This ruling reverses the 2004 San Francisco Superior Court ruling in the case of Miller v. Bank of America where Judge Boulaine found in favor of Miller. She ordered Bank of America to pay damages of over a billion dollars to the over 1.1 million social security beneficiaries involved in the class action suit.
The events leading to the initial case in San Francisco and the state appeal happened over ten years ago. Bank of America (BOA) accidentally credited Mr. Miller’s bank account with $1,800. After realizing their error, they withdrew the amount, leaving Miller’s account in the red. They created a new account for his Social Security deposits (Miller is mentally disabled by the way) and then froze that account, using those funds to bring the original account up to zero- all without notifying the accountholder, Miller.
The original victory for the social security benefactors hinged on a 1974 decision by the California Supreme Court that forbid banks from deducting fees from government benefit accounts in order to recoup funds for separate, credit-card accounts.
In reference to the state court’s decision, spokesperson for Bank of America, Shirley Norton stated, “[BOA] has always acted lawfully in maintaining and balancing its customer accounts.”
Justice Carlos R. Moreno wrote,” Bank of America’s practice of recouping overdrafts and charging insufficient funds fees is permissible in light of the Legislature’s unequivocal statement … that overdrafts and bank charges are not debts,” this foregoes the restrictions laid out in the 1974 ruling.
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