Salveson v. JP Morgan Chase & Co.

• Decision Date: 24 February 2016
• Docket Number: 14–CV–3529 (MKB)
• Court: U.S. District Court — Eastern District of New York
• Parties: Marvin Salveson, Edward Lawrence, Dianna Lawrence and Wendy M. Adams, on behalf of themselves and all others similarly situated, Plaintiffs, v. JP Morgan Chase & Co., J.P. Morgan Bank, N.A., Bank of America Corporation, Bank of America N.A., Capital One F.S.B., Capital One Financial Corporation, Capital One Bank, HSBC Finance Corporation, HSBC Bank USA, N.A., HSBC North American Holdings, Inc. and HSBC Holdings, PLC, Defendants.

166 F.Supp.3d 242

Marvin Salveson, Edward Lawrence, Dianna Lawrence and Wendy M. Adams, on behalf of themselves and all others similarly situated, Plaintiffs,

v.JP Morgan Chase & Co., J.P. Morgan Bank, N.A., Bank of America Corporation, Bank of America N.A., Capital One F.S.B., Capital One Financial Corporation, Capital One Bank, HSBC Finance Corporation, HSBC Bank USA, N.A., HSBC North American Holdings, Inc. and HSBC Holdings, PLC, Defendants.

14–CV–3529 (MKB)

United States District Court, E.D. New York.

Signed February 24, 2016

Jamie Lynne Miller, Joseph M. Alioto, Sr., Theresa Driscoll Moore, Joseph Michaelangelo Alioto, Alioto Law Firm, Lingel Hart Winters, Law Offices of Lingel H. Winters, San Francisco, CA, Jeffery Kenneth Perkins, Law Offices of Jeffrey K. Perkins, Tiburon, CA, John Haslet Boone, Law Offices of John H. Boone, Oakley, CA, Lawrence Genaro Papale, Law Offices of Lawrence G. Papale, Saint Helena, CA, Theodore Frank Schwartz, Schwartz & Schwartz, St. Louis, MO, for Plaintiffs.

Timothy Alan Miller, Boris Bershteyn, Skadden, Arps, Slate, Meagher & Flom LLP, Michael Mugmon, Michael A. Mugmon, Wilmer Cutler Pickering Hale and Dorr LLP, Palo Alto, CA, Jeffrey K. Rosenberg, Mark P. Ladner, Michael B. Miller, Morrison & Foerster LLP, Abby F. Rudzin, Andrew J. Frackman, O'Melveny & Myers, LLP, David S. Lesser, David Sapir Lesser, Wilmer Cutler Pickering

Hale and Dorr LLP, New York, NY, Matthew David Powers, O'Melveny & Myers LLP, San Francisco, CA, for Defendants.

MEMORANDUM & ORDER

MARGO K. BRODIE, United States District Judge:

Plaintiffs Marvin Salveson, Edward Lawrence, Dianna Lawrence and Wendy M. Adams commenced this putative antitrust class action on December 16, 2013, in the United States District Court for the Northern District of California against Defendants, financial institutions who issue general purpose payment cards that consumers use to purchase goods and services, and the affiliates of such institutions.¹ On behalf of a putative nationwide class of consumers using payment cards issued by Defendants, Plaintiffs assert claims pursuant to Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26, and pursuant to the Cartwright Act, California Business and Professions Code § 16750(a). Defendants moved to dismiss all of Plaintiffs' claims, and by Memorandum and Order filed on November 26, 2014, the Court granted Defendants' motion (the “November 26, 2014 Decision”).² The Clerk of Court entered judgment on December 4, 2014. (Dec. 4, 2014 J., Docket Entry No. 86.)

Plaintiffs now move to vacate the judgment and, pursuant to Local Civil Rule 6.3, for reconsideration of the dismissal of their federal claim. Defendants cross-move for reconsideration pursuant to Rule 59(e) of the Federal Rules of Civil Procedure and Local Civil Rule 6.3, seeking reconsideration of the Court's refusal to exercise supplemental jurisdiction over Plaintiffs' California state law claim. For the reasons set forth below, Plaintiffs' reconsideration motion is denied. The Court grants Defendants' reconsideration motion and, on reconsideration, dismisses Plaintiffs' state law claim.

I. Background

The Court assumes familiarity with the facts and procedural background as set forth in the November 26, 2014 Decision. (Nov. 26, 2014 Memorandum and Order (“M & O”), Docket Entry No. 83.) The Court summarizes only the pertinent facts.

According to Plaintiffs, in the course of issuing payment cards to consumers, Defendants and their affiliates knowingly participated in an anticompetitive conspiracy to fix fees related to those payment cards. (Compl. ¶¶ 26–29.) These fees are known as interchange fees. (See id. ¶¶ 40, 48.) Plaintiffs contend that consumers like Plaintiffs and the putative class used the payment cards to purchase goods and services and “paid supracompetitive [i]nterchange [f]ees to Defendants and their co-conspirators.” (Id. ¶¶ 19–20.)

Plaintiffs allege that each time a consumer uses a payment card, the following sequence of events occur: the merchant accepts the payment card from the cardholder and relays the transaction information to the merchant's “acquiring bank”; the acquiring bank then transmits the transaction information to the payment card's network—either Visa or MasterCard; and the network then relays the transaction information to the cardholder's “issuing bank” for approval of the transaction.

