Alert July 24, 2012

Ninth Circuit Affirms Lack of Standing in ATM Interchange Fees Class Action

The United States Court of Appeals for the Ninth Circuit dismissed a claim by plaintiffs, ATM cardholders, alleging that defendants violated the Sherman Act by colluding to artificially increase network interchange fees, and then pass those fees to plaintiffs as part of the defendants’ foreign ATM fee.  Relying on the seminal holding in Illinois Brick Co. v. Illinois, the Court held that because plaintiffs were indirect purchasers, they lacked standing to bring the claim.  431 U.S. 720 (1977). Under Illinois Brick, indirect purchasers cannot use a pass-on theory to recover damages.  In reaching its decision, the Court found that none of the Illinois Brick exceptions applied, which requires co-conspirators to fix the price paid, as plaintiffs did not allege that defendants fixed the foreign ATM fee.