Pamela Brennan v. Concord Efs, Inc.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: ATM FEE ANTITRUST 

LITIGATION,

PAMELA BRENNAN; TERRY CRAYTON;

DARLA MARTINEZ,

Plaintiffs-Appellants,

v. No. 10-17354



CONCORD EFS, INC.; BANK ONE D.C. No.

CORPORATION; BANK ONE, N.A.; 3:04-cv-02676-CRB

J.P. MORGAN CHASE & CO.;

CITIBANK (WEST), F.S.B.DE; OPINION

SUNTRUST BANKS, INC.; WACHOVIA

CORPORATION; WELLS FARGO BANK,

N.A.; SERVUS FINANCIAL CORP.;

CITIBANK, N.A.; FIRST DATA

CORPORATION; BANK OF AMERICA,

N.A.,

Defendants-Appellees.



Appeal from the United States District Court

for the Northern District of California

Charles R. Breyer, District Judge, Presiding

Argued and Submitted

December 6, 2011—San Francisco, California

Filed July 12, 2012

7993

7994 IN RE ATM FEE ANTITRUST LITIGATION

Before: Carlos F. Lucero,* Consuelo M. Callahan, and

N. Randy Smith, Circuit Judges.

Opinion by Judge N.R. Smith

*The Honorable Carlos F. Lucero, Circuit Judge for the Tenth Circuit,

sitting by designation.

7996 IN RE ATM FEE ANTITRUST LITIGATION

COUNSEL

Joseph R. Saveri, Brendan P. Glackin, and Andew S. Kings-

dale, Leiff Cabraser Heimann & Bernstein, LLP, San Fran-

cisco, California; Merrill G. Davidoff (argued), Bart D.

Cohen, and Michael J. Kane, Berger & Montague, P.C., Phila-

delphia, Pennsylvania, for the plaintiffs-appellants.

W. Stephen Smith and Deanne E. Maynard (argued), Morri-

son & Foerster LLP, Washington, D.C.; Robert S. Stern and

Sylvia Rivera, Morrison & Foerster LLP, Los Angeles, Cali-

IN RE ATM FEE ANTITRUST LITIGATION 7997

fornia, for defendant-appellee J.P. Morgan Chase Bank, N.A.,

successor-in-interest to Bank One, N.A.

Sonya D. Winner (argued) and Anita F. Stork, Covington &

Burling LLP, San Francisco, California, for defendant-

appellee Bank of America, N.A.

Stephen V. Bomse, Orrick, Herrington & Sutcliffe, LLP, San

Francisco, California, for defendant-appellee Suntrust Bank,

Inc.

David F. Graham and Eric H. Grush, Sidley Austin LLP, Chi-

cago, Illinois, for defendants-appellees Citibank, N.A. and

Citibank (West), FSB.

Jack R. Nelson, Reed Smith LLP, San Francisco, California,

for defendant-appellee Wachovia Corp.

Daniel M. Wall and Joshua N. Holian, Latham & Watkins,

San Francisco, California, and Donald I. Baker, Baker & Mil-

ler, Washington, D.C., for defendants-appellees Wells Fargo

Bank, N.A. and Servus Financial Corp.

Peter E. Moll and Brian D. Wallach, Cadwalader, Wickcer-

sham & Taft LLP, Washington, D.C., for defendants-

appellees Concord EFS, Inc. and First Data Corp.

OPINION

N.R. SMITH, Circuit Judge:

Plaintiffs-Appellants (Plaintiffs) are automated teller

machine (ATM) cardholders, who allege horizontal price fix-

ing of fees paid to the ATM owners by the banks (issuing the

ATM cards to the cardholders) when cardholders retrieve cash

from an ATM not owned by their bank. Plaintiffs do not

7998 IN RE ATM FEE ANTITRUST LITIGATION

directly pay the allegedly fixed fee; therefore, as indirect pur-

chasers, Supreme Court precedent prohibits Plaintiffs from

bringing this suit. See Illinois Brick Co. v. Illinois, 431 U.S.

720 (1977). Further, Plaintiffs do not qualify for the narrow

exceptions to the Illinois Brick rule, because (1) they do not

allege a conspiracy to fix the price paid by the Plaintiffs and

(2) the banks are not controlled by each other or by the ATM

network. Therefore, Plaintiffs do not have standing under § 4

of the Clayton Act to proceed with their § 1 Sherman Act suit.

We thus affirm the district court’s summary judgment dis-

missal of this suit for lack of antitrust standing.

We limit our discussion in this opinion to the issues rele-

vant to standing. Because Plaintiffs lack antitrust standing, we

do not address Plaintiffs’ appeal regarding the district court’s

(1) determination that the rule of reason, and not the per se

rule, applies here; (2) rejection of the single-brand, derivative

aftermarket alleged in the complaint; and (3) determination

that Plaintiffs’ claim against Bank of America, N.A., did not

relate back to the filing of the original complaint under Rule

15(c) of the Federal Rules of Civil Procedure.

I. BACKGROUND

A. Facts

A “foreign ATM transaction” occurs when ATM card-

holders withdraw money from their bank account using an

ATM not owned by their bank (which issued them the card).

Such foreign ATM transactions involve four parties: (1) the

cardholder, i.e., the person using the ATM to retrieve money

from his or her bank account; (2) the card-issuing bank, i.e.,

the bank at which the cardholder holds an account and who

issues the cardholder an ATM card; (3) the ATM owner, i.e.,

the entity that owns the machine used by the cardholder; and

(4) the ATM network, i.e., the entity that connects the ATM

owners with card-issuing banks. Of all these parties, the ATM

network plays a particularly important role in this fact situa-

IN RE ATM FEE ANTITRUST LITIGATION 7999

tion. The network administers agreements between card-

issuing banks and ATM owners to ensure that customers can

withdraw money from network member ATMs.

Foreign ATM transactions generate four fees. The card-

holder must pay two of these fees—one to the ATM owner

for use of the ATM (known as a “surcharge”) and one to the

card-issuing bank (known as a “foreign ATM fee”). The card-

issuing bank also pays two of these fees—one to the ATM

network that routed the transaction (known as a “switch fee”)

and one to the ATM owner (known as an “interchange fee”).

At issue in this case are the interchange fee and the foreign

ATM fee. The ATM network (not the card-issuing bank nor

the ATM owners) establishes the interchange fee. Individual

card-issuing banks set their own foreign ATM fees.

The STAR Network (STAR) is the ATM network at issue

in this case. STAR has thousands of members who collec-

tively own hundreds of thousands of ATMs nationwide.

These members can be roughly divided into three groups. The

first group includes so-called Independent Service Organiza-

tions (“ISOs”). ISOs own ATMs, but they are not banks and

do not issue ATM cards (e.g., grocery stores or gas stations).

