[00:00:00] Speaker 02:
Case number 21-7109 et al.

[00:00:04] Speaker 02:
National ATM Council Inc.

[00:00:05] Speaker 02:
et al.

[00:00:06] Speaker 02:
versus Visa Inc.

[00:00:07] Speaker 02:
et al.

[00:00:07] Speaker 02:
at balance.

[00:00:08] Speaker 02:
Mr. Anderson for the MasterCard and Visa at balance.

[00:00:12] Speaker 02:
General issues and issues specific to the consumer classes.

[00:00:15] Speaker 02:
Mr. Eisenstein for the MasterCard and Visa at balance.

[00:00:19] Speaker 02:
Issues specific to the ATM operator class.

[00:00:22] Speaker 02:
Mr. Rubin for the ATM operator at police.

[00:00:25] Speaker 02:
Mr. Cooper for the management at police.

[00:00:28] Speaker 02:
Mr. Lobel for the BERT at police.

[00:00:37] Speaker 01:
Good morning, Mr. Anderson.

[00:00:39] Speaker 06:
Good morning, Judge.

[00:00:48] Speaker 06:
May it please the court.

[00:00:49] Speaker 06:
My name is Justin Anderson.

[00:00:51] Speaker 06:
I represent MasterCard in this appeal from the erroneous certification of three classes challenging non-discrimination rules applicable to surcharge.

[00:01:02] Speaker 06:
I will address the two consumer classes and arguments that pertain to all three classes.

[00:01:07] Speaker 06:
My colleague, Matthew Eisenstein, who represents ESA, will address issues specific to the class of independent ATM operators.

[00:01:16] Speaker 06:
Your honor, the class certification in these cases violates settled circuit precedent and must be reversed.

[00:01:25] Speaker 06:
In rail freight, this court held that Rule 23 commands a hard book at injury modeling.

[00:01:32] Speaker 06:
Plans put forward in the district court

[00:01:34] Speaker 06:
to satisfy their burden of proving predominance.

[00:01:38] Speaker 06:
That hard look did not happen here.

[00:01:41] Speaker 06:
In the district court, master-carded visas showed that each plaintiff's model of injury contained false positives.

[00:01:48] Speaker 06:
They swept in class members who could not have been injured.

[00:01:53] Speaker 06:
But the district court did not scrutinize the evidence that we presented.

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The court considered uninjured class members to be irrelevant to the question of class certification

[00:02:04] Speaker 06:
and deferred the issue to the merits phase of the case.

[00:02:08] Speaker 06:
It held that plaintiffs had a burden to only show a reasonable or colorable model of injury.

[00:02:17] Speaker 06:
That was error.

[00:02:19] Speaker 06:
The district court's analysis is directly contrary to rail freight, which instructs that it is, quote, indiscriminately the role of the district court

[00:02:31] Speaker 06:
to scrutinize evidence before granting certification, even when doing so requires inquiry into the merits of the claim."

[00:02:40] Speaker 06:
End quote.

[00:02:41] Speaker 06:
Whether the injury model can establish class-wide injury and withstand that level of scrutiny is not just a merits question.

[00:02:50] Speaker 06:
It is a question for class certification.

[00:02:53] Speaker 01:
But why shouldn't we understand on review for abuse of discretion that what the district court said was

[00:03:01] Speaker 01:
I see general claims on the plaintiff's part that every class member was injured and I see evidence sufficient to support that.

[00:03:14] Speaker 01:
I see defendants countering with a different way of analyzing the evidence that by the way is also a wholesale approach to a subset of the class.

[00:03:27] Speaker 01:
I'm satisfied that that is a situation in which common issues predominate and I'll make the final call or the jury will make the final call as to which analysis ultimately on the merits they accept.

[00:03:44] Speaker 01:
But isn't the predominance inquiry a filter that's supposed to look at, are these wholesale questions?

[00:03:52] Speaker 01:
Or are these case by case questions?

[00:03:54] Speaker 01:
And I don't actually see evidence in this record.

[00:03:58] Speaker 01:
That's not wholesale.

[00:03:59] Speaker 06:
Your honor, that's exactly the right question that the district which which should have answered should have asked that question and address the question.

[00:04:07] Speaker 06:
Instead, it held the burden.

[00:04:09] Speaker 06:
The burden plaintiffs to the burden only of showing a model that was colorable or well accepted.

[00:04:14] Speaker 06:
What the district or should have answered is this question.

[00:04:17] Speaker 06:
Is there common evidence that in one fell swoop can show that all members of the class were injured?

[00:04:25] Speaker 06:
That question, Your Honor, cannot be satisfied by the models here.

[00:04:29] Speaker 06:
Now, the district court did not scrutinize the evidence that we put forward.

[00:04:33] Speaker 06:
However, we showed that using... He said he did.

[00:04:37] Speaker 06:
Your Honor, the district court said that he was applying a standard that helped him

[00:04:44] Speaker 06:
to only show that the models were reasonable.

[00:04:46] Speaker 06:
He said that the Macklin class had put forward a, quote, colorful and well-accepted methodology.

[00:04:52] Speaker 06:
That the Burke class had put forward a well-accepted methodology, and this was not an adjudication on the merits.

[00:04:58] Speaker 06:
He said that the independent ATM operator put forward both a colorful methodology and it referred to our contesting of the merits as a question for the merits.

[00:05:08] Speaker 06:
That's directly contrary to rail freight, where this court said that plausible is not enough.

[00:05:13] Speaker 06:
But workable is not enough.

[00:05:16] Speaker 06:
The district court needs to take a hard look at the models that are put forward to determine whether they can identify injury across the class.

[00:05:24] Speaker 06:
Because if you can't show class-wide injury and class certification, we will raise this point again at summary judgment.

[00:05:30] Speaker 06:
And we will argue that there are class members who lack standing.

[00:05:33] Speaker 06:
And there are tens of thousands or more, hundreds of thousands, potentially, in light of the facts we've put in front of the district court.

[00:05:40] Speaker 06:
district court was required to scrutinize and grapple with that evidence.

