthermore, BOA continues to depend upon the Claim Fraud Filter as a basis for denying

or closing unauthorized transaction claims, or as a basis for freezing any Class Member’s account.
(Id. ¶ 61.) This practice results in the closing of tens of thousands of Class Member accounts each
month, depriving Class Members of access to critical unemployment and other public benefits.
(Id. ¶ 62.) Class Members also continue to experience unauthorized transactions on their debit
cards. (Id. ¶ 63.)
5. Consumer Finance Protection Bureau (“CFPB”) and the Office of
Comptroller of the Currency (“OCC”) Response

On June 14, 2022, the CFPB and the OCC collectively fined BOA $225 million for its
handling of state unemployment benefits at the height of the Pandemic. (Id. ¶ 68.) The CFPB found
BOA engaged in unfair and abusive acts and practices, because they replaced a reasonable
investigation process with a faulty Claim Fraud Filter, lowered the bar for freezing unemployment
insurance benefits, and improperly retroactively deprive account members of access to their
accounts that were investigated and paid. (Id. ¶¶ 69–72.) Further, the CFPB found BOA failed to
issue provisional credits to account holders within the legally-required ten business days, failed to
complete investigations on accounts within forty-five days, and ultimately failed to timely
investigate account holders’ notices of error. (Id. ¶¶ 74–77.) BOA’s erroneous use of the Claim
Fraud Filter occurred while handling approximately 188,000 notices of error by affected
customers. (Id. ¶ 78.) The CFPB found BOA’s actions violated Sections 908 and 909 of the EFTA,
and Section 1005.11 of Regulation E. (Id.) The OCC similarly found BOA failed to give access of
unemployment funds to account holders, leaving them without any effective way of remedying the
situation. (Id. ¶ 73.)
6. Class Representative Experiences

a. Plaintiff Cassandra Valerie Beaman

Beaman lost her job due to the Pandemic in March of 2020. (Id. ¶ 79.) Beaman applied for,
and began receiving, unemployment benefits through the State of New Jersey. (Id.) In May 2021,
Beaman’s debit card was declined while attempting to complete a transaction. (Id. ¶ 80.) Beaman
immediately called BOA to inquire as to why the transaction did not go through. (Id.) A
representative of BOA verified Beaman’s identity and reviewed her account. (Id.) BOA told
Beaman that her card was declined because there were apparent fraudulent transactions on her
account. (Id.) After the telephone call with BOA, Beaman logged in to her account online and
reviewed her May 2021 statement. (Id. ¶ 81.) Beaman discovered the fraudulent transactions
included purchases totaling approximately $300.00 from the month of May 2021. (Id.) Beaman
also discovered that a restriction was placed on her account disabling her from accessing the funds
in her account. (Id. ¶ 91.)
On May 23, 2021, Beaman called BOA and spoke with an account representative. (Id. ¶
83.) During the call, Beaman indicated her belief that the May 2021 statement contained errors of
$300.00 in unauthorized transactions, set forth her reasoning for her belief that errors had occurred,
reported her account restriction, requested additional information as to why a restriction was
placed, and requested that the money be returned to her account and that BOA investigate as to the
source and authorization of the transactions. (Id. ¶¶ 83–84, 91.) BOA was able to locate the
fraudulent transactions, but did not provide provisional or permanent credit. (Id. ¶¶ 85–86.)
Despite Beaman identifying and reporting the unauthorized transactions to BOA within 60 days,
BOA did not investigate, correct the identified errors, provisionally recredit, nor credit interest to
Beaman’s account. (Id. ¶¶ 87–89.) BOA also failed to provide any information as to why a
restriction was placed on Beaman’s account. (Id. ¶ 91.) Since May 2021, Beaman has called BOA
over twenty times. (Id. ¶ 92.) During each telephone call, BOA told her she needed to re-verify her
identity to remove any restriction on her account; however, even when she re-verified her identity,

the restrictions remained. (Id.) BOA has still failed to grant her access to her account. (Id.) Because
of Beaman’s inability to access her BOA account, she missed a $200.00 rent payment, a $60.00
phone bill, and struggled to afford food, gas, and clothing. (Id. ¶ 93.)
b. Plaintiff Stefan Brooks
In 2021, Brooks’s BOA debit card was declined when shopping at a grocery store, despite
having sufficient funds to cover the purchases on his account. (Id. ¶ 94.) Brooks’s account had
been frozen without prior notice. (Id.) When he called BOA to unfreeze the account, BOA asked
him to verify his identity. (Id. ¶ 95.) After spending thirty minutes on the phone with BOA,
Brooks’s account was unfrozen. (Id.) Shortly thereafter, Brooks’s account was frozen without
notice. (Id. ¶ 96.) Again, Brooks spent thirty minutes on the phone with BOA to unfreeze his

account. (Id. ¶¶ 96–97.) After Brooks’s account was unfrozen, BOA froze the account for a third
time. (Id. ¶ 98.) Brooks then called BOA’s fraud department, which re-directed him to the LWD.
(Id.) LWD informed Brooks the funds had been released to BOA, and he should have access to
them. (Id. ¶ 99.) Brooks called BOA to request access to the funds, but he was referred back to
LWD. (Id. ¶ 100.) Brooks was never given any notice of any changes of access to his account. (Id.
¶ 101.)
c. Plaintiff Laura Roselli
In 2021, Roselli was approved to receive unemployment benefits from the State of New
Jersey that would be distributed by BOA. (Id. ¶ 102.) In October 2021, BOA transmitted online
statements to her which showed unauthorized electronic fund transfers which occurred within the
prior 60 days. (Id. ¶ 103.) The online statements displayed the following unauthorized electronic
transfers: a) an unauthorized $7,000.00 withdrawal on October 26, 2021; b) an unauthorized
$7,000.00 withdrawal on October 31, 2021; and c) an unauthorized $2,800.00 withdrawal on
October 31, 2021.3 (Id.)

Roselli reviewed her online statement on October 26, 2021 and discovered the
unauthorized $7,000.00 electronic fund transfer from that date. (Id. ¶¶ 104–05.) On the same date,
Roselli called BOA and spoke with a representative to relay her belief that the online statement
contained an error of $7,000.00. (Id. ¶¶ 104–08.) During the call, BOA verified her identity,
account, and the unauthorized transactions. (Id. ¶ 106.) BOA located the error and noted her
account. (Id. ¶ 109.) Roselli again reviewed her online statement on October 31, 2021 and
discovered two more errors dated October 31, 2021, an unauthorized $7,000.00 electronic fund
transfer and an unauthorized $2,800.00 electronic fund transfer both. (Id. ¶¶ 112–14.) Roselli
called BOA on the same day and spoke with a representative. (Id. ¶ 115.) During the call, BOA

again verified her identity, account, and the unauthorized transactions. (Id.) Roselli explained that
she did not recognize the transactions. (Id. ¶ 116.) She also noted that the unauthorized transfers
were to a Sutton Bank account to which she had no connection. (Id.) BOA again located the errors
and noted her account. (Id.)
BOA did not investigate, correct the identified errors, mail an explanation, provisionally
credit, or permanently credit Roselli’s account. (Id. ¶¶ 110–11, 117–21.) Because of the

3 The Court notes there are some inconsistencies in the TAC. (See id. ¶¶ 103–14.) Plaintiffs state
there were three unauthorized electronic fund transfers from October 26, 2023 and October 31,
2023. (Id. ¶ 103.) Thereafter Plaintiffs state these electronic fund transfers were from October 26,
2021 and October 31, 2021. (Id. ¶¶ 104–14.) As the FAC alleged these transactions occurred in
2021, the Court assumes this was a typographical error by Plaintiffs. (See ECF No. 36 ¶¶ 92–94.)
unauthorized transactions, Roselli was unable to put a deposit on an apartment and did not have
the funds to pay for rent, food, gas, phone, and utility bills. (Id. ¶ 122.)
B. Procedural History
Plaintiff Cassandra Beaman initiated this Class Action on December 17, 2021, individually

and on behalf of all others similarly situated. (ECF No. 1.) BOA moved to dismiss (ECF No. 6),
but the motion was terminated pending the parties’ agreement on an acceptable briefing schedule
(ECF No. 15). BOA’s Motion to dismiss, Beaman’s Opposition, and BOA’s Reply were re-filed
on July 19, 2022. (ECF Nos. 20–22.) On October 18, 2022, the parties stipulated to permit Beaman
to amend the Complaint and to extend BOA’s time to answer, move or otherwise respond. (ECF
No. 35.)
On October 19, 2022, Plaintiffs filed the First Amended Complaint (the “FAC”). (ECF No.
36.) The FAC asserted six claims for relief: violations of the EFTA and Regulation E (Count I),
negligence and negligence per se (Count II), negligent hiring, supervision, and retention (Count
III), breach of contract (Count IV), breach of implied contract (Count V), and breach of implied

covenant of good faith and fair dealing (Count VI). (Id.) BOA moved to dismiss the FAC on
December 9, 2022. (ECF No. 37.) Plaintiffs filed an Opposition on January 13, 2023. (ECF No.
38.) BOA filed a Reply on February 3, 2023. (ECF No. 40.) Thereafter, BOA filed a Notice of
Supplemental Authority on March 29, 2023 in further support of its motion. (ECF No. 41.)
Plaintiffs filed a letter in reply on April 5, 2023. (ECF No. 42.) On June 3, 2023, Plaintiffs similarly
filed a letter with supplemental authority for the Court’s consideration. (ECF No. 43.)
On July 27, 2023, the Court issued an Opinion and Order granting BOA’s motion to dismiss
the FAC. (ECF Nos. 44, 45.) In the July 27, 2023 Opinion, the Court found Plaintiffs had failed to
state a claim under the EFTA and Regulation E. (ECF No. 44 at 15–24.) Additionally, the Court
held Plaintiffs had failed to allege any contract related claims as well as claims for negligence,
negligence per se, and negligent, hiring, supervision, and retention. (Id. at 24–40.) The FAC was
dismissed without prejudice, and Plaintiffs were permitted to file a Second Amended Complaint
(the “SAC”) to cure the deficiencies addressed in the Opinion. (Id. at 40.)

On August 17, 2023, Plaintiffs filed the SAC. (ECF No. 46.) The parties stipulated to a
briefing schedule for BOA’s anticipated motion to dismiss. (ECF Nos. 47, 48.) On September 26,
2023, Plaintiffs filed a motion for leave to amend the SAC. (ECF Nos. 49, 50.) On September 27,
2023, Plaintiffs’ motion for leave to amend was granted. (ECF No. 51.)
Thereafter, Plaintiffs filed the TAC on September 28, 2023. (ECF No. 52.) The TAC asserts
six claims for relief: violations of the EFTA and Regulation E (Count I), negligence (Count II),
breach of contract (Count III), breach of fiduciary duty (Count IV), violations of due process under
the 14th Amendment (Count V), and unjust enrichment and money had and received (Count VI).4
(Id.) BOA moved to dismiss the TAC on October 27, 2023. (ECF No. 55.) Plaintiffs filed an
Opposition on December 11, 2023. (ECF No. 56.) BOA filed a Reply on January 12, 2024. (ECF

No. 57.)
C. Class Action Allegations
Plaintiffs Beaman, Brooks, and Roselli seek to bring this lawsuit individually and as a class
pursuant to Federal Rule of Civil Procedure 23, and they also seek declaratory and injunctive relief
and damages on behalf of a class defined as:
All persons who were [BOA] LWD Debit Cardholders at any time
between January 1, 2020 and the present (“Class Period”), and
whose eligibility for benefits LWD has not revoked for failure to
establish valid identity.

4 This was the first instance in which Plaintiffs raised claims for breach of fiduciary duty, violations
of due process, and unjust enrichment and money had and received.
(ECF No. 52 ¶ 123.) Plaintiffs further seek declaratory and injunctive relief, restitution,
disgorgement, and statutory and actual damages on behalf of the following subclasses:
Claim Denial Subclass: All Class Members who, during the Class
Period, gave [BOA] notice of a claim that an unauthorized
transaction had occurred on their Account (“Claim”) and whose
Claim [BOA] closed or denied based on application of the Claim
Fraud Filter.

Untimely Investigation Subclass: All Class Members who, during
the Class Period, received provisional credit in connection with their
claim for an unauthorized transaction that [BOA] rescinded more
than 45 days after [BOA] received notice of the claim.

Credit Rescission Subclass: All Class Members who, during the
Class Period, received provisional or permanent credit from [BOA]
in connection with their Claim, which [BOA] rescinded more than
45 days after the Class Member gave notice of the Claim.

Account Freeze Subclass: All Class Members whose LWD Debit
Card Account [BOA] froze during the Class Period based on
application of the Claim Fraud Filter and later unfroze or later
converted from frozen to blocked status and then unblocked.

