United States District Court, District of Columbia
NATIONAL ATM COUNCIL, INC. et al., Plaintiffs,
VISA INC. et al., Defendants
MEMORANDUM OPINION (MAY 21, 2017) [DKTS. ## 60, 87,
RICHARD J. LEON, UNITED STATES DISTRICT JUDGE
teller machines ("ATMs") all around the country
allow individuals to conveniently withdraw cash from their
bank accounts without having to locate an open bank branch to
consummate their transaction. Although customers will often
use ATMs that are owned and operated by their own banks, they
will sometimes pay an "access fee" to use an ATM
that is not affiliated with their bank, conducting what is
referred to as a "foreign" ATM transaction.
Whenever a foreign ATM transaction occurs, the ATM terminal
must communicate with the customer's bank through an ATM
network. The plaintiffs in this putative class action are a
group of independent, non-bank-affiliated ATM operators, and
defendants Visa and MasterCard operate several of the ATM
networks that plaintiffs utilize during foreign ATM
transactions. Plaintiffs allege that Visa and MasterCard have
imposed contractual provisions-the "ATM Access Fee
Rules"-that prevent them from charging a discounted
access fee if a customer's transaction can be processed
over an alternative network that is less expensive than Visa
or MasterCard networks, and they allege that those rules
unreasonably restrain trade and therefore violate Section 1
of the Sherman Act, 15 U.S.C. § 1.
pending before the Court is plaintiffs' Renewed
Application for a Preliminary Injunction [Dkt. # 87], which
asks the Court to enjoin defendants' enforcement of the
ATM Access Fee Rules during the pendency of this litigation.
Upon consideration of the pleadings, the record, and the law,
I find that plaintiffs have not met their burden of showing
likely irreparable harm in the absence of an injunction, and
I therefore DENY the Motion.
AND PROCEDURAL BACKGROUND
in this case are the National ATM Council, an association of
independent ATM operators suing on behalf of its members, and
thirteen independent ATM owners and operators. Second Am.
Compl., ¶¶ 10-25 [Dkt. # 55]. When an individual
uses an independent ATM (or an ATM operated by a bank other
than his own), the transaction is referred to as a
"foreign transaction." Defs.' Mem. in
Opp'n. to Renewed App. for Prelim. Inj. at 4 [Dkt. # 99].
For the purposes of this case, there are four relevant actors
in a foreign transaction: (1) the individual accountholder
who initiates a transaction by inserting his or her
bank-issued ATM card into an ATM; (2) the bank that issued
the accountholder's ATM card and maintains his or her
accounts; (3) the ATM operator; and (4) the ATM network that
connects the "foreign" ATM to the bank.
Id. at 4-5.
and MasterCard operate the "Plus" and
"MasterCard" ATM networks respectively, but there
are a number of networks that also facilitate foreign ATM
transactions. Decl. of Jeff Sachs, ¶ 7 [Dkt. # 99-1];
Decl. of Leland Englebardt, ¶¶ 4, 7 [Dkt. # 99-2].
In any given transaction, the specific network that is
utilized is a function of the networks that the ATM can
access, the networks with which the customer's
bank-issued ATM card will work, and the preferences that are
established by the card-issuing bank. At a minimum, the ATM
card and the ATM must share at least one common network for
the transaction to work. See Defs.' Mem. in
Opp'n at 5 [Dkt. # 99].
independent ATM operators, plaintiffs can earn revenue in two
ways. First, as mentioned before, they can charge customers
an "access fee" for using their terminal. Sachs
Decl. ¶ 10; Englebardt Decl. ¶ 11. Second, they
indirectly receive "net interchange" fees.
Id. The card-issuing banks pay an "interchange
fee" to ATM networks like Visa and MasterCard, and
through a complex system of payments, a portion of the fee
eventually gets passed to the end ATM operator. Sachs Decl.
¶¶ 10-12; Englebardt Decl. ¶¶ 11-14. The
intricacies of interchange payments do not need to be
completely fleshed out here, but plaintiffs assert that Visa
and MasterCard pay relatively smaller net interchange rates
to ATM operators than alternative networks. See
Restated Decl. of John Michael Powell, ¶¶ 3-5 [Dkt.
contractual condition for accessing their networks, Visa and
MasterCard impose non-discrimination provisions referred to
as the "ATM Access Fee Rules." The ATM Access Fee
Rules were adopted in 1996, but have remained substantially
the same since that time. Id. ¶ 2; Sachs Decl.
