643 F.3d 1158
8th Cir.2011Background
- Congress passed the Durbin Amendment as part of the Dodd-Frank Act to regulate debit-card interchange fees.
- Section 1693o-2 sets standards for determining when interchange fees are reasonable and proportional to issuer costs.
- The Board must consider cost concepts and distinguish between incremental issuer costs and other costs, with some costs not to be considered.
- Issuers with assets under $10 billion are exempt from these regulations; TCF has assets over $10 billion.
- TCF sued seeking a preliminary injunction, arguing facial unconstitutionality and due-process/equal-protection violations.
- The district court denied the injunction; this appeal follows challenging the facial validity and related standards.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Durbin provisions survive due-process review | TCF contends a confiscatory-rate analysis applies and would show unconstitutionality. | The district court rightly applied rational-basis review; provisions are related to legitimate aims. | Facially valid under rational-basis review; confiscatory-rate analysis not adopted. |
| Whether the Durbin provisions survive equal-protection review | TCF asserts no legitimate interest justifying larger vs. smaller issuers. | Statutory distinction is rationally related to protecting smaller banks and consumer access. | Rational basis maintained; equal-protection claim unlikely to prevail. |
Key Cases Cited
- United States v. Salerno, 481 U.S. 739 (1987) (facial challenges require no set of circumstances for validity)
- Wash. State Grange v. Wash. State Republican Party, 552 U.S. 442 (2008) (reaffirms Salerno test outside First Amendment context)
- Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109 (8th Cir. 1981) (Dataphase factors for preliminary injunctions)
- Planned Parenthood Minn., N.D., S.D. v. Rounds, 530 F.3d 724 (8th Cir. 2008) (Dataphase balancing framework for injunctions)
- FCC v. Beach Commc'ns, Inc., 508 U.S. 307 (1993) (economic regulation rational-basis review tolerates broad classifications)
- In re Permian Basin Area Rate Cases, 390 U.S. 747 (1968) (confiscatory-rate concept discussed in rate-regulation context)
- Pennell v. City of San Jose, 485 U.S. 1 (1988) (price-control constitutionality under due process requires rational basis)