MEMPHIS, Tenn. (Legal Newsline) - A district judge in Tennessee federal court has dismissed a multidistrict class action lawsuit against Wal-mart and the owner of ATMs in its stores that claimed they did not properly disclose ATM fees.
District Judge Jon P. McCalla ruled that the safe-harbor defense protects Wal-mart Stores Inc. and Satellite Receivers, which is doing business as Cash Depot, from liability under federal law.
McCalla granted the defendants' motion for summary judgment and dismissed the plaintiffs' claims, deciding that the defendants provided enough evidence that they attached "on-machine" fee notices to the ATMs during installation, and that they did not instruct anyone to remove them.
The plaintiffs claimed the fee notices were not affixed to the machines and that, in order to establish the safe harbor defense under the Electronic Fund Transfers Act, the defendants must affirmatively prove that the notices were removed by someone other than the operator.
McCalla disagreed, stating that the law does not require "affirmative evidence that the sticker was removed by a third party, and not one of defendant's employees."
"The court finds that defendants have satisfied their burden under the safe harbor defense," the April 28 order states. "Though plaintiffs dispute the evidence submitted by defendants as hearsay...the evidence is admissible under Rule 803(6) of the Federal Rules of Evidence. Therefore, there is no dispute as to any material fact relevant to defendants' safe harbor defense."
The order states that the defendants' safe harbor defense protects them from liability under the EFTA for missing on-machine ATM fee notices.
The EFTA requires any ATM operator who imposes fees on consumers in connection with electronic fund transfers to provide notice of the fact that the fee is being imposed and the amount of the fee, according to court documents.
In order to charge a fee for electronic transfers, the law says the ATM operator must post notice in a prominent and conspicuous location on or at the machine.
Wal-mart, which owns and operates more than 1,900 Money Center Express machines, and Cash Depot charge a $1.50 fee on any cash withdrawals, according to court documents.
The plaintiffs in the case did not dispute, however, that the ATMs included notices in the withdrawal process, according to court documents.
McCalla found that the knowledge of the two managers, Kam Lam and Rocky Heiser, in question about corporate policies and the EFTA was sufficient.
The court "finds Lam and Heiser have sufficient personal knowledge and/or information based on review of the business records of the corporations as demonstrated in their respective declarations and depositions to establish, for purposes of admissibility under the Federal Rules of Evidence as to the facts asserted," according to McCalla's order.
Because the plaintiffs have provided no evidence to contradict facts established in Lam and Heiser's sworn declarations and depositions, which provide the basis for the facts in the case, "and only dispute the admissibility of the submitted evidence, the court finds the facts undisputed for the purposes of the instant motions for summary judgment," the order states.
Neither company had any record of removing the fee notice stickers, or requesting that an employee do so.
The plaintiffs were represented by Eric C. Calhoun of Travis Calhoun & Conlon PC and B.J. Wade of Skouteris & McGee PLLC.
Wal-Mart and Cash Depot were represented by Glen G. Reid Jr., Robert L. Crawford, Kacey L. Faughnan and Byron N. Brown IV of Wyatt Tarrant & Combs LLP.
U.S. District Court for the Western District of Tennessee-Western Division case number: 2:11-md-02234