Michael W. Sobol
Consumer Protection · Banking Trials · Cybersecurity & Data Privacy
The Arithmetic of an Overdraft
A hypothetical customer begins the day with one hundred dollars in a checking account: coffee in the morning, gas at noon, groceries in the afternoon, and then, at the end of the day, a large automatic payment that the account cannot quite cover.
Posted in the order they happened, those purchases produce one overdraft fee. Wells Fargo did not post them in the order they happened. Its software re-sorted each day's debit-card purchases from largest to smallest, so the big payment landed first, emptied the account, and turned every small purchase that followed into a separate overdraft — three fees, four fees, ten fees, manufactured from the same day of ordinary spending.
That posting method affected more than a million California customers. Michael Sobol helped try their case, argued it on appeal, and pursued it for seven years: Gutierrez v. Wells Fargo.
Two Weeks Before Judge Alsup
The bench trial ran two weeks in San Francisco. The plaintiffs' team put the bank's own machinery on display — transaction timestamps, the daily grouping rules, the sorting software, and side-by-side calculations showing what the same purchases would have cost under chronological posting. Against that machinery they set what customers had actually been told in deposit agreements, account materials, and direct communications.
In August 2010, Judge William Alsup issued a ninety-page opinion finding that Wells Fargo had manipulated its posting order to maximize overdraft fees and had led customers to expect something different. He enjoined the practice and ordered $203 million returned in restitution.
Holding the Judgment
Wells Fargo appealed on every available front — federal preemption, arbitration, class certification, the merits. Sobol argued for the customers.
The appeal turned on a distinction he had to make stick: federal banking law lets a national bank choose its posting order, but it does not license a bank to tell customers one thing while doing another. In December 2012, the Ninth Circuit agreed, holding that the misrepresentation claim survived preemption. It also rejected the bank's attempt to compel arbitration after it had already litigated through trial and lost.
On remand, the district court applied its trial findings to the surviving claim and reinstated the full $203 million. In October 2014, the Ninth Circuit affirmed. Sobol's response measured the whole arc of the fight: more than a million Californians were entitled to relief, and they "should not have to wait any longer for Wells Fargo to return their money."
One Hundred Cases, Thirty-Five Banks
The overdraft theory Sobol helped establish in Gutierrez also informed the coordinated proceeding in Miami before Judge James Lawrence King, where more than one hundred lawsuits against thirty-five of the nation's largest banks were brought together and Sobol served on the Plaintiffs' Executive Committee.
Each bank had its own contracts, its own posting software, its own defenses. In the coordinated proceeding, Sobol carried forward the arithmetic he had already taken through trial and appeal: how a re-sorted day of purchases becomes a stack of fees. The coordinated cases produced hundreds of millions of dollars in settlements, including $410 million from Bank of America in Yourke — a nationwide recovery — and made Sobol a Public Justice Trial Lawyer of the Year finalist in 2012.
He was on the leadership team in the Chase Check Loan multidistrict litigation as well, where more than a million cardholders who had accepted promised fixed-rate loans saw their required monthly payments raised by more than 150 percent. That litigation ended in a $100 million settlement approved in 2012, distributed account by account to the people whose loan terms had changed.
Seventy-Eight Million Names
In 2016, Lieff Cabraser created a Cybersecurity & Data Privacy practice group and made Sobol its chair. The subject matter changed — from posting orders to server intrusions and tracking code — but the discipline did not: find the gap between what a company told people and what its systems actually did, and prove it with the company's own records.
The Anthem data breach exposed the personal and health information of 78.8 million people. Sobol served on the court-appointed Plaintiffs' Steering Committee, and the $115 million settlement approved in 2018 paired cash and credit monitoring with guaranteed security funding.
Sobol's privacy matters include a $115 million Oracle settlement over the collection and sale of detailed electronic profiles of internet users, which also required changes to the company's data practices; a $62 million Google settlement over storage and tracking of smartphone users' location information after they switched Location History off; and litigation over Facebook's scanning of users' private messages. In recent years his cases have returned more than a billion dollars and changed business practices reaching tens of millions of people.
Recognition and Practice
The Consumer Attorneys of California honored Sobol's work in Gutierrez, Yourke, and Chase in three consecutive years.
Sobol is a partner in Lieff Cabraser's San Francisco office. His broader consumer practice has included defective products, financial fraud, refinancing for borrowers harmed by discriminatory automobile-dealer markups, and reform of credit-reporting verification procedures — remedies that changed how companies operate, alongside the judgments that made customers whole.
He earned his undergraduate degree from Hobart College in 1983 and his law degree from Boston University in 1989, and is admitted in California and Massachusetts and before the Ninth and Eleventh Circuits and multiple federal district courts.