Supreme Court Declines Credit Card Companies' Request to Review Class Certification

On April 15, 2024, the Supreme Court denied a request to review a class certification made by the D.C. District Court and affirmed by the United States Court of Appeals for the District of Columbia Circuit. This long running dispute between credit card companies and ATM operators will return to the trial court where millions of putative class members allege billions in damages resulting from violations of the Sherman Antitrust Act.

Visa and Mastercard argued that there was Circuit split regarding analysis of class certification requirements.  According to Visa, the D.C. Circuit joined the Eighth and Ninth Circuits in adopting a standard that does not require the district court to make findings supporting the predominance requirement of Rule 23; whereas the Second, Third, Fifth, and Eleventh Circuits require plaintiffs prove predominance, and resolve factual disputes relevant to the predominance question. 

The Supreme Court does not agree that a Circuit split needs to be resolved, or at least did not find this action to be a good vehicle for resolution, and declined Visa’s Petition.

The Classes of the Class Action

The class action was brought by three classes of Plaintiffs. First, the ATM operator class is made up of approximately 3,400 independent (non-bank) ATM operators suing to recover overcharged fees. Second, the Mackmin class, are consumers who paid ATM access fees to withdraw cash from bank-operated ATMs in a “foreign” ATM transaction. Third, the Burke class, are consumers who paid surcharges for a domestic cash withdrawal transaction at independent ATMs.

The Disputed Class Certification

In evaluating class certification questions, courts are asked to determine whether the questions of law or fact common to class members predominate over any questions affecting only individual members (the Predominance Rule).  Visa and Mastercard contended a Circuit split regarding application of the Predominance Rule merited review and resolution.

The District Court held that at the class-certification stage plaintiffs need only demonstrate a “colorable” method by which they intend to prove classwide impact, and that the class members had offered “colorable, reasonable, and well established methods by which they intended to prove classwide impact.” Whereas, Visa and Mastercard contend Supreme Court precedent requires a “rigorous analysis” of the proposed method to prove classwide impact and an affirmative demonstration that the common issues predominate over individualized issues.  Visa and Mastercard also contend the District Court’s class-certification swept tens of thousands of uninjured plaintiffs into the litigation, and that the classes had failed to identify a mechanism to exclude uninjured plaintiffs.

The petition juxtaposed two common evaluation standards: (1) the “rigorous analysis” review employed by the Second, Third, Fifth, and Eleventh Circuits, generally requiring some resolution of disputed facts, and seen as more defendant friendly; and (2) a more relaxed standard employed by the Eighth and Ninth Circuits, which generally decline to resolve factual disputes that overlap or are coextensive with a merits determination at the class-certification stage.

ATM Access Fees

To withdraw cash, a consumer either uses an ATM terminal operated by the bank that issued their payment card, or completes a “foreign” transaction operated by a different entity.  During a foreign transaction, the terminal communicates with the bank that issued the consumer’s card through an ATM network, which enables participants in the transaction to communicate in real time and establishes the operating rules and default fees for the transaction.

The underlying litigation challenged Visa and Mastercard’s network rules, which prohibit ATM operators from imposing discriminatory fees for transactions processed over Visa or Mastercard networks.

The class members allege the network rules result in ATM operators charging higher surcharges to customers, and that the non-discrimination clause of the network rules violates Section 1 of the Sherman Act. 

Key Takeaways