In In re: ATM Fee Antitrust Litigation, the Ninth Circuit upheld the dismissal of a long-running class action against Bank of America, JP Morgan Chase, and other banks alleging that ATM interchange fees were the product of an illegal agreement. The court held that bank customer plaintiffs lacked standing to sue for damages because they are indirect purchasers.
In July 2004, bank customers sued the banks in First Data’s Star ATM network, alleging that the network’s banks paid unlawfully inflated ATM fees that they then passed on to their customers through foreign ATM transaction fees.
The Ninth Circuit held that the plaintiffs lacked standing under the U.S. Supreme Court‘s 1977 Illinois Brick decision, which held that only direct purchasers can sue for damages. The complaint alleged that the banks pass on inflated interchange fees imposed by the network when a plaintiff uses a foreign ATM. But the plaintiffs failed to allege that the banks – from whom they are direct purchasers — conspired to inflate the charges. As a result, the plaintiffs constituted indirect purchasers of the networks ATM services.
The plaintiffs had argued that the ATM fee should be viewed as fixed markup charged directly to the bank customer. But the complaint did not allege that the banks agreed to pass on ATM fees as fixed markups.