Eighth Circuit Holds Informational Injury Sufficient to Establish Standing

Class Action

On August 2, the U.S. Court of Appeals for the Eighth Circuit held that a bank customer had standing to bring a claim against two banks based only on an informational injury. Charvat v. Mut. First Fed. Credit Union, Charvat v. First Nat’l Bank of Wahoo, Nos. 12-2790, 12-2797, 2013 WL 3958300 (8th Cir. Aug. 2, 2013). The customer separately sued two financial institutions on behalf of putative classes claiming that the institutions failed to provide physical (as opposed to on-screen) notice of the transaction fees the institutions charged for use of their ATMs, as required at the time by the federal Electronic Fund Transfer Act (this requirement since has been repealed). The district court dismissed the case, holding that the customer failed to allege an injury in fact, only an injury in law. The customer appealed, and the U.S. Department of Justice filed an amicus brief in support, noting that the case could impact other federal statutes with private rights of action. The appeals court reversed the dismissal on the grounds that an informational injury based on a statutory violation is sufficient to confer standing, even absent economic or other injury. The court explained that once the customer alleged a violation of the EFTA notice provision – a violation of his own interest as opposed to the public’s nonconcrete interest – he had standing to claim damages. The court also rejected the institutions’ argument that the customer broke any causal link between them and the alleged injury when he nevertheless accepted the transaction fee, holding that if the notice requirement had been met, the customer would not have had to choose between accepting the fee and abandoning the transaction. The court reversed the district court’s dismissal and remanded for further proceedings.