Court Opinion

ID: 3051326
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:35:06.356169+00
Date Added: 2024-06-11T11:49:25.420998
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

SHERI L. KENDALL, doing business       
as Bala Hair Salon, James Maser,
and Maiz Holding Co.,
              Plaintiffs-Appellants,         No. 05-16549
                v.
                                              D.C. No.
                                           CV-04-04276-JSW
VISA U.S.A., INC., Mastercard
International, Inc., Bank of                  OPINION
America, N.A., Wells Fargo Bank,
N.A., and U.S. Bank, N.A.,
              Defendants-Appellees.
                                       
        Appeal from the United States District Court
           for the Northern District of California
         Jeffrey S. White, District Judge, Presiding

                  Argued and Submitted
         June 11, 2007—San Francisco, California

                    Filed March 7, 2008

 Before: Michael Daly Hawkins, A. Wallace Tashima, and
             Carlos T. Bea, Circuit Judges.

                   Opinion by Judge Bea

                            2183
2186            KENDALL v. VISA U.S.A., INC.

                       COUNSEL

Richard J. Archer, Archer & Hanson, Occidental, California
and James A. Kopcke, Golden Kopcke, San Francisco, Cali-
fornia, for the appellants.

Marie L. Fiala, Heller Ehrman, San Francisco, California;
Robert Vizas, Arnold & Porter, LLP, San Francisco, Califor-
nia; Jay N. Fastow, Debra J. Pearlstein, Gianluca Morello,
Weil, Gotshal & Manges, LLP, New York, New York; Keila
D. Ravelo, Wesley R. Powell, Hunton & Williams, New
York, New York; Eileen Ridley, Foley & Lardner, LLP, San
Francisco, California; Maurice J. McSweeney, Michael Lued-
ner, Foley & Lardner, Milwaukee, Wisconsin; Daniel M.
Wall, Joshua N. Holian, Latham & Watkins, San Francisco,
California; and Sonya D. Winner, Tara M. Steeley, Covington
& Burling, San Francisco, California.
                    KENDALL v. VISA U.S.A., INC.                    2187
                              OPINION

BEA, Circuit Judge:

   This case concerns the pleading requirements to state a
claim for antitrust violations under Section 1 of the Sherman
Act following the Supreme Court’s recent pronouncement in
Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1964-66
(May 21, 2007).

   Appellants are a group of businesses who offer their cus-
tomers the convenience of paying with a credit card, at a cost
to the business. Appellees are composed of two groups: (1)
MasterCard and Visa (referred to as “Consortiums”) and (2)
Bank of America, N.A.; Wells Fargo Bank, N.A.; and U.S.
Bank, N.A. (referred to as “Banks”).1

   Appellants sued appellees under Section 1 of the Sherman
Act, 15 U.S.C. § 1, and Section 16 of the Clayton Act, 15
U.S.C. § 26, for antitrust violations, alleging appellees con-
spired with each other to set the fees charged to merchants,
such as appellants, for payment of credit card sales. The dis-
trict court dismissed appellants’ First Amended Complaint
without leave to amend for failure to state a claim upon which
relief can be granted pursuant to Federal Rule of Civil Proce-
dure 12(b)(6). We hold that Appellants’ First Amended Com-
plaint failed to plead evidentiary facts sufficient to establish
a conspiracy, and we affirm.

             I.   A Typical Credit Card Transaction

   To understand this case, it is helpful to begin with an exam-
ple of a credit card transaction:2 A customer purchases dinner
  1
    The district court also dismissed allegations against defendant, Citi-
Group, under Federal Rule 12(f). Appellants do not appeal this ruling.
  2
    Our hypothetical is taken from the declaration of William Sheedy,
Executive Vice President of Visa, and from Visa’s brief. No contrary evi-
dence appears in the record.
2188             KENDALL v. VISA U.S.A., INC.
for $100 from a merchant using his Visa credit card. The mer-
chant accepts the credit card from the customer, then electron-
ically presents the card’s data to the merchant’s bank (the
“acquiring bank”), or sometimes to a third party processing
firm, for verification and processing. The acquiring bank pre-
sents the data to Visa, which in turn contacts the bank that
issued the credit card to the customer (the “issuing bank”) to
check the customer’s bank account or credit line. The issuing
bank then tells Visa to authorize or decline the transaction,
and Visa relays this message to the acquiring bank, which
notifies the merchant. Thanks to modern computers, this all
typically happens while the customer finishes his coffee.

