California Grocers Assn. v. Bank of America

I. Introduction

In this appeal we decide whether a $3 fee charged by Bank of America for one of its check-processing services is unconscionably high, and if so, whether the trial court erred in issuing an injunction limiting the fee to $1.73, which represents the bank’s cost plus a 15 percent markup for profit. We conclude the fee is not unconscionable, and even if it were, that fact could not support affirmative injunctive relief.

II. Background

A. The Prior Class Actions

The present litigation has its roots in class actions filed in 1977 against Bank of America, Wells Fargo Bank, and Crocker National Bank. In those cases the plaintiffs challenged various fees imposed by the banks for checking and savings account services. Among these were fees charged to the writer of an “NSF” check, that is, a check for which there are not sufficient funds on deposit and fees charged to the depositor of someone else’s NSF check. In the language of the banking industry, the latter fee is for a “deposited item returned” or DIR.

After a lengthy period of extraordinarily complex litigation, the class actions were resolved through settlements, which were approved by the San Francisco…