Appeal from a judgment of the Superior Court of Orange County, Gail Andrea Andler, Judge. Reversed. (Super. Ct. No. 04CC00598).
The opinion of the court was delivered by: Ikola, J.
CERTIFIED FOR PUBLICATION
Civil Code section 1748.9 (section 1748.9) requires credit card issuers engaged in extending credit to cardholders by means of a "preprinted check or draft" (known as "convenience checks" in the industry) to "disclose on the front of an attachment that is affixed by perforation or other means to the preprinted check or draft, in clear and conspicuous language, all of the following information: [¶] (1) That 'use of the attached check or draft will constitute a charge against your credit account.' [¶] (2) The annual percentage rate and the calculation of finance charges, as required by Section 226.16 of Regulation Z of the Code of Federal Regulations, associated with the use of the attached check or draft. [¶] (3) Whether the finance charges are triggered immediately upon the use of the check or draft."
Alleging systematic violations of section 1748.9, plaintiff Allan Parks filed a class action lawsuit against defendant MBNA America Bank, N.A. (MBNA)*fn1 for its purportedly unlawful business practices under Business and Professions Code section 17200 et seq. MBNA is a national banking association, organized under the laws of the United States and regulated by the Office of the Comptroller of the Currency (OCC). (See 12 U.S.C. §á1 et seq.) The trial court granted judgment on the pleadings to MBNA, following Rose v. Chase Bank USA, N.A. (9th Cir. 2008) 513 F.3d 1032 (Rose) in finding section 1748.9 preempted by federal law applicable to national banks. We conclude section 1748.9 is not, on its face, preempted and therefore reverse. Section 1748.9 does not preclude national banks from exercising their authority to lend money on personal security under section 24 of title 12 of the United States Code (Seventh). Furthermore, without a factual record, a court cannot conclude that section 1748.9 significantly impairs national banks' authorized activities.*fn2
As the court granted judgment on the pleadings to MBNA, we assume the truth of, and liberally construe, all properly pleaded factual allegations in Parks's complaint. (Stone Street Capital, LLC v. California State Lottery Com. (2008) 165 Cal.App.4thá109, 116 (Stone Street).)
In February 2003, MBNA issued a credit card to Parks. MBNA sent several preprinted drafts to his residence (and the residences of other similarly situated proposed class members) in late 2003. The drafts sent to Parks and the other proposed class members did not contain any of the three disclosures required by section 1748.9. Parks used two of the preprinted drafts; other proposed class members used drafts sent to them. Parks (and the other class members) incurred finance charges and interest charges for each transaction, as interest accrued as of the date of the transactions (there was no "grace period" as is typical in credit card transactions).
Parks, on behalf of himself and all others similarly situated, sued MBNA in June 2004 for its alleged violations of Business and Professions Code section 17200 et seq. Several years into the litigation, MBNA renewed a previously rejected motion for judgment on the pleadings, basing its renewed motion on subsequent case law — Rose, supra, 513 F.3d 1032. The court granted MBNA's motion and entered judgment against Parks.
We review the judgment de novo, as it was based on the trial court's grant of MBNA's motion for judgment on the pleadings. (Stone Street, supra, 165 Cal.App.4tháat p. 116.)
In all material respects, Rose, supra, 513 F.3d 1032, is factually identical to the case before us. In Rose, class action plaintiffs sued Chase Bank USA, N.A. (Chase) for its alleged violations of section 1748.9. (Rose, at pp. 1034-1035.) The convenience checks provided by Chase to its cardholders lacked disclosures required under section 1748.9. (Rose, at p. 1035.) The district court granted Chase's motion for judgment on the pleadings and the Ninth Circuit Court of Appeals affirmed. (Id. at p. 1036.) Both courts held federal law preempted section 1748.9 as applied to national banks. (Rose, at pp. 1037-1038; Rose v. Chase Manhattan Bank USA (C.D.Cal. 2005) 396 F.Supp.2d 1116, 1122-1123.)
Parks asserts Rose was wrongly decided. We are not bound to follow federal court precedent; however, "'numerous and consistent'" federal decisions may be particularly persuasive when they interpret federal law. (Etcheverry v. Tri-Ag Service, Inc. (2000) 22 Cal.4thá316, 320-321, overruled on another ground in Bates v. Dow Agrosciences LLC (2005) 544 U.S. 431, 437, 452.) If we are persuaded federal law preempts section 1748.9 as applied to national banks, the supremacy clause (U.S. Const., art. VI, cl. 2) obligates this court to honor federal law by holding section 1748.9 inapplicable to MBNA.
Uncontroverted Legal Framework
We begin our analysis by setting forth several uncontroversial propositions. First, "federal law can preempt state law in one of three ways: (1) expressly; (2) by actually conflicting with state law; or (3) by exclusively occupying a legislative field." (Miller v. Bank of America, N.A. (2009) 170 Cal.App.4thá980, 984 (Miller).)
Second, federal banking law sometimes, but not always, preempts state regulation as applied to national banks. "Business activities of national banks are controlled by the National Bank Act (NBA or Act), 12 U.S.C. §á1 et seq., and regulations promulgated thereunder by the [OCC]. [Citations.] As the agency charged by Congress with supervision of the NBA, OCC oversees the operations of national banks and their interactions with customers." (Watters v. Wachovia Bank, N.A. (2007) 550 U.S. 1, 6 (Watters).) "[F]ederal control shields national banking from unduly burdensome and duplicative state regulation. [Citations.] Federally chartered banks are subject ...