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Switch in Debate Saves the Eight

Atm-1524870_960_720By William M. Strom

On November 17, the U.S. Supreme Court dismissed its review of two related antitrust class actions involving ATM fees and, in an atypical move, explained its reason why. In each of the consumer class actions, Visa, Inc. v. Osborn (No. 15-961) and Visa, Inc. v. Stoumbos (No. 15-962), plaintiffs below had persuaded the D.C. Circuit to allow them to maintain antitrust challenges against credit card company rules preventing independent ATM operators from imposing lower fees for transactions processed on networks that are not owned by Visa or MasterCard.

Petitioners, the credit card companies and associated banks, had argued in their petition for certiorari that allegations of their participation in a business association were not enough to support an action for antitrust conspiracy, and that the D.C. Circuit decisions allowing the challenges to go forward created a direct conflict with the rule in the Ninth Circuit. Certiorari was granted on June 28, 2016, to resolve the question “[w]hether allegations that members of a business association agreed to adhere to the association’s rules and possess governance rights in the association, without more, are sufficient to plead the element of conspiracy in violation of Section 1 of the Sherman Act.” But after making changes to their legal team, petitioners argued in merits briefing that the credit card companies and banks were engaged in a joint venture—a single entity that is incapable of engaging in a conspiracy as a matter of law. The respondent class and the United States as amicus curiae argued in their briefs that petitioners’ shift in legal argument amounted to an abandonment of the position advanced in the petition for certiorari.

The Court agreed and dismissed the petition as improvidently granted. This permits the consumers’ class actions to proceed in the lower courts and leaves the question of Sherman Act liability for the activities of business associations open, at least until another case presents a more appropriate vehicle.

The U.S. Supreme Court’s order of dismissal can be found here. Additional coverage of the cases is available from SCOTUSBlog.