07/26/24 | Court Grants Preliminary Approval of Settlement
On July 26, 2024, U.S. District Judge Richard J. Leon granted preliminary approval of a $197.5 million settlement with Visa and Mastercard in an antitrust litigation accusing the companies of imposing pricing restraints that inflate ATM fees. The settlement class is defined as:
“All individuals and entities that paid an unreimbursed ATM Access Fee directly to any Bank Defendant or Alleged Bank Co-Conspirator for a Foreign ATM Transaction using an ATM card issued by a financial institution in the United States to withdraw cash at an ATM located in the United States at any time from October 1, 2007, to the date of the Preliminary Approval Order.”
The settlement class notice will begin within the next 28 days and a fairness hearing will be held on Jan. 23, 2025, to determine final approval of the settlement.
ATM ANTITRUST LAWSUIT EXPLAINED
Hagens Berman filed a class-action lawsuit alleging that Visa and Mastercard, together with Bank of America, JP Morgan Chase and Wells Fargo, violated federal antitrust laws by establishing uniform agreements with U.S. banks that issue automated teller machine (ATM) cards, preventing ATM operators from setting ATM access fees below the level of the fees charged on Visa’s and Mastercard’s networks. These agreements allegedly eliminate competition in the marketplace for ATM network services, causing ATM fees to be higher than they should be.
The lawsuit asked the court to issue an injunction preventing Visa and Mastercard from enforcing fee restrictions on ATMs. The suit also sought damages for the allegedly higher prices consumers were forced to pay to use ATMs across the country.
HOW THE CLASS ACTION PROGRESSED
The District Court dismissed the complaint and denied plaintiffs’ request to amend it. Plaintiffs appealed to the D.C. Circuit Court of Appeals. The court held oral arguments on the appeal in February 2015, and made the decision to reverse the dismissal of the case. In November 2016, the U.S. Supreme Court dismissed an appeal from Visa and Mastercard to overturn the D.C. Circuit Court’s decision.
In October 2020, Hagens Berman reached a settlement agreement with the banks valued at $66.7 million on behalf of consumers, but in October 2021, Visa and Mastercard appealed a federal judge’s class certification in the case. Defendants asked the D.C. Circuit Court of Appeals to reevaluate the certification. In July 2023, the Circuit Court reaffirmed the federal judge’s class certification, and Visa and Mastercard petitioned the court to reconsider. In September 2023, the Circuit Court announced that it would not rehear its order upholding the class certification, and the case will proceed toward trial.
CASE TIMELINE
On May 29, 2024, Hagens Berman filed a motion for preliminary approval of a $197.5 million settlement in antitrust litigation accusing Visa and Mastercard of price-fixing ATM transaction fees. If approved, the settlement would bring the total recovery to $264.2 million, following a $66.74 million settlement with Bank of America, Chase and Wells Fargo finally approved in 2022.
On April 15 2024, the U.S. Supreme Court denied to hear an appeal from Visa and Mastercard to review a decision by the U.S. Court of Appeals for the District of Columbia Circuit affirming certification to three classes of ATM customers and owners. Visa and Mastercard have been battling claims that their ATM fee rules violate antitrust laws since 2011, and this marks the second time the ATM fee dispute has been before the Supreme Court.
The D.C. Circuit Court of Appeals declined Visa and Mastercard’s petition to rehear its order upholding the federal judge’s class certification in this case.
The D.C. Circuit Court of Appeals reaffirmed the federal judge’s class certification.
On Aug. 8, 2022, U.S. District Court Judge Richard J. Leon approved a $66.74 million settlement reached with Bank of America, Chase and Wells Fargo.
Visa and Mastercard appealed the federal judge’s class certification.
U.S. District Judge Richard J. Leon rejected Visa and Mastercard’s arguments against class certification, and certified a class of ATM operators who had unlawfully been overcharged for network fees and two consumer classes who had been overcharged for access fees at ATM terminals.
$66.7 Million Settlement Reached Against Big Banks in ATM Fee-Fixing Class-Action Lawsuit
Steve Berman said, "Not only is this settlement a tremendous return for consumers, it also serves as a reminder that transparency and fairness are standards that cannot be skirted without a heavy penalty."
The U.S. Supreme Court dismissed a petition from Visa and Mastercard to overturn the D.C. Circuit Court’s decision to revive the class action.
D.C. Circuit Court Reverses Dismissal of ATM Price Fixing Class Action
Steve Berman said, "This is a big win for consumers, as we believe this case will bring not only damages caused by the anti-competitive acts of Visa and MasterCard, but also an injunction that will spark competition in the ATM market."
