U.S. Supreme Court Passes on the Chance to Tighten Class Certification Review

By Anthony J. Carucci and Rachel McMains

On April 15, 2024, the United States Supreme Court declined certiorari in the case of National ATM Council, Inc. v. Visa Inc. The central issue raised in the petition was the depth of analysis a court must conduct at the class certification stage to determine whether plaintiffs have satisfied the “predominance” requirement for FRCP Rule 23(b)(3) classes, including whether plaintiffs’ “well accepted” but flawed methodology in proving classwide injury was sufficient to prove predominance. 

Three putative class action groups sued Visa Inc. (Visa) and Mastercard, arguing that Visa and Mastercard imposed contractual fee provisions that prevented ATM operators from charging a discounted fee if a customer’s transaction could be processed over an alternative, less expensive network. The plaintiffs argued that Visa and Mastercard’s “fee rules” violated the Sherman Antitrust Act, and sought billions of dollars in damages on behalf of hundreds of millions of putative class members. The D.C. District Court consolidated the three putative class actions. 

At the class certification stage, Visa and Mastercard challenged the plaintiffs’ models for establishing antitrust impact and classwide damages. According to Visa and Mastercard, plaintiffs failed to satisfy the “predominance” requirement because plaintiffs’ models had not, and could not, exclude uninjured class members. The D.C. District Court refused to resolve the issue of whether plaintiffs’ models were satisfactory. Instead, the court held that at the class certification stage, the plaintiffs “need only demonstrate a colorable method by which they intend to prove class-wide impact.” The court held that it is for the jury to decide whether plaintiffs’ models are sufficient to prove that the class actually suffered classwide injury. 

After class certification was granted for all three plaintiff groups, Visa and Mastercard appealed to the D.C. Circuit Court of Appeals on the grounds that the D.C. District Court applied the improper legal standard. The court’s recitation of the legal standard, Visa and Mastercard argued, was at odds with Supreme Court precedent which mandates the courts conduct a “rigorous analysis” at the class certification stage. 

The D.C. Circuit Court of Appeals' decision did not hide the court’s disdain with the district court’s verbiage, calling the district court’s missteps “surprising and unfortunate.” The appellate court explained that the certification decision was “at least ‘questionable’ insofar as its statements of law were not entirely clear, its citations were not current, and its record analysis was notably terse.”¹ Despite this criticism, the D.C. Circuit Court of Appeals found that class certification was proper because the plaintiffs’ models were “well accepted.” 

Visa and Mastercard filed a petition for writ of certiorari with the U.S. Supreme Court. The petition juxtaposed two prevailing standards: (1) the “careful consideration” review employed by the Second, Third, Fifth, and Eleventh Circuits, generally requiring at least some factual dispute resolution; and (2) the more relaxed standard employed by the D.C., Eighth, and Ninth Circuits, which utilize a quasi-Twombly plausibility standard, generally declining to resolve factual disputes that overlap or are coextensive with a merits determination. 

The petition’s denial was an unfortunate, missed opportunity for the U.S. Supreme Court to provide clarity on this question. With over 7,500 class actions filed last year, and the class certification question practically case dispositive for civil litigants, some tightening of the class certification process would have been a needed and welcome development for the circuits applying a more relaxed standard. The circuit split emphasized by Visa and Mastercard in their petition may continue to deepen until the U.S. Supreme Court steps in and provides clarity. We’ll continue to watch as this question plays out in the circuit courts.

Footnotes: 

1. National ATM Council, Inc. v. Visa Inc. (D.C. Cir., July 25, 2023, No. 21-7109) 2023 WL 4743013, at * 4, cert. denied sub nom. Visa Inc. v. Nat. ATM Council, Inc. (U.S., Apr. 15, 2024, No. 23-814) 2024 WL 1607963. [Back]