Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Supreme Court passes on opportunity to consider Illinois Brick indirect purchaser doctrine, (Oct 7, 2013)

By Jeffrey May, J.D.

Bank customers alleging a conspiracy to fix fees charged in connection with transactions using automatic teller machines (ATMs) have been denied U.S. Supreme Court review of a decision of the U.S. Court of Appeals in San Francisco, rejecting their claims for lack of standing based on the Illinois Brick indirect purchaser doctrine. The Court today denied the customers’ petition for a writ of certiorari, which was filed on July 11, 2013 (In Re: ATM Fee Antitrust Litigation: Brennan v. Concord EFS, Inc., Dkt. 13-63).

The customers had posed the following question: whether a plaintiff who purchases directly from a member of a price fixing conspiracy is necessarily a “direct purchaser” entitled to standing under the Supreme Court’s holding in Illinois Brick Co. v. Illinois (431 U.S. 720, 1977-1 Trade Cases ¶61,460), or whether a plaintiff must show that the conspirators agreed to set the specific price the plaintiff paid and not merely that the conspiracy inflated that price by anticompetitive means. The Ninth Circuit followed the latter standard.

The petitioners contended that they, as the first non-conspirators in the chain of distribution, were the appropriate plaintiffs under Illinois Brick to challenge the alleged conspiracy. Appellate courts were divided on the issue of whether a plaintiff who directly purchases from a defendant who has participated in a price fixing conspiracy is necessarily a “direct purchaser” under Illinois Brick. According to the petitioners, the Ninth Circuit decision at issue “over-reads Illinois Brick to create an inappropriate immunity for price fixing conspiracies.”

The complaint alleged that the company behind the Star network—the largest ATM network—conspired with banks to fix interchange fees they passed on for ATM transactions at “foreign” ATMs (ATMs that are owned by a different bank, but are part of the same “ATM network” joint venture). In seeking dismissal, the defendants claimed that the customers were indirect purchasers because they alleged that the conspiracy fixed the interchange fee and not the foreign ATM fee that the customers paid.

Left standing is a decision of the Ninth Circuit, affirming summary judgment in favor of the defendants (686 F.3d 741, 2012-1 Trade Cases ¶77,969). The appellate court had reasoned that because the customers did not themselves pay the interchange fee that the defendants allegedly conspired to set, they were “indirect purchasers” under the Illinois Brick doctrine. The appellate court also ruled that the limited exceptions under which indirect purchasers might obtain antitrust standing were inapplicable.

Attorneys: Jeffrey A. Lamken (MoloLamken LLP) for Pamela Brennan. Deanne E. Maynard (Morrison & Foerster LLP) for Concord EFS, Inc.

Companies: Concord EFS, Inc.

News: Antitrust