The second group consists of financial institutions that accept

deposits and issue ATM cards, but do not own any ATMs

(e.g., credit unions or internet banks). The third and largest

STAR member group includes financial institutions that both

issue ATM cards and own ATMs. The defendant banks (or

Bank Defendants) named in this case, which include all

defendants except for Concord EFS, Inc. (Concord) and First

Data Corporation, fit into this category. Until February 1,

2001, STAR was a member-owned network. As a member-

owned network, member banks (including Bank Defendants),

controlled STAR and set the interchange fees paid by the

members. On February 1, 2001, Defendant-Appellee Con-

cord, a publicly traded Delaware corporation, acquired STAR.

After the acquisition by Concord, Bank Defendants lacked

control of STAR based on ownership and board member

8000 IN RE ATM FEE ANTITRUST LITIGATION

appointment, because Concord was not owned by the member

banks of STAR.

Some Bank Defendants were concerned about the acquisi-

tion by Concord, because Concord was not owned by the

member banks and thus Bank Defendants would likely lose

influence over policies and pricing decisions (such as inter-

change fees). To moderate this concern, before the acquisition

STAR revised its agreement with its members to include lan-

guage that indicated that it would not change fees arbitrarily

and that it would consider the interests of its members before

implementing any changes. Additionally, to allegedly quell

the reluctance by the Bank Defendants, Concord agreed to

retain the pre-acquisition Chief Executive Officer of STAR

(who has no formal affiliation with the Bank Defendants) to

run the new network and agreed to elect him to Concord’s

board of directors to give a voice to the Bank Defendants.

Concord also agreed to establish a Network Advisory Board

(comprised of the larger member banks including Bank

Defendants) to advise Concord concerning the interests of the

large financial institutions. The Network Advisory Board

would provide input to Concord’s board as to policy and pric-

ing decisions, but had no authority to determine or veto inter-

change fee changes.

In February 2004, First Data Corporation (another Dela-

ware corporation) acquired Concord. As such, after February

2004, First Data owned and operated STAR.1

B. Procedural History

On July 2, 2004, Plaintiffs filed suit. On behalf of them-

selves and all those similarly situated, Plaintiffs alleged that

Defendants engaged in horizontal price fixing, a per se viola-

1

For simplicity, throughout the rest of the opinion we refer to Concord

as the owner and operator of STAR even though First Data took over that

role in 2004.

IN RE ATM FEE ANTITRUST LITIGATION 8001

tion of § 1 of the Sherman Act. They alleged that Defendants

colluded to fix the STAR interchange fee, which is then

passed on to Plaintiffs as part of the foreign ATM fee. Plain-

tiffs sought damages dating back to July 2, 2000.

Defendants filed a motion to dismiss arguing that Plaintiffs,

as indirect purchasers, lacked standing to allege an antitrust

violation pursuant to Illinois Brick. In re ATM Fee Antitrust

Litig., 768 F. Supp. 2d 984, 990 (N.D. Cal. 2009). On Sep-

tember 4, 2009, the district court denied the motion to dis-

miss. Id. at 994. Accepting all of Plaintiffs’ allegations as true

and construing the pleadings in the light most favorable to

Plaintiffs, the district court found that Plaintiffs’ suit could not

be dismissed for lack of standing. Id. at 992-94. The court

found that there was no realistic possibility that the Bank

Defendants would sue STAR and that Plaintiffs alleged that

they were “purchasing directly from the price-fixing conspira-

tors . . . .” Id. at 992. On October 19, 2009, Plaintiffs filed

their third amended complaint.

Subsequently, “Defendants . . . moved for summary judg-

ment, [again] arguing that the Illinois Brick rule barring indi-

rect purchasers from recovering monetary damages in an

antitrust suit applies here and precludes Plaintiffs from seek-

ing such damages.” In re ATM Fee Antitrust Litigation, No.

C 04-02676 CRB, 2010 WL 3701912, at *4 (N.D. Cal. Sep.

16, 2010). On September 16, 2010, the district court granted

Defendants’ motion for summary judgment and dismissed

Plaintiffs’ claim on the ground that Plaintiffs lack standing

under Illinois Brick’s direct purchaser rule. Id. at *11. Finding

no genuine issue of material fact, the district court found

Plaintiffs to be indirect purchasers. Id. at *12. Plaintiffs did

not directly pay the alleged fixed interchange fees—labeled

by the district court as the alleged “unlawful fee.” Id. at *5.

Critically, Plaintiffs do not allege that Defendants

have conspired to illegally fix the foreign ATM fee

that Plaintiffs pay to their bank when they use a for-

8002 IN RE ATM FEE ANTITRUST LITIGATION

eign ATM. . . . Importantly, Plaintiffs do not allege

that the Defendants or any other banks have con-

spired to fix the foreign ATM fee that Plaintiffs must

pay. . . . Instead, Plaintiffs assert that their banks pay

an unlawfully inflated interchange fee and then pass

the cost of the artificially high interchange fee along

to them through foreign ATM fees. . . . Plaintiffs . . .

do not pay this allegedly unlawful fee directly (their

banks do) and therefore are not directly harmed by

it. . . . Plaintiffs do not dispute that they pay the pur-

portedly unlawful interchange fee only indirectly.

. . . Plaintiffs therefore acknowledge that they are

only indirect payers of the interchange fee and that

the banks are the direct payers. . . . Given that Plain-

tiffs are not “direct purchasers” of the unlawful fee,

their damages claims are barred by the Illinois Brick

rule, unless an exception to the rule applies.

Id. at *2, *3, *5. The district court found no exception applica-

ble.2 Id. at *5-10. The district court filed a final judgment

against Plaintiffs on September 17, 2010. A timely appeal fol-

lowed.

2

Notably, “Plaintiffs argue[d] that there is ‘no realistic possibility’ that

the direct purchasers of interchange fees—i.e., the card-issuing banks—

would file a lawsuit challenging the unlawful fixing of those fees, for sev-

eral reasons.” Id. at *7. The district court rejected the argument, “because

it ignores the critical fact that the overwhelming majority of ATM card-

issuing banks pay more in interchange fees than they receive.” Id. In other

words, they are net payers. Id. “Because they pay more in interchange fees

than they receive, the higher the interchange fee, the higher their costs.

Thus, there is a very realistic possibility that these entities (or some subset

of them) would file suit to challenge the fixing of interchange fees at arti-

ficially high rates.” Id. at *8. In the end, the district court concluded that

“card-issuing banks are better-off if interchange fees are eliminated,” and

so they have incentive to sue. Id.

IN RE ATM FEE ANTITRUST LITIGATION 8003

II. JURISDICTION AND STANDARD OF REVIEW

Federal district courts have jurisdiction over “questions

alleging the violation of federal laws pursuant to 28 U.S.C.

