JP Morgan Chase Wins Appeal of Orders Dismissing Antitrust Class Action

Skadden secured an affirmance in the U.S. Court of Appeals for the Second Circuit of lower court orders dismissing a putative class action against JP Morgan Chase & Co. and three other financial institutions. The plaintiffs —Visa and MasterCard cardholders —alleged that these financial institutions violated state and federal antitrust laws by colluding to fix the interchange fees charged in connection with Visa and MasterCard transactions. In 2013, the U.S. District Court for the Eastern District of New York dismissed the federal claims and declined to assert jurisdiction over the state law claims. The parties cross-moved for reconsideration. On Feb. 24, 2015, the court declined the plaintiffs' motion to reconsider and reaffirmed dismissal of their federal claims. But the court granted the defendants' motion to reconsider by asserting jurisdiction over the plaintiffs' state law claims and dismissing them on the merits.

On Oct. 17, 2016, a three-judge panel consisting of Judges Denny Chin, Susan Carney, and Brian Cogan affirmed dismissal of both the federal and state law claims. The panel held that the federal claim was properly dismissed because cardholders are not direct payors of interchange fees. The panel further held that the plaintiffs waived any argument that the state law claim was improperly dismissed.