Supreme Court Lets ATM Fee Class Action Proceed Against Visa, Mastercard: Consumers Could See Relief

The gloves are off in a long-running battle over ATM fees. The U.S. Supreme Court this week declined to review a lower court decision allowing a class action lawsuit against Visa and Mastercard to proceed. This lawsuit, potentially worth billions, accuses the credit card giants of conspiring to fix ATM fees, allegedly squeezing both consumers and ATM operators.

Millions impacted? Three classes certified

The lawsuit, filed in 2011 by the National ATM Council (NAC), a trade group representing ATM deployers, alongside a group of independent ATM operators and a separate class of consumers who used out-of-network ATMs, hinges on the certification of three distinct plaintiff classes. 

A Washington D.C. federal judge previously greenlit these classes, arguing that the plaintiffs shared enough common ground in their claims to proceed as a group. Visa and Mastercard contested this decision, appealing to the D.C. Circuit Court. However, the appeals court upheld the lower court's ruling, prompting Visa and Mastercard to seek Supreme Court intervention, Bloomberg Law reported.

Focus on "nondiscrimination" rules and antitrust concerns

Allegations center on Visa and Mastercard's network rules, specifically provisions requiring ATM operators to charge the same fees for both in-network and out-of-network transactions. 

The NAC and the operator class allege that these "non-discrimination" rules violate antitrust laws by artificially inflating transaction fees. This, according to the lawsuit, prevents competition between ATM networks, ultimately costing businesses and consumers more.

The consumer class, meanwhile, alleges they were directly harmed by these inflated fees charged at out-of-network ATMs. They argue that Visa and Mastercard's rules limit ATM operators' ability to offer lower fees for using their machines, reducing consumer choice and potentially leading to higher overall costs.

Strict "common questions" standard at issue

A key legal hurdle in this case was the standard for certifying class actions. Visa and Mastercard argued that the lower courts used a lax approach, failing to rigorously assess whether the plaintiffs' claims presented predominantly common questions that could be efficiently addressed as a class. They contended that individual variations in fee structures and consumer experiences across the country would make the case unwieldy.

Plaintiffs prevail: Focus shifts to evidence and damages

The plaintiffs, however, countered that the D.C. Circuit applied the correct legal test. They believe any individual issues regarding fee amounts or specific transactions can be addressed later in the case. This disagreement highlights a potential "circuit split," where different federal courts apply different standards to class certification.

With the Supreme Court declining to review the case, the class action can now proceed. The focus will likely shift to evidence gathering and the merits of the plaintiffs' antitrust claims. This could include debates over damages models, individual plaintiffs' specific experiences with out-of-network ATM fees, and economic analyses of the alleged anti-competitive effects of Visa and Mastercard's rules.

This lawsuit is part of a wave of antitrust cases against Visa and Mastercard, with merchants also suing over swipe fees – the fees charged to process credit card transactions at stores.

Potential for lower atm fees for consumers?

This decision is a significant victory for ATM operators and consumers who allege they've been harmed by Visa and Mastercard's alleged anti-competitive practices. The outcome of this case could have a major impact on the ATM fee landscape, potentially leading to lower fees for everyone who uses out-of-network ATMs.  

It's important to note that this is a complex legal battle, and it could be some time before there's a final resolution. However, this development suggests that consumers may eventually see relief if the court finds merit in the allegations.

The consumer plaintiffs are represented by Hagens Berman Sobol Shapiro LLP, Quinn Emanuel Urquhart & Sullivan LLP, Finkelstein Thompson LLP, and Lovell Stewart Halebian Jacobson LLP.

The Visa Mastercard ATM fees antitrust class action lawsuit is Visa Inc. v. National ATM Council Inc., Case No. 23-814, 4/15/24.