We continue to monitor the progress in Stein v. Bank of America Corp., a case with important and potentially far-reaching implications for any company that transfers confidential customer data abroad. This is a class action suit brought against Bank of America Corporation and several of its domestic and foreign subsidiaries, alleging violations of 12 U.S.C. § 3403(a), a portion of the Right to Financial Privacy Act (RFPA). The plaintiffs are seeking statutory damages and injunctive relief.

Plaintiffs originally alleged violations of several provisions of the Washington D.C. Consumer Protection Act, D.C. Code § 28-3904, as well as claims for unjust enrichment, negligent bailment and negligence. After a motion to dismiss and two amendments, the current version of the complaint is limited to the RFPA claim.

Plaintiffs' claim has two essential elements: (i) that Bank of America transmits customer financial information to its affiliates abroad; and (ii) that the U.S. government has a global electronic surveillance system that monitors and intercepts all transmissions sent to or received by foreign nationals residing overseas. According to plaintiffs, simply by transmitting the data abroad, where government surveillance of foreign nationals might intercept it, Bank of America has provided the government with access to that data, in violation of the RFPA. This expansive interpretation of the RFPA could subject any financial institution to liability any time the institution transfers data abroad.

Most recently, Bank of America has moved to dismiss the Second Amended Complaint. In its motion, Bank of America argues that the plaintiffs lack standing because they have not alleged any actual injury resulting from the cross-border data transfer, and that plaintiffs have failed to state a claim under the RFPA because they have not alleged that Bank of America affirmatively conveyed customer data to the government.

Although no hearing has been scheduled, the motion to dismiss is fully briefed and Judge Walton could issue a ruling at any time.

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