[00:05:45] Speaker 06:
The plaintiff's theory in these cases on the consumer side is that for every one cent reduction in net interchange that ATM operators receive, they increase surcharges on consumers by one cent.

[00:05:59] Speaker 06:
It's a one to one relationship.

[00:06:00] Speaker 06:
It's a simple model of injury.

[00:06:02] Speaker 06:
They say every class member was injured in that fashion, but we scrutinize the evidence in the case

[00:06:09] Speaker 06:
And we found for one of the country's largest banks that it did not raise surcharges at all during the class period and during the timeframe that their experts evaluated.

[00:06:22] Speaker 06:
But that means is any class member who withdrew cash from that ATM was uninjured.

[00:06:29] Speaker 06:
And at a trial, we, MasterCard and Visa would have the right to introduce evidence as to each class member, whether they withdrew cash from that ATM

[00:06:39] Speaker 06:
or one of thousands of other ATMs that did not increase surcharges during the classic period to show they lack injury, lack standing in this case.

[00:06:46] Speaker 01:
What the plaintiff said in response, though, was not, oh, yeah, let's do one by one trials or nor even, oh, you're right, there are some who are uninjured.

[00:06:55] Speaker 01:
What they said was you didn't go back.

[00:06:59] Speaker 01:
The surcharges were raised earlier.

[00:07:03] Speaker 01:
And you don't account for that.

[00:07:04] Speaker 01:
And so I guess I'm, you know, and the district judge does say all three plaintiff groups have demonstrated that common evidence will predominate improving each element of their claims.

[00:07:16] Speaker 01:
So you can pull out, you know, infelicitous comments that he makes about plausible or reasonable.

[00:07:23] Speaker 01:
I guess for me, it would be helpful to know more concretely what standard you think

[00:07:32] Speaker 01:
does apply.

[00:07:34] Speaker 01:
This has been a contested question across the circuits.

[00:07:38] Speaker 01:
And I understand that courts should make findings, but should it say, I reject your evidence and I credit the plaintiff's evidence?

[00:07:50] Speaker 01:
I took it to be more what I thought we agreed to before, which is that it should look at the character of the dispute.

[00:07:56] Speaker 01:
Is it between wholesale and wholesale, or is it

[00:08:00] Speaker 01:
something that, you know, some granularity that is inevitable.

[00:08:05] Speaker 06:
Your Honor, this court has already spoken to that question twice in the rail freight cases.

[00:08:11] Speaker 01:
Can you give me more help on that?

[00:08:13] Speaker 06:
I don't know.

[00:08:14] Speaker 06:
I can, Your Honor.

[00:08:16] Speaker 06:
In rail freight one, the issue was that plaintiffs were seeking to recover damages for wholesalers who had purchased on contracts.

[00:08:25] Speaker 06:
that were set before the alleged antitrust violation began.

[00:08:29] Speaker 06:
And that's what prompted that case.

[00:08:32] Speaker 06:
How could those people have been injured if they had locked in raids before the challenge activity began?

[00:08:38] Speaker 06:
And to the extent the model swept in uninjured class members, it failed the question of predominance.

[00:08:44] Speaker 06:
And that was the basis for the initial decision.

[00:08:48] Speaker 06:
That is the same issue here.

[00:08:49] Speaker 06:
How can

[00:08:51] Speaker 06:
someone who withdrew cash from an ATM that did not increase the surcharge either in response to the reduction at interchange or for some of them at all.

[00:09:00] Speaker 06:
argue that they've been injured.

[00:09:02] Speaker 06:
What is the basis for the injury when they did not pay the overcharge?

[00:09:06] Speaker 06:
It's the same question.

[00:09:07] Speaker 04:
I want to be clear as to how far your argument goes.

[00:09:10] Speaker 04:
In other words, I'm clear as to your point about the district court's articulation of the legal standard he was to apply was erroneous as a matter of law.

[00:09:26] Speaker 03:
Now, you want us to reverse

[00:09:31] Speaker 03:
of the district court's decision.

[00:09:34] Speaker 04:
My question is the way your briefs, not your briefs, the way the arguments are made that you've presented as to, for instance, the largest ATM, maybe the class needs to be redefined in light of the appropriate standard to exclude those consumers.

[00:09:59] Speaker 04:
but it doesn't necessarily or doesn't foreclose the district court from, I'll just say in a sense, reaching the same result that a redefined class should be certified as distinct from our deciding this case can never go forward under any definition of a class.

[00:10:24] Speaker 04:
And of course, if we reversed and remand, we wouldn't be doing that.

[00:10:28] Speaker 04:
But I just want to be clear because your argument says that your clients are presented this evidence showing there could be no injury as to a large number of potential class members.

[00:10:46] Speaker 04:
But I just want to be clear, does that mean even under the correct standard, or you're not deciding that now, but I want to be clear, when you said we should just reverse, I wondered whether that was what you were arguing.

[00:11:00] Speaker 04:
In fact, even though under abuse of discretion, review and error of law is,

[00:11:08] Speaker 04:
and abuse of discretion.

[00:11:10] Speaker 04:
And so we would send it back and let normally in cases, let the district court apply the correct standard, but we wouldn't suggest no remand thereby suggesting that there could be no other result on remand once the district court applies the correct legal standard.

[00:11:30] Speaker 06:
Right.

[00:11:31] Speaker 06:
We are asking for a reversal or remand with instructions to be certified

[00:11:37] Speaker 06:
And we recognize that that is not the course that the court would take ordinarily.

[00:11:44] Speaker 06:
But this case presents a unique scenario where it is a question of law about whether the district court applied the correct standard.

[00:11:54] Speaker 06:
He did not.

[00:11:55] Speaker 06:
If you apply the correct standard here, the undisputed facts show because plaintiff's own experts admitted that there are ATMs that did

[00:12:06] Speaker 06:
surcharges in response to the reduction in that interchange.

[00:12:09] Speaker 04:
I'm not contesting that argument that you make.