   If the transaction was authorized, the merchant eventually
delivers the credit card slip to the acquiring bank and asks the
sum be credited to the merchant’s bank account. If this had
been a personal check from the customer, the acquiring bank
might put a hold on the check until the customer’s bank had
paid it. The acquiring bank might also charge a fee for this
service. Because this is a Visa receipt, and Visa’s credit is
good, the acquiring bank credits the merchant’s account
before the customer pays his Visa bill at the end of the month.

   The acquiring bank, however, will not credit the merchant’s
account the full $100. Instead, the acquiring bank will deduct
a “merchant discount fee” of around three percent. Thus, the
acquiring bank will credit the merchant’s account only $97,
keeping $3 as a fee. This merchant discount fee is negotiable.
The acquiring bank might not charge this fee if the merchant
leaves a large amount of money in its account which the bank
can lend out.

   The acquiring bank then delivers the credit card receipt to
the issuing bank, via Visa. The issuing bank pays the acquir-
ing bank the original amount minus a fee of around two per-
cent, or $98, because the issuing bank knows that when it
presents the $100 receipt to Visa, Visa will deduct a $2 fee
as well. The difference between the credit card receipt, $100,
                     KENDALL v. VISA U.S.A., INC.                     2189
and the amount the issuing bank pays the acquiring bank, $98,
is known as the “interchange fee” or “interchange reimburse-
ment fee.” The issuing bank makes nothing in its transaction
with Visa, but profits, in part, by being one of the owners of
Visa through an association.3

   At the end of the transaction, the customer and his family
are fed, for which he pays $100 to the issuing bank, plus any
late fees and interest. The merchant receives $97 for the din-
ner, for which it charged the customer $100. The acquiring
bank receives $98 from the issuing bank, credits the mer-
chant’s account $97, and keeps $1 as a merchant discount fee.
The issuing bank receives $98 from Visa, but gives all $98 to
the acquiring bank. The issuing bank gets only a portion of
Visa’s $2 profit as one of the many owners of Visa through
an association but, most importantly, keeps any late fees and
interest the customer must pay if the customer does not pay
his account on time, in full, according to his contract with the
issuing bank. Visa receives $100 from the customer, pays the
issuing bank $98, and keeps $2 as an interchange fee. The dif-
ference between what the two banks keep represents the dif-
ference between the greater risk the issuing bank and Visa
have that the consumer will not pay compared to the lesser
risk the acquiring bank has that the issuing bank will not pay.

   In this case, appellants allege the appellees’ actions in set-
ting the amount of the merchant discount fee and interchange
fee constitute violations of Section 1 of the Sherman Act, 15
U.S.C. § 1, and Section 16 of the Clayton Act, 15 U.S.C. § 26,
because appellees conspired to set the amounts charged. The
district court dismissed appellants’ original complaint with
leave to amend for, inter alia, failure to allege specific facts
  3
    The district court found the issuing bank keeps the interchange fee
instead of Visa, but makes no mention of how the Consortiums make a
profit. Either version of the transaction (either Visa keeps the interchange
fee or the issuing bank keeps the interchange fee) results in the same anal-
ysis of this case.
2190                 KENDALL v. VISA U.S.A., INC.
of such conspiracy. The district court then allowed appellants
to conduct discovery so they would have the facts they needed
to plead an antitrust violation in their amended complaint.
Appellants deposed Steven Jonas for MasterCard and William
Sheedy for Visa. They then used the facts learned in those
depositions to form the allegations in their First Amended Com-
plaint.4 The district court then granted appellees’ motions to
dismiss the First Amended Complaint, without leave to
amend, for failure to state a claim upon which relief can be
granted pursuant to Federal Rule of Civil Procedure 12(b)(6).

               II.   Section 1 of the Sherman Act

  We review the dismissal of a complaint under Rule
12(b)(6) de novo. Les Shockley Racing Inc. v. Nat’l Hot Rod
Ass’n, 884 F.2d 504, 507 (9th Cir. 1989).

