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National ATM Council, Inc. v. Visa Inc.

United States District Court, D. Columbia.

December 19, 2013

NATIONAL ATM COUNCIL, INC., et al., Plaintiffs,
v.
VISA INC., et al., Defendants. ANDREW MACKMIN, et al., Plaintiffs,
v.
VISA INC., et al., Defendants. MARY STOUMBOS, Plaintiff,
v.
VISA INC., et al., Defendants

Page 52

For NATIONAL ATM COUNCIL, INC., ATMS OF THE SOUTH, INC., BUSINESS RESOURCE GROUP, INC., CABE & CATO, INC., JUST ATMS, INC., WASH WATER SOLUTIONS, INC., ATM BANKCARD SERVICES, INC., MEINERS DEVELOPMENT COMPANY OF LEE'S SUMMIT, MISSOURI, LLC, MILLS-TEL, CORP., doing business as FIRST AMERICAN ATM, SELMAN TELECOMMUNICATIONS INVESTMENT GROUP, LLC, SCOT GARDNER, doing business as SJI, TURNKEY ATM SOLUTIONS, LLC, TRINITY HOLDINGS LTD, INC., T& T COMMUNICATIONS, INC., RANDAL N. BRO, on behalf of themselves and all others similarly situated, doing business as T& B INVESTMENTS (1:11-cv-01803-ABJ), Plaintiffs: Daniel A. Small, Kit A. Pierson, Laura M. Alexander, LEAD ATTORNEYS, Jeffrey B. Dubner, PRO HAC VICE, COHEN MILSTEIN SELLERS & TOLL PLLC, Washington, DC; David Allen LaFuria, LEAD ATTORNEY, Brooks E. Harlow, PRO HAC VICE, LUKAS, NACE, GUTIERREZ & SACHS, LLP, McLean, VA; Jonathan Laurence Rubin, LEAD ATTORNEY, RUBIN PLLC, Washington, DC.

For VISA INC., VISA U.S.A. INC., VISA INTERNATIONAL SERVICE ASSOCIATION, PLUS SYSTEM, INC. (1:11-cv-01803-ABJ), Defendants: Mark R. Merley, Matthew A. Eisenstein, LEAD ATTORNEYS, ARNOLD & PORTER LLP, Washington, DC.

For MASTERCARD INCORPORATED, MASTERCARD INTERNATIONAL INCORPORATED, doing business as MASTERCARD WORLDWIDE (1:11-cv-01803-ABJ), Defendants: Kenneth Anthony Gallo, LEAD ATTORNEY, PAUL WEISS RIFKIND WHARTON & GARRISON LLP, Washington, DC; Andrew C. Finch, Gary R. Carney, PRO HAC VICE, PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP, New York, NY.

For SAM OSBORN, ANDREW MACKMIN, BARBARA INGLIS (1:11-cv-01831-ABJ), Plaintiffs: Craig L. Briskin, LEAD ATTORNEY, MEHRI & SKALET, PLLC, Washington, DC; Anthony D. Shapiro, George W. Sampson, Steve W. Berman, PRO HAC VICE, HAGENS BERMAN SOBOL SHAPIRO LLP, Seattle, WA.

For JOHN EPSELAND (1:11-cv-01831-ABJ), Plaintiff: Craig L. Briskin, LEAD ATTORNEY, MEHRI & SKALET, PLLC, Washington, DC; Anthony D. Shapiro, George W. Sampson, Steve W. Berman, PRO HAC VICE, HAGENS BERMAN SOBOL SHAPIRO LLP, Seattle, WA.

For VISA INC., VISA U.S.A. INC., VISA INTERNATIONAL SERVICE ASSOCIATION, PLUS SYSTEM, INC. (1:11-cv-01831-ABJ), Defendants: Mark R. Merley, Matthew A. Eisenstein, LEAD ATTORNEYS, ARNOLD & PORTER LLP, Washington, DC.

For MASTERCARD INCORPORATED, MASTERCARD INTERNATIONAL INCORPORATED, doing business as MASTERCARD WORLDWIDE (1:11-cv-01831-ABJ), Defendants: Kenneth Anthony Gallo, LEAD ATTORNEY, PAUL WEISS RIFKIND WHARTON & GARRISON LLP, Washington, DC; Andrew C. Finch, Gary R. Carney, PRO HAC VICE, PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP, New York, NY.

For BANK OF AMERICA, NATIONAL ASSOCIATION, NB HOLDINGS CORPORATION, BANK OF AMERICA CORPORATION (1:11-cv-01831-ABJ), Defendants: Ana-Maria Ignat, Robert A. Salerno, LEAD ATTORNEYS, MORRISON & FOERSTER LLP, Washington, DC; Adam J. Heintz, Mark P. Ladner, Michael B. Miller, PRO HAC VICE, MORRISON & FOERSTER LLP, New York, NY.

For CHASE BANK USA N.A., JPMORGAN CHASE & CO., JPMORGAN CHASE BANK, N.A. (1:11-cv-01831-ABJ), Defendants: Peter Edward Greene, LEAD ATTORNEY, SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP, New York, NY.