[00:12:12] Speaker 04:
I'm just asking, could not the district court, or do you say it would be impossible for the district court even upon applying the correct standard on remand to offer the plaintiffs an opportunity to redefine the class and then determine on the basis of that redefined class

[00:12:36] Speaker 04:
whether or not the plaintiffs had met their burden?

[00:12:42] Speaker 06:
It would, Your Honor.

[00:12:44] Speaker 06:
Under the applicable standard, the plaintiffs have simply not given the district court the tools it would need to approve a class that windows out uninjured class members.

[00:12:55] Speaker 06:
And that's why we refer the court to the Third Circuit precedents in Ferraris, in Henry Light, USA, and the Eighth Circuit decision in Huddock.

[00:13:03] Speaker 06:
In those cases where even if you remanded to the district court, remand would be futile because there is no ability and the plaintiff's court has come forward with no proposal for how they would winnow out the class members who withdrew cash from ATMs that did not incur charges in response to reduction.

[00:13:24] Speaker 10:
That is not the way we typically deal with legal error and factual error.

[00:13:30] Speaker 10:
I mean, the Supreme Court has told us a long time ago

[00:13:32] Speaker 10:
the district court is relying on the incorrect statement of the law.

[00:13:37] Speaker 10:
You send it back and the district court's not got to apply what we tell.

[00:13:41] Speaker 10:
Correct statement of the law and then find the facts.

[00:13:44] Speaker 10:
We don't, I'm listening to you carefully.

[00:13:46] Speaker 10:
What you're asking us to do is make findings of fact.

[00:13:49] Speaker 10:
We have been told over and over again, we don't do that.

[00:13:52] Speaker 06:
And your honor, we're not asking you to make findings of fact.

[00:13:54] Speaker 06:
We are asking you to reverse on the undisputed record here.

[00:13:59] Speaker 06:
We are not contesting that

[00:14:01] Speaker 06:
Plaintiffs experts in their reports found that there were certain ATMs where there was no statistically significant relationship between the reduction of net interchange and an increase in surcharge.

[00:14:14] Speaker 06:
They admitted there's no need for fact-finding.

[00:14:16] Speaker 06:
On their own experts' analysis, there are uninjured class members in this case.

[00:14:21] Speaker 06:
Plaintiffs have waived any rights argued that they're entitled to show that there's a win-win mechanism that could filter them out.

[00:14:27] Speaker 06:
Each one of them, all three sets, have doubled down in their brief saying,

[00:14:31] Speaker 06:
every class member is injured, every class member paid a plated surcharge.

[00:14:37] Speaker 04:
I think what we're trying to get at is you're precluding the district court, and I just want to be sure you're making this argument as a matter of law, from saying to the plaintiffs, well, the models you've given me now are

[00:14:55] Speaker 04:
insufficient for many of the reasons your clients point out, I mean their experts just hypothesize about things, etc.

[00:15:03] Speaker 04:
They don't point to hard data.

[00:15:05] Speaker 04:
But suppose the plaintiff said, well, we want to redefine the class.

[00:15:12] Speaker 04:
I don't wanna go too far here, but just assume they say, well, we accept the point that the largest ATM, there's no injury as to them, but there are these other people.

[00:15:22] Speaker 04:
Now it may be a much smaller class, but your argument seems to preclude that opportunity for the plaintiffs.

[00:15:33] Speaker 04:
And I gather from what your response to me is, well, they waived any.

[00:15:37] Speaker 04:
And I just wondered, in other words, you're saying they'd have to start all over again and file a new complaint.

[00:15:45] Speaker 06:
Your honor, that's right.

[00:15:46] Speaker 06:
This case has been pending for 10 years.

[00:15:49] Speaker 06:
Rail freight was decided in 2013.

[00:15:51] Speaker 06:
This is not a new legal standard.

[00:15:54] Speaker 06:
The plaintiffs are represented by able counsel and assisted by economists whose credentials are well accepted.

[00:16:01] Speaker 06:
They had every opportunity to argue that if there were uninjured class members,

[00:16:06] Speaker 06:
They had a model for winnowing them out.

[00:16:09] Speaker 06:
We had discoveries now closed.

[00:16:12] Speaker 06:
This case is, the record is closed on both expert discovery and fact discovery.

[00:16:17] Speaker 06:
For them now to go back to the district court and reopen that record and propose some fashion of winnowing out uninjured class members would be an unfair burden, unfairly prejudicial to the defendants who have lived with this case for the last 10 years.

[00:16:31] Speaker 04:
Well, I think you had a time limit

[00:16:34] Speaker 04:
to file your petition for review.

[00:16:39] Speaker 04:
But I initially thought, well, why didn't you file a motion for reconsideration by the district court making the legal arguments you made?

[00:16:46] Speaker 04:
And in that situation, hypothetically, the district court might have said, oh, yes, I'm relying on this vitamins decision.

[00:16:56] Speaker 04:
But the circuit and the Supreme Court have abandoned that colorable approach.

[00:17:02] Speaker 04:
And now the standard is different.

[00:17:04] Speaker 04:
And so I'm going to apply that standard.

[00:17:07] Speaker 04:
And so I gather part of your argument was you pointed all this out to the district court and nevertheless it ruled as it did applying the vitamins colorable standard, which was no longer the standard that applied.

[00:17:22] Speaker 06:
That's right, your honor.

[00:17:23] Speaker 06:
Normally, if you file a motion for reconsideration, you have to tell the judge, here's the new thing we want you to consider.

[00:17:29] Speaker 06:
And we had put all these arguments in front of the district court in our briefing.

[00:17:33] Speaker 06:
The question of predominance, the question of uninjured class members was not some side issue.

[00:17:38] Speaker 06:
This was the issue.

[00:17:40] Speaker 06:
This was the issue that we contested.

[00:17:41] Speaker 06:
There were other smaller issues, but this was the main issue that we contested class verification on with these classes.

[00:17:48] Speaker 01:
What is the standard that you think the district court should apply?

[00:17:55] Speaker 06:
It should take the hard look that this court set is required in rail freight.

[00:18:01] Speaker 06:
The Supreme Court has called it a close look in Comcast, also a quote, rigorous analysis, end quote, that's from Comcast.

