## Facts

- Ohio judgment creditors (garnishors) commonly collected judgments by garnishing debtors’ bank accounts.
- Ohio’s garnishment statute required a garnishment to include a $1 fee payable to the garnishee bank for processing.
- The defendant banks charged their own customers (judgment debtors) additional garnishment-processing “service fees” (about $25–$80) under deposit-account fee terms.
- When an account lacked funds to satisfy both the garnishment amount and the service fee, the banks deducted the service fee first and remitted the remaining balance to the garnishor.
- The garnishors alleged they lost millions because banks reduced the amount remitted by taking these fees from the garnished funds.
- The garnishors sued under Ohio law, ultimately pressing a conversion theory that banks wrongfully exercised dominion over funds the garnishors claimed were theirs once garnishment attached.
- Federal banking law authorized national banks to exercise incidental banking powers; OCC regulations and an OCC interpretive letter concluded that national banks may charge garnishment-processing fees and may post fees in whatever order they choose.

## Issues

1. Whether the National Bank Act and OCC regulations/interpretations preempt an Ohio common-law conversion claim that would, in effect, prohibit or penalize federally authorized garnishment-processing fees and fee-posting practices.
2. Whether the garnishors stated a plausible Ohio conversion claim where the banks deducted fees charged to their own customers from deposit accounts subject to account agreements and federally authorized fee practices.

## Decision

- The Sixth Circuit affirmed dismissal of the conversion claim.
- The court held the claim was preempted to the extent it challenged fee amounts or posting order authorized by the OCC under the National Bank Act.
- The court also held that, even aside from preemption, the garnishors failed to plead conversion because the banks’ fee deductions were not a wrongful exercise of dominion over property belonging to the garnishors.

## Legal Principles

- National banks may impose non-interest charges and fees on deposit accounts as an incidental power under the National Bank Act, as interpreted by OCC regulations and reasonable OCC guidance.
- State law is preempted when it prevents, restricts, or significantly impairs a national bank’s exercise of federally authorized powers; state tort theories cannot be used to impose liability for conduct federal banking law permits.
- Conversion under Ohio law requires wrongful dominion over property belonging to another; where deposit-account funds remain subject to the bank-customer contract and lawful bank fees, a garnishor’s interest in garnished funds is subordinate to the bank’s authorized right to collect those fees.
- Ohio’s $1 garnishment fee provision governing the garnishment process did not operate as a state-law cap on a bank’s private deposit-account service fees charged to its customer, particularly where such a cap would conflict with federally authorized banking practices.

## Conclusion

The Sixth Circuit held that federal banking law and OCC-authorized fee practices foreclosed Ohio conversion liability against national banks for charging garnishment-processing fees to account holders and deducting those fees before remitting funds in response to a garnishment order.


Monroe Retail, Inc. v. RBS Citizens, N.A., 589 F.3d 274 (6th Cir. 2009)