SunTrust Banks Inc. (STI:US) was dismissed from litigation over bank fees for overdrafts after a federal appeals court ruled the bank’s case should be sent to arbitration.
U.S. District Judge James Lawrence King in Miami dismissed the case against SunTrust, ruling it couldn’t go forward because the plaintiffs had said they “do not have the financial ability to pursue this matter” and “would be forced to drop their claims against SunTrust if they were required to individually arbitrate.”
The judge previously rejected SunTrust’s request to compel individual arbitration proceedings for each customer. The U.S. Court of Appeals in Atlanta overturned his order, ruling that the individual arbitration clause of SunTrust’s customer agreement had to be enforced.
King has allowed plaintiffs to sue some of the 33 banks involved in the litigation as a group. Some of those banks already have settled with their customers, agreeing to pay a total of almost $1 billion. Bank of America Corp. agreed to the largest settlement last year, paying $410 million.
Hugh Suhr, a spokesman for Atlanta-based SunTrust, declined to comment on the decision. Bruce Rogow and Aaron Podhurst, lawyers for the plaintiffs, didn’t immediately return phone messages seeking comment on it.
The consolidated case is In re Checking Account Overdraft Litigation, 09-md-2036, U.S. District Court, Southern District of Florida (Miami.)
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