Account Block Subclass: All Class Members whose LWD Debit
Card Account [BOA] blocked during the Class Period based on
application of the Claim Fraud Filter and later unblocked.

Security Breach Subclass: All Class Members whose Card,
Account, or other personal information in the possession of [BOA]
or its agents was, during the Class Period, accessed or taken by a
third party without the Class Member’s consent.

EMV Chip Subclass: All Class Members whose LWD Debit Card,
during the Class Period, did not include an EMV chip and whose
Card, Account, or other personal information was accessed or taken
from the Card by a third party without the Class Member’s consent.

Lack of Notice Subclass: All Class Members who experienced
decreased access, and/or change in rights to make EFT on their
consumer accounts without receiving written notice twenty-one-
days prior to the effective date of any change from [BOA].

(Id. ¶ 124.) Plaintiffs allege the action can be maintained as a class action against BOA pursuant
to the provisions of Rule 23. (Id. ¶ 128.) Plaintiffs allege the following claims against BOA: (1)
violations of the EFTA, 15 U.S.C. §§ 1693, et seq. and Regulation E of the EFTA, 12 C.F.R. §§
1005.1-1005.20; (2) negligence; (3) breach of contract; (4) breach of fiduciary duty; (5) violations
of due process under the 14th Amendment, 42 U.S.C. § 1983; and (6) unjust enrichment and money

had and received. (Id. ¶¶ 129–91.)
II. LEGAL STANDARD
In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a
district court is “required to accept as true all factual allegations in the complaint and draw all
inferences from the facts alleged in the light most favorable to [the non-moving party].” Phillips,
515 F.3d at 228. “[A] complaint attacked by a Rule 12(b)(6) motion to dismiss does not need
detailed factual allegations.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations
omitted). However, “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’
requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of
action will not do.” Id. (alteration in original) (quoting Papasan v. Allain, 478 U.S. 265, 286

(1986)). A court is “not bound to accept as true a legal conclusion couched as a factual allegation.”
Papasan, 478 U.S. at 286. Instead, assuming factual allegations in the complaint are true, those
“[f]actual allegations must be enough to raise a right to relief above the speculative level.”
Twombly, 550 U.S. at 555.
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim for relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id. at 678 (citing Twombly, 550 U.S. at 556). This
“plausibility standard” requires the complaint allege “more than a sheer possibility that a defendant
has acted unlawfully,” but it “is not akin to a ‘probability requirement.’” Id. at 678 (citing
Twombly, 550 U.S. at 556). “[D]etailed factual allegations” are not required, but “more than an
unadorned, the-defendant-unlawfully-harmed-me accusation” must be pleaded; it must include

“factual enhancement” and not just conclusory statements or a recitation of the elements of a cause
of action. Id. (citations omitted). In assessing plausibility, the court may not consider any “[f]actual
claims and assertions raised by a defendant.” Doe v. Princeton Univ., 30 F.4th 335, 345 (3d Cir.
2022).
“Determining whether a complaint states a plausible claim for relief [is] . . . a context-
specific task that requires the reviewing court to draw on its judicial experience and common
sense.” Iqbal, 556 U.S. at 679. “[W]here the well-pleaded facts do not permit the court to infer
more than the mere possibility of misconduct, the complaint has alleged—but it has not
‘show[n]’—‘that the pleader is entitled to relief.’” Id. (quoting Fed. R. Civ. P. 8(a)(2)). Indeed,
after Iqbal, it is clear that conclusory or “bare-bones” allegations will no longer survive a motion

to dismiss: “[t]hreadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id. at 678. To prevent dismissal, all civil complaints must
now set out “sufficient factual matter” to show that the claim is facially plausible. This “allows the
court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.
The Supreme Court’s ruling in Iqbal emphasizes that a plaintiff must show that the allegations of
his or her complaints are plausible. See id. at 670.
While, as a general rule, the court may not consider anything beyond the four corners of
the complaint on a motion to dismiss pursuant to Rule 12(b)(6), the Third Circuit has held “a court
may consider certain narrowly defined types of material without converting the motion to dismiss
[to one for summary judgment pursuant to Rule 56].” In re Rockefeller Ctr. Props. Sec. Litig., 184
F.3d 280, 287 (3d Cir. 1999). Specifically, courts may consider any “document integral to or
explicitly relied upon in the complaint.” In re Burlington Coat Factory, 114 F.3d at 1426 (emphasis
added) (quoting Shaw, 82 F.3d at 1220). However, “[w]hen the truth of facts in an ‘integral’

document are contested by the well-pleaded facts of a complaint, the facts in the complaint must
prevail.” Princeton Univ., 30 F.4th at 342.
III. DECISION
BOA argues Plaintiffs have failed to: state a claim under the EFTA and Regulation E; assert
actionable claims for breach of contract, breach of fiduciary duty, violations of due process under
the 14th Amendment; and allege claims for negligence as well as unjust enrichment and money
had and received. (ECF No. 55-1 at 6–32.) BOA submits the TAC should be dismissed with
prejudice because Plaintiffs did not attempt to revive or replead some of the claims that were
dismissed without prejudice in the July 27, 2023 Opinion, have failed to cure the defects of the
remaining claims that were previously addressed by the Court, have failed to sufficiently allege

their new causes of actions, and have been given three opportunities to amend the complaint. (Id.
at 1, 4 n.1, 32.) Plaintiffs counter that they have adequately pled each of the causes of action. (ECF
No. 56.) The Court addresses each count of the TAC in turn.
A. EFTA and Regulation E (Count I)
1. EFTA, 15 U.S.C. § 1693f
The Court previously dismissed without prejudice each of the Class Representative’s
claims under 15 U.S.C. § 1693f for failure to sufficiently allege whether each Class Representative
provided notice to BOA within 60 days of the date on which a reported “unauthorized transfer”
first appeared on their account statements. (ECF No. 44 at 15–22.) The Court noted “BOA’s
arguments relating to the substantive sufficiency of the allegations can be re-raised, if applicable,
in a motion to dismiss Plaintiffs’ amended pleading.” (Id. at 22 n.2.) Count I of the TAC alleges
BOA violated 15 U.S.C. § 1693f and 12 C.F.R. § 1005.11 by failing to provisionally credit
Plaintiffs and the class members’ accounts. (ECF No. 52 ¶¶ 129–38.)

BOA now raises multiple argument as to why Plaintiffs’ claims under 15 U.S.C. § 1693f
should be dismissed. (See ECF No. 55-1 at 7–13; ECF No. 57 at 1–5.) In opposition, Plaintiffs
assert that they have properly alleged facts sufficient to support their claim for violations of the
EFTA and Regulation E. (ECF No. 56 at 4–10.)
a. Beaman and Brooks Have Not Sufficiently Alleged a Qualifying
Error Under 15 U.S.C. § 1693f(f)6

BOA submits Plaintiffs do not allege that Brooks experienced or reported any fraudulent,
unauthorized transactions; instead, Plaintiffs only allege a “change of access to his account,” which
is not a qualifying error under Section 1693f. (ECF No. 55-1 at 7.) In opposition, Plaintiffs contend
Beaman and Brooks sufficiently allege qualifying errors because they requested additional
information regarding the freezes or other restrictions on their accounts.5 (ECF No. 56 at 6–8.) In
reply, BOA counters Plaintiffs’ argument that Beaman and Brooks have sufficiently alleged a
qualifying error by requesting additional information.6 (ECF No. 57 at 1–3.) BOA submits
dismissal is warranted because Plaintiffs, in opposition, assert for the first time that Brooks and

5 Plaintiffs also argue Beaman and Roselli have adequately alleged that they timely identified,
reported, and sought additional information regarding “an unauthorized electronic fund transfer.”
(ECF No. 56 at 8–9.) It appears this argument is in opposition to BOA’s argument that Brooks has
not properly pled a qualifying error.

6 BOA initially moved for dismissal of Brooks’s claim for failure to allege a qualifying error (ECF
No. 55-1 at 7); in response to Plaintiffs’ argument that Beaman and Brooks adequately alleged a
qualifying error, BOA also asserted, in reply, that Beaman’s claim should be dismissed “to the
extent it was premised on an account freeze” (ECF No. 57 at 3).
Beaman have alleged a qualifying error consisting of a request for information under 12 C.F.R. §
1005.11(a)(1)(vii). (Id. at 1–2.)
The EFTA and its implementing regulations, including Regulation E, “impose, in certain
situations, liability on banks for unauthorized electronic fund transfers . . . drawn against their

customers’ accounts.” Marquess v. Pa. State Emps. Credit Union, 427 F. App’x 188, 188–89 (3d
Cir. 2011) (citing 15 U.S.C. § 1693, et seq.; 12 C.F.R. § 205.6, et seq.). The EFTA was enacted
“to provide a basic framework establishing the rights, liabilities, and responsibilities of participants
in electronic fund and remittance transfer systems,” especially regarding individual consumer
rights. Perry v. OCNAC #1 Fed. C.U., 423 F. Supp. 3d 67, 77 (D.N.J. 2019) (citations omitted).
Generally, the EFTA provides a private cause of action to the customer seeking damages for the
financial institutions’ unauthorized electronic transfer of funds from the customer’s account. Id.
Specifically, Section 1693f(a)(3) requires financial institutions to “investigate [an] alleged
error, determine whether an error has occurred, and report or mail the results of such investigation
and determination to the consumer within ten business days,” if the customer provides notice of

the purported error within sixty days of the financial institution having transmitted to the customer
a periodic statement containing the error. 15 U.S.C. § 1693f(a)(3); see also 12 C.F.R. § 205.6(b)(3)
(“A consumer must report an unauthorized electronic fund transfer that appears on a periodic
statement within 60 days of the financial institution's transmittal of the statement to avoid liability
for subsequent transfers.”). The EFTA also mandates specific steps the financial institution must
take depending on the results of an investigation. 15 U.S.C. § 1693f(b)–(d). The EFTA defines
seven instances of “error” which require the financial institution to undertake certain procedures
for resolution, including “an unauthorized electronic fund transfer” and “a consumer’s request for
additional information or clarification concerning an electronic fund transfer or any [required]
documentation.” 15 U.S.C. § 1693f(f)(1)–(7); see also 12 C.F.R. § 1005.11(a)(1)(vii); 12 C.F.R.
§ 1005, Supp. I at 11(a) (Official Interpretation of § 1005.11(a)) (“A request for documentation or
other information must be treated as an error unless it is clear that the consumer is requesting a
duplicate copy for tax or other record-keeping purposes.”).

An individual plaintiff can sufficiently allege a qualifying error when he or she “identified
a fraudulent or unauthorized transaction or withdrawal” and then reported the fraud to the
defendant financial institution. See In re Bank of Am. Cal. Unemployment Benefits Litig., 674 F.
Supp. 3d 884, 909 (S.D. Cal. 2023); see also Ali v. USAA Fed. Sav. Banks, Civ. A. No. 16-00420,
2016 WL 5464602, at *4 (D. Ariz. Sept. 29, 2016) (noting “Defendant’s error can potentially exist
under [Section] 1693f(f)6 . . . simply because Plaintiff requested additional information and
documentation and allegedly did not receive that documentation”).
Count I clearly alleges a theory of recovery based on the fact that an unauthorized
transaction is an “error” under Regulation E. (See ECF No. 52 ¶ 131 (“Plaintiffs and Class
Members provided notice to Bank of America within 60 days after Bank of America sent a period

statement reflecting an unauthorized transaction (which is an “error” under Regulation E)
consistent with 15 U.S.C. § 1693f and 12 C.F.R. § 1005.11.”).) The Court will not consider
Plaintiffs’ argument that the Class Representatives have sufficiently alleged a qualifying error
under Section 1693f(f)6. See In re Samsung Elecs. Am., Inc. Blu-Ray Class Action Litig., Civ. A.
No. 08-0663, 2008 WL 5451024, at *3 n.3 (D.N.J. Dec. 31, 2008) (“Plaintiffs’ new argument is
an improper response to Defendant’s motion to dismiss, and will not be considered by this Court.
. . . Plaintiffs raises [sic] it for the first time in their opposition brief.”); see also Pa. ex rel.
Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir. 1988) (“[I]t is axiomatic that the
complaint may not be amended by the briefs in opposition to a motion to dismiss.” (alteration in
original) (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1107 (7th Cir. 1984)).
Even assuming arguendo this theory had been properly pled, Section 1693f(f)6 provides
that a qualifying error includes “a consumer’s request for additional information or clarification
concerning an electronic fund transfer or any [required] documentation.” 15 U.S.C. § 1693f(f)6

