Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-14-07005/USCOURTS-caDC-14-07005-0/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 20, 2015 Decided August 4, 2015

No. 14-7004

SAM OSBORN, ET AL.,

APPELLANTS

v.

VISA INC., ET AL.,

APPELLEES

Consolidated with 14-7005, 14-7006

Appeals from the United States District Court

for the District of Columbia

(No. 1:11-cv-01831)

(No. 1:11-cv-01882)

(No. 1:11-cv-01803)

Steve W. Berman argued the cause for appellants. With 

him on the briefs were Craig L. Briskin, Michael G. 

McLellan, Douglas G. Thompson, Brooks E. Harlow, and 

Don A. Resnikoff. David A. LaFuria and Jonathan L. Rubin

entered appearances.

Kenneth A. Gallo argued the cause for appellees. With 

him on the brief were Mark R. Merley, Matthew A. Eisenstein,

Mark P. Ladner, Michael B. Miller, William F. Cavanaugh, 

USCA Case #14-7005 Document #1566017 Filed: 08/04/2015 Page 1 of 20
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and Peter E. Greene. Robert P. LoBue and Ana Maria Iquat 

entered appearances. 

Before: TATEL, SRINIVASAN and WILKINS, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge WILKINS.

WILKINS, Circuit Judge: Users and operators of 

independent (non-bank) automated teller machines (ATMs) 

brought these related actions against Visa, MasterCard, and 

certain affiliated banks, alleging anticompetitive schemes for 

pricing ATM access fees. The crux of the Plaintiffs’

complaints is that when someone uses a non-bank ATM, the 

cardholder pays a greater fee and the ATM operator earns a 

lower return on each transaction because of certain Visa and 

MasterCard network rules. These rules prohibit differential 

pricing based on the cost of the network that links the ATM to 

the cardholder’s bank. In other words, the Plaintiffs allege 

anticompetitive harm because Visa and MasterCard prevent

an independent operator from charging less, and potentially 

earning more, when an ATM transaction is processed through 

a network unaffiliated with Visa and MasterCard.

The District Court concluded that the Plaintiffs had failed 

to allege essential components of standing, and also that they 

had failed to allege an agreement in restraint of trade 

cognizable under the Sherman Antitrust Act. See 15 U.S.C. 

§ 1. We disagree, and so we vacate and remand these cases 

for further proceedings based on the proposed amended 

complaints.

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I.

ATMs “have been a part of the American landscape since 

the 1970s – beacons of self-service and convenience, they 

revolutionized banking in ways we take for granted today.”

Linda Rodriguez McRobbie, The ATM is Dead. Long Live 

the ATM!, SMITHSONIAN.COM (Jan. 8, 2015), 

http://www.smithsonianmag.com/history/atm-dead-long-liveatm-180953838/. One view is that “[t]hey live to serve; we 

only really notice them when we can’t seem to locate one.” 

Id. But Plaintiffs tell us they do take notice of ATMs –

specifically, of the fee structure that attaches to their use and 

what they gain or lose from it. We credit for purposes of this 

appeal all facts alleged in the proposed amended complaints.

Some background history: Until the mid-1990s, 

consumers who wished to withdraw cash from their bank 

accounts generally could do so only by visiting a bank branch 

or a bank-operated ATM. But states began to abolish various 

laws that had prohibited ATM operators from charging access 

fees directly to cardholders. This created a financial incentive 

for nonbanks to enter the ATM market, and independent 

ATMs took root accordingly. See National ATM Council 

Proposed Second Amended Complaint (“NAC Prop. 

Compl.”) ¶ 43; Osborn Proposed Second Amended Complaint 

(“Osborn Prop. Compl.”) ¶ 66. These independent ATMs 

connect to a cardholder’s bank through an ATM network. 

The most popular networks are operated by Visa (the Plus, 

Interlink, and VisaNet networks) and MasterCard (the Cirrus 

and Maestro networks). Rival networks include Star, NYCE, 

and Credit Union 24. NAC Prop. Compl. ¶ 40.

Today, a cardholder can use any independent ATM to 

access her bank account, so long as her bank card and the 

ATM are linked by at least one common network. Most bank 

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cards indicate the networks to which they are linked with 

logos printed on the back of the card, referred to colloquially 

as “bugs.” Id.

