The 11th Circuit ruled that SunTrust Bank account holders must arbitrate claims against it for excessive overdraft fees pursuant to an arbitration clause in its depositor agreement. Plaintiffs alleged that SunTrust breached its contract, converted funds, acted unconscionably, and was unjustly enriched by deceptively processing transactions to maximize overdraft fees. Although the district court initially denied SunTrust’s Motion to Compel individual arbitration, finding the clause substantively unconscionable under Georgia state law because it contained a class action waiver, the 11th Circuit remanded SunTrust’s appeal in light of the Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, which held that the Federal Arbitration Act (“FAA”) preempted a California state rule relating to the unconscionability of class arbitration waivers.

Upon SunTrust’s renewed motion, the district court again found the clause substantively unconscionable because its fee-shifting provisions disproportionately allocated the risks of loss in the dispute to the Plaintiffs. Reversing that decision, the 11th Circuit ruled that the bank was entitled under the FAA to arbitration “in the manner provided for in [its deposit] agreement” and held that the clause was “neither procedurally nor substantively unconscionable.” The court noted that arbitration agreements, even when entered by parties with unequal bargaining power, are not per se unconscionable under Georgia law, particularly when given equal prominence to other adhesion contract provisions. Additionally, 11th Circuit precedent and a Georgia statute affirm the legality and conscionability of SunTrust’s multi-party account setoff rights to collect fees. In re Checking Account Overdraft Litigation, No. 11-14316 (11th Cir. Mar. 1, 2012).