   [1] Section 1 of the Sherman Act prohibits “[e]very con-
tract, combination in the form of trust or otherwise, or con-
spiracy, in restraint of trade or commerce among the several
States, or with foreign nations.” 15 U.S.C. § 1. The Supreme
Court recently clarified what a plaintiff must plead to state a
claim under § 1:

      [A] plaintiff’s obligation to provide the “grounds” of
      his “entitle[ment] to relief” requires more than labels
      and conclusions, and a formulaic recitation of the
      elements of a cause of action will not do, see Papa-
      san v. Allain, 478 U.S. 265, 286, 106 S. Ct. 2932, 92
L. Ed. 2d 209 (1986) (on a motion to dismiss, courts
      “are not bound to accept as true a legal conclusion
      couched as a factual allegation”). Factual allegations
      must be enough to raise a right to relief above the
      speculative level. . . . In applying these general stan-
      dards to a § 1 claim, we hold that stating such a
  4
   Appellants did not depose any representatives of the Banks, nor do
they contend on appeal they needed further discovery to plead their case.
                     KENDALL v. VISA U.S.A., INC.                      2191
     claim requires a complaint with enough factual mat-
     ter (taken as true) to suggest that an agreement was
     made. Asking for plausible grounds to infer an
     agreement does not impose a probability requirement
     at the pleading stage; it simply calls for enough
     fact[s] to raise a reasonable expectation that discov-
     ery will reveal evidence of illegal agreement. . . .
     [A]n allegation of parallel conduct and a bare asser-
     tion of conspiracy will not suffice.

Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1964-66
(May 21, 2007).5 This is because discovery in antitrust cases
frequently causes substantial expenditures and gives the plain-
tiff the opportunity to extort large settlements even where he
does not have much of a case. Id. at 1966-67.

   [2] “[T]erms like ‘conspiracy,’ or even ‘agreement,’ are
border-line: they might well be sufficient in conjunction with
a more specific allegation—for example, identifying a written
agreement or even a basis for inferring a tacit agreement, . . .
but a court is not required to accept such terms as a sufficient
basis for a complaint.” Id. at 1966 (quoting DM Research,
Inc. v. College of Am. Pathologists, 170 F.3d 53, 56 (1st Cir.
1999)). The Court also suggested that to allege an agreement
between antitrust co-conspirators, the complaint must allege
facts such as a “specific time, place, or person involved in the
alleged conspiracies” to give a defendant seeking to respond
to allegations of a conspiracy an idea of where to begin. Id.
at 1970 n.10. A bare allegation of a conspiracy is almost
impossible to defend against, particularly where the defen-
   5
     At least for the purposes of adequate pleading in antitrust cases, the
Court specifically abrogated the usual “notice pleading” rule, found in
Federal Rule of Civil Procedure 8(a)(2) and Conley v. Gibson, 355 U.S.
41, 47 (1957), which requires only “a short and plain statement of the
claim showing that the pleader is entitled to relief,” to “give the defendant
fair notice of what the . . . claim is and the grounds upon which it rests.”
Bell Atlantic, 127 S. Ct. at 1964, 1968.
2192             KENDALL v. VISA U.S.A., INC.
dants are large institutions with hundreds of employees enter-
ing into contracts and agreements daily.

   [3] To state a claim under Section 1 of the Sherman Act,
15 U.S.C. § 1, claimants must plead not just ultimate facts
(such as a conspiracy), but evidentiary facts which, if true,
will prove: (1) a contract, combination or conspiracy among
two or more persons or distinct business entities; (2) by which
the persons or entities intended to harm or restrain trade or
commerce among the several States, or with foreign nations;
(3) which actually injures competition. Les Shockley Racing
Inc. v. Nat’l Hot Rod Ass’n, 884 F.2d 504, 507 (9th Cir.
1989); see also Bell Atlantic, 127 S. Ct. at 1964-66.

   In Bell Atlantic, the Supreme Court found allegations that
the defendant telephone companies “have entered into a con-
tract, combination or conspiracy to prevent competitive entry
in their respective local telephone and/or high speed internet
services markets and have agreed not to compete with one
another and otherwise allocated customers and markets to one
another” insufficient because no evidentiary facts were
pleaded which could prove the conspiracy. Id. at 1963. “Al-
though in form a few stray statements speak directly of agree-
ment, on fair reading these are merely legal conclusions
resting on the prior allegations.” Id. at 1970 (footnote omit-
ted). Here, appellants pleaded only ultimate facts, such as
conspiracy, and legal conclusions. They failed to plead the
necessary evidentiary facts to support those conclusions.

  A.   Allegations Against the Banks

   Appellants allege that: (1) each Bank defendant “partici-
pates in the management of and has a proprietary interest in”
the Consortiums; (2) the Banks charge appellants “the amount
of the interchange rate fixed by the Consortiums as the mer-
chant discount fee”; (2) the Banks adopt the interchange fees
set by the Consortiums; (3) the acquiring banks “knowingly,
intentionally and actively participated in an individual capac-
                 KENDALL v. VISA U.S.A., INC.                 2193
ity with the Consortiums in charging the fixed minimum mer-
chant discount fees”; and (4) there is an agreement among all
financial institutions to charge a minimum merchant discount
fee set by the Consortiums.