(emphasis added). Beaman and Brooks have failed to allege a qualifying error under Section
1693f(f)6 because they have not alleged that they sought information concerning an electronic
fund transfer or any required documentation. See Hardin v. Bank of Am., N.A., Civ. A. No. 22-
10023, 2022 WL 3568568, at *3 (E.D. Mich. Aug. 18, 2022) (“[R]equests for additional
information or clarification apply only for requests ‘concerning an electronic fund transfer.’”)
(quoting 12 C.F.R. § 1005.11(a)(1)(vii)). Rather, Beaman alleges that she asked BOA why her
account was restricted (ECF No. 52 ¶¶ 91, 92), and Brooks alleges that he called BOA to verify
his identity and request access to his funds (id. ¶¶ 95, 96). Further, Brooks does not even allege
that he experienced an unauthorized transaction. (See ECF No. 52 ¶¶ 94–101.) Instead, Brooks
merely alleges “a change of access to his account.” (Id. ¶ 101.) As Plaintiffs concede that “courts

have recognized that an account freeze or other restriction (such as an identity re-verification
requirement) alone does not constitute a qualifying error” (ECF No. 56 at 6), Brooks and Beaman
have not sufficiently alleged a qualifying error under Section 1693f(f)(6). See Hardin, 2022 WL
3568568, at *3 (“EFTA does not regulate account freezes; it regulates electronic fund transfers. .
. . And the regulation does not define account freezes as an ‘error’ covered under the EFTA.”); see
also Cal. Unemployment Benefits Litig., 674 F. Supp. 3d at 909 (“Neither EFTA nor Reg[ulation]
E lists account freezes as a qualifying error.”).
Accordingly, BOA’s Motion to Dismiss Brooks’s EFTA claim under 15 U.S.C. § 1693f
for failure to allege a qualifying error is GRANTED. Brooks’s EFTA claim is dismissed without
prejudice.7
b. Plaintiffs Have Sufficiently Alleged Beaman Provided Notice

BOA argues Beaman has not pled facts establishing that she provided sufficient notice to
BOA to trigger BOA’s obligations under EFTA and Regulation E. (ECF No. 55-1 at 8–9.) In
opposition, Plaintiffs assert all of the Class Representatives’ allegations are sufficient to establish
that they satisfied the notice requirements for reporting qualifying errors. (ECF No. 56 at 9–10.)
Specific to Beaman, Plaintiffs submit “the TAC is replete with allegations specifying when [she]
became aware of the qualifying event, and when and how that Plaintiff reported the event to
[BOA].” (Id. at 9.) Plaintiffs argue Beaman has provided allegations which are more detailed than
ones that have been deemed insufficient in cases from different districts. (Id. at 10.) In reply, BOA
asserts Beaman has not alleged sufficient notice because she has not identified which transaction,
or transactions, are at issue. (ECF No. 57 at 3.)
A customer’s notice under Section 1693f must: (1) set forth the name and account number
of the consumer, or set forth information to otherwise enable the institution to identify the

customer; (2) indicate the customer’s belief that the documentation or the customer’s account
contains an error, and the amount of the alleged error; and (3) set forth the reasons for the
customer’s belief that an error has occurred. 15 U.S.C. § 1693f(a). The customer must take “steps
reasonably necessary to provide the institution with pertinent information” and must notify the
institution in person, by telephone, or in writing. 12 C.F.R. § 205.6(b)(5). The financial
institution’s obligations under the EFTA are triggered once proper notice is given. See 15 U.S.C.
§ 1693f(a). However, “[t]he notice of error is effective even if it does not contain the customer’s

7 Beaman’s claim under the EFTA is also dismissed without prejudice to the extent it is premised
on an account restriction and a request for additional information under Section 1693f(f)(6).
account number, so long as the financial institution is able to identify the account in question.”
CFPB Official Interpretation of 12 C.F.R § 1005.11(b)(1), Supp. I at 11(b)(1).
“[T]he statute’s notice requirement is more demanding: it requires Plaintiff[s] to provide
notice within sixty days of the date on which the unauthorized transfer first appeared on the account

statement.” Perry, 423 F. Supp. 3d at 77. In other words, in order to trigger BOA’s error resolution
requirements and to avoid liability for subsequent transfers, the EFTA and Regulation E require
consumers to report any unauthorized electronic fund transfers within the sixty-day window, which
begins on the date the financial institution sends the periodic statement containing the problematic
charge. See 15 U.S.C. § 1693f(a); 12 C.F.R. § 205.6(b)(3).
“While proof of Plaintiff[s’] untimely notice may limit [BOA’s] liability . . . , it does not
necessarily complete the EFTA analysis.” See Perry, 423 F. Supp. 3d at 78. If notice is untimely,
the EFTA places the burden of proof on the financial institution to show that Plaintiffs are liable
for the allegedly unauthorized transfers because timely notice would have prevented the
subsequent unauthorized transfers. See 15 U.S.C. § 1693g(a). Therefore, BOA is not responsible

for reimbursing “losses the financial institution establishes would not have occurred but for the
failure of the consumer to report [the unauthorized transfers] within sixty days of transmittal of
the statement.” Id. In other words, “the EFTA may still provide recovery for consumers who fail
to timely report unauthorized transfers,” but the failure to provide timely notice makes the
consumer liable for any transfers that could have been prevented had the notice been timely.
Exarhos v. JPMorgan Chase Bank, N.A., Civ. A. No. 20-7754, 2021 WL 3047152, at *2 (N.D. Ill.
July 20, 2021) (citing Perry, 423 F. Supp. 3d at 78; Cifaldo v. BNY Melon Inv. Serv. Tr. Co., Civ.
A. No. 17-842, 2017 WL 6513342, at *4 (D. Nev. Dec. 19, 2017)).
Plaintiffs’ recovery is dependent upon when notice of the alleged fraud was provided. See
12 C.F.R. § 205.6(b)(3) (“[T]he consumer’s liability shall not exceed the amount of the
unauthorized transfers that occur after the close of the 60 days and before notice to the institution,
and that the institution establishes would not have occurred had the consumer notified the
institution within the 60-day period.”). For example, in Exarhos, the defendant financial

institution, Chase, issued a statement to the plaintiffs, the Exarhoses, containing the unauthorized
transfer on October 16, 2019. Exarhos, 2021 WL 3047152, at *3. The EFTA required the
Exarhoses to report the transfer within sixty days, by December 15, 2019, but the transfer was not
reported until July 24, 2020. Id. Other than the initial unauthorized transfer appearing in the
October 2019 statement, the remaining fraudulent transfers at issue in the case occurred between
December 15, 2019 and July 24, 2020. Id. Therefore, the Court explained “if Chase establishes
that the remainder of the unauthorized transfers would not have occurred if the Exarhoses timely
reported the October 2019 transfer, the Exarhoses would be liable for the transfers.” Id. (citations
omitted). However, the Court held that was a factual issue not appropriate for the pleading stage.
Id. at *4.

The Court finds Plaintiffs have sufficiently alleged that Beaman provided notice to BOA.
(See ECF No. 52 ¶¶ 79–93.) Specifically, the TAC contains the following facts relating to the
timing of Beaman’s report:
80. In May 2021, [Beaman’s] card was declined while attempting to
complete a transaction. Immediately after discovering that Bank of
America had declined the transaction and likely placed a restriction
on the LWD account, which restricted use, Beaman immediately
called Bank of America to inquire as to why the transaction did not
go through. She knew there were funds on the card and was
perplexed as to why the transaction was denied. Bank of America
had no difficulty verifying Beaman’s identity or accessing and
reviewing the account in question. The bank told her over the phone
that her card was declined because access to her funds was restricted
due to what it believed where fraudulent transactions.
81. As soon as Beaman completed this telephone call with the Bank
of America representative, she logged online to her account and
reviewed her May 2021 statements. She discovered that there was
a total of $300 in unauthorized transactions, which occurred
prior in that same month of May 2021.

82. Within a day after discovering the unauthorized transactions on
her May 2021 statement, which occurred within 60-days, Beaman
called Bank of America and was able to reach an account
representative. Bank of America had no trouble verifying Beaman’s
identity, the account in question, or the unauthorized transactions.

83. During the call on May 23, 2021, she indicated her belief that
the May 2021 online statement of account contained errors of
$300 in unauthorized transactions. On information and belief
Beaman conveyed the transaction details, the amount and
corresponding dates, which transactions occurred within the
preceding 60-days.

84. During the call on May 23, 2023, she set forth the reasons for
her belief that errors had occurred, specifically informing the
Bank of American representative that she did not make those
charges and did not authorize those transactions. She explained that
she did not recognize the transactions and had no idea what they
were or who made them. She requested that Bank of America
conduct an investigation as to the source and authorization of the
transactions and requested the money be returned to her account.

85. Bank of America was able to locate the identified transactions
reported as errors and noted the account.

(ECF No. 52 ¶¶ 80–85) (emphasis added). Then, Plaintiffs generally allege, “Plaintiffs and Class
Members provided notice to [BOA] within 60 days after [BOA] sent a period statement reflecting
an unauthorized transaction . . . consistent with [the EFTA and Regulation E].” (Id. ¶ 131.)
Plaintiffs provide allegations about when the fraudulent charges first appeared on
Beaman’s account statements by alleging the unauthorized transactions occurred in the “month of
May 2021,” (id. ¶ 81), which is an allegation that is “more than [a] conclusion[].” Santiago v.
Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010) (quoting Iqbal, 556 U.S. at 679). Plaintiffs
allege facts relating to when Beaman discovered the fraud on her account in March 2021, and state
when those fraudulent charges appeared on her online statement. Accordingly, the Court finds
Plaintiffs have plausibly alleged that Beaman provided timely notice. Cf. Scheffler v. TD Bank,
N.A., Civ. A. No. 18-6688, 2019 WL 192651, at *5 (D.N.J. Jan. 15, 2019) (noting the plaintiff
failed to “allege the dates on which she received documentation like an account statement that

might show electronic transfers from her checking and savings accounts,” in violation of 15 U.S.C.
§ 1693f(a), but dismissing for violation of the statute of limitations); Cal. Unemployment Benefits
Litig., 674 F. Supp. 3d at 906 (“A complaint that doesn’t allege that a consumer provided timely
notice doesn’t state a claim under the EFTA. . . . At the pleading stage, a complaint must state
sufficient facts, construed in the light most favorable to the plaintiff, to plausibly allege timely
notice.”).
c. Beaman and Roselli Have Sufficiently Alleged a Violation of EFTA
and Regulation E

BOA contends Plaintiffs have not adequately pled violations of EFTA and Regulation E
because Plaintiffs have engaged in improper “shotgun pleading.” (ECF No. 55-1 at 10.) BOA also
asserts the TAC lacks sufficient facts related to the alleged violations of EFTA. (ECF No. 55-1 at
10–12.) BOA submits Plaintiffs do not allege facts which establish that BOA’s decisions—to not
reimburse Roselli and Beaman and to not provide provisional credit to them—were made without
an adequate investigation. (Id. at 10–11.) Next, BOA argues Plaintiffs have not alleged facts to
support an entitlement to interest under EFTA and Regulation E. (Id. at 12.) Finally, BOA contends
Plaintiffs claims fail because EFTA and Regulation E do not prohibit or regulate account freezes.
(Id.)
In opposition, Plaintiffs argue they have adequately alleged a violation of 15 U.S.C. §
1693f based on BOA’s conduct following the reporting of a qualifying error. (ECF No. 56 at 11–
12.) Plaintiffs submit the TAC provides sufficient facts “as to why [BOA]’s investigation in the
case of each amending Plaintiff was not in good faith, took longer than 10 days, and/or reached an
unreasonable conclusion.” (Id. at 11.) Plaintiffs assert they have also alleged “a plausible claim
that [BOA] did not provide the results of its investigation of various Plaintiffs’ claims and instead
relied on boilerplate or automatic account restrictions and closings.” (Id.)

