On August 18, 2026, the federal district court for the Southern District of California issued a 105-page order denying in all material respects defendant Bank of America’s motion for summary judgment in the long-running multi-district litigation led by Altshuler Berzon and co-lead counsel at Cotchett Pitre McCarthy. The class action plaintiffs seek to hold the Bank liable for treble damages and punitive damages for a series of violations of state and federal laws for improperly administering the State’s unemployment insurance (“UI”) program during the COVID pandemic. The certified classes comprise more than 100,000 Californians who received unemployment and disability benefits through Bank-issued prepaid debit cards during the pandemic, and who reported to the Bank that their UI funds had been stolen through one or more unauthorized ATM transactions.
Plaintiffs’ lawsuit alleges that the Bank failed to implement basic security features on its prepaid debit cards, which enabled the widespread theft of UI funds from the class members’ accounts totaling hundreds of millions of dollars. Plaintiffs further allege that the Bank failed to comply with its obligations under a federal statute, the Electronic Funds Transfer Act (EFTA), to timely reimburse these cardholders for their losses if the Bank’s investigation failed to demonstrate within 10 days that the cardholder had authorized the disputed transactions. Plaintiffs contend that the Bank did not conduct the statutorily required investigations but instead applied an automated Claim Fraud Filter to summarily deny all cardholder claims involving unauthorized transactions at ATMs, to rescind previously issued credits, and to freeze the cardholders’ access to their UI funds, thereby depriving these unemployed Californians of their UI benefits at their time of greatest need. The Bank then allegedly compounded these harms by making it nearly impossible for many aggrieved cardholders to reach its customer service call centers, often forcing them to spend hours on hold before their calls were answered.
After the Court certified five classes in June 2025, the Bank moved for summary judgment and filed Daubert motions seeking to exclude the opinions of five of Plaintiffs’ experts. Plaintiffs opposed these motions and filed a Daubert motion of their own to exclude certain opinions of the Bank’s damages expert. The Court granted Plaintiffs’ Daubert motion, largely denied the Bank’s Daubert motions, and denied in all material respects the Bank’s motion for summary judgment. Specifically, the Court’s order allows the class to proceed to trial on all of their key claims for violations of EFTA, the California Consumer Privacy Act, breach of fiduciary duty, negligence, negligence per se (in part), breach of the implied covenant of good faith and fair dealing, and federal and state due process. The Court’s order also allows the class to pursue their claims for treble and punitive damages, finding “genuine issues of fact whether BANA acted with malice or oppression when it implemented CFF-1, understaffed the Claims call center and failed to implement EMV chips sooner” based on evidence (much of which remains under seal) that “BANA’s automatic denial of all PIN-enabled ATM unauthorized transactions was willful and exhibited a conscious disregard of the EDD cardholder’s access to critical UI funds during the COVID-19 pandemic as they were some of BANA’s most vulnerable customers.”
A copy of the publicly filed, redacted summary judgment order may be found here.