[00:18:09] Speaker 06:
And in Walmart, the Supreme Court said the court must make findings.

[00:18:14] Speaker 06:
That's a quote, even if it, again, overlaps with the merits.

[00:18:18] Speaker 01:
What if those things, I mean, how can we confidently say reading the district court's opinion that it didn't take a hard look, a close look at make a rigorous analysis.

[00:18:26] Speaker 01:
And indeed the district judge said, I find and makes the findings.

[00:18:32] Speaker 01:
I mean, it's.

[00:18:35] Speaker 06:
Your honor, if that was sufficient, this court would be deprived of

[00:18:38] Speaker 06:
health review in any case, because every district judge would be counted on.

[00:18:44] Speaker 01:
Well, no, no, we had rail freight and we said, you know, there's some plaintiff acknowledges there, the limitations and didn't have a comeback.

[00:18:57] Speaker 01:
And we said, okay, no class.

[00:18:59] Speaker 06:
The rail freight was free Comcast.

[00:19:01] Speaker 06:
So the first rail freight decision was decided when the district court did not have the benefit of the Comcast decision.

[00:19:08] Speaker 06:
So on appeal, the panel acknowledged that the district court was applying full law.

[00:19:14] Speaker 06:
And so in that case, it cannot be the case that this court only has the ability to review district court decisions where the district court acknowledges that it is not doing what the standard requires.

[00:19:24] Speaker 01:
It can't be the case that... So it's... I mean, Comcast is a much clearer and different case, right?

[00:19:30] Speaker 01:
There there were

[00:19:31] Speaker 01:
four different theories, the only one of them was deemed viable, but the plaintiffs or the district court continued to rely on a damages model that was predicated on all four.

[00:19:42] Speaker 01:
We just don't have something like that.

[00:19:44] Speaker 01:
The way I read Comcast and the rail freight decisions, they're pointing to particular kinds of errors.

[00:19:52] Speaker 01:
You know, plaintiff acknowledged that there was, you know, some 12 plus percent of uninjured customer didn't have a comeback on that.

[00:20:01] Speaker 01:
We just talked about this.

[00:20:04] Speaker 01:
You haven't pointed that kind of defect here.

[00:20:07] Speaker 01:
It's really, you know, we have this one take on the data.

[00:20:11] Speaker 01:
They have a different take.

[00:20:12] Speaker 01:
They're saying everybody's injured.

[00:20:14] Speaker 01:
District judges are saying they're right, but is saying they've come forward with that.

[00:20:20] Speaker 01:
And that's standard evidence.

[00:20:22] Speaker 01:
It's evidence that could be credited good enough.

[00:20:26] Speaker 06:
The problem is that good enough for the district court is not good enough

[00:20:30] Speaker 06:
based on the standards the Supreme Court has announced, and this court has announced in Comcast and Walmart, both rail trade decisions.

[00:20:38] Speaker 06:
If this report did not just say good enough, it needs to take a hard look at the evidence, scrutinize evidence that's put forward by the defendants, and determine whether the models can withstand that scrutiny and show that common evidence will establish class-wide and is capable of establishing class-wide injury.

[00:20:58] Speaker 06:
That hard look did not happen here.

[00:21:00] Speaker 06:
And this court cannot defer to decisions that clearly apply the long standard simply because the court writes, I've considered the evidence and concluded act.

[00:21:10] Speaker 06:
That is clearly not sufficient to meet the hard look rigorous standard that's required here.

[00:21:15] Speaker 06:
Otherwise, we've got the standard.

[00:21:17] Speaker 06:
We've got the precedent from this court, that Comcast and Walmart, that this is not a

[00:21:24] Speaker 06:
Class certification is not a perfunctory stage, similar to a motion to dismiss.

[00:21:28] Speaker 06:
This is a case, this is a stage in the case where the district court must take a hard look and resolve disputes between the parties about whether the injury model that plaintiffs put forward is capable of showing class-wide injury.

[00:21:41] Speaker 06:
Here plaintiffs came forward and said, everyone's injured because for every one cent, the net interest goes up, surcharge goes up by one cent.

[00:21:49] Speaker 06:
We show the district court that there are tens of thousands in the record

[00:21:54] Speaker 06:
Plaintiff swept in who withdrew cash from ATMs that never increased the surcharge in response to the decrease in net interchange.

[00:22:03] Speaker 06:
The judge needed to grapple with that.

[00:22:05] Speaker 06:
And if he had Judge Rogers, he would have found that the evidence is indisputable.

[00:22:12] Speaker 06:
There are uninjured class members in this case.

[00:22:16] Speaker 06:
Judge, we are not asking for fact-finding.

[00:22:21] Speaker 06:
We are asking this court to apply the law to the undisputed facts in the case, which is that there are ATMs that did not increase their charges in response to the reduction in net net change.

[00:22:34] Speaker 00:
Thank you.

[00:22:50] Speaker 01:
Morning, Mr. Eisenstein.

[00:22:58] Speaker 07:
Morning, Your Honors.

[00:22:58] Speaker 07:
May it please the Court, I'm Matt Eisenstein.

[00:23:00] Speaker 07:
I'm going to address the independent operator's case.

[00:23:03] Speaker 07:
I'm going to try to avoid repeating what Mr. Anderson said, but the district court's decision as to the independent operator case did not apply the right standard and should be vacated for the same reason as the consumer cases.

[00:23:19] Speaker 07:
Because these plaintiffs do not have common proof that they can use to establish injury to all class members as they find the class, their class.

[00:23:31] Speaker 07:
These plaintiffs say that their injury is that all class members paid an inflated acquirer fee.

[00:23:38] Speaker 07:
But we know from the record that many class members did not pay those fees directly to the network.

[00:23:44] Speaker 07:
or indirectly such as by receiving a portion of interchange revenue from which acquire fees are deducted.

[00:23:51] Speaker 07:
Here's how we know that and the key facts here as to this case really are undisputed.

[00:23:57] Speaker 07:
These plaintiffs concede that they took the definition of an ATM operator from a visa rule.