In reply, BOA submits “Plaintiffs make no attempt to respond to [BOA]’s argument that
their shotgun pleading approach was improper. . . . Moreover, the Opposition only addresses two
of the alleged EFTA violations: the alleged failure (1) to conduct a reasonable investigation and
(2) to provide a written explanation of results.” (ECF No. 57 at 4.)
Rule 8(a)(2) requires a pleading to include “a short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The United States Supreme
Court has held that a complaint must “give the defendant fair notice of what the plaintiff’s claim
is and the grounds upon which it rests.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002)
(internal quotation marks and citation omitted). Here, Count I of the TAC identifies eleven policies
and/or practices in which BOA allegedly violated the EFTA and Regulation E. (ECF No. 52 ¶

132.) Plaintiffs’ claims arise from separate transactions, yet the Class Representatives’ claims are
grouped together without specifying which of the asserted eleven policies and/or practices apply
to which Class Representative. (See id.) In a different context, the Third Circuit has previously
criticized “the all too common shotgun pleading approach.” Hynson v. City of Chester Legal Dep’t,
864 F.2d 1026, 1031 n.13 (3d Cir. 1988). However, “the Third Circuit has been silent on the issue
since. As a result, district courts within this Circuit look to well-developed Eleventh Circuit case
law on shotgun pleadings.” Patrick v. Equifax Info. Servs., LLC, Civ. A. No. 23-4092, 2024 WL
2077036, at *3 (D.N.J. May 9, 2024). Because Plaintiffs did not address BOA’s argument that
their “shotgun” pleading was improper (see ECF No. 56), the Court will not engage in a detailed
analysis of this issue as BOA raises this argument in passing, in a single paragraph (ECF No. 55-
1 at 1). See John Wyeth & Bro. Ltd. v. CIGNA Int’l Corp., 119 F.3d 1070, 1076 n.6 (3d Cir. 1997)
(“[A]rguments raised in passing . . . but not squarely argued, are considered waived.”).
Plaintiffs only address the sufficiency of two of the policies and/or practices which

allegedly violated the EFTA and Regulation E, BOA’s failure to: (1) conduct a reasonable
investigation; and (2) provide a written explanation of results. (ECF No. 56 at 11–12.) Because
Plaintiffs have not responded to BOA’s substantive arguments (ECF No. 55-1 at 11–12), the Court
finds Plaintiffs have waived their claims for violations of the EFTA and Regulation E to the extent
they are premised on the other policies and/or practices. See Jimenez v. T.D. Bank, N.A., Civ. A.
No. 20-07699, 2021 WL 4398754, at *14 (D.N.J. Sept. 27, 2021) (“The failure to respond to a
substantive argument to dismiss a [claim], when a party otherwise files opposition, results in a
waiver of that [claim].”) (quoting Griglak v. CTX Mortg. Co., LLC, Civ. A. No. 09-5247, 2010
WL 1424023, at *3 (D.N.J. Apr. 8, 2010)).
As to Plaintiffs’ assertion that BOA failed to conduct a reasonable investigation, the Court

finds Plaintiffs have failed to adequately allege a violation of Section 1693. Plaintiffs have not
alleged any facts which establish that BOA did not conduct a reasonable investigation. See Chen
v. Bank of Am., N.A., Civ. A. No. 19-6941, 2019 WL 9633650, at *7–8 (C.D. Cal. Oct. 29, 2019)
(dismissing claim where plaintiff “[did] not allege details establishing any bad faith on [BOA]’s
part”). Plaintiffs have failed to allege sufficient facts as to why the investigations were lacking.
(See ECF No. 52 ¶¶ 86–87, 118.) Plaintiffs, instead, rely on allegations that are “on information
and belief” and legal conclusions. See Advanced Ordal Techs., L.L.C. v. Nutrex Rsch. Inc., Civ. A.
No. 10-5303, 2011 WL 1080204, at *4 n.6 (D.N.J. March 21, 2011) (“Allegations made upon
information and belief—which are little more than conjecture and wishful thinking—have little
hope of salvaging an otherwise defective complaint.”); Papasan, 478 U.S. at 286 (holding a court
is “not bound to accept as true a legal conclusion couched as a factual allegation”).
However, the Court finds Beaman and Roselli8 have sufficiently alleged facts establishing
that BOA engaged in a policy or practice of not providing a written explanation of results in

violation of the EFTA and Regulation E. As noted above, Section 1693f(a)(3) requires financial
institutions to “investigate [an] alleged error, determine whether an error has occurred, and report
or mail the results of such investigation and determination to the consumer within ten business
days,” if the customer provides notice of the purported error within sixty days of the financial
institution having transmitted to the customer a periodic statement containing the error. 15 U.S.C.
§ 1693f(a)(3). Beaman and Roselli allege their requests for provisional credits related to
unauthorized transactions were denied without further explanation, and that BOA did not report or
mail the results of its investigation. (See ECF No. 52 ¶¶ 86–92, 110¸ 117–119.) Beaman and Roselli
have plausibly alleged that they “got a determination but not the results of such investigation.”
Gale v. Hyde Park Bank, 384 F.3d 451, 453 (7th Cir. 2004) (noting “all a complaint need do is

narrate a claim for relief” and finding plaintiff had plausibly alleged a claim under Section 1693f
based on similar allegations).
Accordingly, BOA’s Motion to Dismiss Plaintiffs’ claims under Section 1693f and
Regulation E is GRANTED IN PART and DENIED IN PART.
2. EFTA, 15 U.S.C. § 1693c
BOA argues Plaintiffs’ Section 1693c claims fail because EFTA, Regulation E, and the
Account Agreement permit BOA to freeze accounts. (ECF No. 55-1 at 13.) Plaintiffs concede “that

8 As the Court has already dismissed Brooks’s Section 1693f claim for failure to allege a qualifying
error, the Court does not address whether he has sufficiently alleged a violation of the EFTA and
Regulation E.
their allegations regarding 15 U.S.C. § 1693c cannot be amended at this time.” (ECF No. 56 at 4.)
As noted in the July 27, 2023 Opinion (ECF No. 44 at 22–24), the EFTA requires financial
institutions to disclose, in readily understandable language, the terms and conditions of electronic
fund transfers on a consumer’s account, at the time the consumer contracts for the service. 15

U.S.C. § 1693c(a). Under this Section, the financial institution is responsible for notifying a
consumer “in writing at least twenty-one days prior to the effective date of any change in any term
or condition of the consumer’s account” if that change “would result in greater cost or liability for
such consumer or decreased access to the consumer’s account.” 15 U.S.C. § 1693c(b). However,
the financial institution may implement a change without prior notice “when such change is
immediately necessary to maintain or restore the security of an electronic fund transfer system or
a consumer’s account.” Id.
Plaintiffs’ initial Account Agreement,9 disclosed at the time they contracted with BOA for
its services through the New Jersey Department of Labor and Workforce Development, permitted
BOA to freeze Plaintiffs’ accounts if the bank suspected irregular, unauthorized, or unlawful

activities, pending an investigation. (ECF No. 37-2, Lustberg Dec., Ex 1 (“Account Agreement”)
§ 2) (“If we suspect irregular, unauthorized, or unlawful activities may be involved with your
Account, we may ‘freeze’ (or place a hold on) the balance pending an investigation of such
suspected activities. If we freeze your Account, we will give you a notice required by law.”) This

9 The Account Agreement was provided by BOA as an exhibit to an attorney certification in
support of its Motion to Dismiss the FAC. The Court considered the document in its determination
of BOA’s Motion to Dismiss the FAC, absent objection, because the Court found the Account
Agreement was integral to and was explicitly relied upon in Plaintiffs’ FAC. See In re Burlington
Coat Factory, 114 F.3d at 1426 (“Plaintiffs cannot prevent a court from looking at the texts of the
documents on which its claim is based by failing to attach or explicitly cite them.”); Scheffler,
2019 WL 192651, at *2 (finding the Court could consider the parties’ Account Agreement, which
was not attached to the plaintiff’s complaint because the agreement was integral to the plaintiff’s
claims).
provision was included in the Account Agreement, in readily understandable language, at the time
of the contract. See 15 U.S.C. § 1693c(a). It was not subsequently added or changed, which would
have triggered the twenty-one-day notice requirement of Section 1693c(b).
The freeze, or the alleged “change in their account,” is not prohibited by Section 1693c(b).

Instead, it is permitted by the parties’ Account Agreement. (See Account Agreement § 2). Had
BOA unilaterally changed the terms and conditions relating to the parties’ rights and obligations
under the provision governing the freezing of accounts, notice would have been required. See 15
U.S.C. § 1693c(b). Plaintiffs’ allegations here only demonstrate BOA froze Plaintiffs’ accounts
upon suspected fraudulent activity, which is permissible under the original Account Agreement,
and did not require prior notice because there was no change to the provision from the parties’
initial agreement.10 (See Account Agreement § 2). Because Plaintiffs fail to identify any change
or alteration to the terms and conditions of their initial agreement with BOA, their claims under
Section 1693c also fail.11 In light of Plaintiffs’ concession that their claims under Section 1693c
cannot be amended at this time, BOA’s motion to dismiss these claims are GRANTED. Plaintiffs’

Section 1693c claims are dismissed with prejudice. See In re Lamictal Indirect Purchaser &
Antitrust Consumer Litig., 172 F. Supp. 3d 724, 739 (D.N.J. 2016).
B. Negligence (Count II)
BOA asserts Plaintiffs’ negligence claims fail because: (1) Plaintiffs have failed to allege
that BOA owed them a duty; (2) the claim is barred by the economic loss doctrine; (3) Plaintiffs
have not sufficiently alleged causation; and (4) Plaintiffs cannot replead their deficient negligence

10 To the extent Plaintiffs challenge that BOA was required under the Account Agreement to give
“notice required by law,” such an argument is not sustainable under the EFTA.

11 Whether BOA provided sufficient notice under the Account Agreement, which requires notice
be provided “by law,” is a separate cause of action unrelated to this provision of the EFTA.
per se claim under the Gramm-Leach-Bliley Act (the “GLBA”) as a negligence claim in order to
avoid the FAC’s pleading deficiencies. (ECF No. 55-1 at 14–17.)
In opposition, Plaintiffs argue BOA owed Plaintiffs an ordinary duty of care which was
mandated by BOA’s awareness of the likelihood of unauthorized transactions and BOA’s

capability to prevent unauthorized transactions. (ECF No. 56 at 13.) Plaintiffs assert BOA’s failure
to implement safeguards against the unauthorized transactions was the proximate cause of
Plaintiffs’ damages. (Id. at 14–15.) Next, Plaintiffs contend BOA’s breach directly harmed
Plaintiffs because Plaintiffs’ damages “stem from [BOA]’s negligence in the secure storage,
sharing, transmission or use of Cardholder Information.” (Id. at 16.) Plaintiffs further argue their
negligence claims are not barred by the economic loss doctrine because the duties that form the
bases of the claims are distinct from the duties which arise under the Account Agreement. (Id. at
16–17.) Finally, Plaintiffs respond their “contentions that [BOA]’s non-compliance with GLBA,
while not constituting negligence per se, buttress the argument that [BOA] failed to meet the
ordinary standard of care.” (Id. at 17.)

In reply, BOA asserts Plaintiffs’ opposition is devoid of any case law that supports
Plaintiffs’ position that a bank owes a general duty of care that gives rise to the duties on which
the negligence claim is premised. (ECF No. 57 at 5–6.) BOA reiterates the economic loss doctrine
bars Plaintiffs’ negligence claim. (Id. at 7.)
To sustain a cause of action for negligence, a plaintiff must establish: “(1) a duty of care;
(2) a breach of that duty; (3) proximate cause; and (4) actual damages.” Townsend v. Pierre, 110
A.3d 52, 61 (N.J. 2015) (citations omitted). A plaintiff must establish those four elements “by
some competent proof.” Id. (citations omitted).12
1. Plaintiffs’ Negligence Claims Fail Under the Economic Loss Doctrine
Plaintiffs allege BOA had a duty to:
(a) safeguard their [unemployment insurance] and other LWD
benefits;

(b) protect them from fraudulent access by unauthorized third
parties to the funds paid into their LWD Debit Card Accounts,
including by timely and accurately warning them of suspicious
activity in those Accounts;

(c) protect them from unreasonable interference with their right and
ability to continue to collect, receive, and access the LWD
benefits to which they were entitled;

(d) ensure that [BOA’s] customer service staffing levels,
technology, and operations were capable of providing Plaintiffs
and Class Members reasonably timely and effective customer
service, including to address those customers’ concerns about
fraudulent or unauthorized transactions related to their LWD
Debit Cards or Accounts;

(e) provide Plaintiffs and Class Members reasonable and adequate
notice that their LWD Debit Cards and Accounts were at risk of
being subject to unauthorized use or had been subjected to
unauthorized use;

(f) timely and adequately investigate and resolve Plaintiffs’ and
Class Members’ claims regarding unauthorized or fraudulent
transactions; and

(g) extend to Plaintiffs and Class Members provisional credit in
cases where [BOA] failed to timely resolve their fraud-related
claims.

