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DRURY v. HORIZON SAV. BANK

April 17, 1991

MARSHA DRURY and RICHARD DRURY, on behalf of themselves and all other persons and entities similarly situated, Plaintiffs,
v.
HORIZON SAVINGS BANK, F.S.B., and all other persons and entities similarly situated, Defendants



The opinion of the court was delivered by: BUA

 NICHOLAS J. BUA, UNITED STATES DISTRICT JUDGE

 Defendant Horizon Savings Bank, F.S.B. ("Horizon") has moved to dismiss an action brought against it by plaintiffs Marsha Drury and Richard Drury (collectively "Drurys"). *fn1" The Drurys challenge actions taken by Horizon pursuant to the Expedited Funds Availability Act, 12 U.S.C. § 4001 et seq. For the reasons stated below, the court grants defendant Horizon's motion to dismiss.

 FACTS

 Simply put, the Drurys are challenging the constitutionality of certain provisions of the Expedited Funds Availability Act ("Act"), 12 U.S.C. § 4001 et seq. The vehicle for their attack is this lawsuit against Horizon. In June 1988, the Drurys opened a checking account with Horizon. On Friday, June 8, 1990, Richard Drury wrote a tuition check for $ 404.00 on his Horizon account. On Monday, June 11, 1990, Marsha Drury deposited a check in the amount of $ 450.00, drawn on American National Bank, into Richard Drury's checking account. The $ 450.00 check deposited in the Drurys' Horizon account was paid to Horizon by American National Bank on June 12, 1990. On June 13, 1990 Horizon returned Richard Drury's $ 404.00 check because of insufficient funds. Horizon also assessed Richard Drury a $ 15.00 uncollected check charge.

 The Drurys additionally claim that this "holding" violates their equal protection rights under the Fifth Amendment. The Act makes reference to provisional credit which may be obtained by banks before depositor withdrawal is available. The Drurys claim that their inability to use these funds is a violation of the due process clause.

 Latching onto a different provision of the Act, the Drurys make a further equal protection claim. Under Section 4005(a), holders of interest-bearing accounts accrue interest from the time that provisional credit is made available. The Drurys claim that the non-availability of funds for non-interest-bearing accounts at a time when interest is available for interest-bearing accounts is a violation of their equal protection rights.

 Lastly, the Drurys challenge Sections 4010(a)(2)(B)(ii), 4010(3)(b)(1)-(5) and 4010(3)(c)(1)-(2) of the Act. These provisions set out limitations on class action and individual awards. The Drurys claim that the difference in these limitations constitutes a denial of equal protection in violation of the Fifth Amendment. The Drurys also attack the limits on bank liability included in these provisions as being a denial of equal protection.

 As the remedy for all of these claims, the Drurys seek injunctive relief, declaratory judgment relief and an accounting of all funds and interest held by Horizon.

 ANALYSIS

 I. "Holding"

 A. Deprivation of Property Without Due Process

 The Drurys' first claim is that Horizon's "holding" of their check for the statutorily-approved period constitutes a deprivation of their property and a denial of their equal protection rights under the Fifth Amendment. In order for plaintiffs to proceed with a Fifth Amendment claim against Horizon, it must first be determined whether Horizon is a governmental actor. In these circumstances, Horizon can be considered a governmental actor since it acted at the behest of the government. The government may be "held responsible for a private decision . . . when it has exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the State." Blum v. Yaretsky, 457 U.S. 991, 1004, 73 L. Ed. 2d 534, 102 S. Ct. 2777 (1982). The overt encouragement here was Congress' adoption of the Act. Horizon was acting under the authorization of the Act when it put a "hold" on Marsha Drury's check. Horizon's ...


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