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Case Center
Wells Fargo Overdraft Fees
- Issue: $203 million in restitution; litigation ongoing
Gutierrez v. Wells Fargo Bank Summary
On August 10, 2010, U.S. District Court Judge William Alsup issued a 90-page opinion finding that Wells Fargo manipulated its processing of customer debit card purchases by its California customers to maximize overdraft fees in violation of California state law. Instead of posting transaction chronologically, Wells Fargo deducted the largest charges first, drawing down available balances more rapidly and triggering a higher volume of overdraft fees. Judge Alsup ordered that Wells Fargo return to its customers approximately $203 million in restitution and enjoined the abusive accounting practices.
Judge Alsup's August 10, 2010, decision followed two and half years of extended litigation that culminated in a two-week bench trial which ended in May 2010. The judgment against Wells Fargo constituted the 4th largest judgment in California in 2010, and the largest judgment in a class action lawsuit.
Lieff Cabraser partner Richard M. Heimann served as Lead Trial Counsel and tried Gutierrez along with partner Michael W. Sobol. For their work in the case, Richard Heimann and Michael Sobol were recognized as finalists for the 2011 Consumer Attorney of the Year Award by the Consumer Attorneys of California.
Video - Consumer Attorney of the Year Award Finalists
Case Update
Judge Alsup entered judgment against Wells Fargo on October 25, 2010. Wells Fargo appealed. On September 9, 2010, Wells Fargo filed an appeal with the Ninth Circuit Court of Appeals. No funds will be distributed to the class until appeals are exhausted and the judgment becomes final.
The case before Judge Alsup was brought on behalf of the following California Wells Fargo customers: “[A]ll Wells Fargo customers from November 15, 2004 to June 30, 2008, who incurred overdraft fees on debit card transactions as a result of the bank’s practice of sequencing transactions from highest to lowest.” If you are a member of this Class, you do need to take any action at this time to remain a member of the class.
On May 16, 2012, the Ninth Circuit Court of Appeals heard oral argument on Wells Fargo's appeal.
Multi-District Litigation
Lieff Cabraser also serves on the plaintiffs' executive committee in a multi-district litigation action before U.S. District Court Judge James Lawrence King in Miami, Florida, against the nation's major banks for the same fraudulent overdraft practices. Learn more about the national bank overdraft fee litigation at www.bank-overdraft.com.