Key Legal Concepts:

• • Sherman Antitrust Act, Section 1: Disallows conspiracies and agreements that unreasonably restrain trade and harm competition.
  • Per Se vs. Rule of Reason Analysis: Some restraints are presumed illegal “per se,” while others are judged under the “rule of reason” weighing procompetitive benefits against anticompetitive harms.
  • Horizontal vs. Vertical Restraints: Agreements between competitors are “horizontal” while those between parties at different market levels are “vertical,” impacting how they’re legally analyzed.
  • Common Antitrust Remedies: Successful antitrust plaintiffs can recover treble (triple) damages, injunctions against the challenged conduct, and attorneys’ fees.

Examples from the Complaint:

• • Networks’ rules allegedly prohibited ATM operators from charging lower access fees for transactions processed by networks other than Visa or Mastercard.
  • This supposedly constituted an unlawful restraint insulating Visa and Mastercard from price competition on ATM access fees.
  • Plaintiffs claimed this harmed competition and increased prices by preventing ATM operators from encouraging consumers to use cheaper networks.
  • The uniform access fee rules allegedly reduced independent ATM operators’ incentives to lower costs or promote less expensive networks.

In a Nutshell:

• • ATM cardholders alleged Visa, Mastercard, and banks conspired to adopt rules prohibiting differential surcharging that inflated ATM fees and violated antitrust laws.
  • The case implicates core antitrust principles around the legality of horizontal and vertical restraints on competition.
  • Rule of reason analysis generally applies, weighing the alleged anticompetitive effects against any procompetitive justifications Defendants raise.
  • Plaintiffs sought monetary damages for the alleged overcharges as well as an injunction prohibiting the challenged practices going forward.

Key Procedural Concepts:

• • Motion to Dismiss: Argues the complaint fails to state a legally viable claim and should be tossed at the outset, before discovery.
  • Interlocutory Appeal: Discretionary mid-case appeal of a non-final order, like class certification, that can substantially impact the case.
  • Class Action Fairness Act: Expands federal court jurisdiction over class actions and adds settlement notice/approval procedures.
  • Rule 23(f) Appeal: Allows for immediate appeal of class certification grants or denials if accepted by the appellate court.

Procedural Takeaways:

• • The lawsuit overcame an initial dismissal and two trips to the D.C. Circuit to reach discovery and class certification.
  • Settlements achieved with the Bank Defendants in 2022 for $66.74 million laid the groundwork for the $197.5 million Visa/Mastercard deal.
  • Class certification, enabling the case to proceed on behalf of all ATM users meeting defined criteria vs. just the named Plaintiffs, was pivotal.
  • The affirmance of certification on a Rule 23(f) appeal increased pressure to settle to avoid the risks of a certified class action trial.

In a Nutshell:

• • Plaintiffs’ antitrust claims took a winding path through federal district and appellate courts over the past 13 years.
  • Surviving dismissal and class certification over Defendants’ repeated objections set the stage for serious settlement negotiations.
  • The affirmance of class certification and the denied petition for Supreme Court review made a class trial or settlement the endgame.
  • With the Bank Defendants settled out and their own certiorari petition spent, Visa and Mastercard opted to resolve the matter now.

Key Settlement Concepts:

• • Non-Reversionary Fund: All settlement money gets paid out to class/admin costs – none goes back to Defendants.
  • Opt-Out right: Due process requires class members be able to exclude themselves and preserve right to sue individually.
  • Released Claims: Releases prevent future suits on settled claims in exchange for benefits; scope is negotiated.
  • Attorneys’ Fees: Class counsel fronted all costs and only paid from settlement fund if successful, subject to court approval.

Settlement Benefits Breakdown:

• • The $197.5M fund, less fees/costs/awards, will be distributed pro rata to class members submitting valid claims.
  • Class members who got $ from the prior bank settlements are automatically eligible without a new claim.
  • Remaining class members must file a simple online or mail claim form verifying their ATM surcharges by 1/22/25.
  • Individual payments will vary based on the # of claims, but 23-38% of the alleged ATM overcharges is estimated.

In a Nutshell:

• • Visa and Mastercard have agreed to create a $197.5 million settlement fund in exchange for a release of class claims.
  • Class members can submit simple claims to get a share of the fund after deductions for fees/costs/administration.
  • Those who already got payments from the bank settlements are automatically eligible again without a new claim.
  • This deal, combined with the earlier $66.74M bank settlements, will provide class members 23-38% of their claimed ATM overcharges.

Key Notice Concepts:

• • Due Process: Notice must be reasonably calculated to reach class members and allow them to make informed decisions.
  • Plain Language: Notices should concisely explain key settlement points and class member rights in simple, clear terms.
  • Best Practicable Notice: Individual notice is preferred, supplemented by broad media/pub notice to reach more class members.
  • CAFA Notice: Class Action Fairness Act also requires Defendants notify state/fed officials of class settlements.

Preservation of Rights:

• • Class members can exclude themselves by the 11/22/24 deadline to preserve their right to sue separately.
  • Non-excluders who dislike the settlement terms can object by 11/22/24 and argue the court shouldn’t approve the deal.
  • Those who don’t exclude are bound by the settlement approval and give up the right to sue on the settled issues.
  • These rights, the approval process, and hearing date will all be explained in the detailed long-form settlement notice.