(ECF No. 52 ¶ 145.) Plaintiffs further allege BOA “owed these duties to Plaintiffs and Class

12 In the July 27, 2023 Opinion, the Court dismissed Plaintiffs’ negligence claims because
“Plaintiffs failed to plead negligence based upon a theory of BOA’s breach of the duty of ordinary
care . . . [therefore] the Court cannot consider the argument raised for the first time in Plaintiffs’
opposition.” (ECF No. 44 at 37.) The Court also noted “it is unclear how, if at all, the duties alleged
in Plaintiffs’ FAC arise under an ‘ordinary duty of care.’” (Id.)
Members because they were foreseeable and probable victims of inadequate security measures.”
(Id. ¶ 146; see also id. ¶¶ 148–50.)13
“The standard of care ordinarily imposed by negligence law is well established. To act non-
negligently is to take reasonable precautions to prevent the occurrence of foreseeable harm to

others. What precautions are ‘reasonable’ depends upon the risk of harm involved and the
practicability of preventing it.” Weinberg v. Dinger, 524 A.2d 366, 374 (N.J. 1987) (citations
omitted). “Courts consider several factors when determining whether a duty of care is owed:
fairness and public policy; foreseeability; the relationship between the parties; the nature of the
conduct at issue; and the ability to alter behavior to avoid injury to another.” G.A.-H. v. K.G.G.,
210 A.3d 907, 915 (N.J. 2019) (citation omitted); see also Robinson v. Vivirito, 86 A.3d 119, 124
(N.J. 2014) (“The determination of the existence of a duty of care to avoid harm to another is
ultimately governed by fairness and public policy.”) (citing Carvalho v. Toll Bros. & Devs., 675
A.2d 209 (N.J. 1996)). The New Jersey Supreme Court has explained that “[b]ecause [p]ublic
policy must be determined in the context of contemporary circumstances and considerations, duty

of care is a malleable concept that must of necessity adjust to the changing social relations and
exigencies and man’s relation to his fellows.” G.A.-H., 210 A.3d at 915 (internal quotation marks
and citation omitted). Notably, “the law of torts declines to impose a duty of care upon ‘[a]n actor
whose conduct has not created a risk of physical or emotional harm to another.’” Id. (citing
Restatement (Third) of Torts § 37 (Am. Law Inst. 2012)). Therefore, “when the duty at issue relates

13 In their claim for breach of contract, Plaintiffs similarly allege BOA “breached its promises to
Plaintiff Roselli and Class Members in its Cardholder Agreement by, among other things: (a)
failing to timely and reasonably investigate and resolve their fraud claims; (b) failing to reimburse
them for unauthorized transactions; (c) failing to provide them with provisional credit when the
Bank’s investigation in their fraud claims exceeds 10 business days; and (d) failing to limit their
liability for unauthorized transactions.” (Id. ¶ 163.)
to the risk of harm created by a third party, the plaintiff must prove that the defendant knew or had
reason to know of the risk of harm in question.” Id. (citation omitted).
However, the economic loss doctrine bars claims for negligence between parties to a
contract. SRC Const. Corp. of Monroe v. Atl. City Hous. Auth., 935 F. Supp. 2d 796, 800 (D.N.J.

2013). This doctrine “prohibits plaintiffs from recovering in tort economic losses to which their
entitlement only flows from a contract.” Chen v. HD Dimension, Corp., Civ. A. No. 10-863, 2010
WL 4721514, at *8 (D.N.J. Nov. 15, 2010) (citing Bracco Diagnostics, Inc. v. Bergen Brunswig
Drug Co., 226 F. Supp. 2d 557, 562 (D.N.J. 2002)); see also Atlas Acquisitions, LLC v. Porania,
LLC, Civ. A. No. 18-17524, 2019 WL 6130774, at *3 (D.N.J. Nov. 19, 2019) (“Under New Jersey
law, a plaintiff typically may not recover in tort for damages caused by a breach of contract.”).
“[T]he economic loss doctrine ‘defines the boundary between the overlapping theories of tort law
and contract law by barring the recovery of purely economic loss in tort, particularly in strict
liability and negligence cases.’” Travelers Indem. Co. v. Dammann & Co., Inc., 594 F.3d 238, 244
(3d Cir. 2010) (citation omitted); see Minn. Life Ins. Co. v. Cooke, Civ. A. No. 20-14326, 2021

WL 5122070, at *22–23 (D.N.J. Nov. 4, 2021) (observing that “[t]he economic loss doctrine bars
negligence claims when the party asserting the action has a contractual remedy,” unless “the
injured party would not otherwise have a remedy” or if the breaching party owes an independent
duty imposed by law (citation omitted)).
The Court finds that the economic loss doctrine bars Plaintiffs’ claims for negligence.
Although Plaintiffs allege that BOA was aware of the foreseeable harm of unauthorized
transactions and that BOA had the capability to prevent this foreseeable harm (ECF No. 52 ¶¶ 2–
3, 145–46, 148–50), the Court finds that Plaintiffs have not sufficiently alleged that the contractual
relationship between Plaintiffs and BOA implicated an independent, reasonable duty of care
irrespective of the duties under the Account Agreement.14 The Court is “persuaded that this case
is essentially a [] breach of contract case, and that [Plaintiffs] through [their] tort allegations,
simply [are] seeking to enhance the benefit of the bargain [they] contracted for with [BOA].”
Saltiel v. GSI Consultants, Inc., 788 A.2d 268, 280 (N.J. 2002).

2. Plaintiffs’ Negligence Claims Under the GLBA Also Fail
Plaintiffs further allege BOA’s “misconduct concerning its failure to adequately protect
Plaintiffs’ and Class Members’ data also violates the [GLBA].” (ECF No. 52 ¶ 153.) Plaintiffs
allege BOA’s “failure to comply with the [GLBA] constitutes negligence.” (Id. ¶ 155.) Plaintiffs
also identify how BOA’s conduct violated which portion of the GLBA, and how that conduct
caused their injuries. (See id. ¶¶ 154–57.) In the July 27, 2023 Opinion, the Court dismissed
Plaintiffs’ negligence per se claims predicated on violations of the GLBA. (ECF No. 44 at 37–38.)
The Court found: (1) “Plaintiffs’ allegations relating to violation of the GLBA are ‘conclusory,’
which cannot survive a motion to dismiss”; (2) “Plaintiffs fail to identify how BOA’s conduct
violated which portion of the GLBA, and how that conduct caused their injuries”; and (3) the

GLBA does not invoke a common law standard of care. (Id.)
The Court holds that Plaintiffs’ claims for negligence due to violations of the GLBA fail
because the GLBA does not invoke a common law duty of care. See Kelly v. Walker-Grassi, No.

14 Plaintiffs have not alleged nor argued why BOA’s relationship to Plaintiffs, as the disburser of
their unemployment insurance and other LWD benefits, implicates ideals of fairness and public
policy such that this Court should find that BOA owed Plaintiffs a reasonable duty of care. See
Schneider's Dairy, Inc. v. Serv. Pers. & Emps. of Dairy Indus., Teamsters Local Union No. 205,
No. 13-01325, 2013 WL 6485367, at *2 (W.D. Pa. Dec. 10, 2013) (“[I]t is not the Court's job ‘to
research and construct legal arguments open to parties, especially when they are represented by
counsel.’” (quoting 330 West Hubbard Rest. Corp. v. United States, 203 F.3d 990, 997 (7th Cir.
2000))). Additionally, Plaintiffs have not identified a case in which a court has held that a financial
institution owed an independent and reasonable/ordinary duty of care imposed by law under
similar circumstances as here. (See ECF No. 56.)
CPM-L-182-03, 2007 WL 162285, at *6 (N.J. Super. Ct. App. Div. Jan. 24, 2007); see also Cal.
Unemployment Benefits Litig., 674 F. Supp. 3d at 925; Cf. Ortiz v. Adams, Civ. A. No. 08-04509,
2018 WL 3410027, at *10 (D.N.J. July 13, 2018) (“Because neither of the other statutes referred
to by Plaintiff incorporates the common law standards or invokes similar language, any violation

of those statutes may be evidence of negligence, but would not constitute negligence per se.”).
Further, “it is clear from the language of the statute that Plaintiff cannot bring a private right of
action under the GLBA.” Arce v. Bank of Am., Civ. A. No. 13-2776, 2013 WL 6054817, at *8
(D.N.J. Nov. 15, 2013). Indeed, Plaintiffs do not cite to any case which supports the argument that
an alleged violation of the GLBA may serve as the basis for a negligence cause of action. (See
ECF No. 56.)
Accordingly, BOA’s Motion to Dismiss Plaintiffs’ claims for negligence (Count II) is
GRANTED.
C. Breach of Contract (Count III)

BOA notes: “Plaintiffs have significantly narrowed their claim for breach of contract.
Plaintiffs’ sole remaining theory—raised only on behalf of plaintiff Roselli—is that [BOA] failed
to timely and properly investigate and reimburse Roselli for her allegedly unauthorized
transactions.” (ECF No. 55-1 at 18.) BOA argues Plaintiffs’ breach of contract claim fails because:
(1) Roselli has been fully reimbursed for the allegedly fraudulent transactions therefore the Court
should dismiss Roselli’s claim under either Rule12(b)(1) for mootness and a lack of subject matter
jurisdiction or under Rule 12(b)(6) because she cannot allege damages; and (2) the TAC still fails
to state a breach of contract claim based on the investigation or reimbursement of the alleged
unauthorized transactions therefore dismissal is warranted pursuant to Rule 12(b)(6). (Id. at 18–
21.)
In opposition, Plaintiffs assert Roselli’s claim is not moot and she has adequately pled a
breach of contract claim as she remains uncompensated therefore she can satisfy the element of
damages. (ECF No. 56 at 18–19.) Plaintiffs contend BOA’s reliance on an affidavit “contradicts
the complaint, and a Rule 12(b)(1) analysis should not shift the burden of persuasion. Competing

declarations constitute a factual challenge, inappropriate at this stage. [BOA]’s sole Rule 12(b)(6)
challenge should not alter the burden of persuasion, maintaining that Roselli sufficiently alleged
facts to overcome dismissal.” (Id.) Plaintiffs also submit Section 11 of the Account Agreement
“mandates timely investigation, unfulfilled by [BOA] in Roselli’s case, violating the implied
covenant of good faith.” (Id. at 19.) Plaintiffs further argue Section 9 of the Account Agreement
“promising ‘zero liability,’ is breached as unauthorized transactions persist without
reimbursement.” (Id.)
In reply, BOA submits a factual challenge, such as whether Roselli has been reimbursed,
is appropriate at this stage. (ECF No. 57 at 8, 9 n.5.) As to Plaintiffs’ claims for alleged breaches
of Section 9 and 11 of the Account Agreement, BOA asserts these claims should be dismissed

because the Court has previously held Plaintiffs failed to sufficiently allege this claim and
Plaintiffs did not substantively oppose the argument in BOA’s underlying brief. (Id. at 9.)
Under North Carolina law,15 to state a claim for breach of contract, a plaintiff must allege
“(1) existence of a valid contract and (2) breach of the terms of that contract.” MedShift, LLC v.
Charles W. Morgan Pelle, LLC, 584 F. Supp. 3d 112, 122 (W.D.N.C. 2022) (quoting Poor v. Hill,
530 S.E.2d 838, 843 (N.C. 2000)). Where a complaint alleges both of those elements, “it is error
to dismiss a breach of contract claim under Rule 12(b)(6).” Woolard v. Davenport, 601 S.E.2d

