In Widjaja v. JPMorgan Chase Bank, N.A., No. 20-55862, 2021 U.S. App. LEXIS 37512, at *1-2 (9th Cir. Dec. 20, 2021), the Court of Appeals affirmed in part and reversed in part the district court’s dismissal of an action under the Electronic Fund Transfer Act against JPMorgan Chase Bank. The Court of Appeals summarized its holding as follows:
Reversing the dismissal of plaintiff’s claim under the EFTA or its California counterpart and remanding, the panel held that, to avoid liability for unauthorized electronic fund transfers, a consumer must report an unauthorized withdrawal within 60 days after a bank sends a monthly statement reflecting the withdrawal. The panel held that plaintiff did not plausibly allege extenuating circumstances excusing her failure to report unauthorized withdrawals, and notice to Chase from a third-party source did not excuse her failure to report. Nonetheless, under 15 U.S.C. § 1693g(a), a consumer may be held liable for unauthorized transfers occurring after the 60-day period only if the bank establishes that those transfers “would not have occurred but for the failure of the consumer” to timely report the earlier [*2] unauthorized transfer reflected on her bank statement. The panel held that plaintiff met her pleading burden by alleging facts plausibly suggesting that even if she had reported an unauthorized transfer within the 60-day period, the subsequent unauthorized transfers for which she sought reimbursement would still have occurred. Affirming the dismissal of additional state law claims, the panel held that plaintiff’s claim for breach of contract failed because a Privacy Notice appended to her Deposit Account Agreement did not impose any substantive duties on Chase. The panel held that plaintiff’s claim for breach of the implied covenant of good faith and fair dealing failed because the Deposit Account Agreement expressly permitted Chase to close plaintiff’s accounts.