by Ed O'Connor
In In re Currency Conversion
Fee Antitrust Litig., Judge William H. Pauley III denied a motion for
summary judgment by Defendants Discover and Citigroup after finding that a
handful of meetings over four years by Defendants' in-house counsel related to
drafting and implementing arbitration clauses was probative of an antitrust conspiracy.
This was despite Plaintiffs' admitted paucity of evidence, overall weak
circumstantial evidence, the absence of discussions of pricing terms, and the
lack of knowledge about such meetings by Defendants' decision-makers.
Background Claims and Facts
Plaintiffs, holders of credit or charge cards, alleged that the issuing bank
Defendants violated Section 1 of the Sherman Act by conspiring to include
mandatory arbitration clauses in cardholder agreements and participating in a
group boycott by refusing to issue cards to individuals who did not agree to
From 1999 through 2003, in-house counsel from Defendants allegedly met several
times and discussed arbitration clauses. Moving Defendants Citigroup and
Discover allegedly only attended 3-5 meetings, possibly adopted their
arbitration clauses prior to such meetings, and their executives with
decision-making authority to implement the arbitration clauses had "no
knowledge" of such meetings. These two remaining Defendants moved for
summary judgment, but the Court denied the motion because there were genuine
issues of fact to be resolved at trial.
The Court summarized the familiar antitrust summary judgment standards stated
in Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588
(1986) [an enhanced version of this opinion is available to lexis.com subscribers]
("antitrust law limits the range of permissible inferences from ambiguous
evidence in a § 1 case. ... [Thus, t]o survive a motion for summary judgment
... a plaintiff [alleging] a violation of § 1 must present evidence that tends
to exclude the possibility that the alleged conspirators acted
independently.") and Monsanto Co. v. Spray-Rite Serv. Corp., 465
U.S. 752, 764 (1984) [enhanced version] (to survive summary judgment, Plaintiffs
must proffer "direct or circumstantial evidence that reasonably tends to
prove the [defendants] had a conscious commitment to a common scheme designed
to achieve an unlawful objective."). [footnote omitted]
Access the full version of "Drafting Arbitration Clauses
May Be Probative Of Antitrust Conspiracy" with your lexis.com ID. Additional
fees may be incurred.
If you do not have a lexis.com ID, you can purchase this commentary and additional Emerging Issues Commentaries from the LexisNexis Store.
Lexis.com subscribers can access the complete
set of Emerging Issues Analyses for Antitrust & Trade Law and
the Antitrust & Trade Area of Law page.
For more information about LexisNexis
products and solutions connect with us through our corporate site.
This Emerging Issue Analysis was authored by attorneys from the Antitrust
Practice Group of Sheppard, Mullin, Richter & Hampton LLP.Eric
O'Connor is an associate in the Business Trial and Antitrust Practice Groups
in the firm's New York office.Mr. O'Connor specializes
in complex litigation, with particular expertise in antitrust, unfair
competition, intellectual property, and class actions. He has first-chair trial
experience in federal court, including a successful trial to verdict in a
copyright matter. Mr. O'Connor's practice includes all forms of Alternative
Dispute Resolution, focusing particularly on international arbitration and also
is a Court-appointed mediator for the U.S. District Court for the Southern
District of New York.