United States District Court, E.D. Virginia, Alexandria Division
SUSAN DRESS, AMY EDWARDS, and STEPHANIE BARNETT, on behalf of themselves and all others similarly situated, Plaintiffs,
CAPITAL ONE BANK (USA), N.A., Defendant.
MEMORANDUM OPINION AND ORDER
O. Grady, United States District Judge.
matter comes before the Court on Defendant's Motion to
Dismiss (Dkt. 50). The motion is fully briefed, and the Court
dispensed with oral argument, finding it would not aid in the
decisional process. For the reasons stated below, and for
good cause shown, Defendant's Motion to Dismiss (Dkt. 50)
each have Capital One credit cards and dispute Capital
One's authority to charge Plaintiffs interest on new
purchases when they pay off their account balance in full by
the due date of their next monthly statement, but had not
paid off their account balance in full by the due date of
their previous monthly statement.
Capital One Customer Agreement includes the following
relevant provisions regarding charging interest:
We will charge Interest Charges and Fees to your Account as
disclosed on your Statement and other Truth-in-Lending
Disclosures. In general. Interest Charges begin to accrue
from the day a transaction occurs. However, we will
not charge you interest on any new transactions
posted to the purchase Segment of your Account if you
paid the total balance across all Segments of your
Account in full by the due date on your Statement each
We will continue to charge Interest Charges during Billing
Cycles when you carry a balance regardless of whether your
Statement includes a minimum payment that is due.
Dkt. 43-1 at 4 (italics in original removed, emphasis added).
monthly billing statements sent to Plaintiffs, which were
incorporated by reference into the Customer Agreement,
included slightly different, yet consistent, disclosures
How can I Avoid Paving Interest
Charges? If you pay your statement's New
Balance in full by the due date, we will not charge you
interest on any new transactions that post to the
purchase segment. If you have been paying your account in
full with no Interest Charges, but then you do not pay your
next New Balance in full, we will charge interest on the
portion of the balance that you did not pay....
How is the Interest Charge applied?
Interest Charges accrue from the date of the transaction or
the first day of the Billing Cycle. Interest Charges
accrue on every unpaid amount until it is paid in full. This
means you may owe Interest Charges even if you pay the entire
New Balance for one Billing Cycle, but did not do so the
previous Billing Cycle....
How do you Calculate the Interest Charge? We use a
method called Average Daily Balance (including new
1. First, for each segment we take the beginning balance each
day and add in new transactions and the periodic
Interest Charge on the previous day's balance. Then we
subtract any payments and credits for that segment as of that
day. The result is the daily balance for each segment.
However, if your previous statement balance was zero or a
credit amount, new transactions which post to your purchase
segment are not added to the daily balance. ...
E.g., Dkt. 43-2 at 3 (underline and bold in
original, emphasis added).
Plaintiffs Barnett and Edwards contacted Capital One about
the terms of their credit card agreements, Capital One
provided Plaintiffs with a copy of the Capital One Customer
Agreement and summarized the key current terms in a
"Current Terms Letter." In the Current Terms
Letter, Capital One stated that it "will not charge
interest on new purchases, provided you have paid your
previous balance in full by the due date each
month." Dkt. 43-3 at 2 (emphasis added). Capital One
more fully explained that:
If you pay your statement's "New Balance" in
full by the due date, we will not charge interest on any
new transactions that post to the Purchase balance.
If you have been paying your account in full with no interest
charges, but then you do not pay your next "New
Balance" in full, we will charge interest on the portion
of the balance that you did not pay....
... Interest charges accrue on every unpaid amount until it
is paid in full. This means you may owe interest charges even
if you pay the entire "New Balance" one month, but
did not do so for the previous month....
For each segment of your account, we calculate your total
interest charge by multiplying your average daily balance by
the daily periodic rate and multiplying the result by the
number of days in the billing period.... To determine your
daily balance: 1) take the beginning balance and add in
new transactions and the periodic interest charge on the
previous day's balance. 2) Subtract any payments and
credits for that segment as of that day. However, if you
paid your previous month's balance in full (or if your
balance was zero or a credit amount), new transactions which
post to your purchase or ...