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United States District Court for the Eastern District of New York
August 27, 2010, Decided; August 27, 2010, Filed
MEMORANDUM AND ORDER
JOHN GLEESON, United States District Judge:
This opinion resolves a discovery dispute over two documents created in connection with the European Commission's investigations into [*2] the defendants' conduct. The Commission, appearing as amicus curiae, asserts that the documents are confidential under European law and that this Court should deny the plaintiffs access to them pursuant to the doctrine of international comity. Magistrate Judge James Orenstein granted the plaintiffs' motion to compel discovery of the documents. Defendants Visa and MasterCard, supported by the Commission, object to that ruling. For the reasons stated below, I conclude that the order appealed from is contrary to the law of international comity, which mandates an exception in this instance to the usual rule that all relevant information is discoverable. Accordingly, the motion to compel is denied.
A. This Litigation
Prior decisions provide more detail on the background to this case; 1 a brief introduction suffices for present purposes. The plaintiffs are merchants in the United States who accept Visa and MasterCard payment cards. 2 They charge that the defendants — Visa, MasterCard, and various American banks — have violated and continue to violate the United States antitrust laws by unlawfully inflating the fees merchants pay on Visa and MasterCard transactions.
Visa and MasterCard are membership corporations comprised of thousands of banks. In any given consumer payment-card transaction, a bank assumes the role of "Issuing Bank" or "Acquiring Bank." The Issuing Bank issues a payment card bearing the Visa or MasterCard name; a consumer then uses the card to pay a merchant for goods [*4] or services. The merchant holds an account with the Acquiring Bank. The amount debited from the consumer's account with the Issuing Bank is reduced by various fees before it arrives in the merchant's account with the Acquiring Bank. Chief among these fees is the interchange fee, which the Issuing Bank keeps for itself as compensation for its role in the transaction.
The interchange fee is calculated using rules set by the Visa and MasterCard Boards of Directors. Several banks are represented on one Board or the other, and some are represented on both. According to the plaintiffs, the defendants are violating section 1 of the Sherman Act of 1890, 15 U.S.C. § 1, by conspiring to fix the interchange rate, by adopting and enforcing anticompetitive restraints of trade, and by engaging in illegal tying and bundling. In addition, the plaintiffs allege that Visa and MasterCard have monopolized the market for payment card transactions, thereby violating section 2 of the Sherman Act, 15 U.S.C. § 2. The plaintiffs, who seek damages and injunctive relief, filed various complaints in several district courts in 2005. Those actions were consolidated and transferred to me by the Judicial Panel on Multidistrict [*5] Litigation. In re Payment Interchange Fee and Merchant Discount Antitrust Litig., 398 F. Supp. 2d 1356 (J.P.M.L. 2005).
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2010 U.S. Dist. LEXIS 89275 *; 2011-1 Trade Cas. (CCH) P77,519
IN RE PAYMENT CARD INTERCHANGE FEE AND MERCHANT DISCOUNT ANTITRUST LITIGATION
Subsequent History: Later proceeding at In re Payment Card Interchange Fee, 2012 U.S. Dist. LEXIS 153637 (E.D.N.Y., Oct. 24, 2012)
Prior History: In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig., 2008 U.S. Dist. LEXIS 104439 (E.D.N.Y., Nov. 25, 2008)
documents, confidentiality, discovery, oral hearing, disclosure, comity, recording, courts, merchants, practices, investigations, interchange, antitrust, contested, third party, defendants', banks, card, motion to compel, cooperation, plaintiffs', proceedings, Acquiring, parties, reasons, enforcement proceeding, anti trust law, district court, member state, sovereign