§ 1331.” Del. Valley Surgical Supply Inc. v. Johnson & John-

son, 523 F.3d 1116, 1119 (9th Cir. 2008). We have jurisdic-

tion over appeals from final decisions of district courts. 28

U.S.C. § 1291.

Standing is a question of law for the district court to decide.

See Warth v. Seldin, 422 U.S. 490, 498-99 (1975); Del. Val-

ley, 523 F.3d at 1119; see also Haase v. Sessions, 835 F.2d

902, 904 (D.C. Cir. 1987) (“[T]he ultimate responsibility to

ensure subject matter jurisdiction always lies with the court,

not the parties.”). Because the court (and not a jury) decides

standing, the district court must decide issues of fact neces-

sary to make the standing determination. See Duke Power Co.

v. Carolina Envtl. Study Group, Inc., 438 U.S. 59, 72 (1978)

(district court held four days of hearings to decide motion to

dismiss for want of standing). “The fact-finding of the [dis-

trict] court to support or deny standing is subject to review

under the clearly erroneous standard.” Haase, 835 F.2d at 907

(citing Duke Power, 438 U.S. at 77 (“[W]e cannot say we are

left with ‘the definite and firm conviction that’ the finding by

the trial court . . . is clearly erroneous; and, hence, we are

bound to accept it.” (citation omitted))). However, when

standing is challenged on summary judgment, “[t]he court

shall [not] grant summary judgment if the movant shows that

there is [a] genuine dispute as to any material fact . . . .” Fed.

R. Civ. P. 56(a); see also Lujan v. Defenders of Wildlife, 504

U.S. 555, 561 (1992) (“[E]ach element [of standing] must be

supported in the same way as any other matter on which the

plaintiff bears the burden of proof, i.e., with the manner and

degree of evidence required at the successive stages of the liti-

gation.”). Therefore, if there is a genuine issue of material

fact, then summary judgment is inappropriate without the dis-

trict court resolving the factual dispute. See Bischoff v. Osce-

ola Cnty., Fla., 222 F.3d 874, 878-80 (11th Cir. 2000); see

8004 IN RE ATM FEE ANTITRUST LITIGATION

also Haase, 835 F.2d at 907, 910. “Several [other] circuits

explicitly prohibit district courts from resolving disputed fac-

tual questions or making credibility determinations essential

to the question of standing on the basis of affidavits alone.”

Harry T. Edwards & Linda A. Elliott, Federal Standards of

Review Ch. III.A (2007) (citing Bischoff, 222 F.3d at 880-81

(following First and Fifth Circuit cases)). We need not decide

whether the district court must conduct additional evidentiary

inquiries or the necessary extent of those inquires when

resolving issues of material fact at the summary judgment

stage, because our holding confronts no genuine issue of

material fact and does not rely on factual findings of the dis-

trict court.

When a district court determines standing on summary

judgment (as is the case here), “[w]e must determine [de

novo], viewing the evidence in the light most favorable to the

nonmoving party, whether there are any genuine issues of

material fact and whether the district court correctly applied

the relevant substantive law.” Del. Valley, 523 F.3d at 1119.

In the absence of genuine issues of material fact, we may

affirm the district court’s summary judgment “on any ground

supported by the record, regardless of whether the district

court relied upon, rejected, or even considered that ground,”

Kling v. Hallmark Cards Inc., 225 F.3d 1030, 1039 (9th Cir.

2000), if “the movant is entitled to judgment as a matter of

law.” Fed. R. Civ. P. 56(a).

III. DISCUSSION

Under § 4 of the Clayton Act, “any person who shall be

injured in his business or property by reason of anything for-

bidden in the antitrust laws may sue . . . and shall recover

threefold the damages by him sustained, and the cost of suit,

including a reasonable attorney’s fee.” 15 U.S.C. § 15(a).

However, “[t]he Supreme Court has interpreted that section

narrowly, thereby constraining the class of parties that have

statutory standing to recover damages through antitrust suits.”

IN RE ATM FEE ANTITRUST LITIGATION 8005

Del. Valley, 523 F.3d at 1119 (citing Illinois Brick, 431 U.S.

720).

[1] The Supreme Court has held that a direct purchaser has

“been injured in its business as required by [§ ] 4” even

though it passes on “claimed illegal overcharge[s] to” its cus-

tomers. Illinois Brick, 431 U.S. at 724 (discussing Hanover

Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481 (1968)).

Thus, defendants may not use a pass-on theory to challenge

the standing of direct purchasers. However, the Supreme

Court has also held that § 4 of the Clayton Act does not “per-

mit offensive use of a pass-on theory against an alleged viola-

tor that could not use the same theory as a defense in an

action by direct purchasers.” Id. at 735. In other words, indi-

rect purchasers may not use a pass-on theory to recover dam-

ages and thus have no standing to sue. Id. at 745-46. This rule

(the Illinois Brick rule), that indirect purchasers suffer no

injury under § 4, was reaffirmed in Kansas v. UtiliCorp

United, Inc., 497 U.S. 199, 207 (1990). “In sum, a bright line

rule emerged from Illinois Brick: only direct purchasers have

standing under § 4 of the Clayton Act to seek damages for

antitrust violations.” Del. Valley, 523 F.3d at 1120-21.

The underlying purposes for the rule are (1) “to eliminate

the complications of apportioning overcharges between direct

and indirect purchasers,” UtiliCorp, 497 U.S. at 208; (2) “to

eliminate multiple recoveries,” id. at 212; and (3) to “promote

the vigorous enforcement of the antitrust laws,” id. at 214.

However, the Supreme Court has stated that, while “[t]he

rationales underlying . . . Illinois Brick will not apply with

equal force in all cases[, w]e nonetheless believe that ample

justification exists for our stated decision not to ‘carve out

exceptions to the [direct purchaser] rule for particular types of

markets.’ ” Id. at 216 (second alteration in original) (quoting

Illinois Brick, 431 U.S. at 744). “[E]ven assuming that any

economic assumptions underlying the Illinois Brick rule

might be disproved in a specific case, we think it an unwar-

ranted and counterproductive exercise to litigate a series of

8006 IN RE ATM FEE ANTITRUST LITIGATION

exceptions.” Id. at 217; see also Del. Valley, 523 F.3d at 1124

(“The Court’s firm rule does not provide us the leeway to

make a policy determination on a case-by-case basis as to

whether standing should be recognized when there are special

business arrangements.”).

