9th Circuit Tosses ATM Fee Conspiracy Lawsuit

(CN)- The 9th Circuit dismissed claims that an ATM network and several banks conspired to fix the fees charged when cardholders withdraw cash from a machine not owned by their bank.

The federal appeals panel in San Francisco found that the proposed class in California had no standing to sue the STAR Network, Bank of America, Wells Fargo and others, because the offending fees are passed on to ATM users rather than paid directly by them.

Plaintiffs Pamela Brennan, Terry Crayton and Darla Martinez sued the network's parent company and the banks in 2004 in San Francisco District Court, alleging that the defendants had fixed the fees for so-called "foreign" ATM transactions in violation of federal law.

Presiding U.S. District Judge Charles Breyer dismissed the case based on the U.S. Supreme Court's 35-year-old precedent in Illinois Brick Co. v. Illinois, which bars Sherman Act claims by "indirect purchasers."

The three-judge appeals panel affirmed unanimously on Thursday.

The plaintiffs conceded that they had never actually paid the "interchange fee" to which they objected, the panel found.

Instead, "card-issuing banks (including Bank Defendants) pay interchange fees and then include them when they charge foreign ATM fees (alleged by Plaintiffs to be artificially inflated)," according to the ruling. "In other words, the Bank Defendants pass on the cost of the interchange fees through the foreign ATM fees."

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