Reed Smith attorneys secured a decertification of a putative class action asserted against Bank of America, N.A. in the U.S. District Court for the Eastern District of Pennsylvania on February 3, 2016.  The Honorable Petrese B. Tucker struck class allegations from a suit accusing Bank of America NA and co-defendant McCabe Weisberg & Conway, PC of charging unauthorized and illegal foreclosure-related attorneys’ fees. Specifically, Plaintiffs alleged that a foreclosure complaint filed in July 2012, which contained a flat fee for counsel fees was an improper demand for payment under their mortgage.  Arguing that such fees may not have been incurred at the time the foreclosure complaint was filed, Plaintiffs sought to represent a class of similarly situated Pennsylvania borrowers.

On August 11, 2014, Judge Tucker granted partial dismissal of several of Plaintiffs’ claims, including those brought under the Racketeer Influenced and Corrupt Organizations Act (RICO) and Fair Debt Collection Practices Act (FDCPA), as well as Act 6.   Although, the Judge did not dismiss Plaintiffs’ claims that Defendants violated Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL), the court’s most recent ruling held that applicable law precluded Plaintiffs from pursuing their UTPCPL claim on a class-wide basis.

Judge Tucker agreed with Defendants’ argument that the principle of justifiable reliance, which requires detailed consideration of a person’s reliance on an alleged misrepresentation, was too individualized and claim specific to allow class-wide certification:

[T]his court would need to know whether the payment was made after service of the foreclosure complaint, assume that putative plaintiff read the foreclosure complaint and believed it to be true, and further assume that any partial payment made by the putative plaintiff was meant to be applied to the attorneys’ fees listed and not to any other amounts. These are individual inquiries unsuitable for class adjudication. Allowing certification to proceed on the mere proof of payment would, in sum, amount to an outright presumption of justifiable reliance.

Davis v. Bank of Am., N.A., 2016 U.S. Dist. LEXIS 13333, *16 (E.D. Pa. Feb. 3, 2016).  The court also held that a class certification was not practicable due to the highly individualized findings needed to determine ascertainable loss, another element of a prima facie case under the UTPCPL.  As such, Plaintiffs were unable to satisfy the predominance requirement for class certification – although their UTPCPL claim was permitted to go forward on an individual basis.