[2] While the Supreme Court has expressed reluctance in

carving out exceptions to the Illinois Brick rule, limited

exceptions do exist. First, the Supreme Court recognized

standing for indirect purchasers when a preexisting cost-plus

contract with the direct purchaser exists. Illinois Brick, 431

U.S. at 736; Utilicorp, 497 U.S. at 217-18. Second, indirect

purchasers may have standing under a “co-conspirator”

exception. 2A Phillip E. Areeda et al., Antitrust Law ¶ 346h

(3d ed. 2007). The court explained this exception, stating that

“an indirect purchaser may bring suit where he establishes a

price-fixing conspiracy between the manufacturer and the

middleman.” Del. Valley, 523 F.3d at 1123 n.1 (citing Arizona

v. Shamrock Foods, Co., 729 F.2d 1208, 1211 (9th Cir.

1984)). However, for the indirect purchaser to merit standing

under this exception, the conspiracy must fix the price paid by

the plaintiffs. Shamrock Foods, 729 F.2d at 1211. Third, indi-

rect purchasers may sue when customers of the direct pur-

chaser own or control the direct purchaser, Illinois Brick, 431

U.S. at 736 n.16, or when a conspiring seller owns or controls

the direct purchaser, Royal Printing Co. v. Kimberly Clark

Corp., 621 F.2d 323, 326 (9th Cir. 1990). For example, an

indirect purchaser may sue if the direct purchaser is a division

or subsidiary of the price-fixing seller. Id. In Freeman, our

court may have outlined a fourth exception, that “indirect pur-

chasers can sue for damages if there is no realistic possibility

that the direct purchaser will sue,” relying on the seller’s con-

trol of the direct purchaser. Freeman, 322 F.3d at 1145-46

(citing Royal Printing Co., 621 F.2d at 326). However,

whether there is such an exception is unclear, because we held

IN RE ATM FEE ANTITRUST LITIGATION 8007

that standing existed in Freeman based on the control or co-

conspirator exceptions.3 See id.

In this case, the parties argue over the contours of these

exceptions. But after review, none of the exceptions allow

Plaintiffs to avoid “run[ning] squarely into the Illinois Brick

wall.” Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1049 (9th

Cir. 2008).

A. Indirect Purchasers

[3] Plaintiffs argue that they should be considered as direct

purchasers or fit within the co-conspirator exception, because

the foreign ATM fee they have paid is an illegally fixed fee

as defined by antitrust law.4 However, Plaintiffs concede that

they have never directly paid interchange fees. 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). In other

words, the Bank Defendants pass on the cost of the inter-

change fees through the foreign ATM fees. The district court

found Plaintiffs to be indirect purchasers, because they do not

directly pay the fixed interchange fee, labeled by the district

court as the alleged “unlawful fee.” In re ATM Fee Antitrust

Litig., 2010 WL 3701912, at *5. The district court found it

important that “Plaintiffs do not allege that the Defendants or

any other banks have conspired to fix the foreign ATM fee

that the Plaintiffs must pay.” Id. at *2. We agree with the dis-

trict court that Plaintiffs are indirect purchasers.

3

“[T]he exception that [Freeman] purported to recognize is not yet one

acknowledged by the Supreme Court, which has thus far been indifferent

to the question whether the direct purchaser is likely to sue. What the

[Ninth Circuit] was really describing was a ‘control’ or perhaps a ‘co-

conspirator’ exception.” 2A Phillip E. Areeda et al., Antitrust Law ¶ 346f

(3d ed. 2007).

4

Although the argument touches upon the initial inquiry whether Plain-

tiffs are indirect purchasers, we address the argument within our discus-

sion of the co-conspirator exception.

8008 IN RE ATM FEE ANTITRUST LITIGATION

B. Exceptions to Illinois Brick

1. No Preexisting Cost-Plus Contract

[4] Plaintiffs do not contend that they had a preexisting

cost-plus contract with Defendants. Therefore, this exception,

allowing indirect purchasers to sue when they have a preexist-

ing cost-plus contract with the direct purchaser, Illinois Brick,

431 U.S. at 736; Utilicorp, 497 U.S. at 217-18, does not apply

here.

2. Co-Conspirator Exception and the Price “Fixed”

This co-conspirator exception allows an indirect purchaser

to sue when co-conspirators set the price paid by the plaintiff.

2A Phillip E. Areeda et al., Antitrust Law ¶ 346h (“Illinois

Brick does not limit suits by consumers against a manufac-

turer who illegally contracted with its dealers to set the latter’s

resale price. The consumer plaintiff is a direct purchaser from

the dealer who . . . has conspired illegally with the manufac-

turer with respect to the very price paid by the consumer.”

(footnote omitted)).

Specifically, our circuit has outlined this exception in

Shamrock Foods as applying when the direct purchaser con-

spires horizontally or vertically to fix the price paid by the

plaintiffs. 729 F.2d at 1211. In Shamrock Foods, consumers

alleged that retail grocery stores conspired with dairy produc-

ers, who also sold directly to consumers, to fix the retail

prices of dairy products. Id. Illinois Brick did not apply,

because “the retail price was the one fixed,” and thus, the

“theory of recovery d[id] not depend on pass-on damages.”

Id.; see also id. at 1214 (“The consumers confine their claim

for damages . . . solely to that overcharge resulting from a

retail level price-fixing conspiracy. There is no need to appor-

tion that overcharge because it was not passed on to the con-

sumers through any other level in the distribution chain.”). As

the district court aptly noted, this co-conspirator exception is

IN RE ATM FEE ANTITRUST LITIGATION 8009

not really an exception at all. In re ATM Fee Antitrust Litig.,

2010 WL 3701912, at *6; see also 2A Phillip E. Areeda et al.,

Antitrust Law ¶ 346h (“Whether one adopts a co-conspirator

exception or regards this situation as outside Illinois Brick’s

domain, there is no tracing or apportionment to be done.”

(footnote omitted)). If the direct purchaser conspires to fix the

price paid by the plaintiffs, then the plaintiffs pay the fixed

price directly and are not indirect purchasers (i.e., there is no

pass-on theory involved). See Shamrock Foods, 729 F.2d at

1211-12.

Here, the district court found Shamrock Foods inapplicable,

because

Plaintiffs in this case, unlike the plaintiffs in Sham-

rock Foods, do not allege that Defendants conspired

to fix the price Plaintiffs paid (i.e., the foreign ATM

fee). Instead, Plaintiffs allege that Defendants fixed

the interchange fee that Star Network pay one

another and then passed along the artificially inflated

fee to Plaintiffs. Thus, unlike Shamrock Foods,

Plaintiffs’ theory of recovery expressly depends on

pass-on damages. . . . In short, the Shamrock Foods

exception applies where the Defendants have con-

spired to fix the price that Plaintiffs paid directly.

That is not the case here.

In re ATM Fee Antitrust Litig., 2010 WL 3701912, at *6

(internal quotation marks and alterations omitted). We agree

with the district court.