15 See Account Agreement § 18 (“The Agreement will be governed by the laws and regulations of
the United States and, to the extent not so covered, by the laws and regulations of the State of
North Carolina.”). Neither party disputes the application of North Carolina law to this action.
319, 322 (N.C. 2004).
1. Roselli’s Claim for Breach of Contract is Moot
“When a motion under Rule 12 is based on more than one ground, the court should consider
the 12(b)(1) challenge first because if it must dismiss the complaint for lack of subject matter

jurisdiction, all other defenses and objections become moot.” Dickerson v. Bank of Am., N.A., Civ.
A. No. 12-3922, 2013 WL 1163483, at *2 (D.N.J. Mar. 19, 2013) (quoting In re Corestates Tr.
Fee Litig., 837 F. Supp. 104, 105 (E.D. Pa. 1993), aff'd, 39 F.3d 61 (3d Cir. 1994)). “In order to
have subject matter jurisdiction, a District Court must be able to exercise either federal question
jurisdiction or diversity jurisdiction.” Trinh v. Off. of Recs. Phila., 779 F. App’x 118, 119–20 (3d
Cir. 2019) (citing 28 U.S.C. §§ 1331 & 1332). “[I]t is the plaintiff who bears the burden of proving
that the federal court has jurisdiction.” McCracken v. Murphy, 129 F. App’x 701, 702 (3d Cir.
2005) (citations omitted); see also Wright v. N.J./Dep't of Educ., 115 F. Supp. 3d 490, 495 (D.N.J.
2015) (“It is well-settled that the plaintiff bears the burden of establishing subject matter
jurisdiction in order to defeat a motion under Rule 12(b)(1).”). In considering dismissal for lack of

subject matter jurisdiction, a district court's focus is not on whether the factual allegations entitle
a plaintiff to relief but rather on whether the court has jurisdiction to hear the claim and grant relief.
Maertin v. Armstrong World Indus., Inc., 241 F. Supp. 2d 434, 445 (D.N.J. 2002) (citing New
Hope Books, Inc. v. Farmer, 82 F. Supp. 2d 321, 324 (D.N.J. 2000)).
“A challenge to subject matter jurisdiction under Rule 12(b)(1) may be either a facial or a
factual attack.” Davis v. Wells Fargo, 824 F.3d 333, 346 (3d Cir. 2016). A facial attack “challenges
subject matter jurisdiction without disputing the facts alleged in the complaint, and it requires the
court to ‘consider the allegations of the complaint as true.’” Id. (quoting Petruska v. Gannon Univ.,
462 F.3d 294, 302 n.3 (3d Cir. 2006)). A factual attack, on the other hand, “attacks the factual
allegations underlying the complaint's assertion of jurisdiction, either through the filing of an
answer or ‘otherwise present[ing] competing facts.’” Id. (alteration in original) (quoting Const.
Party of Pa. v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014)). A “factual challenge allows ‘a court
[to] weigh and consider evidence outside the pleadings’ ” and “[n]o presumptive truthfulness

attaches to [the] plaintiff's allegations.” Id. (first alteration in original) (quoting Mortensen v. First
Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977)). Rather, “‘the plaintiff will have the
burden of proof that jurisdiction does in fact exist,’ and the court ‘is free to weigh the evidence
and satisfy itself as to the existence of its power to hear the case.’” Id. (quoting Mortensen, 549
F.2d at 891).
A U.S. federal court can only adjudicate live cases and controversies. Rendell v. Rumsfeld,
484 F.3d 236, 240 (3d Cir. 2007). Article III of the United States Constitution states, “[t]he judicial
Power shall extend to all Cases, in Law and Equity, arising under this Constitution.” U.S. Const.
art. III, § 2. The exercise of judicial power under Article III therefore requires “that ‘an actual
controversy must be extant at all stages of review, not merely at the time the complaint is filed.’”

Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 72–73 (2013) (quoting Arizonans for Off. Eng.
v. Arizona, 520 U.S. 43, 67 (1997)). “An action is rendered moot when ‘an intervening
circumstance deprives the plaintiff of a personal stake in the outcome of the lawsuit,’ at any point
during the litigation.” Camesi v. Univ. of Pittsburgh Med. Ctr., 729 F. 3d 239, 247 (3d Cir. 2013)
(quoting Genesis, 569 U.S. at 762).
Here, BOA provided a declaration from Shane Daniels, Senior Vice President, Business
Executive Operations for Claims Administration which provides copies of the letters that BOA
sent to Roselli reflecting that her account was credited $16,800.00 in total for the alleged
unauthorized transactions on January 18, 2023 and August 28, 2023. (See ECF No. 55-3 (Decl. of
Shane Daniels) ¶ 3, Exs. A and B.) Plaintiffs do not dispute the authenticity or veracity of these
letters. (See ECF No. 56.) Rather, Plaintiffs assert that a factual challenge is inappropriate at this
stage. (Id. at 18–19.) The Court may properly consider the declaration and exhibits provided by
BOA. See Davis, 824 F.3d at 346; see also Cestonaro v. United States, 211 F.3d 749, 752 (3d Cir.

2000) (“Because the government’s challenge to the District Court’s jurisdiction was a factual one
under Fed. R. Civ. P. 12(b)(1), we are not confined to the allegations in the complaint (nor was the
District Court) and can look beyond the pleadings to decide factual matters relating to
jurisdiction.”).
The Account Agreement expressly limits BOA’s contractual liability to the “face amount
of any unauthorized card transaction,” and provides that BOA is “not liable for any claims of
special, indirect, or consequential damages.” (Account Agreement § 9.) Therefore, the Court finds
that Roselli’s claim for breach of contract is rendered moot and she no longer has a personal stake
in the outcome of a claim because she has been fully reimbursed for the unauthorized transactions
as represented by the declaration and exhibits that BOA provided. See Cal. Unemployment Benefits

Litig., 674 F. Supp. 3d at 930 (“[A]ny Plaintiff that has been completely reimbursed can’t recover
contract damages, and can’t state a claim for breach of contract.”)
Accordingly, BOA’s Motion to Dismiss Roselli’s claim as moot pursuant to Rule 12(b)(1)
is GRANTED. Roselli’s claim is DISMISSED WITH PREJUDICE. See id.
2. Plaintiffs Do Not Sufficiently Allege Breach of Contract Claims Premised
on Inadequate Investigation and Reimbursement

The Court also finds dismissal is warranted of Roselli and Class Members’ claims for
breach of contract premised on BOA’s breach of the investigation and reimbursement provisions
of the Account Agreement. Plaintiffs allege “Roselli and Class Members entered into a Cardholder
Agreement with [BOA] that require[d] [BOA] to administer LWD benefits to them through
prepaid debit cards.” (ECF No. 36 ¶ 160.) The parties do not dispute that the Account Agreement
was a valid contract, only whether the Account Agreement was breached. Plaintiffs allege BOA
breached Sections 9, 11 and other miscellaneous provisions of the Account Agreement. (See id. ¶¶
161–63.) Section 9 covers BOA’s “Zero Liability” Policy for Unauthorized Transactions which

states:
Federal law . . . may limit your liability for unauthorized transactions
on your Account, but you may still be liable in some circumstances.
Under the [BOA] “zero liability” policy, you may incur no liability
for unauthorized use of your Card up to the amount of the
unauthorized transaction, provided you notify us within a reasonable
time of the loss or theft of your Card, Card number or PIN or its
unauthorized use, subject to [certain enumerated] terms and
conditions[.]”

(Account Agreement § 9.) Plaintiffs also refer to a Section entitled “WHEN YOU WILL HEAR
FROM US” which states:
We will determine whether an error occurred within 10 business
days after we hear from you – and will correct any error promptly.
If we need more time, however, we may take up to 45 days to
investigate your complaint or questions. If we decide to do this, we
will credit your Account within 10 business days for the amount you
think is in error . . . .

(Id. § 11.). As noted above, Plaintiffs allege BOA breached these provisions by:
(a) failing to timely and reasonably investigate and resolve their
fraud claims; (b) failing to reimburse them for unauthorized
transactions; (c) failing to provide them with provisional credit
when [BOA’s] investigation . . . exceed[ed] 10 business days; and
(d) failing to limit their liability for unauthorized transactions.

(ECF No. 52 ¶ 163.) Plaintiffs further allege that Roselli and Class Members were harmed by
BOA’s conduct and suffered actual damages, despite providing valuable consideration for the
services they received. (Id. ¶ 164.)
As noted in the July 27, 2023 Opinion, the plaintiffs in Hardin sued BOA for several causes
of action relating to BOA’s administration of unemployment benefits in Michigan during the
COVID-19 Pandemic, including for breach of contract. 2022 WL 3568568, at *4. The Michigan
District Court applied North Carolina state law, which governed the applicable agreement between
BOA and the State. Id. at *4. The Hardin court dismissed some of the plaintiffs’ cause of action

for breach under this theory for separate reasons. First, the court held the plaintiffs “never alleged
that they complied with the contract’s requirements to provide notice that would trigger [BOA’s]
duties to investigate and reimburse a potential unauthorized transaction” including by failing to
allege they provided the necessary information to verify their identity or whether they followed up
in writing, as required by the agreement. Id. at *5. Further, the Hardin court explained, even if the
plaintiffs provided the proper notice, “no allegations show that [BOA], after an investigation,
violated its duty to reimburse[,]” in other words, whether BOA simply determined the transactions
were not fraudulent. Id. Accordingly, the Hardin plaintiffs’ breach of contract claims related to the
unauthorized transactions were dismissed. Id.
Here, Roselli and the Class Members’ claims for breach of BOA’s investigation and

reimbursement obligations fail for the latter reason. Section 9 of the Account Agreement only
applies to claims that are unauthorized, which is defined as a transaction “initiated by someone
other than you (the cardholder) without your actual or apparent authority, and you receive no
benefit from the transaction.” (Account Agreement § 9.) It is in BOA’s sole discretion whether the
“facts and circumstances . . . reasonably support a claim of unauthorized use.” (Id.) If the
transaction is not found to be “unauthorized,” Section 9 of the Account Agreement detailing
“[BOA’s] ‘Zero Liability’ Policy for Unauthorized Transactions” does not apply. Section 11
similarly provides BOA with great flexibility in investigating a cardholder’s allegation of error,
again, allowing BOA to “determine whether an error occurred” before its responsibilities under
the provision are triggered. (Id. § 11.)
Plaintiffs’ allegations in the TAC do not allege how BOA unreasonably failed to reach
either conclusion—that the transactions were unauthorized, or an error occurred. Roselli does not
sufficiently allege the facts and circumstances surrounding the transactions supported a claim for

unauthorized use, in BOA’s discretion, and that BOA still failed to fulfill its obligations under the
Account Agreement. (See ECF No. 52 ¶¶ 102–22.) Plaintiffs’ allegations do not support that BOA,
“after an investigation, violated its duty to reimburse.” Hardin, 2022 WL 3568568, at *5. Without
more detailed factual allegations, Plaintiffs fail to state a claim for breach of the Account
Agreement, and their allegations under the theories of investigation and reimbursement are
dismissed. See Cal. Unemployment Benefits Litig., 674 F. Supp. 3d at 930 (“Based on the plain
language of the contract, Plaintiffs can’t allege [BOA] breached its obligations under the Account
Agreement simply by disagreeing with the outcome.”).
Accordingly, BOA’s Motion to Dismiss Roselli and the Class Members’ claims for breach
of contract (Count III) pursuant to Rule 12(b)(6) is GRANTED.

D. Breach of Fiduciary Duty (Count IV)

BOA argues Plaintiffs’ claim for breach of fiduciary duty must be dismissed because
relationships between banks and depositors do not give rise to fiduciary duties under New Jersey
law. (ECF No. 55-1 at 21.) BOA asserts “[n]one of Plaintiffs’ allegations are sufficient to elevate
this common contractual relationship between a bank and depositor into a special relationship
under New Jersey law.” (Id.) BOA contends Plaintiffs’ theories of recovery fail because: (1) access
to personal or financial information does not render BOA a fiduciary; and (2) there is no legal
basis for imposing a fiduciary duty on a financial institution that has an account(s) which contains
funds received from a government benefits program. (Id. at 22.)
In opposition, Plaintiffs argue they have plausibly alleged the existence of a fiduciary
relationship that is different from an ordinary bank-depositor relationship. (ECF No. 56 at 20.)
Plaintiffs submit “courts in other jurisdictions like California have recognized that a bank owes a
fiduciary duty to a depositor.” (Id. at 21.) Plaintiffs assert “[t]he thrust of the inquiry [of other

jurisdictions] is whether the lender encouraged the borrower to repose special trust or confidence
in its advice, thereby inducing the borrower’s reliance.” (Id. at 22.) Based on their allegations,
Plaintiffs contend that BOA “did not merely receive and process direct deposits of funds that
happened to consist of State unemployment benefits, and given [BOA]’s control over the
administration of the [LWD] benefits program in this matter, it cannot contend that it had no more
than an ordinary banking relationship with those beneficiaries.” (Id. at 24.)
In reply, BOA asserts “Plaintiffs acknowledge the well-settled proposition that the
relationship between banks and their customers is not a fiduciary one, but nevertheless insist that
‘the TAC plausibly alleges the existence of a fiduciary relationship that is different from an
ordinary bank-depositor relationship,’” (ECF No. 57 at 9–10.) Further, BOA argues Plaintiffs rely

“almost entirely on irrelevant case law that has nothing to do with banking relationships.” (Id. at
10.)
In Count IV, Plaintiffs allege, in pertinent part, that:
171. [BOA] owes and continues to owe a fiduciary duty to Plaintiffs
and Class Members. By virtue of its unequal bargaining power and
its position as the financial institution charged with implementing
LWD benefits programs, which gave [BOA] delegated authority to
determine when, why, and how to deny Plaintiffs and Class
Members access to LWD benefits to which they are entitled by
freezing LWD Debit Card Accounts, as well as unbridled access to
Plaintiffs’ and Class Members’ personal, confidential, and financial
information, and because of [BOA]’s superior knowledge, business
responsibilities and duties—including those provided by law or
statute—and its absolute ability to control or otherwise manipulate
Plaintiffs’ and Class Members’ LWD Debit Card Account data in
its system, [BOA] assumed a fiduciary duty to Plaintiffs and Class
Members not to deny them access to their Account funds without
reasonable basis, and to secure and maintain the personal,
confidential, and financial information that it received from
Plaintiffs and Class Members, free from unauthorized intrusion,
theft, or other disclosure.