[00:24:04] Speaker 07:
They say that at page nine of their brief, they say that at page 10 of the brief, they say that in footnote five of

[00:24:12] Speaker 07:
Visa's definition of an ATM operator is very broad.

[00:24:16] Speaker 07:
It's designed to track entities that could have access to information at independent ATMs and therefore could present fraud or other risks to the network.

[00:24:27] Speaker 07:
We know that from JA6808, which is a declaration from the head of Visa's ATM business, we know that from JA7026, which is a document adopting

[00:24:42] Speaker 07:
the visa rule.

[00:24:43] Speaker 07:
The documents make clear that the definition that they use, the visa definition, which is the same as their class definition, has nothing to do with which entities pay acquire fees directly or indirectly.

[00:24:56] Speaker 07:
That has nothing to do with which entities manage cryptographic functions.

[00:25:01] Speaker 07:
It sweeps much broader because its purpose is to minimize risk of fraud.

[00:25:06] Speaker 07:
And the documents make clear that there is a range of entities

[00:25:10] Speaker 07:
more than one entity per terminal that can satisfy the definition of an ATM operator.

[00:25:17] Speaker 01:
But the class definition is narrower.

[00:25:21] Speaker 01:
It explicitly excludes a lot of the entities that I think you say are muddying the waters.

[00:25:26] Speaker 01:
No?

[00:25:27] Speaker 07:
That's incorrect, Your Honor, respectfully.

[00:25:31] Speaker 07:
It's the same.

[00:25:33] Speaker 07:
The definition is so extensive.

[00:25:37] Speaker 07:
They're the same.

[00:25:38] Speaker 07:
So, for example, a merchant that owns an ATM is in, that owns an ATM and that loads cash in the ATM.

[00:25:49] Speaker 07:
He's a class member.

[00:25:51] Speaker 07:
It's an ATM operator.

[00:25:54] Speaker 07:
We know that.

[00:25:55] Speaker 07:
There's an example at JA6078.

[00:25:59] Speaker 07:
It is a form filled out by a merchant that meets the definition of an ATM operator.

[00:26:05] Speaker 07:
We know from JA6070, which are guidelines from an acquiring bank, that there can be more than one ATM operator per terminal.

[00:26:17] Speaker 07:
That's important because you could take an example of an ATM at a corner store here in DC.

[00:26:23] Speaker 07:
If the merchant owns that ATM, it can be the ATM operator.

[00:26:26] Speaker 07:
If there's a sales entity that deployed

[00:26:28] Speaker 07:
The ATMs and the owner, it can be the ATM operator.

[00:26:33] Speaker 07:
If there's an entity that provides actual processing services, it can be an ATM operator.

[00:26:39] Speaker 07:
Sometimes those entities receive the net interchange or share in it.

[00:26:44] Speaker 07:
Other times they don't.

[00:26:45] Speaker 07:
But whether they receive

[00:26:47] Speaker 07:
Net interchange or paid acquire fee, which is the injury they say exists, is irrelevant.

[00:26:53] Speaker 01:
Where do we know that sometimes they receive net interchange and sometimes they don't?

[00:26:58] Speaker 07:
Your Honor, we know that, and I apologize, I'm throwing a lot of sites at the court, but it's important because this is exactly what Judge Leon didn't do, which is scrutinize the evidence in the record of uninjured class members.

[00:27:13] Speaker 07:
So we know from JA,

[00:27:16] Speaker 07:
6108 and that is as a class member in this case that's talking about merchants who own and load have own and load arrangements and it makes clear that sometimes they do pay acquire what sometimes they do pay acquire fees indirectly these merchants and other times they don't he set out for the merchants that he deals with it's 30 percent versus 70

[00:27:46] Speaker 01:
My question was, I thought you had asserted that sometimes they receive net interchange and sometimes they don't.

[00:27:53] Speaker 01:
And now you're talking about whether they pay acquirer fees.

[00:27:56] Speaker 07:
Right.

[00:27:56] Speaker 07:
I mean, it's, uh, they receive net interchange from which, uh, the acquirer fees are deducted.

[00:28:04] Speaker 07:
And I, as I understand it, that's the plaintiffs, ultimately what the plaintiffs say.

[00:28:09] Speaker 07:
What we're saying to you, your honors is that there are,

[00:28:13] Speaker 07:
ATM operators that do not receive net interchange at all.

[00:28:17] Speaker 01:
So there's that testimony, is there anything else?

[00:28:19] Speaker 07:
Yes, there's a testimony at 5460 and 5461, which is another example of merchants in these own and loan circumstances that sometimes.

[00:28:34] Speaker 07:
So the question was in that circumstance, in most they own, they load arrangements, the customer does not receive

[00:28:41] Speaker 07:
Any interchange, and the answer is correct.

[00:28:44] Speaker 07:
And then there's another question, do any customers with the only load arrangement pay network fees?

[00:28:49] Speaker 07:
And this is for this- Customers here meaning independent- Meaning, yes, meaning ATM operator, meaning a class member, as they have defined class, which is the same as the definition of the visa rule.

[00:29:04] Speaker 04:
Let me just, if I may- I want to ask you a question, and I asked

[00:29:10] Speaker 04:
Visa counsel a question, but I need to be clear that you take the same position.

[00:29:16] Speaker 04:
If this court were to hold that the district court in applying a colorable standard based on the vitamins decision in the district court, that that was a clear error of law.

[00:29:33] Speaker 04:
given that this court and the Supreme Court have rejected that standard in determining the burden that the plaintiffs face.

[00:29:44] Speaker 04:
So hypothetically, just suppose we say that and we remand the case to the district court and the plaintiffs say, well, in light of the remand, in light of this post vitamins authority,

[00:30:04] Speaker 04:
we want to concede the point that, or would the district court define that, you know, we agree with the defendant's experts and what the record shows.

[00:30:26] Speaker 04:
But it doesn't show that there are no consumers or no operators who had to pay these fees.

[00:30:39] Speaker 04:
And that's what I need to be clear about.