As we emphasized in Kendall v. Visa U.S.A., Inc., 518 F.3d

1042, the price paid by plaintiffs must be fixed. Kendall

applies particularly well to this case, because it involved simi-

lar allegations and fee structures. In Kendall, merchants sued

credit card companies (or Consortiums) and banks, alleging

that they conspired to set the transaction fee charged to mer-

chants for each retail transaction—i.e., the merchant discount

8010 IN RE ATM FEE ANTITRUST LITIGATION

fee—by setting the interchange fees charged by the Consor-

tiums to the issuing banks. Id. at 1049. The merchant plain-

tiffs alleged that setting the interchange fees “establish[ed] a

minimum amount for the merchant discount fees.” Id. How-

ever, the merchant plaintiffs “[ran] squarely into the Illinois

Brick wall,” with respect to interchange fees, because they

were not charged the interchange fee directly. Id. Also,

“[a]ppellants allege[d] the Consortiums indirectly estab-

lish[ed] the minimum merchant discount fee the Banks char-

ge[ed] Merchants.” Id. “[T]his allegation [was] barred by

Illinois Brick to the extent that the Consortiums d[id] not

directly set the merchant discount fee; the acquiring bank sets

that fee.” Id. More importantly, the Kendall plaintiffs alleged

that the credit card companies directly conspired with the

banks to set the merchant discount fee, so they should have

standing under the co-conspirator exception. Id. at 1050. Crit-

ically, the plaintiffs alleged a conspiracy to fix the price paid

by the plaintiffs. Id. Although the court rejected the argument

because plaintiffs provided no facts to support such a conspir-

acy, the court found significant the fact that the plaintiffs did

“not allege any facts showing the Consortiums have any

direct control over the merchant discount fee the acquiring

bank chooses to charge . . . .” Id.

[5] The Kendall plaintiffs failed to show a conspiracy “to

set merchant discount fees,” and “appellants [did] not allege

any facts showing the Consortiums ha[d] any direct control

over the merchant discount fee.” Id. As such, Kendall reaf-

firmed that the co-conspirator exception applies when the

conspirators set the price paid by the consumer. The same

analysis applies in our case. Here, while Plaintiffs allege a

conspiracy to set interchange fees, they fail to show a conspir-

acy to set foreign ATM fees. Plaintiffs do not allege that

STAR has control to set foreign ATM fees. Further, Bank

Defendants have no control over the foreign ATM fees of

other Bank Defendants or STAR members.

[6] The Fourth Circuit also requires that plaintiffs allege a

conspiracy to fix the price paid by the plaintiffs. Dickson v.

IN RE ATM FEE ANTITRUST LITIGATION 8011

Microsoft Corp., 309 F.3d 193 (4th Cir. 2002). In Dickson,

computer purchasers alleged that license agreements between

computer sellers and Microsoft

resulted in supracompetitive prices for Microsoft’s

operating system and application software. [Com-

puter purchasers do] not allege any conspiracy

between Microsoft and the OEM Defendants to set

the resale price of the software. Instead, [they]

claim[ ] that overcharges were passed on to the con-

sumers by the OEM Defendants when the consumers

purchased personal computers (PCs) from the OEM

Defendants.

309 F.3d at 200. As such, Dickson held the claim it faced to

be “materially indistinguishable from the claim under consid-

eration in Illinois Brick, and [the plaintiffs’] inclusion of a

conspiracy allegation [was] insufficient to circumvent the Illi-

nois Brick rule.” Id. at 215. Dickson acknowledged the trend

of recognizing a co-conspirator exception. Id. at 214-15.

However, the court “interpret[ed] these cases as standing for

the more narrow proposition that Illinois Brick is inapplicable

to a particular type of conspiracy—price-fixing conspiracies.”

Id. at 215. In other words, the court concluded that only a

conspiracy to fix the price paid by the consumer is an excep-

tion to Illinois Brick, because it is “grounded on the damages

theory underlying the alleged conspiracy”—i.e., “no over-

charge has been passed on to the consumer.” Id. Dickson

refused to recognize an exception when plaintiffs allege a

conspiracy but the conspirators did not fix the price paid by

the plaintiffs, because such an action would be contrary to the

Supreme Court’s direction not to carve out exceptions to the

Illinois Brick rule. Id. at 214 (citing Utilicorp, 497 U.S. at 216

(“We . . . believe that ample justification exists for our stated

decision not to ‘carve out exceptions to the [direct purchaser]

rule for particular types of markets.’ ” (quoting Illinois Brick,

431 U.S. at 744))).

8012 IN RE ATM FEE ANTITRUST LITIGATION

[7] Although Dickson cites Shamrock Foods as an example

of the co-conspirator exception, id. at 214-15, Shamrock

Foods parallels Dickson’s understanding that the exception

only applies when the co-conspirators fix the price paid by the

plaintiff. Shamrock Foods held that Illinois Brick does not

apply when co-conspirators fix the retail price paid by con-

sumers because the “theory of recovery does not depend on

pass-on of damages . . . .”5 See 729 F.2d at 1211. Shamrock

Foods then indicates that a conspiracy to fix upstream prices

relies on the pass-on damages Illinois Brick prohibits. See id.

Therefore, we agree with the Fourth Circuit and decline to

extend the co-conspirator exception past the situation when

alleged co-conspirators set the price paid by the plaintiffs.

Plaintiffs argue that they have standing here, because

Defendants conspired to fix interchange fees for the purpose

and effect of fixing foreign ATM fees. In sum, Plaintiffs

argue that the foreign ATM fee was “fixed,” because

[w]hen the term ‘fix prices’ is used, that term is used

in its larger sense. A combination or conspiracy

formed for the purpose and with the effect of raising,

depressing, fixing, pegging or stabilizing the price of

a commodity in interstate commerce is unreasonable

per se under the Sherman Act.

Plymouth Dealers’ Ass’n of N. Cal. v. United States, 279 F.2d

128, 132 (9th Cir. 1960); see also Palmer v. BRG of Ga., Inc.,

498 U.S. 46, 48 (1990) (per curiam). Plaintiffs argue that

Defendants conspired to fix interchange fees for the purpose

of raising foreign ATM fees. Therefore, Defendants fixed the

5

Plaintiffs argue that Delaware Valley construed Shamrock Foods to

mean that plaintiffs have standing by “establish[ing] a price-fixing con-

spiracy between manufacturer and middleman—without regard to the

price at issue.” But Delaware Valley only discussed Shamrock Foods in

a passing footnote and did not describe the scope of the price-fixing con-

spiracy. Delaware Valley, 523 F.3d at 1123 n.1.

IN RE ATM FEE ANTITRUST LITIGATION 8013

foreign ATM fees (which Plaintiffs directly paid), and Plain-

tiffs have standing.