In A Nutshell:

• • A robust notice program will combine direct email, media, and a settlement website to reach 80%+ of the class.
  • Class members can easily file claims online or by mail by the 1/22/25 deadline to get their pro rata settlement share.
  • Those who want to preserve their right to sue Visa/MC separately on the ATM fee issues must exclude by 11/22/24.
  • The judge will hold a final approval hearing on 1/23/25 where class members can appear or object, if not satisfied.

Key Risk Factors:

• • Antitrust Complexity: Antitrust cases are expert-intensive, often requiring market definition & impact analysis with extended discovery.
  • Rule of Reason: If the NDRs aren’t deemed per se illegal, Plaintiffs must prove an unreasonable restraint w/ anticompetitive effects.
  • Antitrust Injury: Plaintiffs still faced challenges proving pass-through of overcharges to class members after liability.
  • Trial Risks: Complex class actions involve unpredictable juries, massive costs for multi-week trials, and added appeal issues.

Perspectives to Consider:

• • While 23-38% of single damages may seem low to some, that’s before trebling and is a strong result given the risks.
  • Early dismissal, two 23(f) appeals, and SCOTUS petitions showed the real odds this case could have ended with no class recovery.
  • Class certification added settlement leverage, but a certified Rule 23(b)(3) class doesn’t guarantee a plaintiff verdict at trial.
  • Future legislative action could restrict card networks/bank deals regardless, making costly litigation less beneficial than settlement.

In a Nutshell:

• • The $197.5M settlement, combined with the $66.74M already approved from banks, is an excellent class result.
  • The 23-38% single damages recovery beats the odds in a complex, long-fought antitrust case facing continued risks.
  • Auto-eligibility for prior claimants and an easy new claims process ensures robust class participation in the settlement benefits.
  • While the deal isn’t perfect, it secures meaningful, assured compensation now without the uncertainty of a certified class trial.

Questions: Settlement Basics

• • 1. What did the lawsuit allege Visa, Mastercard, and major banks did wrong?
    • A) Conspired to fix/inflate ATM access fees in violation of antitrust laws
    • B) Negligently miscounted ATM deposits/withdrawals
    • C) Hacked cardholder PINs to enable fraud
    • D) Knowingly allowed ATMs to dispense counterfeit currency
  • 2. What specific time period does the settlement cover for ATM fees paid?
    • A) Jan. 2000 – Dec. 2005
    • B) July 2002 – Aug. 2008
    • C) Oct. 2007 – July 2024
    • D) Mar. 2011 – Sept. 2018
  • 3. How much are Visa and Mastercard collectively paying to settle?
    • A) $66.74 million
    • B) $107.25 million
    • C) $197.50 million
    • D) $264.24 million
  • 4. Who’s included in the settlement class?
    • A) Anyone with a U.S. bank account
    • B) All U.S. citizens over age 18
    • C) Those charged an unreimbursed ATM fee by a bank defendant/co-conspirator
    • D) Anyone who used an ATM, period
  • 5. What’s the deadline to file a claim for payment?
    • A) July 4, 2024
    • B) September 30, 2024
    • C) November 22, 2024
    • D) January 22, 2025

Answers: Settlement Basics

• • 1. A) The lawsuit alleged the defendant banks/card networks conspired to adopt and enforce rules that inflated ATM surcharges in violation of antitrust laws.
  • 2. C) The settlement class period runs from October 2007 through the July 2024 preliminary approval date.
  • 3. C) Visa will pay $104.675 million and Mastercard will pay $92.825 million for a total of $197.5 million into the settlement fund.
  • 4. C) The class includes individuals/entities who paid an unreimbursed ATM access fee for a transaction at a bank defendant/alleged co-conspirator’s ATM.
  • 5. D) Class members must file a valid claim by January 22, 2025 to get a payment (prior bank deal claimants are automatically eligible again).

Questions: Settlement Process

• • 1. What was the first court to dismiss the case before it got reinstated?
    • A) U.S. Supreme Court
    • B) D.C. Court of Appeals
    • C) D.C. District Court
    • D) Judicial Panel on Multidistrict Litigation
  • 2. When did the D.C. Circuit Court reverse the dismissal on appeal?
    • A) March 2013
    • B) August 2015
    • C) January 2017
    • D) October 2018
  • 3. How much did the earlier 2022 settlements with Bank of America, Chase, and Wells Fargo total?
    • A) $66.74 million
    • B) $92.83 million
    • C) $107.25 million
    • D) $197.50 million
  • 4. How many times did the defendants unsuccessfully petition the Supreme Court for review?
    • A) Zero, they never sought high court review
    • B) One time after the motion to dismiss stage
    • C) Two times after dismissal and class certification
    • D) Three times after dismissal, class certification, and summary judgment
  • 5. When is the final approval hearing where the judge will evaluate the settlement’s fairness?
    • A) June 15, 2024
    • B) October 1, 2024
    • C) January 23, 2025
    • D) March 31, 2025

Answers: Settlement Process

• • 1. C) The D.C. District Court initially dismissed the complaint in 2013 before the D.C. Circuit Court of Appeals reversed in 2015.
  • 2. B) The pivotal D.C. Circuit opinion reviving the case after dismissal came out in August 2015.
  • 3. A) Bank of America, Chase, and Wells Fargo previously settled in 2022 for a combined $66.74 million.
  • 4. C) Defendants twice sought Supreme Court review without success, after the motion to dismiss and class certification stages.
  • 5. C) The Court will hold a final approval hearing to assess the settlement’s fairness on January 23, 2025.