[00:30:43] Speaker 04:
Why wouldn't on remand the district court be required to do the type of meticulous

[00:30:51] Speaker 04:
record review where you're citing all these pages in the joint appendix.

[00:30:57] Speaker 04:
and make conclusions.

[00:30:59] Speaker 04:
And suppose where the class has originally proposed involved millions.

[00:31:04] Speaker 04:
When the district court looks at the record closely and sees what's there and that his colorable standard is no longer the standard that applies to models, he determines, well, under this more rigorous standard,

[00:31:26] Speaker 04:
I agree that the plaintiffs haven't met their burden as to some of the members of the defined class.

[00:31:38] Speaker 04:
And then the plaintiffs say, fine, we want to redefine the class in light of this new standard.

[00:31:45] Speaker 04:
And when I heard visa counsel tell me, well, this case is 10 years old, it's just too late to give them another chance.

[00:31:55] Speaker 04:
Is that your position too?

[00:31:57] Speaker 07:
Your honor, it is my position and there is a particular reason with respect to the ATM operators for them.

[00:32:07] Speaker 07:
They cannot narrow their class definition.

[00:32:12] Speaker 07:
to just refer to entities that pay acquirer fees directly or indirectly.

[00:32:18] Speaker 07:
They can't do that because their entire liability and causation theory is that these rules restrain ATM operators, class members from setting surcharges at different levels based on the ATM network.

[00:32:33] Speaker 07:
If the class is limited to entities,

[00:32:36] Speaker 07:
that paid acquire fees directly or indirectly or received net interchange indirectly or directly, it would exclude significant swaths of entities that are actually responsible for setting surcharges at the terminals.

[00:32:53] Speaker 07:
And these, this class needs to have those entities in, they need it for their theory of liability and their theory of causation, which is that these rules affect

[00:33:05] Speaker 07:
the ATM, the ATM operators.

[00:33:07] Speaker 01:
You've just done a beautiful job of articulating what I think Judge Leon found to be a sufficiently general theory of liability.

[00:33:16] Speaker 01:
If it's accepted, then although it may show up in the wash in different places for different independent ATM operators, if the plaintiff's theory is accepted, they are all harmed.

[00:33:30] Speaker 01:
They may receive it in different ways, in different fractions, but it's out there in the market.

[00:33:35] Speaker 01:
This non-competitive price that imposes opportunity costs on businesses that would offer a cheaper service if they could.

[00:33:50] Speaker 01:
Why isn't that classic predominant?

[00:33:52] Speaker 07:
Your Honor, that is exactly the issue that requires individualized inquiry because

[00:33:59] Speaker 07:
We take a single ATM and we look at the entity that's responsible for setting surcharges.

[00:34:06] Speaker 07:
We look at the entity, there may be a different entity that's getting the acquire fee.

[00:34:12] Speaker 07:
If there are different entities, if there are different reasons for changing surcharges, for example, at a casino where they just want to jack up surcharges and there's a different entity that's receiving the economics from the network, then it really does boil down to an individualized

[00:34:29] Speaker 07:
Inquiry and the common evidence they have of the injury, which is of the payment of acquire fees cannot be applied to the class as a whole because.

[00:34:41] Speaker 07:
We know there are uninjured class members.

[00:34:43] Speaker 01:
I don't follow that.

[00:34:44] Speaker 01:
If just because I'm willing to take this as a loss leader because I want to bring people into my casino, it doesn't mean that it's not a piece of my financial equation that could be different but for an anti-competitive rule.

[00:35:02] Speaker 07:
What they need is common evidence to establish injury.

[00:35:08] Speaker 07:
And they have defined, they say, all class members, as they defined it, are injured by the payment of an inflated acquirer fee.

[00:35:19] Speaker 07:
And we know, based on this class definition, that there are entities that don't pay that acquirer fee at all.

[00:35:29] Speaker 07:
And so therefore we, this common evidence they have can't be used for all of their best example of the ones that don't pay.

[00:35:38] Speaker 01:
Like, can you explain in a way, if you're trying to make this theory make sense, not just, you know, growing up,

[00:35:46] Speaker 01:
things that aren't explained.

[00:35:48] Speaker 01:
Can you affirmatively explain why it would be that there would be entities that don't pay acquire fees?

[00:35:56] Speaker 07:
I appreciate that, Your Honor.

[00:35:58] Speaker 07:
And I've cited a few examples from the record.

[00:36:02] Speaker 07:
You can think of, again, let's go back to our corner store.

[00:36:07] Speaker 07:
The ATM is rolled in to the corner store.

[00:36:11] Speaker 07:
The merchant has the discretion, the corner store itself, as an ATM operator.

[00:36:16] Speaker 07:
has discretion to set interchange, excuse me, to set the surcharges at whatever level it wants in this situation.

[00:36:25] Speaker 07:
Just bear with me.

[00:36:26] Speaker 07:
Well, that's in the record.

[00:36:28] Speaker 07:
There are examples of merchants that have the ability to set surcharges.

[00:36:35] Speaker 07:
They have the discretion.

[00:36:36] Speaker 07:
They are ATM operators.

[00:36:38] Speaker 07:
They're also merchants.

[00:36:39] Speaker 07:
They have their own discretion.

[00:36:41] Speaker 07:
To set them below visas and MasterCard.

[00:36:45] Speaker 07:
to set them at the level they want, consistent with the rules at issue.

[00:36:51] Speaker 07:
So they can surcharge everybody $5.

[00:36:56] Speaker 07:
They can surcharge everybody $10 for taking out cash.

[00:36:59] Speaker 01:
How about $2?

[00:37:00] Speaker 01:
How about $1?

[00:37:01] Speaker 07:
Yes.

[00:37:03] Speaker 07:
We're not talking about the operation of the rule.

[00:37:07] Speaker 07:
We're talking about here that there's a distinction, Your Honor, between the operation of the rule with respect to

[00:37:15] Speaker 07:
the entities that it restrained on the one hand, and the entities who these plaintiffs are claiming are harmed, which are the ATM operators that are actually paying the acquirer fee indirectly.

[00:37:31] Speaker 07:
They don't have to be the same.

