663 F. App'x 71
2d Cir.2016Background
- Plaintiffs are representatives of a putative nationwide class of Visa/MasterCard cardholders alleging antitrust violations under the Clayton Act and the Cartwright Act.
- District court dismissed the Clayton Act claim under Fed. R. Civ. P. 12(b)(6) and declined to exercise jurisdiction over the Cartwright Act claim.
- Plaintiffs contend defendants knowingly conspired to fix interchange fees and that cardholders pay those fees directly, causing injury.
- The district court described the card-transaction flow: merchant to acquiring bank to network to issuing bank, with the issuer paying an interchange fee to the acquirer and billing the cardholder the purchase price.
- The court held cardholders do not directly pay interchange fees, so plaintiffs lack standing under Illinois Brick to sue for damages.
- On appeal, plaintiffs also challenge reconsideration rulings and the court’s handling of the Cartwright Act claim; the panel affirms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing under Illinois Brick | Plaintiffs contend cardholders directly pay interchange fees and are injured. | Transaction structure shows cardholders do not directly pay interchange fees; indirect purchaser standing applies. | No standing; Illinois Brick bars indirect purchasers from Clayton Act damages. |
| Reconsideration standard | District court overlooked critical facts and decisions. | Reconsideration requires strong showing; no abuse of discretion. | No abuse of discretion in denying reconsideration. |
| Leave to amend | Charts cure defects and justify amendment. | No request for leave to amend and charts not proper; no prejudice shown. | Leave to amend denied; amendments not ripe to cure viability. |
| Cartwright Act jurisdiction and merits | Not argued substantively in main brief; waiver. | District court properly dismissed; jurisdiction is supported or waived argument not raised. | Cartwright Act claim affirmed as dismissed due to waiver. |
Key Cases Cited
- Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) (indirect purchasers generally lack standing for Clayton Act damages)
- Simon v. Key Span Corp., 694 F.3d 196 (2d Cir. 2012) (standing concerns in antitrust actions)
- DPWN Holdings (USA), Inc. v. United Air Lines, Inc., 747 F.3d 145 (2d Cir. 2014) (allegations contradicted by specific allegations cannot be accepted)
- United States v. Am. Express Co., 838 F.3d 179 (2d Cir. 2016) (interchange fee characterization in card transactions)
- Wal-Mart Stores, Inc. v. Visa U.S.A. Inc., 396 F.3d 96 (2d Cir. 2005) (definition of interchange fee and payment flows)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for pleading)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleading)
- Wilson v. Merrill Lynch & Co., 671 F.3d 120 (2d Cir. 2011) (leave to amend and pleading standards)