¶ 23; Englebardt Decl. ¶ 26. Stated simply, the
rules prohibit ATM operators from charging access fees for
transactions processed over Visa or MasterCard networks that
are higher than any access fee they charge for transactions
processed over alternative networks. Powell Decl. ¶ 2;
Sachs Decl. ¶ 16; Englebardt Decl. ¶ 21. Plaintiffs
allege that without the Access Fee Rules, they would offer
discounts and structure their access fees to encourage
customers to use ATM cards that are compatible with less
expensive networks. Second Am. Compl. ¶ 69. As a result,
they argue that they are an illegal restraint of trade that
unfairly protects Visa and MasterCard from price competition
from less expensive networks and harms the operators'
profitability and economic sustainability.
filed this civil class action in October 2011. Compl. [Dkt.
#1]. In February 2013, one of my colleagues on the District
Court concluded that plaintiffs' complaint failed to
allege facts to establish standing or concerted activity
under the Sherman Act and dismissed the case without
prejudice. Nat'l ATM Council, Inc. v. Visa
Inc., 922 F.Supp.2d73 (D.D.C.2013). In December 2013, my
colleague denied plaintiffs' motion to alter the judgment
with leave to re-plead, after concluding that the proposed
amended complaint lacked adequate facts to establish standing
or concerted activity. Nat'l ATM Council,
Inc. v. Visa Inc., 7 F.Supp.3d 51 (D.D.C. 2013).
Plaintiffs successfully appealed, and our Circuit Court
reversed and remanded for further proceedings. Osborn v.
Visa Inc., 797 F.3d 1057 (D.C. Cir. 2015). The case was
reassigned to me on August 4, 2015. [Dkt#49].
originally moved for a preliminary injunction enjoining
enforcement of the ATM Access Fee Rules in 2016, but I stayed
consideration of the case when the United States Supreme
Court granted certiorari to review the Circuit Court's
decision. Plaintiffs' Application for a Preliminary
Injunction [Dkt. # 60]; 7/21/16 Minute Order Staying Case. In
November 2016, the Supreme Court dismissed defendants'
petitions for certiorari as improvidently granted. I
thereafter held a status conference at which plaintiffs
indicated that they were still seeking preliminary relief. At
the status conference, I gave the plaintiffs an opportunity
to renew their motion and re-constitute their briefs to
account for any changed circumstances arising from the
passage of time. Plaintiffs' Renewed Application for a
Preliminary Injunction [Dkt. # 87]. After the renewed motion
was fully briefed, I held a hearing on April 18, 2017 and
took the motion under advisement.
their renewed motion, plaintiffs seek a broad injunction that
would prohibit Visa and MasterCard from adopting or enforcing
any rules that would stop ATM operators from charging higher
access fees for transactions over Visa and MasterCard
networks; offering customers discounts, incentives, or free
services for using specific ATM cards or networks; expressing
a preference for or promoting specific networks;
communicating the relative costs incurred when different
networks are used; or engaging in substantially equivalent
practices. Corrected Renewed Application for a Preliminary
Injunction at 4 [Dkt. #97].
seeking a preliminary injunction must make a "clear
showing" that the following four factors, taken
together, merit the granting of such an extraordinary remedy:
that there is "likely success on the merits, likely
irreparable harm in the absence of preliminary relief, a
balance of the equities in its favor, and [the requested
injunction is in] accord with the public interest."
Cobell v. Norton, 391 F.3d 251, 258 (D.C. Cir.
2004); League of Women Voters of United States v.
Newby, 838 F.3d 1, 6 (D.C. Cir. 2016) (quoting
Pursuing Am. 's Greatness v. FEC, 831 F.3d 500,
505 (D.C. Cir. 2016)).
considering these factors tend to apply a "sliding
scale" that balances the relative strength of the
arguments for each factor. Davis v. Pension Benefit Guar.
Corp., 571 F.3d 1288, 1291-92 (D.C. Cir. 2009). However,
a movant "must demonstrate at least some injury for a
preliminary injunction to issue, " and a
"movant's failure to show any irreparable harm is
therefore grounds for refusing to issue a preliminary
injunction, even if the other three factors entering the
calculus merit such relief." Chaplaincy of Full
Gospel Churches v. England,454 F.3d 290, 297 (D.C. Cir.
2006). See also Econ. Research Servs., Inc. v. Resolution
Econ., LLC,140 ...