[00:37:33] Speaker 07:
That's part of the problem here.

[00:37:36] Speaker 07:
And the record sites we provided, I think, illustrate that.

[00:37:40] Speaker 07:
I see I'm way over time.

[00:37:42] Speaker 07:
I will just emphasize

[00:37:44] Speaker 07:
that in rail freight to this court has made clear that it's improper to defer questions about the number and nature of individualized inquiries that might be necessary to establish liability.

[00:37:59] Speaker 07:
That's exactly what happened below.

[00:38:02] Speaker 01:
And do you have a standard that you think we should adopt other than hard look, rigorous,

[00:38:12] Speaker 07:
I all I have your honor is the language from rail freight too.

[00:38:17] Speaker 07:
And I believe that language ought to apply here.

[00:38:20] Speaker 07:
I just read it.

[00:38:21] Speaker 07:
Uh, and I, and I do, I agree with, um, my colleague, Justin Anderson on that issue.

[00:38:26] Speaker 07:
Thank you very much.

[00:38:28] Speaker 01:
And I think you're not seeking any rebuttal, but, uh, Mr. Anderson is.

[00:38:35] Speaker 10:
Thank you.

[00:38:40] Speaker 01:
All right, and I believe we hear next from Mr. Rubin.

[00:38:46] Speaker 09:
Good morning, Your Honor.

[00:38:48] Speaker 09:
May it please the court.

[00:38:49] Speaker 09:
I'm Jonathan Rubin with Mogan Rubin LLP on behalf of the ATM operator plaintiffs.

[00:38:55] Speaker 09:
My comments today will be addressed solely to the case brought by the ATM operator plaintiffs.

[00:39:02] Speaker 09:
I believe the issues involved with the operators are substantially different as is the nature of the class and the nature of the claim.

[00:39:10] Speaker 09:
So we're stricking our attention to the ATM operator plainness.

[00:39:13] Speaker 09:
I think it's clear it's been said before that the standard of review is abusive discretion or clear legal error.

[00:39:24] Speaker 09:
This is a very deferential standard.

[00:39:28] Speaker 09:
And we don't believe it.

[00:39:31] Speaker 09:
And in addition, the DC circuit case law

[00:39:35] Speaker 09:
calls out in several cases that it's the district court that is uniquely well situated.

[00:39:41] Speaker 09:
We don't believe the defendants have met the standards and have established that there is any abuse of discretion or any legal error.

[00:39:50] Speaker 09:
There is no indication in the briefs or elsewhere that the court failed to consider anything.

[00:39:55] Speaker 01:
Either the defendants- Mr. Rubin, is it always true that the acquiring bank

[00:40:01] Speaker 01:
remits net interchange to the ATM operator?

[00:40:06] Speaker 09:
Thank you for the question, Your Honor.

[00:40:08] Speaker 09:
There's a great deal of confusion, some of which was just presented to this Court.

[00:40:12] Speaker 09:
There are certain layers that exist in the industry that exist because the networks do not permit non-financial institutions to be members.

[00:40:25] Speaker 09:
Accordingly, there's the network at the top layer.

[00:40:28] Speaker 09:
There is a layer of financial institutions there under.

[00:40:31] Speaker 09:
And under financial institutions, there are non-financial institutions.

[00:40:35] Speaker 01:
One of the basic pieces of advice that I give to people arguing is that when somebody asks you a question, I can't even absorb what you're saying unless you tell me before you get going into the details, yes or no.

[00:40:46] Speaker 01:
Is it always true that the acquiring bank remits net interchange to an independent ATM operator?

[00:40:55] Speaker 09:
Your honor, the word remit suggests that there is a payment from the acquiring bank to the network.

[00:41:03] Speaker 09:
We do not believe the acquiring bank touches any of the money.

[00:41:06] Speaker 09:
The acquiring bank is lending their credentials as a member of the network to the ISO, which, and the acquiring bank is not the correct term here.

[00:41:17] Speaker 09:
It's incorrectly stated in Appellant's Greece,

[00:41:22] Speaker 09:
The correct term is sponsoring bank.

[00:41:24] Speaker 09:
There are four or five sponsoring banks that sponsor independent ATM.

[00:41:29] Speaker 09:
We have testimony in the record from the processors who specialize in processing ATM transactions that the acquiring banks, pardon me, the sponsoring banks do not touch the money.

[00:41:41] Speaker 09:
The money is paid by the processors who are in the layer between the networks and the functional entities.

[00:41:51] Speaker 09:
What happens is that the ATM operators on a per transaction basis are entitled to a payment of interchange.

[00:42:07] Speaker 09:
Sometimes it's called reverse interchange because it's different from the point of sale interchange.

[00:42:12] Speaker 09:
But that is an additional revenue stream.

[00:42:15] Speaker 09:
on a per transaction basis that is paid by the issuing bank to the ATM operator through the processor.

[00:42:24] Speaker 01:
So you're saying the ATM operators do get this?

[00:42:27] Speaker 01:
They are entitled to interchange?

[00:42:28] Speaker 09:
They get interchange in every transaction and that interchange when the processor passes it to the ATM operator, they deduct the network fee and send it to the network in a mass for all of their

[00:42:41] Speaker 09:
ATM operator customers.

[00:42:44] Speaker 01:
And is there a place in the record you would point me to for that?

[00:42:48] Speaker 09:
I would point you to the, I don't have the insight for it, but it's the testimony of Paul Willingham, who is a functionary with Switch Commerce, which is a processor that specializes in ATM processing.

[00:43:02] Speaker 09:
I think the crucial point I need to make at this point, however, is that when that every ATM operator

[00:43:10] Speaker 09:
is entitled to receive interchange.

[00:43:13] Speaker 09:
It gets the interchange and what it does with it is what Mr. Eisenstein was talking about.

[00:43:20] Speaker 09:
Downstream from the ATM operator are other parties, in particular the location owner.

[00:43:28] Speaker 09:
The location owner is the customer of the ATM operator.

[00:43:33] Speaker 09:
There are arrangements that the ATM operator says as part of payment of rent,

[00:43:39] Speaker 09:
we will give you a portion or all of our interchange revenue.