For WELLS FARGO & COMPANY, WELLS FARGO BANK, N.A. (1:11-cv-01831-ABJ), Defendants: Gloria Corriols Phares, LEAD ATTORNEY, Sarah E. Zgliniec, Vivian R. M. Storm, William F. Cavanaugh, Jr., PRO HAC VICE, PATTERSON BELKNAP WEBB & TYLER LLP, New York, NY.

For MARY STOUMBOS, on behalf of herself and all others similarly situated (1:11-cv-01882-ABJ), Plaintiff: Michael G McLellan, LEAD ATTORNEY, FINKELSTEIN THOMPSON LLP, Washington, DC.

For VISA INC., VISA U.S.A. INC., VISA INTERNATIONAL SERVICE ASSOCIATION, PLUS SYSTEM, INC. (1:11-cv-01882-ABJ), Defendants: Mark R. Merley, Matthew A. Eisenstein, LEAD ATTORNEYS, ARNOLD & PORTER LLP, Washington, DC.

For MASTERCARD INCORPORATED, MASTERCARD INTERNATIONAL INCORPORATED, doing business as MASTERCARD WORLDWIDE (1:11-cv-01882-ABJ), Defendants: Kenneth Anthony Gallo, LEAD ATTORNEY, PAUL WEISS RIFKIND WHARTON & GARRISON LLP, Washington, DC; Andrew C. Finch, Gary R. Carney, PRO HAC VICE, PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP, New York, NY.

OPINION

Page 53

AMY BERMAN JACKSON, United States District Judge.

MEMORANDUM OPINION

Before the Court are motions to amend the complaints in three separate antitrust lawsuits. Plaintiffs in all three cases allege that certain pricing requirements that defendants Visa and MasterCard impose on operators of automatic teller machines (" ATMs" ) violate section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1 et seq. (2012). On February 13, 2013, the Court dismissed the lawsuits without prejudice for failing to plead sufficient facts to allege either injury in fact or the existence of an agreement or conspiracy. Nat'l ATM Council, Inc. v. Visa Inc., 922 F.Supp.2d 73 (D.D.C. 2013). Shortly after, plaintiffs filed motions to alter or amend the Court's judgment under Federal Rule of Civil Procedure 59(e), asking the Court to amend the judgment to dismiss the complaints, but not the cases, so plaintiffs could then move to amend their complaints.[1] While these motions were pending, plaintiffs filed motions for leave to amend their complaints under Federal Rule of Civil Procedure 15(a).[2]

Plaintiffs attempt to remedy the pleading deficiencies in their first amended complaints by setting forth new factual allegations in their proposed second amended complaints. The allegations of injury in the new complaints are still highly conclusory,

Page 54

and since they depend upon a series of intervening actions by parties not before the Court, they fail to state a redressable injury in fact. And even if the consumer plaintiffs have overcome the standing hurdle, they have yet to allege facts to support the conspiracy allegations. Accordingly, the Court will deny the motions to amend because the amendments in all three cases would be futile. The Court will also deny the motions to alter the judgment as moot.

BACKGROUND

All three proposed second amended complaints set forth additional allegations about ATM transactions, including additional facts about the role of the entities involved in these transactions and the fees they pay, and they add detail to support plaintiffs' theory of injury.

As the new complaints recount, consumers use personal identification number (" PIN" ) cards issued by their banks to access ATMs at locations other than a bank branch. When a consumer uses an ATM, the transaction request is transmitted electronically from the ATM to the bank that acquires the transaction, called the " acquiring bank." 2d Am. Class Action Compl., Ex. A to NAC Mot. to Amend [Dkt. # 39-2] (" NAC Proposed Compl." ) ¶ ¶ 40, 45; 2d Am. Class Action Compl., Ex. A to Mackmin Mot. to Amend (" Mackmin Proposed Compl." ) [Dkt. # 65-2] ¶ 58. The acquiring bank then sends the request electronically to the " issuing bank," which is the bank that issued the ATM card to the consumer and maintains the account from which the consumer seeks to withdraw money. NAC Proposed Compl. ¶ 45; see Mackmin Proposed Compl. ¶ 61. If the issuing bank confirms that the consumer has sufficient funds for the withdrawal, it sends an authorization back to the ATM operator, and the ATM dispenses the cash to the consumer. NAC Proposed Compl. ¶ 54.

ATM networks, such as Visa, MasterCard, Star, NYCE, Star, Pulse, or others, provide the infrastructure through which the data in an ATM transaction is transmitted electronically from the ATM to the acquiring bank, to the issuing bank, and back.[3] Some ATMs are bank-owned, while others are owned and operated by independent entities. Id. ¶ 54; Mackmin Proposed Compl. ¶ 69; 2d Am. Class Action Compl., Attach. A to Stoumbos Mot. to Amend [Dkt. # 32-3] (" Stoumbos Proposed Compl." ) ¶ 5. In order to transmit a transaction through an ATM network, the ATM operator must have a contract with that network. Banks that issue Visa-or MasterCard-branded PIN cards are automatically granted access to the Visa or MasterCard networks. Non-bank, independent operators obtain access to Visa, MasterCard, and other ATM networks by affiliating with a sponsoring financial institution, which acts as the acquiring bank for the independent operator. NAC Proposed Compl. ¶ 48; Mackmin Proposed Compl. ¶ 69; Stoumbos Proposed Compl. ¶ ¶ 55, 76. ...


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