[8] However, Plaintiffs’ argument hinges on what it means

to “fix” a price. The district court and Defendants suggest

that, in the Illinois Brick context, fixing a price sets the price

directly paid, not a price latter passed-on as part of the price

at issue. However, Plaintiffs argue that conspiring to set a

price for the purpose and effect of raising the price at issue

equates to fixing that price and makes the payers of the raised

price direct purchasers.

Plaintiffs’ argument misses the mark. Illinois Brick rejected

this argument when it rejected “mark up” claims. See 431

U.S. at 744. Plaintiffs’ argument re-characterizes the “mark

up” claim by alleging that the Defendants imposed fixed

interchange fees for the purpose of marking up foreign ATM

fees. Plaintiffs’ argument differs little from the argument that

a fixed percentage mark up or a price-fixed good used in the

ultimate product should allow indirect purchasers to sue,

because the price ultimately paid by Plaintiffs includes the

fixed costs. However, the Supreme Court expressly rejected

such arguments, based largely on the reasoning that “[f]irms

in many sectors of the economy rely to an extent on cost-

based rules of thumb in setting prices . . . [and t]he intricacies

of tracing the effect of an overcharge on the purchaser’s

prices, costs, sales, and profits . . . are not spared the liti-

gants.” Id. Further, Plaintiffs do not allege here that the banks

agreed to fix the level of the “mark up” in the foreign ATM

fees or even whether such fees would be charged at all. The

third amended complaint states that “Defendants have contin-

ued to impose fixed Interchange Fees because the Bank

Defendants mark them up to set Foreign ATM Fees, which

generate substantial revenues for Bank Defendants.” Plaintiffs

allege a mark up of foreign ATM fees to pass on the inter-

change fees. The allegation contradicts Illinois Brick, because

Illinois Brick rejected exceptions for markups by middlemen

8014 IN RE ATM FEE ANTITRUST LITIGATION

or when the price-fixed good is a vital input to a larger prod-

uct. 431 U.S. at 743-45.

Moreover, Plaintiffs’ cited precedent does not support the

argument that foreign ATM fees were fixed. See Plymouth

Dealers’ Ass’n, 279 F.2d at 132; Palmer, 498 U.S. at 48. Nei-

ther case involved the question of who is injured under § 4 of

the Clayton Act or pass-on theories. In Plymouth Dealers’

Ass’n, car dealers agreed to a fixed price list that would be the

starting point for bargaining. 279 F.2d at 132. In Palmer,

competitors agreed to give one of them the exclusive rights to

Georgia. 498 U.S. at 47-48. Neither involved passing on the

price fixed through the price paid by the plaintiffs. Both cases

determined what constituted fixing prices under § 1 of the

Sherman Act. See, e.g., Plymouth Dealers’ Ass’n, 279 F.2d at

132 (holding that conspiring to raise, depress, fix, peg, or sta-

bilize a price “is unreasonable per se under the Sherman Act”

(emphasis added)).

However, as in Illinois Brick, our task involves determining

whether Plaintiffs are injured within the meaning of § 4 of the

Clayton Act. See Illinois Brick, 431 U.S. at 723-26. Section

4 of the Clayton Act provides: “Any person who shall be

injured in his business or property by reason of anything for-

bidden in the antitrust laws may sue . . . .” 15 U.S.C. § 15(a).

Therefore, Plymouth Dealers’ Association and Palmer

decided what constitutes “anything forbidden in the antitrust

laws,” while Illinois Brick decided whether injury results

based on a pass-on theory. See Illinois Brick, 431 U.S. at 729

(“[T]he overcharged direct purchaser, and not others in the

chain of manufacture or distribution, is the party ‘injured in

his business or property’ within the meaning of [§ 4 of the

Clayton Act] . . . .”). In sum, the price paid by plaintiffs must

be the price set (not merely “fixed” in some broad sense) for

plaintiffs to be a direct purchaser under the narrowly defined

injury requirement of § 4 of the Clayton Act. Further, under

the co-conspirator exception recognized in this circuit, the

price paid by a plaintiff must be set by the conspiracy and not

IN RE ATM FEE ANTITRUST LITIGATION 8015

merely affected by the setting of another price. See Shamrock

Foods, 729 F.2d at 1211.

Plaintiffs cite Knevelbaard Dairies v. Kraft Foods, Inc.,

232 F.3d 979 (9th Cir. 2000), for the proposition that Defen-

dants effectively fixed foreign ATM fees by fixing inter-

change fees, which thus gives Plaintiffs standing. However,

Plaintiffs inappropriately rely on Knevelbaard, because Kne-

velbaard found antitrust injury under California’s Cartwright

Act, which “is enlarged, by statute, in comparison to federal

law.” Id. at 991. “As a result, the more restrictive definition

of antitrust injury under [Illinois Brick] does not apply to the

Cartwright Act.” Id. (internal quotation marks omitted).

Because “California law affords standing more liberally than

does federal law,” Knevelbaard did not decide whether anti-

trust injury, or standing, existed under Illinois Brick. See id.

at 987.

Lastly, Freeman fails to support Plaintiffs’ argument that

the foreign ATM fees were “fixed.” In Freeman, realtor asso-

ciations formed a single MLS6 database ran by Sandicor, a

corporation they created, owned, and controlled. 322 F.3d at

1141, 1146. The plaintiffs alleged that the associations con-

spired to fix support fees charged to Sandicor, and that these

fees inflated the MLS fees charged by Sandicor and paid by

plaintiffs. Id. at 1142. The associations fixed the support fees

charged to Sandicor, and Sandicor set the MLS fees charged

to subscribers. Id. at 1141, 1145. Freeman held that fixing the

support fees artificially inflated that MLS fees paid by the

plaintiffs. See Freeman, 322 F.3d at 1145.

[9] Contrary to Plaintiffs’ argument, Freeman demon-

strates that fixing one fee for the purpose and effect of inflat-

6

“[T]he Multiple Listing Service, or ‘MLS,’ [ ] lets agents share infor-

mation about properties on the market with the help of a computerized

database. Agents who subscribe to the MLS can peruse the listings of

other subscribers and post their own.” Freeman, 322 F.3d at 1140.

8016 IN RE ATM FEE ANTITRUST LITIGATION

ing another fee does not make the purchaser a direct purchaser

under Illinois Brick. In Freeman, the court was forced to find

an exception to Illinois Brick even though the court found

price fixing by setting the support fees and passing them on

through MLS fees. Id. at 1145-46. Therefore, in the context

of Illinois Brick, fixing an upstream cost did not equate to fix-

ing the price paid by the plaintiffs. Standing existed in Free-

man, not because the associations fixed the support fees for

the purpose and effect of raising MLS fees, but because of the

associations’ ownership and control of Sandicor (the direct

purchaser). Id. at 1145-46 (citing Royal Printing, 621 F.2d at

326).