Independent ATM operators rely on two streams of 

revenue to sustain their businesses. The first is the “net 

interchange” fee: the gross interchange fee paid by the 

cardholder’s bank to the ATM operator, which runs between 

$0.00 and $0.60 per transaction, less any network services fee 

charged by the ATM network. MasterCard and Visa 

generally charge high network services fees, which means 

that ATM operators receive low net interchange fees –

running between $0.06 and $0.29 for domestic transactions, 

and even less for international transactions – for transactions 

on these networks. Several competing networks charge 

comparatively low network services fees, thus enabling an 

ATM operator to collect a higher net interchange fee (up to 

$0.50 per transaction) when using the lower-fee networks. Id. 

¶ 59. 

The second source of revenue comes from the ATM 

access fees paid by the cardholder. The average access fee in 

2012 was $2.10. See Osborn Prop. Compl. ¶ 99 (citing GOV’T

ACCOUNTABILITY OFFICE, GAO-13-266, AUTOMATED TELLER 

MACHINES: SOME CONSUMER FEES HAVE INCREASED 14 

(2013)). 

Visa and MasterCard each impose, as a condition for 

ATM operators to access their networks, a sort of nondiscrimination or most favored customer clause called the 

“Access Fee Rules.” These rules provide that no ATM 

operator may charge customers whose transactions are 

processed on Visa or MasterCard networks a greater access 

fee than that charged to any customer whose transaction is 

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processed on an alternative ATM network.1 Thus, under the 

Access Fee Rules, operators cannot say to cardholders: “We 

will charge you $2.00 for a MasterCard or Visa transaction, 

but if your card has a Star or Credit Union 24 bug on it, we 

will charge you only $1.75.”

Both Visa and MasterCard were owned and operated as 

joint ventures by a large group of retail banks at the time that 

the Access Fee Rules were adopted. NAC Prop. Compl. ¶ 89.

Although these member banks later relinquished direct 

control over the bankcard associations through public 

offerings, the IPOs did not alter the substance of the Access 

Fee Rules, which remain intact to this day.

 

 1 The challenged Visa rule provides:

An ATM Acquirer may impose an Access Fee if: It 

imposes an Access Fee on all other Financial 

Transactions through other shared networks at the same 

ATM; The Access Fee is not greater than the Access Fee 

amount on all other Interchange Transactions through 

other shared networks at the same ATM . . . .

NAC Prop. Compl. ¶ 68 (citing Visa Int’l Operating Regulations 

¶ 4.10A (Oct. 15, 2012)). The challenged MasterCard rule 

provides:

An Acquirer must not charge an ATM Access Fee in 

connection with a Transaction that is greater than the 

amount of any ATM Access Fee charged by that Acquirer 

in connection with the transactions of any other network 

accepted at that terminal.

Id. ¶ 64 (citing MasterCard’s Cirrus Worldwide Operating Rule 

¶ 7.14.1.2 (Dec. 21, 2012)).

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Plaintiffs assert that these rules illegally restrain the 

efficient pricing of ATM services. They characterize the 

Access Fee Rules as constituting an “anti-steering” regime 

that prevents independent ATM operators from incentivizing 

cardholders to choose and use cards “that are more efficient 

and less costly than either Visa or MasterCard’s.” NAC Prop. 

Compl. ¶ 1.

This consolidated appeal arises from decisions in three 

separate but related civil actions. The first action, Stoumbos 

v. Visa, was filed by a debit cardholder, Mary Stoumbos, who 

paid access fees in connection with ATM transactions at 

various independent ATMs. The second action, Mackmin v. 

Visa (referred to here as the Osborn case), was filed by four

consumers of independent and bank-run ATM services. The 

third action, National ATM Council v. Visa, was brought by a 

leading association of independent ATM operators and 

several individual ATM operators. The Plaintiffs allege 

violations of Section 1 of the Sherman Act as well as various 

state laws, and they name Visa and MasterCard entities as 

defendants. In addition, the Osborn plaintiffs name certain 

member banks as co-defendants.

On February 12, 2013, the District Court concluded that 

the Plaintiffs’ respective complaints had failed to allege facts 

sufficient to establish standing and, in the alternative, lacked 

adequate facts to establish concerted activity under Section 1 

of the Sherman Act. Nat’l ATM Council, Inc. v. Visa Inc., 

922 F. Supp. 2d 73 (D.D.C. 2013) (“NAC I”). It dismissed 

not just the complaints, but the cases without prejudice.