   [4] Appellants do not allege any facts to support their the-
ory that the Banks conspired or agreed with each other or with
the Consortiums to restrain trade. Although appellants allege
the Banks “knowingly, intentionally and actively participated
in an individual capacity in the alleged scheme” to fix the
interchange fee or the merchant discount fee, this allegation
is nothing more than a conclusory statement. There are no
facts alleged to support such a conclusion. See id. at 1970.
Even after the depositions taken, the complaint does not
answer the basic questions: who, did what, to whom (or with
whom), where, and when?

   [5] Regarding the allegation that the Banks conspired to fix
the interchange fee, merely charging, adopting or following
the fees set by a Consortium is insufficient as a matter of law
to constitute a violation of Section 1 of the Sherman Act. Id.
at 1964-66; see also Kline v. Coldwell Banker & Co., 508
F.2d 226 (9th Cir. 1974). In Kline, we held that membership
in an association does not render an association’s members
automatically liable for antitrust violations committed by the
association. Kline, 508 F.2d at 232. Even participation on the
association’s board of directors is not enough by itself.

    A statement of parallel conduct, even conduct con-
    sciously undertaken, needs some setting suggesting
    the agreement necessary to make out a § 1 claim;
    without that further circumstance pointing toward a
    meeting of the minds, an account of a defendant’s
    commercial efforts stays in neutral territory. An alle-
    gation of parallel conduct is thus much like a naked
    assertion of conspiracy in a § 1 complaint: it gets the
    complaint close to stating a claim, but without some
    further factual enhancement it stops short of the line
2194             KENDALL v. VISA U.S.A., INC.
    between possibility and plausibility of “entitle[ment]
    to relief.”

Bell Atlantic, 127 S. Ct. at 1966 (citation omitted).

   [6] Appellants failed to plead any evidentiary facts beyond
parallel conduct to prove their allegation of a conspiracy.
Accordingly, the district court correctly dismissed the com-
plaint against the Banks.

  B.   Allegations Against the Consortiums

  [7] The Supreme Court in Illinois Brick v. Illinois, 431 U.S.
720, 736 (1977), held “indirect purchasers” may not recover
antitrust damages. The Court held that permitting suits by
indirect third parties:

    essentially would transform treble-damages actions
    into massive efforts to apportion the recovery among
    all potential plaintiffs that could have absorbed part
    of the overcharge from direct purchasers to middle-
    men to ultimate consumers. However appealing this
    attempt to allocate the overcharge might seem in the-
    ory, it would add whole new dimensions of com-
    plexity to treble-damages suits and seriously
    undermine their effectiveness.

Illinois Brick, 431 U.S. at 737.

   In Illinois Brick, an antitrust treble-damages action was
brought by the State of Illinois and local government entities
alleging that concrete block manufacturers had engaged in a
price-fixing conspiracy. Id. at 726-27. The government enti-
ties had contracted with general contractors who in turn hired
masonry sub-contractors, who bought the concrete blocks for
installation in government projects. Id. at 735. The Supreme
Court held that only a direct purchaser of the concrete blocks
(the masonry sub-contractor who purchased the concrete
                  KENDALL v. VISA U.S.A., INC.              2195
blocks) is a party “injured in his business or property” entitled
to sue under Section 1 of the Sherman Act, not another party
in the chain of manufacture or distribution. Id. at 729, 735-37.

   Courts are not permitted to determine “what portion of [an]
illegal overcharge was ‘passed on’ . . . and what part was
absorbed by the middlemen” because such an analysis would
“involve all the evidentiary and economic complexities that
Illinois Brick clearly forbade.” Royal Printing Co. v.
Kimberly-Clark Corp., 621 F.2d 323, 327 (9th Cir. 1980).

   [8] Appellants allege that the Consortiums set both the mer-
chant discount fee and the interchange fee. Appellants allege
that by setting the interchange fee that the Consortiums
charge the issuing bank, the Consortiums establish a mini-
mum amount for the merchant discount fee. Appellants have
no contractual relationship with the Consortiums directly, nor
are they charged the interchange fee directly. In Illinois Brick,
the State’s contractors who bought the brick to be installed
were the middlemen. Here, the acquiring and issuing banks
are the middlemen. Thus, with respect to the interchange fee,
appellants run squarely into the Illinois Brick wall. Illinois
Brick, 431 U.S. at 746.