[10] Plaintiffs argue Freeman relies on the co-conspirator

exception, because the court noted that the associations, in

essence, had agreed to have the MLS charge be $44. See 322

F.3d at 1146 (comparing the case to resale price maintenance

and noting that “Defendants can’t turn a horizontal agreement

to fix prices into something innocuous just by changing the

way they keep their books”). However, even if Freeman

applied the co-conspirator exception, it does not help Plain-

tiffs. The defendants in that case conspired to effectively set

the price paid by the customers of the MLS. See id. (associa-

tions effectively “agree[d] among themselves to resell [MLS

database access] with support services for exactly $22.50”).

Here, unlike Freeman, the Bank Defendants independently set

the fee paid by Plaintiffs (i.e., foreign ATM fee) and the

amount of such fee varies between Bank Defendants. As such,

Defendants have not conspired to set the foreign ATM fees

unlike the associations in Freeman effectively setting the

price for Sandicor’s MLS service.

Plaintiffs next argue that they have standing, because they

“purchased directly from price-fixing Defendants,” an argu-

ment closely related to the argument that the foreign ATM

fees were “fixed.” In other words, Plaintiffs argue that the

direct purchaser Bank Defendants conspired to fix the inter-

change fees (an upstream cost), so Plaintiffs purchased from

IN RE ATM FEE ANTITRUST LITIGATION 8017

a horizontal price fixing conspirator. They argue Illinois Brick

does not apply even though Defendants did not fix the price

Plaintiffs directly paid, because they are purchasing from a

violator. However, because Shamrock Foods only involved

the setting of the price actually paid (and not an upstream

price that was then passed on), we would have to extend our

current co-conspirator exception. Though other courts have,7

we decline to do so.

7

In In re TFT LCD (Flat Panel) Antitrust Litigation, the Northern Dis-

trict of California held that a purchaser of a finished TFT-LCD product

was a direct purchaser, even though “the alleged price-fixing conspiracy

existed only with regard to TFT-LCD panels, and not finished products.”

267 F.R.D. 291, 306-07 (N.D. Cal. 2010). The district court classified con-

sumers of the final products as direct purchasers because they “pur-

chase[d] directly from the alleged violator.” Id. at 307 (quoting In re

Sugar Indus. Antitrust Litig., 579 F.2d 13, 17 (3d Cir. 1978)). In support

of the conclusion, the Northern District of California cited two Third Cir-

cuit cases.

In In re Sugar Industries Antitrust Litigation, the Third Circuit classi-

fied candy wholesalers as direct purchasers because the candy manufactur-

ers also refined sugar (sugar refiners being the alleged violators). 579 F.2d

at 17-18. In In re Sugar Industries, the plaintiff “limited the issue to the

summary judgment only insofar as it affects the direct purchases of candy

from defendants,” because “in the face of Illinois Brick . . . plaintiff has

no hope of success on the purchases from nondefendants.” Id. at 16. Thus,

In re Sugar Industries actually exemplifies the exception allowed when an

upstream violator controls or owns the direct purchaser, which is dis-

cussed in more detail below. See id. at 18-19; 2A Phillip E. Areeda et al.,

Antitrust Law ¶ 346f & n. 41.

Later, in In re Linerboard Antitrust Litigation, the Third Circuit classi-

fied purchasers of corrugated sheets and boxes as direct purchasers of

linerboard (which was included in the purchased corrugated sheets and

boxes), because the linerboard was subject to a price-fixing agreement.

305 F.3d 145, 158-60 (3d Cir. 2002) (“Illinois Brick . . . bans Clayton Act

lawsuits by persons who are not direct purchasers from the defendant anti-

trust violator.”). Similarly, the Seventh Circuit has held that “the first pur-

chaser[ ] from outside the conspiracy” may sue. Paper Sys. Inc. v. Nippon

Paper Indus. Co., 281 F.3d 629, 631-32 (7th Cir. 2002). Thus, these cases

restrict Illinois Brick’s influence by allowing an exception when the direct

purchaser conspires with the seller, even though the price illegally set is

an upstream cost that is passed-on to the plaintiffs. This contradicts the

Supreme Court’s admonition “not to ‘carve out exceptions to the [direct

purchaser] rule for particular types of markets.’ ” Utilicorp, 497 U.S. at

216 (quoting Illinois Brick, 431 U.S. at 744).

8018 IN RE ATM FEE ANTITRUST LITIGATION

[11] Based on our precedent in Kendall and Shamrock

Foods, we recognize the co-conspirator exception only when

the conspiracy involves setting the price paid by the plaintiffs.

Therefore, as the district court concluded, the exception does

not apply, because the theory of recovery depends on pass-on

damages. We decline to extend the co-conspirator exception

further. As in Kendall, Plaintiffs “run into the Illinois Brick

wall,” because Plaintiffs do not pay interchange fees directly

and the Bank Defendants independently set foreign ATM

fees.

3. Ownership and Control and Freeman’s “No Realistic

Possibility that Direct Purchasers Will Sue”

Royal Printing allowed indirect purchasers to sue “where a

direct purchaser is a division or subsidiary of a co-

conspirator.” 621 F.2d at 326. Royal Printing created an

exception when parental control existed, because applying

Illinois Brick “would eliminate the threat of private enforce-

ment,” id. at 326 n.7, and “close off every avenue for private

enforcement,” id. at 327. “The co-conspirator parent will for-

bid its subsidiary or division to bring a lawsuit that would

only reveal the parents own participation in the conspiracy.”

Id. at 326. In our case, neither Bank Defendants nor STAR are

divisions or subsidiaries of the other. However, Plaintiffs

argue that the exception in Royal Printing should, as con-

strued in Freeman, 621 F.2d at 1145-46, apply in any event.

We disagree.

[12] Freeman, citing Royal Printing, enunciated the excep-

tion as follows: “[I]ndirect purchasers can sue for damages if

there is no realistic possibility that the direct purchaser will

sue its supplier over the antitrust violation.” Freeman, 322

F.3d at 1145-46. However, Freeman did not create a new

variation of the Royal Printing exception, because Freeman

relied on ownership and control to find standing. Id. at 1146

(“The associations own Sandicor . . . , [t]hey appoint its board

of directors, and they are accused of conspiring with it.”); id.

IN RE ATM FEE ANTITRUST LITIGATION 8019

at 1146 n.12 (“Royal Printing applies because the associations

own Sandicor.”). In Freeman, the co-conspiring realtor asso-

ciations owned and controlled Sandicor (the direct purchaser)

and had the power to appoint Sandicor’s board of directors.

