Pennsylvania Judges Deny Appeal in Overdraft Fee Lawsuit

The state Supreme Court will not review a lower court’s decision to allow a class action lawsuit accusing National Penn Bank of improperly assessing overdraft fees. The Court let stand a ruling that found that an updated bank account agreement without an arbitration clause replaces an earlier agreement that required arbitration.

National Penn Bank’s request to compel arbitration was struck down in November 2015 by a unanimous three-judge panel. The panel also rejected the defendant’s appeal of an order overruling its demurrer on the grounds that it did not have jurisdiction to review the matter.

The Supreme Court agreed with the lower court’s decision, pointing out that the plain language of the 2010 updated bank account agreement clearly indicated that it was meant to supersede the agreement from 2008, which relied on “available balance” rather than “ledger balance” when determining when to impose overdraft fees.

Plaintiff Jennifer Collier, represented by of Golomb Legal, P.C., originally brought the lawsuit against the bank over allegations that the bank improperly assessed overdraft fees by reordering her transactions from largest to smallest. The bank argued that the fees were properly assessed based on the 2008 agreement, but was unable to compel arbitration based on the terms of that agreement while the later agreement was in effect.

Judge Mary Jane Bowes also pointed out that the 2008 agreement did not reference any particular type of bank account, as was also the case with the 2010 agreement. Bowes agreed that the agreement applied to any past, present, or future account with the bank.

According to Bowes, there is absolutely no suggestion that applying federal law would remove liability from National Penn for violations of tort and state contract law.

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