Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_16-cv-01150/USCOURTS-cand-3_16-cv-01150-54/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 15:1 Antitrust Litigation

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

B & R SUPERMARKET, INC.; GROVE

LIQUORS, LLC,

Plaintiffs,

 v.

VISA, INC.; VISA USA, INC.;

MASTERCARD INTERNATIONAL,

INC.; AMERICAN EXPRESS

COMPANY; DISCOVER FINANCIAL

SERVICES; BANK OF AMERICA, N.A.;

BARCLAYS BANK DELAWARE;

CAPITAL ONE FINANCIAL

CORPORATION; CHASE BANK USA,

N.A.; CITIBANK (SOUTH DAKOTA),

N.A.; CITIBANK, N.A.; PNC BANK,

N.A.; USAA SAVINGS BANK; U.S.

BANCORP, N.A.; WELLS FARGO

BANK, N.A.; EMVCo, LLC; JCB CO.,

LTD; and UNIONPAY, a Chinese bank

association,

Defendants. /

No. C 16-01150 WHA

ORDER GRANTING MOTION

TO TRANSFER

In this antitrust action, a defendant charge card company moves to transfer the claims

against it to the Southern District of New York. For the reasons stated herein, the motion to

transfer is GRANTED.

Case 3:16-cv-01150-WHA Document 282 Filed 06/24/16 Page 1 of 4
United States District Court

For the Northern District of California

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Two Florida merchants filed this antitrust action against payment card networks, cardissuing banks (“issuing banks), and the standards-setting entity EMVCo. The complaint alleges

that defendants conspired to impose a “Liability Shift” effective October 1, 2015, on any and all

merchants that failed to upgrade to EMV chip technology. Pursuant to the Liability Shift, the

merchants allegedly became liable for fraudulent transactions that had previously been absorbed

by the issuing banks. Plaintiffs allege that defendants violated Section 1 of the Sherman

Antitrust Act and the California Cartwright Act, codified at Business and Professions Code

Section 16700.

Plaintiff B & R Supermarket, Inc. (doing business as Milam’s Market) and plaintiff

Grove Liquors LLC operate retail stores in Florida (Compl. ¶¶ 3–4). Both companies operate

under B & R Supermarket’s parent merchant account with American Express. B & R

Supermarket has been an American Express merchant since 1997 (Spellman Decl. at ¶ 4). In a

motion to intervene, plaintiffs seek to add two new plaintiffs — rue21, Inc., a nationwide

retailer with 49 stores in California, and Strouk Group LLC (doing business as Monsieur

Marcel), a California restaurant and retail business (Dkt. No. 255-2 at ¶¶ 4). Monsieur Marcel

has been an American Express merchant since 2014. rue21 has been an American Express

merchant since 1992 (Second Spellman Decl. at ¶ 4, 5).

American Express has included an arbitration provision in its Card Acceptance

Agreement since 1999. The October 2015 version of the Agreement provided in relevant part

(Spellman Decl., Exh. C):

You or we may elect to resolve any Claim by individual, binding arbitration. 

Claims are decided by a neutral arbitrator. 

If arbitration is chosen by any party, neither you nor we will have the right to

litigate that Claim in court or have a jury trial on that Claim. Further, you and

we will not have the right to participate in a representative capacity or as a

member of any class pertaining to any Claim subject to arbitration. . . . Except

as set forth below, the arbitrator’s decision will be final and binding. Other

rights you or we would have in court may also not be available in arbitration. 

The Agreement defined “claim” as follows:

Claim means any claim (including initial claims, counterclaims, crossclaims,

and third party claims), dispute, or controversy between you and us arising from

or relating to the Agreement or prior Card acceptance agreements, or the

Case 3:16-cv-01150-WHA Document 282 Filed 06/24/16 Page 2 of 4
United States District Court

For the Northern District of California

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relationship resulting therefrom, whether based in contract, tort (including

negligence, strict liability, fraud, or otherwise), statutes, regulations, or any

other theory, including any question relating to the existence, validity,

performance, construction, interpretation, enforcement, or termination of the

Agreement or prior Card acceptance agreements, or the relationship resulting

therefrom, except for the validity, enforceability, or scope of section 7.c of the

General Provisions.

The Agreement also included forum-selection and choice-of-law provisions: 

The Agreement and all Claims are governed by and shall be construed and

enforced according to the laws of the State of New York without regard to

internal principles of conflicts of law. Subject to [the arbitration provision], any

action by either party hereunder shall be brought only in the appropriate federal

or state court located in the County and State of New York. Each party

consents to the exclusive jurisdiction of such court and waives any Claim of

lack of jurisdiction or forum non conveniens. 

Plaintiffs filed a complaint on March 8, 2016. American Express now moves to compel

arbitration and moves to sever and transfer the claims against it to the Southern District of New

York pursuant to pursuant to Rule 21 and 28 U.S.C. 1404(a).

American Express does not submit evidence that plaintiffs signed the Agreement. 

Nonetheless, while plaintiffs attack the Agreement’s arbitration provision as being procedurally

unconscionable, plaintiffs do not dispute that they are otherwise subject to the Agreement.

American Express’s motion to transfer as to the named plaintiffs is GRANTED. All

claims by the named plaintiffs against American Express are severed and hereby transferred to

the United States District Court for the Southern District of New York. American Express’s

motion to compel arbitration is DENIED WITHOUT PREJUDICE to a motion there to compel

arbitration and a determination as to whether the arbitration provision is unconscionable. This

order also transfers the claims without prejudice to a possible intervention here by named

plaintiffs with claims against American Express not subject to a forum-selection clause.

A separate order declined to add the intervening plaintiffs, Monsieur Marcel and rue21,

at this time (Dkt. No. 281). American Express’s motion to transfer and motion to compel

arbitration as to Monsieur Marcel and rue21, are therefore DENIED WITHOUT PREJUDICE to a

future motion to intervene in connection with the amended pleading. Because Monsieur Marcel

Case 3:16-cv-01150-WHA Document 282 Filed 06/24/16 Page 3 of 4
United States District Court

For the Northern District of California

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and rue21 are also subject to the Agreement, their claims against American Express will likely

be susceptible to a motion to transfer.

IT IS SO ORDERED.

Dated: June 24, 2016. 

WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:16-cv-01150-WHA Document 282 Filed 06/24/16 Page 4 of 4