Bank of America and U.S. Bancorp fight back against ‘flu rights’ lawsuit

U.S. Bank, Bank of America
Both Bank of America and Bank of America are defending themselves against lawsuits alleging that their terms of service violate California’s so-called “flu rights” law.


Bank of America and Bank of America is fighting back a lawsuit accusing the two banks of violating a California law in their terms of service that ensures customers the right to publicly air their dissatisfaction.

The lawsuits are part of a series of recently filed cases that could help determine the scope of corporate liability under California’s so-called “flu rights” law. The goal of the law is to protect the ability of consumers to complain online about their experiences with specific companies without the threat of retaliation.

Plaintiff attorneys have filed lawsuits in recent months alleging that multiple companies — a list that includes not just Bank of America and U.S. Bank but also Amazon, Mastercard and United Parcel Service — violated the law.

The California law was signed by then-Gov. Jerry Brown enacted it in 2014 and took effect the following January. Nine years later, there is still little case law, said Andrew Bluth, one of the plaintiffs’ attorneys leading the lawsuit. “I don’t think it’s been tested extensively,” he said.

The lawsuits against Bank of America and U.S. Bank were both filed in state court last November but have since been moved to federal court. Plaintiffs in both cases are seeking class-action status.

In a lawsuit filed against Bank of America, the complaint cites Company’s Internet Banking Services Agreement. The text addresses potential consequences if a customer exposes the Charlotte, N.C.-based bank to “liability, reputational harm or brand harm.”

Bluth, a partner at the law firm Singleton Schreiber, argued that the rule prevents U.S. Bank customers from making statements that the bank believes could cause reputational damage. “That’s exactly what the law is designed to protect,” he said.

But earlier this month, Bank of America filed a motion to dismiss the lawsuit, saying the bank’s terms of service did not prevent customers from speaking negatively about Bank of America. The bank said the terms cited by the plaintiffs prohibit mobile banking users from engaging in brand-damaging or illegal conduct but do not restrict speech.

Bank of America reserves the right to suspend or terminate users if it determines that they have violated the relevant terms.

Bank of America said the relevant portion of the bank’s online banking services agreement covers customers’ use of Zelle transfer services. The agreement states that “illegal or brand damaging activity” includes, but is not limited to: firearms; pornography; material promoting intolerance, violence or hatred; Ponzi schemes; digital currencies; financing of terrorists; fraud; and money laundering.

“This list does not include any provision that customers of Bank of America may not make critical or disparaging ‘remarks’ about Bank of America, let alone any provisions targeting customers’ remarks about Bank of America.” Bank with $3.2 trillion in assets wrote in a court filing.

“For example, there is nothing in the list that prohibits Bank of America customers from posting critical comments about the bank on X, Facebook, Yelp or any other social media platform.”

Separately, Bank of America noted that its online banking services agreement is not a “contract” for the “sale or lease of goods or services” covered by California law.

US Bank, the banking subsidiary of Minneapolis-based US Bancorp, made a similar point.

“The relevant wording in U.S. Bancorp’s customer agreement relates to customer behavior when using our products and services and is intended to prevent incorrect use of those products and services,” a spokesman for the bank said in an email. “The agreement does not There is no limit to what customers can say about the bank. This lawsuit has no legal basis.”

The outcome of recently filed cases could affect how often plaintiffs’ attorneys file lawsuits under California’s nine-year law.

California isn’t the only state with “flu rights” laws (sometimes called “Yelp rights”). But the Golden State regulation may be most attractive to litigants because it allows consumers to bring civil lawsuits and companies can be fined up to $2,500 for a first violation.

In a class-action lawsuit involving 39 million California residents, the company could face considerable liability if successful.

Clay Calvert, professor emeritus at the University of Florida, wrote a 2018 law review article titled “Gag Clauses and the Right to Complain.” In an interview, he did not take a position on whether the terms of service used by Bank of America and U.S. Bank violated California law.

But he does think “flu rights” laws are necessary in an era when many consumers use sites like Yelp and Tripadvisor to share their experiences, some of them negative.

“People use these sites all the time,” said Calvert, who is also a nonresident senior fellow at the American Enterprise Institute. “There is certainly a danger that commercial entities will try to suppress this kind of speech.”

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