172. As a result of this relationship of trust and confidence, the
unique nature of the LWD Debit Card Accounts that contain only
LWD benefits, and the highly confidential nature of the records and
data pertaining to Plaintiffs’ and Class Members’ LWD Debit Cards
Accounts, and the [BOA]’s duties to maintain the privacy of such
information, the Bank owed Plaintiffs and Class Members the
highest degree of loyalty, honesty, fidelity, trust, and due care in its
fiduciary obligations with respect to ensuring legitimate benefits
recipients are not denied access to their Account funds, and with
respect to securing and maintaining the privacy of their personal,
confidential, and financial data in [BOA’s] possession. In order to
comply with such duty, [BOA] was required to use its utmost ability
to ensure that legitimate benefits recipients are not denied access to
their Account funds, and to protect, preserve, and secure Plaintiffs’
and Class Members’ private data and confidential information from
unauthorized access, fraud, or theft and to take all necessary steps
in order to do so, including encrypting such information and
deploying sufficient data access security controls, EMV chips, and
other measures, to frustrate and disable hackers, skimmers, cloners,
or others from accessing such information for their personal profit
or unlawful goals.

(ECF No. 52 ¶¶ 171–72.) Plaintiffs further allege BOA breached its fiduciary duties by failing to:
(1) “take all adequate and necessary steps to ensure legitimate benefits recipients are not denied
access to the Account funds without reasonable basis”; (2) “preserve, secure, and maintain the
confidentiality and privacy of their LWD Debit Cards and Accounts and their personal,
confidential, and financial information”; (3) “timely, fully, and adequately disclose that it had not
taken the necessary steps to protect such information from unauthorized or fraudulent access and
theft and that such information was at a heightened risk of breach by virtue of [BOA’s] data
security failings and policies”; and (4) “timely, fully, and adequately disclose that it had not taken
the necessary steps to monitor for, detect, stop, and promptly notify Plaintiffs and Class Members
about suspicious transactions involving their Cards and Accounts.” (Id. ¶ 173.)
To sufficiently allege a claim for breach of fiduciary duty, a plaintiff must plead the
following elements: “1) the existence of a fiduciary duty or relationship between the parties; 2)
breach of that duty; and 3) resulting damages.” Read v. Profeta, 397 F. Supp. 3d 597, 633 (D.N.J.

2019). “The essence of a fiduciary relationship is that one party places trust and confidence in
another who is in a dominant or superior position.” McKelvey v. Pierce, 800 A.2d 840, 859 (N.J.
2002). “A fiduciary relationship arises between two persons when one person is under a duty to
act for or give advice for the benefit of another on matters within the scope of their relationship.”
Fischell v. Cordis Corp., Civ. A. No. 16-00928, 2016 WL 5402207, at *7 (D.N.J. Sept. 26, 2016).
“Generally, ‘there is no presumed fiduciary relationship between a bank and its customer.’”
Remtek Servs. v. Wells Fargo Bank, N.A., Civ. A. No. 19-12790, 2020 WL 241332, at *11 (D.N.J.
Jan. 16, 2020) (quoting United Jersey Bank v. Kensey, 704 A.2d 38, 44 (N.J. Super. Ct. App. Div.
1997); see Paradise Hotel Corp. v. Bank of Nova Scotia, 842 F.2d 47, 53 (3d Cir. 1998) (“Creditor-
debtor relationships . . . rarely are found to give rise to a fiduciary duty.”). However,

[i]n Kensey, the Appellate Division of the New Jersey Superior
Court articulated exceptions to the general rule that “creditor-debtor
relationships rarely give rise to a fiduciary duty.” Relying on the
Restatement (Second) of Torts § 551, the Appellate Division
explained that a duty may arise when a [bank] commits gross acts of
misconduct or deceit, or under the “special circumstance” where a
[bank] “knows or has reason to know that the customer is placing
his trust and confidence in the bank and [is] relying on the bank . . .
to counsel and inform him.”

Bank of Am., N.A. v. Westheimer, 683 F. App’x 145, 149 (3d Cir. 2017) (quoting Kensey, 704 A.2d
at 44–45).
Although the relationship between the parties here is not a typical “creditor-debtor
relationship,” Plaintiffs are pursuing claims against BOA for unauthorized transactions that may
typically arise under the standard creditor-debtor relationship. The Court finds Plaintiffs have
failed to allege how BOA’s relationship with Plaintiffs and Class Members rises to the level of
special circumstances such that the Court should disavow the general rule that that there is no
fiduciary duty between a bank and its customer. Indeed, Plaintiffs have not alleged that BOA

encouraged Plaintiffs and Class Member to place “special trust or confidence in its advice.”
Kensey, 704 A.2d at 45. Plaintiffs conclusively allege there was a special relationship between the
parties and rely on Cal. Unemployment Benefits Litig. in arguing that they have satisfied the factors
applied by courts in California. (ECF No. 56 at 21–23.) The Court is not persuaded by this
argument, and further finds that Plaintiffs have not sufficiently alleged nor argued a legal basis for
imposing a fiduciary duty, under New Jersey law, upon a financial institution that disburses
unemployment and other public benefits received from a government program.
Accordingly, BOA’s Motion to Dismiss Plaintiffs’ claim for breach of fiduciary duty
(Count IV) is GRANTED.
E. Violations of Federal Due Process Under the 14th Amendment, 42 U.S.C. §
1983 (Count V)

BOA argues Plaintiffs’ claims for violations of federal due process under the 14th
Amendment fail because: (1) BOA is not a state actor; (2) Plaintiffs have failed to allege a due
process violation; and (3) Beaman’s due process claim is time barred. (ECF No. 55-1 at 24–30.)
1. Plaintiffs Have Adequately Alleged that BOA is a State Actor

BOA argues Plaintiffs fail to sufficiently allege that it is a state actor because the TAC fails
to meet the public function and joint action tests. (ECF No. 55-1 at 24–28.)
In opposition, Plaintiffs assert BOA’s role in the administration of unemployment benefits
is a power traditionally reserved to a state. (ECF No. 56 at 25.) In analogizing this case to Brown
v. Stored Value Cards, Inc., Civ. A. No. 15-01370, 2016 WL 4491836, at *2 (D. Or. Aug. 25,
2016), rev’d on other grounds, 953 F.3d 567, 575 (9th Cir. 2020), Plaintiffs contend “[s]imilar to
the situation in the Brown case, where the bank-issued debit card served as the sole state-provided
avenue for the plaintiff to access her funds, the Plaintiffs contend that [BOA] possesses the
‘exclusive contract’ to distribute their LWD benefits through prepaid debit cards.” (Id. at 26.)

Plaintiffs further argue BOA is a state actor because in addition to being delegated “the public
responsibilities pertaining to the dissemination of LWD benefits to Cardholders ([ECF No. 52] ¶
185) through the issuance of debit cards . . . [LWD] has also expressly sanctioned and compelled
BOA to collaboratively engage with LWD in the concerted effort to combat fraudulent enrollments
in LWD benefits.” (Id. at 26.)
In reply, BOA argues Plaintiffs’ arguments are misplaced because although they “argue
that [BOA] engaged in the ‘administration’ of unemployment benefits (Opp. at 25), [they] do not
allege that [BOA] played any role in determining or revoking their benefits eligibility.” (ECF No.
57 at 12.) BOA asserts Plaintiffs’ characterization of BOA’s LWD debit card as the “sole state-
provided avenue” for benefits is contradicted by their allegations. (Id.) BOA reiterates Plaintiffs’
claim fails under the joint action test. (Id. at 13.)16

“To state a claim under § 1983, a plaintiff must allege the violation of a right secured by
the Constitution and laws of the United States, and must show that the alleged deprivation was
committed by a person acting under color of state law.” West v. Atkins, 487 U.S. 42, 48 (1988).
“The traditional definition of acting under color of state law requires that the defendant in a § 1983
action have exercised power ‘possessed by virtue of state law and made possible only because the

16 BOA also asserts “Plaintiffs’ failure to address [BOA]’s application of the joint action analysis
to this case (requiring [BOA] substituting its own judgment for LWD’s) . . . or the argument that
deposited funds are no longer owned by LWD . . . waives any opposition to both arguments.” (Id.
at 13 n.10.)
wrongdoer is clothed with the authority of state law.’” Id. at 49 (quoting United States v. Classic,
313 U.S. 299, 326 (1941)). The Supreme Court has stated that an otherwise private actor may be
liable under § 1983 as a state actor in limited circumstances, including “(i) when the private entity
performs a traditional, exclusive public function; (ii) when the government compels the private

entity to take a particular action; or (iii) when the government acts jointly with the private entity.”
Manhattan Cmty. Access Corp. v. Halleck, 587 U.S. 802, 809 (2019) (citation omitted).
Plaintiffs allege that BOA is a state actor because “it is engaged in a joint undertaking with
the State to provide and administer [unemployment insurance] and other LWD benefits under a
mutually beneficial relationship and because it performs a function that is both traditional and
exclusively governmental.” (ECF No. 52 ¶ 180.) Plaintiffs further allege that BOA engages in “a
traditional and exclusively governmental function in administering the LWD benefits payments
programs as alleged herein pursuant to contractual authority generally delegated to it by LWD,
including when it blocks or freezes Cardholder Accounts without specific authorization from LWD
to do so and in violation of Cardholders’ rights.” (Id. ¶ 185.) Plaintiffs’ allegations therefore

implicate the issues of whether BOA performed a traditional, exclusive public function, and
whether BOA acted jointly with the State of New Jersey pursuant to the Contract with LWD.
a. The Public Function Test

“[T]o qualify as a traditional, exclusive public function within the meaning of our state-
action precedents, the government must have traditionally and exclusively performed the
function.” Manhattan Cmty. Access, 587 U.S. at 809 (alteration in original) (citations omitted).
“The [Supreme] Court has stressed that ‘very few’ functions fall into that category.” Id. (quoting
Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 158 (1978). For instance, in American Mfrs. Mut. Ins.
Co. v. Sullivan, the Supreme Court held that “a private insurer’s decision to withhold payment for
disputed medical treatment [is not] fairly attributable to the State so as to subject insurers to the
constraints of the Fourteenth Amendment.” 526 U.S. 40, 51 (1999).
Plaintiffs primarily rely upon Brown to support their argument that they have plausibly
alleged BOA performed a function that is traditionally and exclusively reserved to the State. (See

ECF No. 56 at 25–26.) In Brown, the plaintiff was held in state custody and when she was released,
the plaintiff received a preloaded debit card equivalent to the cash in possession at booking. 2016
WL 4491836, at *1. The District of Oregon found that plaintiff satisfied the public function test
because the relationship between plaintiff and the private defendants was “one that could only
come about through the exercise of the state’s power. The state confiscated [plaintiff]’s money and
left her no choice on how to retrieve it.” Id. at 2.
Here, Plaintiffs do not allege that BOA’s debit cards were the “exclusive means” for
Plaintiffs and Class Members to have received their public benefits. Instead, Plaintiffs allege that
they could have chosen to receive checks from LWD (see ECF No. 52 ¶¶ 56), and even
acknowledge that “Plaintiffs had the initial choice on how to receive benefits,” (ECF No. 56 at

27). Compare Cal. Unemployment Benefits Litig., 674 F. Supp. 3d at 941 (“Because [BOA]-
provided debit cards were held out as the exclusive means of receiving [unemployment] benefits,
the [master consolidated complaint] plausibly alleges that the relationship between Plaintiffs and
[BOA] only came about ‘through the exercise of the state’s power.’”) (quoting Brown, 2016 WL
4491836, at *2), Brown, 2016 WL 4491836, at *2 (noting the plaintiff had “no choice on how to
retrieve” her money) with (ECF No. 52 ¶ 17 (“On information and belief, continuing in to 2020
and beyond LWD began distributing LWD benefits pursuant to its contract with [BOA], under
which the default means of distributing LWD benefits payments has been through Bank-issued
and Bank-administered LWD Debit Cards . . . .”), id. ¶ 170 (alleging Plaintiffs and Class Members
had the capability to “opt out of the default option of receiving their LWD benefits payment
through LWD Debit Cards”)).
Notwithstanding, the Court is guided by the Southern District of California’s discussion in
Cal. Unemployment Benefits Litig. where the district court applied nearly identical factual

allegations as here and found that the master consolidated complaint plausibly alleged “[BOA]’s
role in administering the distribution of [unemployment] benefits is a function that is both
traditionally and exclusively governmental.” 674 F. Supp. 3d at 941 (internal quotation marks and
citation omitted). In this case, Plaintiffs allege BOA had an exclusive contract with the LWD to
administer unemployment benefits and other benefit payments. (ECF No. 52 ¶ 12.) Plaintiffs
further allege BOA acted “pursuant to contractual authority generally delegated to it by LWD.”
(Id. ¶ 185.) Just as in Brown, the relationship between Plaintiffs and BOA came about “through
the exercise of the state’s power.” 2016 WL 4491836, at *2. Drawing all inferences in favor of
Plaintiffs as the non-moving party, the Court finds that Plaintiffs have plausibly alleged that BOA
actions qualify as a traditional, exclusive public function. See Cal. Unemployment Benefits Litig.,

