GEORGES v. BANK OF AMERICA (2021)

United States Court of Appeals, Ninth Circuit.2021-02-16No. No. 20-55499

Summary · law.co

Holding. The court affirmed the district court's dismissal of the plaintiffs' class action complaint, concluding that Bank of America's age-based student fee waiver does not violate the Unruh Civil Rights Act or the Unfair Competition Law because the policy is supported by legitimate public-policy considerations and is therefore not arbitrary, invidious, or unreasonable discrimination.

Plaintiffs who are accountholders at Bank of America challenged the bank's student fee waiver program, which waives a monthly maintenance fee for accounts held by individuals under twenty-four years old who are enrolled in educational programs. The plaintiffs, both over twenty-four, argued that the age-based waiver violated California's Unruh Civil Rights Act and the state's Unfair Competition Law.

The court upheld the fee waiver as permissible under California law. The Unruh Act does not prohibit all age-based distinctions; it only bars discrimination that is arbitrary, invidious, or unreasonable. The court found that Bank of America's policy is supported by legitimate public-policy considerations reflected in federal tax law and higher education statutes, which recognize the transition period for young adults under twenty-four as they establish financial independence. Because the age-based distinction serves reasonable public-policy purposes, it does not constitute unlawful discrimination.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether age-based fee waivers constitute illegal discrimination under the Unruh Civil Rights Act
Standard for evaluating reasonable versus unreasonable age-based discrimination
Role of public-policy considerations in justifying age-based distinctions in banking services
Whether derivative claims under the Unfair Competition Law survive when underlying statutory claims fail

Procedural posture

The appellate court reviewed de novo the district court's grant of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim in a putative class action brought in federal diversity jurisdiction.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

MEMORANDUM ***

Aleksander Georges and Ida Jelveh (collectively, “Plaintiffs”) appeal the district courts dismissal of a putative class action brought in diversity against Bank of America (“BOA”). Plaintiffs, who are at least twenty-four years old, are accountholders at BOA and allege that BOAs student-fee waiver constitutes illegal age discrimination under the California Unruh Civil Rights Act (“Unruh Act”), Cal. Civ. Code § 51 et seq., and the “unlawful” prong of Californias Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq. “We review de novo a district courts order granting a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).” L.A. Lakers, Inc. v. Fed. Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017). We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

1. Like most banks, BOA offers various banking products, including personal bank accounts, to its customers. One type of personal bank account BOA offers is called “Bank of America Advantage Plus Banking.” BOA imposes a monthly $12 “maintenance fee” on this account unless the account holder: (1) makes at least one direct deposit of $250 or more per month; (2) maintains a daily minimum balance of at least $1,500; (3) enrolls in a specified rewards program and qualifies for a certain tier of rewards; or (4) qualifies for a student waiver. To qualify for the student waiver, accountholders must show that they (1) are enrolled in a high school, college, university, or vocational program and (2) are under twenty-four years old. Plaintiffs contend that BOAs age-based student-fee waiver constitutes illegal age discrimination under the Unruh Act because the waiver ceases to apply to student accountholders—like them—when they turn twenty-four years of age.

We find an insufficient basis to conclude that BOAs age-based maintenance fee violates the Unruh Act. The Unruh Act does not prohibit all preferential treatment based on age, but “prohibits only arbitrary, invidious or unreasonable discrimination.” Sargoy v. Resol. Tr. Corp., 8 Cal.App.4th 1039, 10 Cal. Rptr. 2d 889, 891 (1992) (citing In re Cox, 3 Cal.3d 205, 90 Cal.Rptr. 24, 474 P.2d 992, 999 (1970)). Such discrimination “ ‘emphasizes irrelevant differences’ or ‘perpetuates [irrational] stereotypes.’ ” Dallas & Lashmi, Inc. v. 7-Eleven, Inc., 112 F. Supp. 3d 1048, 1062 (C.D. Cal. 2015) (alteration in original) (quoting Koire v. Metro Car Wash, 40 Cal.3d 24, 219 Cal.Rptr. 133, 707 P.2d 195, 201–02 (1985)). This is consistent with the “fundamental purpose” of the Unruh Act, which is “the elimination of antisocial discriminatory practices—not the elimination of socially beneficial ones.” Sargoy, 10 Cal. Rptr. at 895; see also Chabner v. United of Omaha Life Ins. Co., 225 F.3d 1042, 1050 (9th Cir. 2000) (“[D]isparities in treatment and pricing that are reasonable do not violate the Unruh Act.”).

The overwhelming majority of California courts to address age-based discrimination under the Unruh Act have upheld reasonable age-based discrimination so long as the age-based discrimination is justified by public-policy considerations. See, e.g., Javorsky v. W. Athletic Clubs, Inc., 242 Cal.App.4th 1386, 195 Cal. Rptr. 3d 706, 718–23 (2015) (upholding fitness membership discount for individuals aged eighteen to twenty-nine); Pizarro v. Lambs Players Theatre, 135 Cal.App.4th 1171, 37 Cal. Rptr. 3d 859, 862–63 (2006) (upholding an age-based price discount for individuals born between 1946 and 1964); Lazar v. Hertz Corp., 69 Cal.App.4th 1494, 82 Cal. Rptr. 2d 368, 372–74 (1999) (upholding higher car-rental fees for drivers under twenty-five); Sargoy, 10 Cal. Rptr. 2d at 893 (upholding a banks policy offering higher savings-account interest rates to customers aged 55 and older); Starkman v. Mann Theatres Corp., 227 Cal.App.3d 1491, 278 Cal. Rptr. 543, 546–49 (1991) (upholding discounts for movie theater tickets for children under age 12 and senior citizens over age 60).

Plaintiffs’ reliance on Candelore v. Tinder, Inc., 19 Cal.App.5th 1138, 228 Cal. Rptr. 3d 336 (2018) is unpersuasive. Unlike in Candelore, where the defendant made no attempt to identify any public interest in its age-based pricing differences, BOAs age-based student fee waiver is supported by public-policy considerations, as evidenced by statutes and federal reports that favor assistance to young adults—and in particular those under twenty-four—as they transition to financial independence and into the banking system. See, e.g., 26 U.S.C. § 152(c)(3)(A)(ii) (parents may claim a child as a dependent on their tax returns if, among other things, the child “is a student who has not attained the age of 24” at the close of the calendar year); 20 U.S.C. § 1087vv(d)(1)(A) (under the Higher Education Act, any student who is twenty-four or older is deemed to be an “independent student” for purposes of federal student-aid programs). Because BOAs age-based maintenance fee is supported by public-policy considerations, we cannot conclude it constitutes “arbitrary, invidious or unreasonable discrimination.” Sargoy, 10 Cal. Rptr. 2d at 891.

2. Plaintiffs also assert a derivative claim under the “unlawful” prong of Californias UCL, which prohibits “any unlawful, unfair or fraudulent business act or practice.” Cal. Bus. & Prof. Code § 17200. But because there is no violation of the Unruh Act, Plaintiffs’ UCL claim also fails. See Aleksick v. 7–Eleven, Inc., 205 Cal.App.4th 1176, 140 Cal. Rptr. 3d 796, 801 (2012) (“When a statutory claim fails, a derivative UCL claim also fails.”).

AFFIRMED.