In an attempt to toll the statute of limitations, Plaintiffs 

timely moved the District Court to modify its judgment from 

dismissal of the cases without prejudice to dismissal of the 

complaints with leave to replead. Plaintiffs simultaneously 

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submitted proposed amended complaints. On December 19, 

2013, the District Court denied Plaintiffs’ motions after 

concluding that their proposed amended complaints still 

lacked sufficient facts to establish standing or a conspiracy. 

Nat’l ATM Council, Inc. v. Visa Inc., 7 F. Supp. 3d 51 

(D.D.C. 2013) (“NAC II”). The Plaintiffs appeal. 

II.

Procedural quirks notwithstanding, we review de novo 

the District Court’s determination that the filing of the 

amended complaints would be futile due to the perceived 

deficiencies of those complaints under Rules 12(b)(1) and 

12(b)(6). See Kim v. United States, 632 F.3d 713, 715 (D.C. 

Cir. 2011) (stating standard of review for FED. R. CIV. P.

12(b)(1) & 12(b)(6)). To reach that bottom line, we must do 

some procedural untangling.

The District Court’s February 12 order dismissed the 

cases without prejudice. The principle guiding a dismissal 

without prejudice is that absent futility or special 

circumstances (such as undue delay, bad faith, or dilatory 

motive), a plaintiff should have the opportunity to replead so 

that claims will be decided on merits rather than 

technicalities. Foman v. Davis, 371 U.S. 178, 181-82 (1962); 

see also English-Speaking Union v. Johnson, 353 F.3d 1013, 

1021 (D.C. Cir. 2004). Where, as it appears was the case 

here, a plaintiff has not notified the district court that a statute 

of limitations issue might bar the plaintiff “from correcting 

the complaint’s defects and filing a new lawsuit,” a dismissal 

of the case without prejudice is not an abuse of discretion. 

See Ciralsky v. CIA, 355 F.3d 661, 671 (D.C. Cir. 2004).

Plaintiffs followed an appropriate course against this 

background, asking the District Court to modify its judgment 

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pursuant to Rule 59 – so that merely the complaint, and not 

the case, would have been dismissed – and simultaneously 

filing a proposed amended complaint. See Firestone v. 

Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996) (describing 

this as proper procedure). In its December 19 opinion on 

those motions, the District Court asked and answered the 

essential question – whether leave to amend was futile – but 

the accompanying order purported to deny on the merits 

Plaintiffs’ motion for leave to amend their complaints, and to 

deny as moot their motion to modify the February 12 

judgment. As a technical matter, the District Court lacked 

authority to rule on the merits of the Rule 15(a) motion 

because it did not modify its final judgment dismissing those 

cases. See Ciralsky, 355 F.3d at 673; Firestone, 76 F.3d at 

1208. 

Because the District Court’s denial of the Plaintiffs’ Rule 

59(e) motion as moot was based on its conclusion that 

amendment of the complaints would be futile, see NAC II, 7 

F. Supp. 3d at 54, we review the decision below as a denial on 

the merits of the motion to modify the judgment. On this 

question, we look for abuse of discretion. Firestone, 76 F.3d 

at 1208 (citing Browder v. Dir., Ill. Dep’t of Corrections, 434 

U.S. 257, 263 n.7 (1978)). An abuse of discretion necessarily 

occurs when a district court misapprehends the underlying 

substantive law, and we examine the underlying substantive 

law de novo. Conservation Force v. Salazar, 699 F.3d 538, 

542 (D.C. Cir. 2012); see also Dyson v. District of Columbia, 

710 F.3d 415, 420 (D.C. Cir. 2013) (reviewing de novo

questions of law underlying district court’s denial of 

plaintiff’s Rule 59(e) motion). In other words, the District 

Court’s futility conclusion turned on a legal determination –

here, the sufficiency of the proposed amended complaints 

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under Rule 12(b)(1) or Rule 12(b)(6) – and we review those 

legal determinations independently of the District Court.2

That brings us to the substantive questions we must 

decide. We look first, as always, at the question of whether 

the Plaintiffs have standing and second, whether the 

Plaintiffs’ proposed amended complaints adequately stated a 

claim.

A.

