In Eiess v. Usaa Fed. Sav. Bank, No. 19-cv-00108-EMC, 2019 U.S. Dist. LEXIS 144026, at *2-4 (N.D. Cal. Aug. 23, 2019), Judge Chen ordered a class action plaintiff’s individual claim to arbitration, and stayed the claim for public injunctive relief pending the outcome of Plaintiff’s individual claim. The facts were as follows:

Ms. Eiess is a customer of USAA and maintains a checking account with the bank. See FAC ¶ 13. Since 2014, she has resided in California. See FAC ¶ 20.  In October 2018, she tried to use funds in her USAA checking account to pay for a credit card bill (in the amount of $358.83). See FAC ¶ 21. “USAA rejected payment of that transaction due to insufficient funds and charged [her] a $29 NSF [non-sufficient funds] Fee for doing so.” FAC ¶ 22. “Three days later, . . . the same transaction was submitted for payment again” – (presumably, by the credit card company), but USAA again rejected the transaction due to insufficient funds and charged Ms. Eiess a second NSF Fee of $29. FAC ¶ 23. Five days later, the same transaction was submitted for payment, and USAA charged Ms. Eiess a third NSF Fee of $29 based on insufficient funds. See FAC ¶ 25. In short, “USAA charged [Ms. Eiess] $87 in fees to attempt to process a single $358.85 payment.” FAC ¶ 27 (emphasis omitted).  ccording to Ms. Eiess, by charging multiple NSF Fees for only one transaction, USAA has breached the terms of contracts that exist between them — namely, a Deposit Agreement, an Online Banking Agreement, and a Fee Schedule. Ms. Eiess maintains that these documents expressly state that USAA will charge only one NSF Fee per single transaction. Ms. Eiess further asserts that, because the above documents are publicly available, members of the public who consider opening a checking account with USAA will be misled by its representations that it only charges one NSF Fee per transaction.  Based on, inter alia, the above allegations, Ms. Eiess brings a claim for breach of contract or, in the alternative, unjust enrichment. Ms. Eiess also brings two statutory claims – i.e., a claim for violation of California Business & Professions Code § 17200 and a claim for violation of the California Consumer Legal Remedies Act (“CLRA“). Ms. Eiess seeks to bring all claims as class claims. For the statutory claims, part of the relief sought is injunctive in nature; in particular, Ms. Eiess seeks an order preventing USAA from misrepresenting its NSF Fee policy in its publicly available documents.

Judge Chen found that the class claims sought “public injunctive relief” post-Blair.

Similarly, the Court does not find persuasive the Central District cases on which USAA relies that take [*36]  a narrow definition of public injunctive relief because those cases do not address the fact that McGill allowed public injunctive relief in a very similar situation to the case at bar. See Johnson v. JP Morgan Chase Bank, N.A., No. EDCV 17-2477 JGB, 2018 WL 4726042, at *6 (C.D. Cal. Sept. 18, 2018); Rappley v. Portfolio Recovery Assocs., LLC, No. EDCV 17-108 JGB, 2017 WL 3835259, at *6 (C.D. Cal. Aug. 24, 2017); Wright v. Sirius XM Radio, Inc., No. SACV 16-1688 JVS, 2017 WL 4676580, at *9 (C.D. Cal. June 1, 2017). Finally, USAA attempts to argue that the remedy of public injunctive relief is inapplicable in the instant case because its services are offered to a subset of the general public — those who have served in the military or are related to servicemembers who qualify for USAA’s services — and therefore any injunctive relief could never be for the benefit of the general “public.” USAA cites to no California court decision holding that, if all members of the public are not potentially affected, then the injunction is not “public.” Indeed, such a position would seem untenable; for example, simply because relief in a given case were designed to protect a subset of the general public [*37]  — such as children, the elderly, women, or non-English speakers — such relief would hardly be deemed “nonpublic” in nature. Moreover, USAA’s argument provides no guiding principle for a court to decide when a group of potentially affected individuals is sufficiently small to preclude “public” injunctive relief.  Ms. Eiess is seeking public injunctive relief under McGill. The only issue that remains is the final step of the Nedlloyd test – i.e., whether California has a materially greater interest than Texas in respect thereto. See Nedlloyd, 3 Cal. 4th at 466.  . . . Under McGill, the agreement to arbitrate is invalid to the extent it waives claims for public injunctive relief in any forum. Thus, the Court denies the motion to compel arbitrate Ms. Eiess’s claims for injunctive relief. These claims must be litigated and not arbitrated. See FAC, Ex. A (Deposit Agreement at 33) (providing that “[t]he arbitrator shall be restricted to resolving only the Covered Claims between you and FSB” and that, “[i]f one or more of the above limitations on proceedings and other rights is determined to be unenforceable or interpreted to not prevent a collective or class action, then such collective or class action shall proceed in a court of law and not in arbitration”).

