Consumers who've filed a proposed class action against Bank of America claiming the bank employed overly broad nondisparagement clauses in its online service agreements have asked to send their case up to the Ninth Circuit. The ruling comes after a California federal judge tossed the proposed class action for the second time in July.

In an official notice submitted Tuesday, the plaintiffs indicated that they planned to challenge a ruling last week by U.S. District Judge Sherilyn Peace Garnett rejected their claim and concluded it failed to demonstrate statutory grounds under California law.

BofA Gag Clause Suit :  Nondisparagement Clauses Allegations

The suit, originally filed in 2017, alleged Bank of America broke a California state law banning sales contracts from restricting consumers' right to publicly comment on the sellers or their merchandise. According to the plaintiffs, USAA's online services agreement contained language that served as a nondisparagement clause preventing users from making public negative statements about the bank.

But Bank of America said no such clause exists, and that the plaintiffs simply misunderstood its wording. The bank contended that the allegedly challenged language came from a portion of its Zelle, digital payment service rules forbidding high-risk uses and did not silence customer speech about it.

Dismissals and Appeal

The first dismissal of the case came in March, when Judge Garnett held that the plaintiffs had not effectively shown that an online service agreement fell within California law regarding protected consumer sales contracts. The plaintiffs filed an amended complaint in April, attempting to define more precisely the nature of the contract, but U. S. District Judge Julian v.F.Dominguez still found their claims “conclusory” and insufficient by dismissing them again this week with prejudice.

The court will not provide plaintiffs leave to amend because "plaintiffs were unable correct their allegations in line with this Court's prior order, and the Court would dismiss an amended case as futile," Judge Garnett wrote.

The plaintiffs will take issue with Judge Garnett's reasoning in their appeal, though the notice of appeal did not detail what their argument to the Ninth Circuit would be.

BofA Gag Clause Suit : Class Action Scope

The action was brought on behalf of six named plaintiffs and a putative class potentially including tens of thousands of California consumers who had used BOA's online or mobile banking services. The plaintiffs claim the bank is in violation of California consumers' free speech rights for imposing an allegedly illegal penalty (account suspension or termination) on any statement made by a user that "reflects poorly upon [the] public image" of Chase.

Legal Representation

The plaintiffs are represented by Singleton Schreiber LLP and solo practitioner Thomas A. Leary, while Bank of America is defended by WilmerHale with attorneys Matthew D. Benedetto and Vivek A. Banerjee heading the defense team