(Id. ¶ 49 (quoting United States v. Visa U.S.A., Inc. , 344 F.3d 229, 235 (2d Cir.2003) ).) If the issuing bank determines the consumer has sufficient credit and approves the transaction, it conveys its approval to the acquiring bank and the acquiring bank then relays its approval to the merchant. (See id . ) Finally, the issuing bank—in this case, one of the Defendants—pays the acquiring bank an amount representing the price of the goods or services purchased by the consumer in the underlying transaction, less an “interchange fee,” the fee at issue in this case. (See id . )

Plaintiffs allege that Defendants' participation in an anticompetitive conspiracy has injured cardholders by causing them to “pa[y] supracompetitive price-fixed [i]nterchange [f]ees to Defendants” that were higher “than [the fees] they would have paid in the absence of ... antitrust violations” by Defendants. (Id . ¶¶ 104–105.) Plaintiffs contend that a cardholder “pays the gross amount of the transaction, including fees, directly to the [issuing bank], which keeps the [i]nterchang [f]ee and passes on a separate transaction fee to the [acquiring bank] and the net amount to the merchant via the Visa or MasterCard network.” (Id . ¶ 38.) According to Plaintiffs, the interchange fee is paid “directly” by the cardholders. (Id . ¶ 6.) Plaintiffs specifically allege that the initial payment in the transaction is made by cardholders, that the issuing bank “keep[s]” the interchange fee from that payment, and that the payments made by cardholders are “comprise[d]” of the “balance” due to the merchant plus the interchange fee and other fees. (Id . ¶¶ 47–48, 81.)

II. Discussion

a. Standards of review

i. Reconsideration

The standard for granting a motion for reconsideration is strict, and “[r]econsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked—matters, in other words, that might reasonably be expected to alter the conclusion reached by the court.” Cedar Petrochemicals, Inc. v. Dongbu Hannong Chem. Co., Ltd. , 628 Fed.Appx. 793, 796–97, 2015 WL 5999215, at *3 (2d Cir.2015) (quoting Shrader v. CSX Transp., Inc. , 70 F.3d 255, 257 (2d Cir.1995) ); Bank of Am. Nat'l Ass'n v. AIG Fin. Prods. Corp. , 509 Fed.Appx. 24, 27 (2d Cir.2013) (“The standard for granting such a motion is strict ....” (quoting Shrader , 70 F.3d at 257 )), as amended (Apr. 5, 2013); see also Local Civ. R. 6.3 (The moving party must “set[ ] forth concisely the matters or controlling decisions which counsel believes the Court has overlooked.”).

It is thus “well-settled” that a motion for reconsideration is “not a vehicle for relitigating old issues, presenting the case under new theories, securing a rehearing on the merits, or otherwise taking a ‘second bite at the apple.’ ” Analytical Surveys, Inc. v. Tonga Partners, L.P. , 684 F.3d 36, 52 (2d Cir.2012) (quoting Sequa Corp. v. GBJ Corp. , 156 F.3d 136, 144 (2d Cir.1998) ), as amended (July 13, 2012). A motion for reconsideration is “neither an occasion for repeating old arguments previously rejected nor an opportunity for making new arguments that could have previously been made.” Simon v. Smith & Nephew, Inc. , 18 F.Supp.3d 423, 425 (S.D.N.Y.2014) (citation and internal quotation marks omitted). In order to prevail on a motion for reconsideration, “the moving party must demonstrate that the Court overlooked controlling decisions or factual matters that were put before the Court on the underlying motion.” Lichtenberg v. Besicorp Grp. Inc. , 28 Fed.Appx. 73, 75 (2d Cir.2002) (citations and internal quotation marks omitted); see also Stoner v. Young Concert Artists, Inc. , No. 11–CV–7279, 2013 WL 2425137, at *1 (S.D.N.Y. May 20, 2013) (“A motion for reconsideration is an extraordinary remedy, and this Court will not reconsider issues already examined simply because a party is dissatisfied with the outcome of his case. To do otherwise would be a waste of judicial resources.” (alteration, citations and internal quotation marks omitted)); Henderson v. City of New York , No. 05–CV–2588, 2011 WL 5513228, at *1 (E.D.N.Y. Nov. 10, 2011) (“In order to have been ‘overlooked,’ the decisions or data in question must have been put before [the court] on the underlying motion ... and which, had they been considered, might have reasonably altered the result before the court.” (citations and internal quotation marks omitted)).

ii. Motion to dismiss for failure to state a claim

In reviewing a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court must “accept all factual allegations in the complaint as true and draw inferences from those allegations in the light most favorable to the plaintiff.” Tsirelman v. Daines , 794 F.3d 310, 313 (2d Cir.2015) (quoting Jaghory v. N.Y. State Dep't of Educ. , 131 F.3d 326, 329 (2d Cir.1997) ); see also Matson v. Bd. of Educ. , 631 F.3d 57, 63 (2d Cir.2011) (quoting Connecticut v. Am. Elec. Power Co. , 582 F.3d 309, 320 (2d Cir.2009) ). A complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Matson , 631 F.3d at 63 (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ); see also Pension Ben. Guar. Corp. ex rel. St. Vincent Catholic Med. Ctrs. Ret. Plan v. Morgan Stanley Inv. Mgmt....