A judicial panel denied a request to consolidate 11 class action overdraft lawsuits filed against credit unions overtheir overdraft practices, meaning courts will likely have toweigh the merits of each case individually.

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Since September, at least 15 credit unions in 10 states havebeen hit with class action suits over their overdraft practices,according to court documents. Often, the dispute was over howcredit unions disclose the methods under which they apply overdraftfees. Two firms – the Redlands, Calif.-based McCune Wright and theSanta Monica, Calif.-based The Kick Law Firm – represent all theplaintiffs. Law firms in the plaintiffs' home states are alsoinvolved, according to the complaints.

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On Nov. 30, 2015, McCune Wright, The Kick Law Firm and theEdwardsville, Ill.-based Brandt Law filed a request to have 11 ofthe class action suits consolidated and heard in an IllinoisDistrict Court. But according to an order filed this week by theUnited States Judicial Panel on Multidistrict Litigation, theplaintiffs in the 11 suits aren't enough alike to warrant combiningthe cases.

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“There is no overlap among the plaintiffs, the defendants or the putative classes,” the panel wrote in anorder denying the transfer of the cases to the Southern District ofIllinois. “Discovery in each action will be chiefly, and perhapseven entirely, unique to that action. Furthermore, the actions,which moving plaintiff describes as essentially breach of contractcases, are brought under the laws of at least nine states.”

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The panel also said that the possibility that the litigationcould expand substantially required caution, given that there areabout 6,000 credit unions in the United States.

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“Because it is unclear how many of them utilize an overdraftprogram like those allegedly used by the 11 defendants named inthese actions, the possibility that the scope and complexity ofthis proposed MDL could expand beyond the bounds of manageabilityalso influences our decision against centralization,” it said.

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“What this means is that each credit union will be defending theclaims in the jurisdictions where they each operate,” explainedStuart Richter, a Los Angeles-based partner at Katten MuchinRosenman, which represents several of the defendants. “The casesare fact-specific, so it is too early to tell whether this rulingwill make it harder or easier for the plaintiffs. I know thedefendants are pleased because their strong preference is to defendthese cases in the communities where they operate.”

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However, Richard McCune of McCune Wright expects little tochange.

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“Our view on this is that it will not significantly impact theclients,” he told CU Times. “Their cases will go forward.For counsel for both parties, I think it might add a little moretime and expense in travel, but it will not greatly affect thecounsel. The greatest impact of the decision will be on the courts,with numerous judges now needing to rule on the issues.”

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Many of the allegations against the credit unions are similar tothose made against the Lakeland, Fla.-based MidFlorida CreditUnion, which has $2.4 billion in assets and 225,000 members. Inthat case, which was filed on Nov. 24, plaintiff Tracy Fry allegedthat the credit union charged overdraft fees based on members'available balances rather than their actual balances. Fry claimedthe practice breached MidFlorida's opt-in agreement and wasinconsistent with its disclosure materials.

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MidFlorida has not responded to CU Times' requests forcomment.

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