Judge Chen ordered the individual claim to arbitration, and stayed the injunctive relief claim.

The Court notes, however, that this does not mean that the entirety of Ms. Eiess’s UCL and CLRA claims are to be litigated. These claims may be litigated in court only to the extent Ms. Eiess is seeking public injunctive relief [*40]  (i.e., enjoining USAA from misrepresenting its NSF Fee policy). Notably, Ms. Eiess is also asking for monetary relief with respect to these claims (damages and/or restitution). See FAC ¶¶ 102, 118 (for UCL and CLRA claims, alleging that “Plaintiff and members of the California Subclass have paid, and/or will continue to pay NSF Fees and thereby have suffered and will continue to suffer actual damages”). The claims for monetary relief are subject to arbitration because the McGill rule does not apply to these claims, and Ms. Eiess has failed to provide any other argument as to why the monetary claims should not be arbitrated.  3. Stay of Proceedings.  For the reasons stated above, the Court concludes that the contract and unjust enrichment claims must be arbitrated, as well as Ms. Eiess’s UCL and CLRA claims to the extent she seeks monetary relief. However, to the extent Ms. Eiess seeks public injunctive relief as a remedy for a violation of the UCL and CLRA, those claims must be litigated in court.  The final issue for the Court to resolve is whether to stay litigation on the claims for public injunctive relief pending the resolution of the arbitration. In deciding whether a stay is warranted, the Court takes some guidance from Landis v. North American Co., 299 U.S. 248 (1936). See Levya v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863-64 (9th Cir. 1979) (citing, inter alia, Landis in support of the statement that “[a] trial court may, with propriety, find it is efficient for its own docket and the fairest course for the parties to enter a stay of an action before it, pending resolution of independent proceedings which bear upon the case[;] [t]his rule applies whether the separate proceedings are judicial, administrative, or arbitral in character, and does not require that the issues in such proceedings are necessarily controlling of the action before the court”) (emphasis added). . . .In the instant case, the first two Landis factors are countervailing. Ms. Eiess has an interest in seeing her claims for public injunctive relief litigated promptly to prevent future injury to consumers and so she may trust USAA’s representations in the future. However, the importance of prospective relief and the harm from its delayed adjudication if the proceeding were stayed pending arbitration is mitigated by the following: (1) a relatively small sum of money per consumer is at issue; (2) there is no suggestion that public health or safety or any other time-sensitive irreparable injury to the public is at stake; and (3) the delay will be short if individualized non-class arbitration proceeds promptly and expeditiously. As for USAA’s interests, it stands to lose the benefit of what it bargained for in the Deposit Agreement if litigation were to go forward — namely, the comparative efficiency and streamlined nature of arbitration proceedings. As to the third Landis factor, staying proceedings in this forum pending the conclusion of arbitration may simplify the issues, proof, and questions of law for this Court.  Therefore, while a close call, the Court shall stay proceedings in this matter pending the conclusion of arbitration of USAA’s liability under the UCL and CLRA, at which point it shall revisit Ms. Eiess’s request for public injunctive relief. Accord Dornaus v. [*43]  Best Buy Co., Inc., No. 18-cv-04085-PJH, 2019 WL 632957, at *6 (N.D. Cal. Feb. 14 2019) (staying plaintiff’s claim for public injunctive relief until the conclusion of arbitration because “all issues other than the potential award of public injunctive relief are subject to arbitration and will predominate over the relatively narrow issues concerning the propriety and scope of a public injunctive relief award”). Should this arbitration not proceed expeditiously, this Court will be open to reconsidering the stay.