674 F. Supp. 3d at 941; Cahoo v. SAS Inst. Inc., 322 F. Supp. 3d 772, 793 (E.D. Mich. 2018), aff’d
in part, rev’d in part on other grounds sub nom., Cahoo v. SAS Analytics, Inc., 912 F.3d 887 (6th
Cir. 2019) (“[T]here is no question that that the administration of unemployment benefits is a
power traditionally exclusively reserved to the State.”). At this stage, it would be unreasonable to
dismiss Plaintiffs’ due process claims on the basis that BOA was not acting in a public function in
their role of administering the distribution of LWD benefits.17
Accordingly, BOA’s Motion to Dismiss Count V for failure to sufficiently allege that BOA

17 As the Court has found that the TAC satisfies the public function test, it is not necessary for the
Court to undertake an analysis of the joint action test. See Cal. Unemployment Benefits Litig., 674
F. Supp. 3d at 941.
is a state actor is DENIED.
2. Plaintiffs Have Adequately Alleged a Deprivation of Due Process

Alternatively, BOA argues Count V fails because Plaintiffs have failed to adequately allege
a due process violation. (ECF No. 55-1 at 28–29.) In its underlying brief, BOA submits the sole
argument that is “has a compelling interest in preventing fraud, and it is not only reasonable, but
[it] is [also] completely logical, to freeze accounts without advance notice.” (Id. at 28.)
In opposition, Plaintiffs argue BOA’s reliance on the limited exception that an “interest in
preventing fraud justifies the practice of freezing accounts without prior notice” is misplaced.
(ECF No. 56 at 28–29.) Additionally, Plaintiffs submit they have sufficiently alleged a due process
violation because they allege that BOA: (1) failed to provide reasonable post-deprivation notice or
an opportunity to be heard; and (2) persistently denied access to accounts even after cardholders
re-verified their entitlement to benefits. (Id. at 29.)
In reply, BOA argues Plaintiffs have failed to allege a deprivation of a property interest
because the “allegations establish that an account freeze does not cut off eligibility or entitlement

to benefits—it just requires the benefits recipients to choose a different delivery method.” (ECF
No. 57 at 13.) Additionally, BOA submits the pre-deprivation process for previously deposited
funds “can be suspended if it would be ‘impractical.’” (Id. at 14 (quoting Vatner v. Board of Trs.
of the Univ. of Med., Civ. A. No. 12-3339, 2015 WL 461901, at *10 (D.N.J. Feb. 4, 2015)).) BOA
asserts the TAC concedes that BOA provided a post-deprivation process for account freezes. (Id.)18

18 The Court will not consider these arguments as they are new arguments which BOA cannot raise
for the first time in a reply brief. See Skretvedt v. E.I. DuPont De Nemours, 372 F.3d 193, 202–03
(3d Cir. 2004) (“[A]n issue is waived unless a party raises it in its opening brief, and for those
purposes a passing reference to an issue will not suffice to bring that issue before this court.”); see
also Dana Transp. v. Ableco Fin., Civ. A. No. 04-2781, 2005 WL 2000152, at *6 (D.N.J. Aug. 17,
2005) (holding that it is axiomatic in federal practice that arguments raised for the first time in a
reply brief should be disregarded). BOA’s arguments relating to the substantive sufficiency of the
“The essential requirements of any due process claim are notice and the opportunity to be
heard.” Zappan v. Pa. Bd. of Prob. & Parole, 152 F. App’x 211, 220 (3d Cir. 2005) (citing
Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 546 (1985)). “[D]ue process, unlike some
legal rules is not a technical conception with a fixed content unrelated to time, place and

circumstances. Due process is flexible and calls for such procedural protections as the particular
situation demands.” Biliski v. Red Clay Consol. Sch. Dist. Bd. of Educ., 574 F.3d 214, 220 (3d Cir.
2009)) (internal quotation marks and citations omitted). To state a procedural due process claim,
Plaintiffs “must show that the Defendant[] deprived him of a protected property interest and that
the state procedure for challenging the deprivation was constitutionally inadequate.” Perano v.
Twp. of Tilden, 423 F. App’x 234, 237 (3d Cir. 2011) (citing Hill v. Borough of Kutztown, 455
F.3d 225, 233–34 (3d Cir. 2006); Revell v. Port Auth. of N.Y. & N.J., 598 F.3d 128, 138 (3d Cir.
2010)). “To determine what process is due in a particular situation, courts consider three factors:
first, the private interest at stake; second, the risk of erroneous deprivation of that interest through
the procedures used and the probable value of different procedures; and third, the government’s

interest.” Mulholland v. Gov’t Cnty. of Berks, 706 F.3d 227, 238 (3d Cir. 2013) (citing Mathews
v. Eldridge, 424 U.S. 319, 335 (1976)).
It is undisputed that Plaintiffs have a constitutionally protected property interest in the
public benefits that LWD provided. See Wilkinson v. Abrams, 627 F.2d 650, 664 (3d Cir. 1980)
(“State statutes providing for the payment of unemployment compensation benefits create in the
claimants for those benefits property interests protected by due process.”); Goldberg v. Kelly, 397
U.S. 254, 262 (1970) (holding procedural due process applies “to the withdrawal of public

allegations of a deprivation of due process can be re-raised, if applicable, in a motion to dismiss
Plaintiffs’ amended pleading.
assistance benefits” and “disqualification for unemployment compensation”). Based on Plaintiffs’
allegations that BOA’s account freezes were caused by a Faulty Claim Fraud Filter and allegations
that BOA failed to provide reasonable post-deprivation notice or an opportunity to be heard by
denying access to accounts even after cardholders re-verified their identity, the Court finds that

Plaintiffs have adequately alleged a claim for deprivation of due process “that is plausible on its
face.” Iqbal, 556 U.S. at 678.19 BOA’s Motion to Dismiss Count V for failure to allege a
deprivation of due process is DENIED.
3. Beaman’s Due Process Claim is Time Barred

BOA argues Beaman’s due process claim is barred by the statute of limitations because she
was aware of the facts giving rise to this cause of action in May 2021. (ECF No. 55-1 at 29.) In
opposition, Plaintiffs assert equitable tolling pursuant to the “continuing violations” doctrine
should be applied here because: (1) BOA has failed to give her access to her account and her
unemployment funds to this day; and (2) BOA’s “faulty fraud filter has resulted in misleading
Beaman regarding there being alleged ‘fraud’ on her account.” (ECF No. 56 at 29.)20 In reply,
BOA contends Plaintiffs’ arguments regarding equitable tolling are misplaced because Plaintiffs
rely on cases unrelated to banking. (ECF No. 57 at 12 n.9.)

19 The Court is again guided by guided by the Southern District of California’s discussion in Cal.
Unemployment Benefits Litig. where the district court applied the Mathews test and held that the
master consolidated complaint “states a claim for a due process violation by alleging [BOA]
deprived Plaintiffs of a protected property interest without providing adequate due process.” 674
F. Supp. 3d at 942–43.

20 Plaintiffs cite to Barron v. Gersten, 277 A.3d 502 (N.J. Super. Ct. App. Div. 2022) for the
assertion that equitable tolling should be applied here. However, Barron noted that “[a]bsent a
showing of intentional inducement or trickery by a defendant, [equitable tolling] . . . should be
applied sparingly and only in the rare situation where it is demanded by sound legal principles and
in the interest of justice.” 277 A.3d at 505 (alterations in original) (quoting Binder v. Price
Waterhouse & Co., L.L.P., 923 A.2d 293, 298 (N.J. Super. Ct. App. Div. 2007)). The TAC does
not contain allegations of intentional inducement or trickery.
Typically, “the Federal Rules of Civil Procedure require a defendant to plead an affirmative
defense, like a statute of limitations defense, in the answer, not in a motion to dismiss.” Schmidt v.
Skolas, 770 F.3d 241, 249 (3d Cir. 2014). In this circuit, however, a defendant may succeed on a
motion to dismiss on the basis of statute of limitations, “if the time alleged in the statement of a

claim shows that the cause of action has not been brought within the statute of limitations.” Id.
(quoting Robinson v. Johnson, 313 F.3d 128, 134–35 (3d Cir. 2002)) (quotations omitted).
Here, Beaman alleges that in May 2021 “her card was declined while attempting to
complete a transaction,” “[s]he discovered there was a total of $300 in unauthorized transactions,”
and she called BOA and “set forth the reasons for her belief that errors had occurred.” (ECF No.
52 ¶¶ 80–81, 83–84.) Both parties seemingly agree that the relevant statute of limitations as to
Beaman’s due process claim is two years. “In New Jersey, claims brought under [42 U.S.C. §
1983] are subject to a two-year statute of limitations.” Hawkins v. Feder, Civ. A. No. 07-4005,
2008 WL 3192973, at *2 (D.N.J. Aug. 5, 2008); see also Cito v. Bridgewater Twp. Police Dept.,
892 F.2d 23, 25 (3d Cir. 1989) (“The statute of limitations for any Section 1983 claim is the state

statute which limits actions for personal injuries” which in New Jersey is “within two years of
accrual of the cause of action.”). Therefore, because Beaman brought her due process claim on
September 28, 2023, and since her claim accrued earlier than September 28, 2021, her claim is
barred by the applicable statute of limitations unless an exception applies.
Although Beaman alleges that BOA “has stilled failed to give her access to her account
and her unemployment funds,” (ECF No. 52 ¶ 92), the Court finds that Plaintiffs’ arguments
related to the “continuing violations” doctrine are misguided. “The continuing violations doctrine
is . . . an ‘equitable exception to the timely filing requirement.’” Bennett v. Susquehanna Cty.
Children & Youth Servs., 592 F. App'x 81, 84 (3d Cir. 2014) (quoting Cowell v. Palmer Twp., 263
F.3d 286, 292 (3d Cir. 2001)). This equitable exception is applicable “where the conduct
complained of consists of a pattern that has only become cognizable as illegal over time.” Foster
v. Morris, 208 F. App'x 174, 177 (3d Cir. 2006) (citing Cowell, 263 F.3d at 292). “When a
defendant's conduct is part of a continuing practice, an action is timely so long as the last act

evidencing the continuing practice falls within the limitations period; in such an instance, the court
will grant relief for the earlier related acts that would otherwise be time barred.” Foster, 208 F.
App'x at 177–78 (quoting Brenner v. United Bhd. of Carpenters & Joiners, 927 F.2d 1283, 1295
(3d Cir. 1991) (marks omitted)). “Courts consider two factors in determining whether to apply the
continuing violations doctrine: (1) whether the violations were related in subject matter and (2)
whether the acts were recurring.” Bennett, 592 F. App’x at 84 (citing Cowell, 263 F.3d at 292 and
Mandel v. M & Q Packaging Corp., 706 F.3d 157, 166 (3d Cir. 2013)).
However, the Third Circuit has cautioned “the continuing violations doctrine is not a
substitute for a plaintiff's ‘awareness of and duty to assert his/her rights’ in a timely fashion.”
Bennett, 592 F. App’x at 85 (quoting Cowell, 263 F.3d at 295). As such, “the doctrine ‘does not

apply when plaintiffs are aware of the injury at the time it occurred.’” Bennett, 592 F. App’x at 85
(quoting Morganroth & Morganroth v. Norris, McLaughlin & Marcus, P.C., 331 F.3d 406, 417
n.6 (3d Cir. 2003)); see also Muhammad, 483 F. App’x at 762 (“The District Court correctly
reasoned that . . . the continuing violations doctrine did not apply because [the plaintiff] should
have been aware of each act's negative impact at the time it occurred.”); Zied v. Barnhart, 418 F.
App’x 109, 114 (3d Cir. 2011) (“[A]s explained by the District Court, the continuing violations
doctrine for extending a statute of limitation does not apply to injuries that occurred before the
filing period if the plaintiff was aware, as Zied was, of those injuries at the time they occurred.”).
Based on the foregoing, the Court finds the continuing violations doctrine does not apply
to Beaman’s time-barred claim for deprivation of due proces

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10656145. Public record. Not legal advice.