The District Court determined that the Plaintiffs lacked 

Article III standing because their allegations showed neither 

injury nor redressability. NAC II, 7 F. Supp. 3d at 60-61. To 

establish standing, a plaintiff must show that (i) it has 

“suffered a concrete and particularized injury in fact, (ii) that 

was caused by or is fairly traceable to the actions of the 

defendant, and (iii) is capable of resolution and likely to be 

redressed by judicial decision.” Sierra Club v. EPA, 755 F.3d 

968, 973 (D.C. Cir. 2014) (citing Lujan v. Defenders of 

Wildlife, 504 U.S. 555, 560-61 (1992)).

Plaintiffs contend that “in the absence of the access fee 

rules, ATM operators would offer consumers differentiated 

access fees at the point of transaction, consumers would then 

demand multi-bug PIN cards from their banks, their banks 

would provide these cards, and the market for network 

 2

 The parties have focused on the sufficiency of the proposed 

amended complaints, rather than the complaints originally 

dismissed by the District Court, and the Plaintiffs have not argued 

that the initial complaints should not have been dismissed. See

Appellants’ Br. 8 n.4 (explaining that the complaints dismissed on 

February 12 are of “questionable” relevance here, as this appeal is 

confined to the District Court’s rulings on the proposed amended 

complaints).

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services would become more competitive, all resulting in 

more choice of networks and lower access fees for 

consumers.” NAC II, 7 F. Supp. 3d at 60. The District Court 

held that this was an “attenuated, speculative chain of events[] 

that relies on numerous independent actors, including the PIN 

card issuing banks.” Id. We disagree, and we think the 

District Court was demanding proof of an economic theory 

that was not required in a complaint.

A plaintiff’s burden to demonstrate standing grows 

heavier at each stage of the litigation. See Lujan, 504 U.S. at 

561. Thus, “[a]t the pleading stage, general factual 

allegations of injury resulting from the defendant’s conduct 

may suffice, for on a motion to dismiss we presum[e] that 

general allegations embrace those specific facts that are 

necessary to support the claim.” Id. (internal quotation marks 

omitted); see also Am. Nat. Ins. Co. v. FDIC, 642 F.3d 1137, 

1139 (D.C. Cir. 2011) (observing that on a Rule 12(b)(1) 

motion, we “grant[] plaintiff the benefit of all inferences that 

can be derived from the facts alleged”).

Two distinct theories of injury are relevant in this appeal. 

First is the ATM operators’ theory of harm. The operators 

allege that MasterCard and Visa, working in concert with the 

member banks, have maximized their own returns on each 

transaction, thereby minimizing the independent ATM 

operators’ cut. See NAC Prop. Compl. ¶¶ 77-88. According 

to the operators, in a competitive market, the imbalance 

between low- and high-cost networks “would be corrected by 

a price differential for the final service, and consumers would 

respond to lower prices for a fungible service by switching.” 

Id. ¶ 79. But while ATM operators can respond by routing 

transactions on multi-bugged cards over the lowest priced 

networks, they are prevented from using differential pricing to 

incentivize customers to use such cards. As the operator 

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plaintiffs put it, “ATM operators are prohibited from setting 

the price differential needed to encourage consumers to 

switch.” Id. Visa and MasterCard are thereby insulated from 

competition with other networks and can charge supracompetitive network services fees with impunity. 

The consumers’ theory of harm complements that of the 

operators. The consumers allege that they pay inflated access 

fees when they visit ATMs. They believe that the Access Fee 

Rules inhibit competition in both the network services market 

and the market for ATM access fees. But for the Rules, some 

ATM operators would offer discounted access fees for cards 

linked to lower-cost ATM networks, and this discounting 

would create downward pressure on access fees generally.

Osborn Prop. Compl. ¶ 94-107; Stoumbos Proposed Second 

Amended Complaint (“Stoumbos Prop. Compl.”) ¶¶ 81-100.

Economic harm, such as that alleged here, “is a classic 

form of injury-in-fact.” Danvers Motor Co. v. Ford Motor 

Co., 432 F.3d 286, 293 (3d Cir. 2005). But the Defendants 

painted Plaintiffs’ allegations as speculative and conclusory, 

and the District Court agreed. NAC II, 7 F. Supp. 3d at 60. 

The District Court reasoned that the “protracted chain of 

causation” alleged by Plaintiffs “fails both because of the 

uncertainty of several individual links and because of the 

number of speculative links that must hold for the chain to 

connect the challenged acts to the asserted particularized 

injury.” Id. (quoting Fla. Audubon Soc’y v. Bentsen, 94 F.3d 

658, 670 (D.C. Cir. 1996) (en banc)) (internal quotation 

marks omitted). This was error. 

