Pamela Brennan v. Concord Efs, Inc.
2012 U.S. App. LEXIS 14265
| 9th Cir. | 2012Background
- ATM cardholders allege horizontal price fixing of STAR interchange fees that are passed to them as foreign ATM fees.
- Interchange fee setting is done by the STAR network; foreign ATM fees are set by card-issuing banks.
- Concord acquired STAR in 2001; after acquisition, STAR’s member banks allegedly had reduced control over STAR’s pricing.
- Plaintiffs did not directly pay the complained fixed fee; they pay foreign ATM fees indirectly via banks.
- District court granted summary judgment holding plaintiffs lacked antitrust standing under Illinois Brick; the Ninth Circuit affirms.
- Court confines discussion to antitrust standing and does not address other related issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs have antitrust standing under Illinois Brick | Plaintiffs are indirect purchasers; pass-on theory supports standing | Illinois Brick bars indirect purchasers from damages | Plaintiffs lack standing under Illinois Brick |
| Whether the co-conspirator exception applies to standing | Defendants fixed interchange fees to indirectly fix foreign ATM fees; co-conspirator exception should apply | No conspiracy fixing the price paid by plaintiffs; exception not met | Co-conspirator exception does not apply; no direct price fixing of plaintiffs' payments |
| Whether ownership/control (Royal Printing/Freeman) creates a realistic possibility of suit | Bank Defendants’ ownership/control over STAR creates lack of realistic possibility of suit | No control by Bank Defendants over STAR after Concord acquisition; ownership% insufficient | No ownership/control sufficient to defeat Illinois Brick; no realistic possibility of suit; standing not established |
| Whether plaintiffs’ injury is the price fixed (foreign ATM fee) or upstream cost (interchange fee) | Interchange fee fixed upstream to inflate foreign ATM fees; injury occurs at foreign ATM fee | Illinois Brick rejects fixing upstream costs as injury; price paid must be directly fixed | Injury requires direct price fixing; pass-on theory cannot circumvent Illinois Brick |
Key Cases Cited
- Illinois Brick Co. v. Illinois, 431 U.S. 720 (supreme court 1977) (direct purchaser standing; pass-on theory barred for indirect purchasers)
- Delaware Valley Surgical Supply Inc. v. Johnson & Johnson, 523 F.3d 1116 (3d Cir. 2008) (standing determined by de novo analysis on appeal; facts reviewed for clear error at district court)
- Kendall v. Visa U.S.A., Inc., 518 F.3d 1042 (9th Cir. 2008) (co-conspirator/exceptions discussion; standing limits under Illinois Brick)
- Shamrock Foods Co. v. Detroit Retail Grocery Wars, 729 F.2d 1211 (9th Cir. 1984) (co-conspirator exception applies when direct purchasers conspire to fix price paid by plaintiffs)
- Utilicorp United, Inc. v. American Global AAA, 497 U.S. 199 (supreme court 1990) (adopted rule against carving exceptions to direct purchaser standing; Illinois Brick framework)
- Royal Printing Co. v. Kimberly Clark Corp., 621 F.2d 324 (4th Cir. 1980) (ownership/control exception; lack of control bars private antitrust enforcement)
- Dickson v. Microsoft Corp., 309 F.3d 193 (4th Cir. 2002) (limits to co-conspirator exception; price fixing must be the price paid by plaintiffs)
- Plymouth Dealers’ Ass’n of N. Cal. v. United States, 279 F.2d 132 (9th Cir. 1960) (definition of price fixing under Sherman Act; not directly applicable here)
- Palmer v. BRG of Ga., Inc., 498 U.S. 46 (supreme court 1990) (illustrates pricing/competition issues in markets; pass-on considerations)
- In re Sugar Indus. Antitrust Litig., 579 F.2d 13 (3d Cir. 1978) (discussion of direct purchasers in Third Circuit context)