Court Reverses Dismissal of ATM Price Fixing Class Action
SEATTLE – Hagens Berman attorneys representing a class of consumers who paid inflated ATM (automated teller machine) “access fees” announced today that the United States Court of Appeals for the District of Columbia Circuit reversed and remanded a District Court ruling dismissing a class action brought against Visa and MasterCard, together with Bank of America, JP Morgan Chase and Wells Fargo, for entering into agreements that set the level of those fees. The decision revives two previously-dismissed class actions brought by consumers as well as a class action brought by independent ATM operators.
In February 2013, the District Court dismissed the complaints and, in December 2013, denied Plaintiffs’ motions to file amended complaints. The D.C. Circuit’s decision remands the case back to the District Court. The decision rejects both of the District Court’s grounds for not allowing the plaintiffs to file amended complaints, finding both that Plaintiffs had alleged the essential components of standing and had alleged an agreement in restraint of trade under Section 1 of the Sherman Antitrust Act.
“This is a big win for consumers, who now can seek not only damages caused by the Defendants but can now also pursue an injunction that will spark competition in the ATM market,” said Steve Berman, managing partner of Hagens Berman who argued the appeal before the D.C. Circuit. “The decision today affirms that our claims should be heard on their merits.”
The decision concluded that the ATM operator plaintiffs had sufficiently alleged that the Defendants’ agreements injured ATM operators by preventing operators from setting ATM fees to encourage consumers to use lower cost cards. The court observed that preventing competition in setting ATM access fees insulated Visa and MasterCard from competition with other networks and allowed them to charge inflated network service fees to ATM operators. The Court similarly found that consumers had sufficiently alleged that, because ATM operators could not charge lower ATM access fees for transactions conducted over lower cost networks, consumers had paid inflated ATM access fees. It held that Plaintiffs’ theories were susceptible to proof at trial because they “allege a system in which Visa and MasterCard insulate their networks from price competition from other networks [which] yields higher profits for Visa and MasterCard… at the cost of consumers and independent ATM operators.” Slip Op. at 12.
The Court also held that Plaintiffs had sufficiently alleged an anti-competitive agreement under the Sherman Antitrust Act. It determined that, even though the challenged agreements were reached at a time when Visa and MasterCard were owned and operated as joint ventures by a large group of retail banks -- and those banks had since relinquished direct control over Visa and MasterCard -- Plaintiffs had sufficiently alleged that “the member banks used the bankcard associations to adopt and enforce a supra-competitive pricing regime for ATM access fees.” Slip Op. at 16. The Court also found that the Defendants had not shown they had withdrawn from any previously-established conspiracy because each member bank continued to benefit from the challenged agreements.
Hagens Berman’s lawsuit asks the court to issue an injunction preventing Visa and MasterCard from enforcing fee restrictions on ATMs. The suit also seeks damages for the allegedly higher prices consumers were forced to pay to use ATMs across the country.
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About Hagens Berman
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with offices in nine cities. The firm has been named to the National Law Journal’s Plaintiffs’ Hot List eight times. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.