At the pleadings stage, a court “must accept as true all 

material allegations of the complaint,” Warth v. Seldin, 422 

U.S. 490, 501 (1975), an obligation that we have recognized 

“might appear to be in tension with the Court’s further 

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admonition that an allegation of injury or of redressability that 

is too speculative will not suffice to invoke the federal judicial 

power,” United Transp. Union v. ICC, 891 F.2d 908, 911 

(D.C. Cir. 1989) (internal quotation marks omitted). But “this 

ostensible tension is reconciled by distinguishing allegations 

of facts, either historical or otherwise demonstrable, from 

allegations that are really predictions.” Id. at 912 (emphasis 

added). Thus, “[w]hen considering any chain of allegations 

for standing purposes, we may reject as overly speculative . . . 

those types of allegations that are not normally susceptible of 

labelling as ‘true’ or ‘false.’” Id. 

Plaintiffs’ theories here are susceptible to proof at trial. 

The Plaintiffs allege a system in which Visa and MasterCard 

insulate their networks from price competition from other 

networks. This insulation yields higher profits for Visa and 

MasterCard (and higher returns for their shareholders), at the 

cost of consumers and independent ATM operators. The 

economic injury alleged is present and ongoing.

Moreover, the complaints contain factual details, 

including details about the Plaintiffs’ own conduct, that 

support the alleged causal link between the Access Fee Rules 

and the economic harm. According to the Plaintiffs, Visa and 

MasterCard currently capture over half of all ATM 

transactions, despite charging higher fees than rival networks.

See Osborn Prop. Compl. ¶¶ 91, 101. Plaintiffs further allege 

that independent ATM operators (such as the operator 

plaintiffs) have the desire and technical capacity to offer 

discounts on cards linked to low-cost networks. See NAC 

Prop. Compl. ¶¶ 79, 82; Stoumbos Prop. Compl. ¶ 85. They 

contend that consumers, such as Stoumbos and the Osborn 

plaintiffs, are “sensitive to differences in ATM Access Fees 

and where possible will seek out ATMs with the lowest 

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Access Fees.” Stoumbos Prop. Compl. ¶ 86; accord Osborn 

Prop. Compl. ¶ 105.

To be certain, Plaintiffs also rely on certain economic 

assumptions about supply and demand: that other consumers 

besides the Plaintiffs are price conscious; that bank operators 

will respond to consumer demand for cards tied to low-cost 

networks; and that in the face of competitive pressure, ATM 

networks will reduce their network fees. But these sorts of 

assumptions are provable at trial. See United Transp. Union, 

891 F.2d at 912 n.7 (allegations “founded on economic 

principles,” while “perhaps not as reliable as allegations based 

on the laws of physics, are at least more akin to demonstrable 

facts than are predictions based only on speculation.”); Ill.

Brick Co. v. Illinois, 431 U.S. 720, 758 (1977) (Brennan, J., 

dissenting) (recognizing, in the context of damages, that 

antitrust cases often involve “tracing a cost increase through 

several levels of a chain of distribution”). Indeed, allegations 

of economic harm “based on standard principles of ‘supply 

and demand’” are “routinely credited by courts in a variety of 

contexts.” Adams v. Watson, 10 F.3d 915, 923 (1st Cir. 

1993).

In deciding that the Plaintiffs had failed to establish 

injury and redressability, the District Court relied on cases 

that had been decided at summary judgment. See NAC II, 7 F. 

Supp. 3d at 60 (citing Lujan, 504 U.S. at 560-61; Valley 

Forge Christian Coll. v. Ams. United for Separation of 

Church and State, Inc., 454 U.S. 464, 496 n.10 (1982); Fla. 

Audubon Soc’y, 94 F.3d at 670); see also NAC I, 922 F. Supp. 

2d at 81 (citing Dominguez v. UAL Corp., 666 F.3d 1359, 

1362 (D.C. Cir. 2012); Gerlinger v. Amazon.com Inc.; 

Borders Group, Inc., 526 F.3d 1253, 1255-56 (9th Cir. 

