U.S. District Judge Margo Brodie/courtesy photo U.S. District Judge Margo Brodie/courtesy photo

U.S. District Judge Margo Brodie of the Eastern District of New York has denied a motion to set aside an earlier ruling in an antitrust class action suit, finding that a 2018 U.S. Supreme Court ruling changed decisional law but did not disturb the court's prior reasoning in the class action case.

Brodie's dismissal is a victory for the defendants, including JPMorgan Chase & Co., which was represented by a Skadden, Arps, Slate, Meagher & Flom team led by partner Boris Bershteyn.

The ruling comes after years of litigation in a sprawling multidistrict case related to credit charge interchange fees. In 2014, former U.S. District Judge John Gleeson dismissed the claims of lead plaintiff Marvin Salveson and other members of the cardholding class. The case was reassigned to Brodie soon after, and the U.S. Court of Appeals for the Second Circuit affirmed the dismissal.

After the Supreme Court issued its ruling in Ohio v. American Express in 2018, finding that payment card networks are "two-sided transaction platforms," Brodie invited the plaintiffs to brief whether they were entitled to relief in connection with the ruling.

Plaintiffs attorney Joseph Alioto of the California-based Alioto Law Firm argued that cardholders are direct purchasers of transaction products and therefore have standing to sue antitrust defendants. The 2014 judgment must be vacated, Alioto argued, because subsequent court decisions had established that cardholders and merchants are both direct purchasers in a two-sided market and should be treated alike.

Bershteyn argued that the American Express ruling did not prove that merchants and cardholders are alike; in contrast, he wrote, "cardholders benefit—not suffer—when interchange fees rise" and courts have found that the interchange fees are paid by one bank to another, not by cardholders.

He also argued that Ohio v. American Express, or Amex II, did not change the decisional law because the Second Circuit reached its decision in United States v. American Express, or Amex I, in 2016, while the Salveson appeal was pending before the circuit court.

"Simply put, there is no relevant change in the decisional law here because the holding of Amex II was already controlling in the Second Circuit when the Second Circuit last considered and rejected the claims of the Salveson plaintiffs," he wrote.

Brodie, in the decision dated July 15, found that the Second Circuit reached a different conclusion in Amex II than it reached in Amex I and that Amex II did change decisional law, but it ultimately had no bearing on the cardholder plaintiffs' standing.

"Because Plaintiffs still lack standing to sue under Section 4 of the Clayton Act, there is no basis for the Court to set aside its prior decisions," she wrote. "The Court therefore declines to address Plaintiffs' additional arguments as to why there are extraordinary circumstances present warranting vacatur of the judgment."

Alioto and a representative for Skadden did not respond to requests for comment.

READ MORE:

Circuit Upsets $7.5B Pact Between Merchants, Credit Cards

Opposing Counsel Join in Bid to Preserve $5.7B Credit Card Pact

Counsel's 'Egregious' Conduct Upsets Credit Card Settlement