The United States Supreme Court declined Visa and Mastercard’s petition for certiorari on Monday, thereby deepening a split between the circuit courts regarding the predominance standard for class certification. The National ATM Council, Inc. (NAC) filed a class action against the credit card companies for blocking ATM operators from charging customers different ATM fees. The credit card companies opposed certification by arguing, in part, that the putative class contained uninjured plaintiffs. They further argued this mixture of injured and uninjured plaintiffs failed to satisfy the predominance standard.
A federal judge disagreed and certified the class. The D.C. Circuit affirmed and joined the Eighth and Ninth Circuit in allowing the issue of uninjured plaintiffs within a class to be later addressed by a fact finder. The credit card companies argued that the D.C. Circuit exacerbated a split with the Second, Third, Fifth, and Eleventh Circuits, which examine the issue with greater scrutiny.
The Supreme Court’s decision to not hear the case has two significant implications for class action defendants. First, it permits the D.C., Eighth, and Ninth Circuits to continue using a less rigorous analysis of the predominance requirement. Plaintiffs are more likely to prevail on class certification in these circuits compared to the Second, Third, Fifth, and Eleventh Circuits. It remains to be seen whether more class actions will be filed in federal courts within the D.C., Eighth, and Ninth Circuits as a result.
Second, class action defendants in the D.C., Eighth, and Ninth Circuits will lose leverage in pre-certification settlement negotiations. Class action defense costs increase significantly after certification. A relaxed predominance standard increases the likelihood of certification. Plaintiffs’ counsel may accordingly demand more to settle a suit before certification.
While the Supreme Court declined to hear this case, it is likely another case testing the limits of the predominance standard with come before the Court soon. We will keep you updated with any new developments.