   [9] Appellants also allege the Consortiums indirectly estab-
lish the minimum merchant discount fee the Banks charge
Merchants. Appellants allege that because the interchange fee
is one of the cost factors an acquiring bank considers when
determining the merchant discount fee, the interchange fee
effectively sets a floor for each bank’s merchant discount fee.
In this sense, the Consortiums indirectly establish the mer-
chant discount fee, much as the cost of eggs sets a floor for
the price of an omelette on a menu. Just like the restauranteur,
the banks charge the merchant a higher price than their cost
of business to make a profit. This behavior suggests a rational
business decision, not a conspiracy. See Wal-Mart Stores, Inc.
v. Visa U.S.A., Inc., 396 F.3d 96, 102 (2d Cir. 2005)
(“Economics demands that the [merchant] discount fee [for
2196              KENDALL v. VISA U.S.A., INC.
credit card transactions] be greater than the interchange fee
the acquiring institution must pay to the card-issuing institu-
tion.”). Allegations of facts that could just as easily suggest
rational, legal business behavior by the defendants as they
could suggest an illegal conspiracy are insufficient to plead a
violation of the antitrust laws. Bell Atlantic, 127 S. Ct. at
1964-66 & n.5 (explaining that an antitrust complaint must
cross the threshold not only between “conclusory and factual”
but also between “the factually neutral and the factually sug-
gestive”). Further, this allegation is barred by Illinois Brick to
the extent that the Consortiums do not directly set the mer-
chant discount fee; the acquiring bank sets that fee.

   In an attempt to circumvent Illinois Brick, appellants also
allege the Consortiums directly conspired with the Banks to
set the merchant discount fee. Appellants contend they are
entitled to sue the Consortiums as co-conspirators under the
exception to Illinois Brick found in Arizona v. Shamrock
Foods Co., 729 F.2d 1208, 1213-14 (9th Cir. 1984). Appel-
lants, however, simply allege the Consortiums are co-
conspirators, without providing any facts to support such an
allegation, despite having deposed executives from both
MasterCard and Visa. Here again, the district court was not
required to accept appellants’ conclusion that the Consortiums
were co-conspirators of the Banks without any evidentiary
facts alleged to support such conclusion. See Bell Atlantic,
127 S. Ct. at 1964-66 (holding the district court is not
required to accept as true conclusory allegations of law or
legal conclusions couched as factual allegations); see also
Kansas v. Utilicorp United, Inc., 497 U.S. 199, 216 (1990)
(holding the exception to Illinois Brick did not apply even
where the direct purchaser almost certainly passed on the
entire cost of an alleged overcharge to the indirect purchaser
because no facts were alleged to support the allegation of con-
spiracy).

  Importantly, appellants do not allege any facts showing the
Consortiums have any direct control over the merchant dis-
                  KENDALL v. VISA U.S.A., INC.                 2197
count fee the acquiring bank chooses to charge, or not charge,
the merchant. In fact, appellants have expressly excluded
from the putative class of plaintiffs “those merchants who
negotiate merchant discounts directly with VISA and/or
MASTERCARD or receive payments directly from them.”

   Appellants also attempt to rely upon Freeman v. San Diego
Ass’n of Realtors, 322 F.3d 1133, 1145-46 (9th Cir. 2003), in
which we held that indirect purchasers can sue for damages
if there is no “realistic possibility that the direct purchaser will
sue” over the antitrust violation. But appellants failed to
allege any facts establishing that there is no realistic possibil-
ity the Banks will not sue the Consortiums.

   [10] Appellants’ allegations that the Consortiums charge
different interchange fees for different types of merchants also
fail to state a violation for Section 1 of the Sherman Act
because appellants do not allege they compete with these
other unidentified merchants, or that their trade was in any
way injured by such practices. See Monsanto Co. v. Spray-
Rite Serv. Corp., 465 U.S. 752, 763-64 (1984).

  C.   Issue Preclusion

   To cure the deficiencies in their failure to plead the neces-
sary evidentiary facts, appellants attempt to assert issue pre-
clusion to rely upon the factual findings in United States v.
Visa U.S.A., Inc., 344 F.3d 229 (2d Cir. 2003). Whether issue
preclusion applies is a legal question we review de novo. See
Frank v. United Airlines, Inc., 216 F.3d 845, 849-50 (9th Cir.
2000).

