Visa (V.N) and Mastercard (MA.N) have jointly filed a petition with the U.S. Supreme Court to overturn a federal judge’s ruling permitting consumers and a coalition of ATM operators to form class actions aiming for billions of dollars in compensation over transaction fees.
Legal Challenge to Class Certification
Arguing that the federal judge in Washington, D.C., erred in approving the class actions, Visa and Mastercard assert that this decision could lead to widespread confusion and legal uncertainty regarding the standards for class certification. Attorneys representing the payment giants contend that the trial judge’s evaluation of commonality among class members was inadequate.
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According to court documents, the proposed classes involve hundreds of millions of plaintiffs, indicating the significant scope of the litigation.
Call for Scrutiny on Class Action Dynamics
Led by attorney Kannon Shanmugam of Paul Weiss, the petition allows the Supreme Court to reevaluate the parameters of class action lawsuits. This issue has been the subject of multiple deliberations in recent years. Granting class-action status, particularly in cases involving potential multi-billion dollar liabilities, can pressure corporate defendants to settle.
Response and Background
Visa and Mastercard representatives have not yet commented on the matter. Similarly, attorneys representing the plaintiffs have not provided immediate responses.
The underlying litigation traces back to 2011 when individual consumers and independent ATM operators sued Visa, Mastercard, and several banks, alleging violations of U.S. antitrust laws. The plaintiffs argue that ATM transaction fee regulations have artificially inflated costs for consumers and operators alike, with damages sought exceeding $9 billion.
While some banks have opted to settle, leaving Visa and Mastercard as the remaining defendants, this isn’t the first time the payment giants have faced legal challenges over transaction fees. Last year, a federal appeals court upheld a $5.6 billion class-action settlement resolving price-fixing allegations brought by 12 million retailers against Visa and Mastercard.
The case is formally known as Visa Inc and Mastercard Inc v. National ATM Council et al. and is currently pending before the U.S. Supreme Court.
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