Id. Thus, in Freeman, we found no realistic possibility of suit,

because the associations owned and controlled the direct pur-

chaser.8 Id. at 1146. Therefore, Freeman outlines that,

whether a realistic possibility of suit exists, depends on the

existence of ownership or control between the direct pur-

chaser and the seller. See, e.g., Royal Printing, 621 F.2d at

326 n.7 (“[I]f Royal Printing is . . . barred [from suing], and

the controlled wholesalers will not sue, the appellees’ transac-

tions would be immune from private antitrust enforcement.”

(emphasis added)).

We do not overlook that Plaintiffs argue that there is no

realistic possibility that the Bank Defendants will sue STAR

or their co-defendants, because the district court preliminarily

denied the Defendants’ motion to dismiss (on September 4,

2009) on such grounds. In re ATM Fee Antitrust Litig., 768

F. Supp. 2d at 991-92. However on summary judgment (with

more information in the record than at the time of the motion

to dismiss), the district court subsequently found a lack of

standing, because there was a realistic possibility of suit by

pure-payer (and net-payer) direct purchasers of the inter-

change fee.9 In re ATM Fee Antitrust Litig., 2010 WL

3701912.

8

Freeman concludes the paragraph discussing the exception by stating

that “[t]here’s no realistic possibility Sandicor will sue them,” but in the

corresponding footnote the court finds Royal Printing applicable because

of the associations ownership of Sandicor. 322 F.3d at 1146 n.12.

9

We do not rely on the same reasoning as the district court, because

Royal Printing may cast some doubt on the district court’s conclusion. In

Royal Printing, we found that the plaintiffs had standing to sue for the pur-

chases they had made from wholesalers controlled by the paper manufac-

tures even though the plaintiffs also made purchases from independent

wholesalers. Royal Printing, 621 F.2d at 324, 327-28.

8020 IN RE ATM FEE ANTITRUST LITIGATION

[13] In Royal Printing and Freeman, the ownership or con-

trol of the direct purchasers by the conspiring sellers created

no realistic possibility of suit. Here, Plaintiffs do not allege

that STAR owns or controls Bank Defendants or that Bank

Defendants own or control other Bank Defendants. Thus, this

case does not involve a lack of a realistic possibility of suit

because of the seller (STAR) prohibiting the direct purchasers

(Bank Defendants) from suing through its ownership or con-

trol, as found in Royal Printing and Freeman. Instead, this

case deals with whether a realistic possibility of suit exists

when a direct purchaser conspires with the seller to set a cost

passed-on to Plaintiffs. We decline to extend the exception

noted in Royal Printing and Freeman to situations where the

seller does not own or control the direct purchasers, because,

after Royal Printing, the Supreme Court stated that “[t]he pos-

sibility of allowing an exception, even in rather meritorious

circumstances, would undermine the rule.” Utilicorp, 497

U.S. at 216; see 2A Phillip E. Areeda et al., Antitrust Law ¶

346h (“[T]he Supreme Court . . . has thus far been indifferent

to the question whether the direct purchaser is likely to sue

. . . .”).

Plaintiffs argue that Bank Defendants owned or controlled

STAR. The applicable statute does not define control. There-

fore, we construe it in its ordinary, contemporary, and com-

mon meaning. United States v. Bennett, 621 F.3d 1131, 1139

n.2 (9th Cir. 2010). Control means “ ‘to exercise restraint or

direction over; dominate, regulate, or command,’ ” id. (quot-

ing Webster’s College Dictionary 297 (Random House

1991)), or to have “the ‘power or authority to guide or man-

age,’ ” id. (quoting Webster’s New Collegiate Dictionary 285

(9th ed.1983)).

[14] Plaintiffs’ outline sources purported to show that

Bank Defendants’ ownership and control of STAR foreclosed

a realistic possibility of suit. However, Bank Defendants did

not control STAR after Concord, a publicly owned Delaware

IN RE ATM FEE ANTITRUST LITIGATION 8021

corporation, purchased STAR on February 1, 2001.10 Former

stockholders of STAR owned, in aggregate, approximately

ten percent of Concord’s outstanding common stock after the

merger. Because of Concord’s widely disbursed ownership

and Bank Defendants’ small ownership percentage, Bank

Defendants had insufficient ownership interests to control

Concord and thus STAR. Cf. Weinstein Enters., Inc. v. Orloff,

870 A.2d 499, 506-08 (Del. 2005) (in finding that a fiduciary

duty exists, a shareholder must have control of the affairs of

the corporation, which does not exist unless the shareholder

owns a majority of the stock or has actual control over the

corporation’s conduct); Kaplan v. Centex Corp., 284 A.2d

119, 122-23 (Del. Ch. 1971) (“A plaintiff who alleges domi-

nation of a board of directors and/or control of its affairs must

prove it. Stock ownership alone, at least when it amounts to

less than a majority, is not sufficient proof of domination or

control.” (citation omitted)). Moreover, the language added to

STAR’s agreement with its members does not create control,

because (1) it is a negotiated agreement between STAR and

its members, and (2) STAR still has the ultimate power to

change interchange fees based on market conditions. The lan-

guage essentially protects Bank Defendants from arbitrary

changes, but Concord has the power to change interchange

fees if changes are reasonably related to prevailing market

conditions. Likewise, the Network Advisory Board (com-

posed of large member banks like Bank Defendants) does not

create control, because it had no power to set interchange fees

or to control Concord’s board. The Network Advisory Board

has influence, because it represents the views of large member

banks. However, input on policies and pricing issues by inter-

ested members does not constitute the type of control neces-

sary to meet the exception to Illinois Brick. See Freeman, 322

10

As for the time period from July 2, 2000, to February 1, 2001, there

are no allegations that Bank Defendants controlled one another or con-

spired to fix foreign ATM fees. As such, the concern in Royal Printing of

a controlling party prohibiting the direct purchaser from suing is not pres-

ent here.

8022 IN RE ATM FEE ANTITRUST LITIGATION

F.3d at 1145-46 (control existed from ownership); cf. Werner

v. Miller Tech. Mgmt., L.P., 831 A.2d 318, 328 (Del. Ch.

2003) (“The ability to offer ideas [by the Advisory Board]

cannot be construed as an ability to manage the affairs of

Interprise.”). As a Delaware corporation, Concord’s board of

directors has the power, authority, and responsibility to man-

age the corporation. Del. Code Ann. tit. 8, § 141. Therefore,

to control STAR, the Bank Defendants must have had control

of Concord’s board of directors, which is not demonstrated

here.

CONCLUSION

[15] For these reasons, we AFFIRM the district court’s

summary judgment. Plaintiffs lack standing to seek damages

for the alleged antitrust violations.