   [11] Issue preclusion prevents a party from relitigating an
issue decided in a previous action if four requirements are
met: “(1) there was a full and fair opportunity to litigate the
issue in the previous action; (2) the issue was actually liti-
gated in that action; (3) the issue was lost as a result of a final
judgment in that action; and (4) the person against whom col-
2198                  KENDALL v. VISA U.S.A., INC.
lateral estoppel is asserted in the present action was a party or
in privity with a party in the previous action.” United States
Internal Revenue Serv. v. Palmer (In re Palmer), 207 F.3d
566, 568 (9th Cir. 2000). The burden is on the party seeking
to rely upon issue preclusion to prove each of the elements
have been met. Here, appellants have not shown any of the
elements of issue preclusion have been met. The Second Cir-
cuit’s decision in Visa involved exclusivity rules which barred
member banks from issuing American Express or Discover
cards; any discussion of interchange fees or merchant fees in
that opinion was provided as background only and was irrele-
vant to the issue actually decided in that litigation. See 344
F.3d at 235, 237.6

               III.    Section 16 of the Clayton Act

   [12] Section 16 of the Clayton Act provides that “[a]ny per-
son, firm, corporation, or association shall be entitled to sue
for and have injunctive relief . . . against threatened loss or
damage by a violation of the antitrust laws . . . .” 15 U.S.C.
§ 26. Section 16 does not furnish an independent cause of
action. Rather, it allows the court to fashion relief upon a
showing of a separate violation of the antitrust laws. See, e.g.,
Catlin v. Washington Energy Co., 791 F.2d 1343, 1350 (9th
Cir. 1986). Because appellants failed to state a claim under
Section 1 of the Sherman Act, their claim under Section 16 of
the Clayton Act, predicated upon a violation Section 1 of the
Sherman Act, is barred. Cargill, Inc. v. Monfort of Colo., Inc.,
479 U.S. 104, 109 (1986) (threatened antitrust injury is a pre-
requisite to equitable relief).

   [13] The district court properly dismissed appellants’ com-
  6
   In fact, the attorneys representing appellants here also sued these same
defendants in Reyn’s Pasta Bella, LLC v. Visa, USA, Inc., 442 F.3d 741
(9th Cir. 2006). We rejected the argument that issue preclusion applied
because, as is the case here, the appellants failed to allege the required
facts.
                  KENDALL v. VISA U.S.A., INC.               2199
plaint under the pleading standards recently reinforced in Bell
Atlantic and the indirect purchaser rule in Illinois Brick.
Accordingly, we affirm.

            IV.   Leave to Amend the Complaint

   [14] Finally, plaintiffs seek leave to file a Second Amended
Complaint, although they fail to state how they would amend
the Complaint if given leave. Normally, we would agree that
when the Supreme Court alters the pleading requirements for
a cause of action, such as it did in Bell Atlantic, plaintiffs
should be allowed leave to amend their complaint to meet the
new standard. In this particular case, however, we think such
leave would be futile. Dismissal without leave to amend is
proper if it is clear that the complaint could not be saved by
amendment. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d
1048, 1052 (9th Cir. 2003) (per curiam).

   The district court in this case was particularly prescient in
its original order granting the Bank Defendants’ motion to
dismiss with leave to amend. The district court dismissed
appellants’ original complaint with leave to amend and
allowed appellants to conduct discovery so they would have
the facts they needed adequately to plead an antitrust violation
in their First Amended Complaint.

   In its original dismissal order, the district court relied upon
the pleading standards set forth in Papasan v. Allain, 478 U.S.
at 286 (holding courts are not required to accept as true con-
clusory allegations of law or legal conclusions couched as
factual allegations). This is the very same standard and rea-
soning that the Supreme Court relied upon in Bell Atlantic in
articulating the pleading standards for antitrust complaints.
Accordingly, appellants had already been put on notice once
before of the same defects that led to the dismissal of their
First Amended Complaint.

  [15] Appellants were already granted leave to amend once
and were given an opportunity to conduct discovery to dis-
2200               KENDALL v. VISA U.S.A., INC.
cover the facts needed to plead their causes of action, yet their
First Amended Complaint contained the same defects as their
original Complaint. Appellants fail to state what additional
facts they would plead if given leave to amend, or what addi-
tional discovery they would conduct to discover such facts.
Accordingly, amendment would be futile.

  AFFIRMED.7

  7
   All other pending motions are denied.