2008)). On a motion for summary judgment by a defendant, 

the question is not whether the plaintiff has asserted a 

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plausible theory of harm, but rather whether the plaintiff has

offered sufficient evidence for a reasonable jury to conclude 

that its theory is correct. See Fla. Audubon Soc’y, 94 F.3d at 

672 (at summary judgment, the court “need not accept 

appellants’ alleged chain of events if they are unable to 

demonstrate competent evidence to support each link”); 

Dominguez, 666 F.3d at 1362-64 (evaluating plaintiff’s theory 

of supra-competitive pricing and concluding that no record 

evidence supported its theory of harm). A Rule 12(b)(1) 

motion, however, is not the occasion for evaluating the 

empirical accuracy of an economic theory. Because the 

economic facts alleged by the Plaintiffs are specific, plausible, 

and susceptible to proof at trial, they pass muster for standing 

purposes at the pleadings stage.

B.

We next turn to the District Court’s alternative holding 

that the Plaintiffs failed to plead adequate facts to establish 

the existence of concerted activity. Under the familiar 

Twombly-Iqbal standard, “[t]o survive a motion to dismiss, a 

complaint must contain sufficient factual matter, accepted as 

true, to state a claim to relief that is plausible on its face.’” 

Jones v. Horne, 634 F.3d 588, 595 (D.C. Cir. 2011) (quoting 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

Section 1 of the Sherman Act prohibits any “contract, 

combination . . . or conspiracy, in restraint of trade or 

commerce.” 15 U.S.C. § 1. Thus, to make out a claim under 

this section, the Plaintiffs must allege that “the challenged 

anticompetitive conduct stems from . . . an agreement, tacit or 

express.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 553 

(2007) (internal quotation marks and brackets omitted). If 

such an agreement is among competitors, we refer to it as a 

horizontal restraint. See Bus. Electronics Corp. v. Sharp 

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Electronics Corp., 485 U.S. 717, 730 (1988) (contrasting 

horizontal agreements from vertical restraints imposed by 

firms at different levels of distribution). The complaints are 

sufficient if they contain “enough factual matter (taken as 

true) to suggest that an agreement was made.” Id. at 556. We

conclude that the Plaintiffs have alleged a horizontal

agreement to restrain trade that suffices at the pleadings stage.

According to the Plaintiffs, the member banks developed 

and adopted the Access Fee Rules when the banks controlled 

Visa and MasterCard. The rules served several purposes. 

First and foremost, the rules protected Visa and MasterCard 

from competition with lower-cost ATM networks, thereby 

permitting Visa and MasterCard to charge supra-competitive 

fees. Osborn Prop. Compl. ¶ 80. The rules also benefited the 

banks, who were equity shareholders of the associations (and 

therefore financial beneficiaries of the deal). Id. ¶¶ 116-117.

And the rules protected banks from competition with each 

other over the types of bugs offered on bank cards. See id.

¶ 80 (alleging that “banks were assured that their MasterCard 

customers would not have to pay more in fees than their Visa 

cardholders, and they would not face competition at the 

network level”).

That the rules were adopted by Visa and MasterCard as 

single entities does not preclude a finding of concerted action. 

The Supreme Court has “long held that concerted action 

under [Section] 1 does not turn simply on whether the parties 

involved are legally distinct entities,” but rather depends upon 

“a functional consideration of how the parties involved in the 

alleged anticompetitive conduct actually operate.” Am. 

Needle, Inc. v. Nat’l Football League, 560 U.S. 183, 191 

(2010). Thus, “a legally single entity violate[s] [Section] 1 

when the entity [i]s controlled by a group of competitors and 

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serve[s], in essence, as a vehicle for ongoing concerted 

activity.” Id.

The allegations here – that a group of retail banks fixed 

an element of access fee pricing through bankcard association 

rules – describe the sort of concerted action necessary to make 

out a Section 1 claim. See, e.g., Nat’l Soc’y of Prof’l Eng’rs 

v. United States, 435 U.S. 679 (1978) (upholding antitrust 

action against association that imposed ethical rule 

prohibiting competitive bidding by members); Robertson v. 

Sea Pines Real Estate Cos., 679 F.3d 278, 288-89 (4th Cir. 

2012) (finding adequate allegations that real estate brokerages 

agreed to restrain market competition through anticompetitive 

service rules in their joint venture). Indeed, in 2003 the 

Second Circuit upheld a trial court’s finding that rules 

adopted by Visa and MasterCard that prohibited member 

banks from issuing American Express or Discover cards 

violated Section 1 of the Act. United States v. Visa U.S.A., 

Inc., 344 F.3d 229 (2d Cir. 2003) (affirming United States v. 

