SunTrust 2010 Annual Report Download - page 198

SUNTRUST BANKS, INC.
Notes to Consolidated Financial Statements (Continued)
in these actions are seeking to recover the par value of the ARS in question as well as compensatory and punitive
damages in unspecified amounts. The Company reserved $16 million and $0 as of December 31, 2010 and 2009,
respectively, for estimated probable losses related to other ARS claims, and recognized those probable losses in trading
account profits/(losses) and commissions in the Consolidated Statements of Income/(Loss).
Interchange and Related Litigation
Card Association Antitrust Litigation
The Company is a defendant, along with Visa U.S.A. and MasterCard International (the “Card Associations”), as well as
several other banks, in one of several antitrust lawsuits challenging the practices of the Card Association (the
“Litigation”). For a discussion regarding the Company’s involvement in the Litigation matter, refer to Note 18,
“Reinsurance Arrangements and Guarantees,” to the Consolidated Financial Statements.
In re ATM Fee Antitrust Litigation
The Company is a defendant in a number of antitrust actions that have been consolidated in federal court in San
Francisco, California under the name In re ATM Fee Antitrust Litigation, Master File No. C04-2676 CR13. In these
actions, Plaintiffs, on behalf of a class, assert that Concord EFS and a number of financial institutions have unlawfully
fixed the interchange fee for participants in the Star ATM Network. Plaintiffs claim that Defendants’ conduct is illegal
under Section 1 of the Sherman Act. Plaintiffs initially asserted the Defendants’ conduct was illegal per se. In August
2007, Concord and the bank defendants filed motions for summary judgment on Plaintiffs’ per se claim. In March 2008,
the Court granted the motions on the ground that Defendants’ conduct in setting an interchange fee must be analyzed
under the rule of reason. The Court certified this question for interlocutory appeal, and the Court of Appeals for the
Ninth Circuit rejected Plaintiffs’ petition for permission to appeal on August 13, 2008. Plaintiffs subsequently filed a
Second Amended Complaint in which they asserted a rule of reason claim. This complaint was dismissed by the Court as
well, but Plaintiffs were given leave to file another amended complaint. Plaintiffs filed yet another complaint and
Defendants moved to dismiss the same. The Court granted this motion in part – dismissing one of Plaintiffs two claims –
but denied the motion as to one claim. On September 16, 2010, the Court granted the Defendants’ motion for summary
judgment as to the remaining claim on the grounds that Plaintiffs lack standing to assert that claim. Plaintiffs have filed
an appeal of this decision with the Ninth Circuit Court of Appeals.
Overdraft Fee Cases
The Company has been named as a defendant in two putative class actions relating to the imposition of overdraft fees on
customer accounts. The first such case, Buffington et al. v. SunTrust Banks, Inc. et al. was filed in Fulton County Superior
Court on May 6, 2009. This action was removed to the U.S. District Court for the Northern District of Georgia, Atlanta
Division on June 10, 2009, and was transferred to the U.S. District Court for the Southern District of Florida for inclusion in
Multi-District Litigation Case No. 2036 on December 1, 2009. Plaintiffs assert claims for breach of contract, conversion,
unconscionability, and unjust enrichment for alleged injuries they suffered as a result of the method of posting order used by
the Company, which allegedly resulted in overdraft fees being assessed to their joint checking account, and purport to bring
their action on behalf of a putative class of “all SunTrust Bank account holders who incurred an overdraft charge despite
their account having a sufficient balance of actual funds to cover all debits that have been submitted to the bank for
payment,” as well as “all SunTrust account holders who incurred one or more overdraft charges based on SunTrust Bank’s
reordering of charges.” Plaintiffs seek restitution, damages, expenses of litigation, attorneys’ fees, and other relief deemed
equitable by the Court. The Company filed a Motion to Dismiss and Motion to Compel Arbitration and both motions were
denied. The denial of the Motion to Compel Arbitration currently is on appeal to the Eleventh Circuit Court of Appeals. The
second of these cases, Bickerstaff v. SunTrust Bank, was filed in the Fulton County State Court on July 12, 2010 and an
amended complaint was filed on August 9, 2010. Plaintiff asserts that all overdraft fees charged to his account which related
to debit card and ATM transactions are actually interest charges and therefore subject to the usury laws of Georgia. Plaintiff
has brought claims for violations of civil and criminal usury, conversion, and money had and received, and purports to bring
the action on behalf of all Georgia citizens who have incurred such overdraft fees within the last four years where the
overdraft fee resulted in an interest rate being charged in excess of the usury rate. SunTrust has filed a motion to compel
arbitration and that motion is pending.
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