The Eastern District of New York recently declined to certify a putative class action filed by merchants against the four major credit card providers alleging antitrust violations. The complaint alleges that MasterCard, Visa, Discover, and American Express (“Amex”) conspired by adopting the same liability policy for fraudulent charges with chip-enabled credit cards by shifting liability from banks to merchants and implementing the policy on the same day to reduce competition. Plaintiffs moved to certify a damages class of merchants subjected to the liability shift beginning with the policies’ effective date and continuing “until the anticompetitive conduct ceases.” The court denied the motion, but based its decision on a technicality that can be corrected on a new motion.
The court’s analysis focused on two challenges to class certification: one raised by Amex regarding adequacy of class representation and another by all defendants regarding ascertainability.
First, Amex argued that plaintiffs’ attempt to hold all defendants jointly and severally liable failed because there were two groups of plaintiffs: (1) those merchants who accept Amex cards asserting joint and several liability against MasterCard, Visa, and Discover (but whose claims against Amex were severed and transferred to another court); and (2) those merchants who do not accept Amex cards asserting joint and several liability against all four credit card companies. Amex contended the first group was overbroad by encompassing claims that could not be heard in the Eastern District of New York because of a forum selection clause. The court swiftly rejected this argument because Amex failed to cite any provision of its agreement (or legal authority) that prevented bringing claims based on joint and several liability against non-parties to the agreement outside of the selected forum. Amex also argued the second group’s representative merchant did not accept Amex and therefore could not adequately represent merchants that do. The court rejected this argument as well, holding that there was no “fundamental” conflict of interest between the two groups. The relevant claims depended on the “same finding of liability” against all defendants.
Second, all defendants contested certification on ascertainability grounds because the class definition identified the class period as continuing “until the anticompetitive conduct ceases.” The court compared plaintiffs’ liability theory — but-for the conspiracy, each defendant would have set its own effective date for the liability shift — with the potential dates on which plaintiffs proposed to cap the class period. While “[a]ny” of the dates “could be acceptable to make the class ascertainable,” at this point in the litigation the plaintiffs “lack[ed] the necessary information” to satisfy the ascertainability requirement. Therefore, the court denied plaintiffs’ motion for class certification but noted its authority to revisit or entertain a renewed motion.
B & R Supermarket, Inc. v. MasterCard Int’l Inc., Case No. 17-2738 (E.D.N.Y. Mar. 14, 2018).