Visa U.S.A., Inc., 163 F. Supp. 2d 322 (S.D.N.Y. 2001)).

The Defendants correctly observe that “[m]ere 

membership in associations is not enough to establish 

participation in a conspiracy with other members of those 

associations.” Fed. Prescription Serv., Inc. v. Am. Pharm. 

Ass’n, 663 F.2d 253, 265 (D.C. Cir. 1981); see also Kendall v. 

Visa U.S.A., Inc., 518 F.3d 1042, 1048 (9th Cir. 2008) 

(“[M]embership in an association does not render an 

association’s members automatically liable for antitrust 

violations committed by the association.”). But the Plaintiffs 

here have done much more than allege “mere membership.” 

They have alleged that the member banks used the bankcard 

associations to adopt and enforce a supracompetitive pricing 

regime for ATM access fees. See, e.g., Osborn Prop. Compl. 

¶ 81 (“The unreasonable restraints . . . originated in the rules 

of the former bankcard associations agreed to by the banks 

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themselves.”) (emphasis added); NAC Prop. Comp. ¶¶ 89-90 

(alleging that member banks appointed representatives to the 

bankcard associations’ Boards of Directors, which in turn 

established the anticompetitive access fee rules, with the 

cooperation and assent of the member banks). That is enough 

to satisfy the plausibility standard.

Defendants next seek refuge in the fact that the banks 

reorganized MasterCard and Visa as publicly held 

corporations in 2006 and 2008, respectively. The Defendants 

contend that even if there had been agreements or 

conspiracies, the public offerings terminated them. See 

Appellees’ Br. 40-41. In their view, the offering constituted a 

withdrawal by the member banks – and with that withdrawal, 

the cessation of any concerted action. The Rules that 

remained intact no longer represented an agreement by the 

member banks, but rather unilateral impositions by the 

bankcard associations themselves, over which the banks no 

longer had control.

To establish withdrawal, a defendant may show that it 

has taken “[a]ffirmative acts inconsistent with the object of 

the conspiracy and communicated in a manner reasonably 

calculated to reach co-conspirators.” United States v. U.S. 

Gypsum Co., 438 U.S. 422, 464 (1978); accord Watson 

Carpet & Floor Covering, Inc. v. Mohawk Indus., Inc., 648 

F.3d 452, 460 (6th Cir. 2011); In re Brand Name Prescription 

Drugs Antitrust Litig., 123 F.3d 599, 616 (7th Cir. 1997). 

Even where a member of the conspiracy appears to sever ties 

with other co-conspirators, there is no withdrawal if that 

member continues to support or benefit from the agreement. 

See United States v. Eisen, 974 F.2d 246, 269 (2d Cir. 1992) 

(finding no withdrawal from conspiracy where defendant 

resigned from corrupt firm but continued to receive a portion 

of profits); United States v. Antar, 53 F.3d 568, 583 (3d Cir. 

USCA Case #14-7005 Document #1566017 Filed: 08/04/2015 Page 17 of 20
18

1995) (holding that resignation from conspiracy is insufficient 

if the defendant “continues to do acts in furtherance of the 

conspiracy and continues to receive benefits from the 

conspiracy’s operations”), overruled on other grounds, Smith 

v. Berg, 247 F.3d 532, 534 (3d Cir. 2001). Whether there was 

an effective withdrawal is typically a question of fact for the 

jury. See United States v. Bafia, 949 F.2d 1465, 1480 (7th 

Cir. 1991); In re Cathode Ray Tube (CRT) Antitrust Litig., 

No. C-07-5944, 2014 WL 1091589, at *9 (N.D. Cal. Mar. 13, 

2014) (noting that withdrawal generally “is a fact-sensitive 

affirmative defense”).

According to the complaints, each member bank “knew 

and understood that it and each and every other member of 

the applicable network would agree or continue to agree to be 

bound” by the rules both before and after the public offerings. 

NAC Prop. Compl. ¶ 102. To support that allegation, the 

plaintiffs point out that the banks have continued to issue 

Visa- and MasterCard-branded cards and to comply with the 

Access Fee Rules at their own ATMs. Id. ¶¶ 101, 103. 

