Capital One

O’Melveny won the dismissal of all claims against client Capital One in the US District Court for the Northern District of California in a case challenging the late fee and over-limit fee practices of credit card issuers. The putative nationwide class claimed that the fees are punitive damages that violate their Constitutional right to due process; that the credit card issuing banks engaged in a conspiracy to fix their late and over-limit fees in violation of the Sherman and Cartwright Acts; and that the fees and practices violate a variety of California consumer laws and common law. US District Court Judge Sandra Brown Armstrong granted the defendants’ motion, adopting all of the defendants’ arguments. The court found that the Supreme Court’s jurisprudence on punitive damages does not apply to the privately set contractual fees, and any claim that they violated contractual doctrines—such as liquidated damages—is preempted by the National Bank Act.