Lopez
Lopez v. Washington Mutual Bank, FA
Opinion
Lead Opinion
Hawkins, J.
Opinion by Judge MICHAEL DALY HAWKINS; Concurrence by Judge NOONAN.
ORDER
Appellee’s Petition for Rehearing is GRANTED. The Amended Opinion filed on May 9, 2002, and appearing at 284 F.3d 990 (9th Cir.2002), is withdrawn. An Opinion will be filed contemporaneously with this Order.
OPINION
We must decide whether the statutory protections afforded Social Security and Supplemental Security Income (“SSI”) beneficiaries are offended by a bank’s practice of using directly deposited Social Security and SSI benefits to cover overdrafts and overdraft fees. We must also decide whether plaintiffs’ related state law claims are preempted by Office of Thrift Supervision (“OTS”) regulations, or whether there are alternate grounds for affirming the district court’s dismissal of the state law claims.
FACTS AND PROCEDURAL HISTORY
The facts of this case are not extremely complex. Each of the named plaintiffs 1 receive Social Security and/or SSI benefits. Each had an account with Washington Mutual, and their benefits were directly deposited into these accounts. At the time the plaintiffs opened their accounts with Washington Mutual and/or it predecessors-in-interest, they executed account…
Concurring Opinion
Noonan, J.
concurring:
I concur in the opinion of the court and add two points:
First. Social Security recipients would almost certainly be denied overdraft privileges if Plaintiffs prevailed. No bank would be willing to become vulnerable to class action suits because it paid overdrafts and then reimbursed itself from the deposit of a Social Security check. Under Plaintiffs’ theory, not only would it be illegal for a bank to offset an overdraft by a direct deposit from the Treasury to the customer’s account, but it would be equally illegal for the bank to accept the customer’s own deposit of his/her Social Security check and then pay the overdraft. The proceeds of the customér’s own deposit would be Social Security money. Philpott v. Essex County Welfare Board, 409 U.S. 413, 417 , 93 S.Ct. 590 , 34 L.Ed.2d 608 (1973). Consent by a Social Security recipient to reimburse a state agency from Social Security does not permit the state agency to sue to reach his Social Security check after he has deposited it. The funds on deposit after the check has cleared are “readily withdrawable and retained the quantity of ‘moneys’ within the provision of § 407.” Id.