Furthermore, even though the banks no longer directly control 

Visa and MasterCard, the plaintiffs observe, the banks work 

with those associations to route more transactions over their 

networks. For example, at least some member banks offer 

single-bug cards so that independent ATM operators have no 

choice but to run those transactions over a high-cost network 

run by Visa or MasterCard. See Osborn Prop. Compl. ¶¶ 83-

85 (alleging that Bank of America, Wells Fargo, and Chase 

struck deals with Visa to drop alternative networks); id. ¶ 87

(alleging that Capital One and Fifth Third banks offer 

MasterCard debit cards with no rival bugs on the back). 

Based on these allegations, a jury could no doubt conclude 

that, in so doing, the banks continue to protect Visa and 

MasterCard from price competition.

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Plaintiffs also allege that several member banks continue 

to benefit indirectly from the Access Fee Rules. Because the 

major banks still own shares in Visa and MasterCard, see 

NAC Prop. Compl ¶¶ 99-100; Osborn Prop. Compl. ¶¶ 116-

117, it can be inferred that the banks reap some ongoing 

financial benefit from increased profits at Visa and 

MasterCard. And by removing any incentive for customers to 

demand multi-bugged debit cards, the banks are able to avoid 

competition with each other on network offerings attached to 

their cards. See NAC Prop. Compl. ¶ 105 (referring to 

“collusive agreement not to compete on the basis of the 

efficiency of each bank’s ATM services”).

We therefore reject the Defendants’ assertion that the 

public offerings dispelled any hint of conspiracy. The 

Plaintiffs have adequately alleged an agreement that 

originated when the member banks owned and operated Visa 

and MasterCard and which continued even after the public 

offerings of those associations.3

In a final attempt to defeat the proposed complaints, the 

Defendants contend that even if the Plaintiffs have adequately 

pleaded standing and agreement, they have failed to state a 

claim because their allegations do not establish antitrust 

injury. Appellees’ Br. 21-22; see Brunswick Corp. v. Pueblo 

Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977) (defining 

antitrust injury as “injury of the type the antitrust laws were 

 3 The Plaintiffs plead in the alternative that the Access Fee Rules 

constitute unlawful vertical conspiracies to restrain trade. See

Osborn Prop. Compl. ¶¶ 155-170; NAC Prop. Compl. ¶¶ 125-134. 

Stoumbos puts forward an alternative theory that the rules stem 

from unlawful “hub-and-spoke” conspiracies. See Stoumbos Prop. 

Compl. ¶ 53. Because we conclude that the proposed amended 

complaints allege a horizontal conspiracy, we do not reach the 

question of whether Plaintiffs’ alternative theories are tenable. 

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intended to prevent and that flows from that which makes 

defendants’ acts unlawful.”). The Defendants do not provide 

a meaningful argument as to why antitrust standing is not 

present here, where the Plaintiffs have alleged that the Access 

Fee Rules chill competition among network service providers, 

leading to artificially high access fees for consumers and 

artificially low margins for the ATM operators. See, e.g., 

NAC Prop. Compl. ¶ 108 (arguing that Defendants’

anticompetitive conduct has forced the independent operators 

to pay supra-competitive network fees). We therefore decline 

Defendants’ invitation to affirm on that basis.

III.

For the foregoing reasons, we hold that the District Court 

erred in concluding that the Plaintiffs had failed to plead 

adequate facts to establish standing or the existence of a 

horizontal conspiracy to restrain trade. We therefore vacate 

the District Court’s December 19 order denying the Plaintiffs’

motion to amend the judgment, and we remand for further 

proceedings consistent with this opinion.

4

So ordered.

 4

 As futility was the sole ground articulated by the District Court

for denying the Plaintiffs’ motions to amend the judgment and to 

file amended complaints, we see no reason that the motions should 

not be granted on remand. See Foman, 371 U.S. at 181-82 

(explaining that if “the underlying facts or circumstances relied 

upon by a plaintiff may be a proper subject of relief, he ought to be 

afforded an opportunity to test his claim on the merits”); Ciralsky, 

355 F.3d at 672-73 (recognizing that it may be appropriate to 

convert a judgment that dismisses a case into an order dismissing a 

complaint for statute of limitations purpose). But we leave this

discretionary decision to the district judge, see Firestone, 76 F.3d at 

1208, whose view of the case is more nuanced than our own.

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