[00:43:45] Speaker 09:
Mr. Eisenstein has told this court that because of that, the ATM operator does not pay acquiring fees.

[00:43:52] Speaker 09:
This is plainly ridiculous.

[00:43:55] Speaker 09:
It is as if I were to say that because my employer deducts my taxes from my paycheck and pays me a net salary, I don't pay taxes.

[00:44:06] Speaker 09:
My employer pays the tax.

[00:44:07] Speaker 09:
It is clear from the

[00:44:09] Speaker 09:
report of Dr. McAndrews, who was a research, head of research for the New York Fed for six years, that the economic incidence of ATM acquirer fees falls on the ATM operator, regardless of what they do downstream with their customers.

[00:44:29] Speaker 09:
Whether or not they give their interchange away does not affect whether they have suffered the incidence of the acquirer fee.

[00:44:38] Speaker 09:
The I urge the court to take a look at the announcement in 2005 where visa introduced the term ATM operator.

[00:44:49] Speaker 09:
The class definition is not

[00:44:52] Speaker 09:
a wholesale adoption of visas terminology, but we have taken their approach to defining ATM operator as the entity in the environment that does certain things.

[00:45:06] Speaker 09:
One of the things they do is give the instructions to the processor regarding the level of the surcharge, who is to receive the interchange, who is to receive the surcharge,

[00:45:19] Speaker 09:
to handle the encryption keys and to otherwise operate the ATM.

[00:45:26] Speaker 09:
I direct the court to JA6897 where one of the founders of the processor, Switch Commerce, explains what it is that an ATM operator does that no other party can do, which means

[00:45:42] Speaker 09:
the encryption keys communicating regarding the level of the surcharge and who gets the interchange.

[00:45:52] Speaker 09:
These are things that a merchant cannot.

[00:45:55] Speaker 09:
In 2005, when Visa defined an ATM operator, they put a footnote in their rules.

[00:46:01] Speaker 09:
And it said quite clearly that premises owners are not ATM operators.

[00:46:10] Speaker 09:
Even if the merchant loads the cash into the machine, they are not an ATM operator.

[00:46:16] Speaker 09:
Even if they receive interchange, they're not the ATM operator.

[00:46:20] Speaker 09:
They are never permitted to change the surcharge or direct the distribution of funds or handle encryption keys.

[00:46:29] Speaker 09:
Those are the roles of only the ATM operator.

[00:46:32] Speaker 09:
Finally, I understand my time is short, but I need to make this point, and that is that

[00:46:37] Speaker 09:
If, in fact, there was variation in who pays the acquirer fee, where is the evidence of that?

[00:46:44] Speaker 09:
Where is the memo that says, oh, in this particular case, somebody else will pay the acquirer fee?

[00:46:51] Speaker 09:
Or the network letter that says, oh, we didn't get the acquirer fee from whoever you are supposed to pay it?

[00:46:58] Speaker 09:
The reason there is no evidence of this is because there is a custom and practice in this industry that has been around for almost 30 years, and that is that

[00:47:07] Speaker 09:
lawyer of the ATM is responsible for the acquire fee.

[00:47:11] Speaker 09:
That is why, without a shadow of a doubt, and after a rigorous analysis, which by the way, was the standard since 1982, a Supreme Court case by the name of Falcon, I think General Telephone versus Falcon, that's where rigorous analysis comes, Judge Leon is fully familiar with this standard.

[00:47:37] Speaker 09:
there is really zero limits on the part of the defendants that shows that there is anything other than the practice and custom that the ATM operator deployer pays every penny of the acquire fee.

[00:47:51] Speaker 09:
And we stand strongly by our contention that every ATM operator member of the class pays the acquire fee.

[00:47:58] Speaker 01:
Mr. Rogers, did you have any further questions from Sir Rubin?

[00:48:02] Speaker 01:
All right.

[00:48:03] Speaker 01:
Thank you, Mr. Rubin.

[00:48:04] Speaker 01:
I think we'll hear next from Mr. Cooper.

[00:48:07] Speaker 05:
Thank you, Your Honor.

[00:48:21] Speaker 05:
May it please the court?

[00:48:22] Speaker 05:
David Cooper on behalf of the MacMahon class.

[00:48:26] Speaker 05:
The defendants make only one very narrow argument against certification of the MacMahon class.

[00:48:31] Speaker 05:
They say that all the evidence of class-wide entry does not suffice because our expert used Wells Fargo data in his entry model, and that data is supposedly not representative of the class.

[00:48:42] Speaker 05:
But in looking at this issue, it's crucial to note that no one uses complete data for all the transactions, because that data doesn't exist.

[00:48:50] Speaker 05:
So the experts had a choice.

[00:48:51] Speaker 05:
Do you use the complete data for one bank, Wells Fargo, or do you use incomplete data for the other banks, limited to transactions over one particular network?

[00:49:00] Speaker 05:
Each expert explained why they made their choice, why our expert chose to do the complete data for one, why their expert chose to do incomplete data for the others.

[00:49:09] Speaker 05:
And the question here is whether the district court and this court should resolve this choice of data battle of the experts on class certification.

[00:49:18] Speaker 10:
Let me just tell you one more.

[00:49:22] Speaker 10:
Yes.

[00:49:24] Speaker 10:
My review of the record and thinking about what the district court did and what the two both sides are arguing.

[00:49:31] Speaker 10:
And I can't pinpoint it precisely.

[00:49:34] Speaker 10:
One problem that leaves out for me is it does not appear to be common evidence that sustains class-wide injuries and that there are a number of persons in the class or classes for whom there is no indication that there is injury.

[00:49:51] Speaker 10:
It just seems fairly straightforward to me.

[00:49:54] Speaker 10:
And I don't know how, in light of the existing law, that can stand.

[00:50:01] Speaker 10:
So, so there is not doubting that they, cause my understanding was that your argument was, well, we can whittle away, we can work that out later.

[00:50:12] Speaker 10:
And I thought the district court was saying, you can work that out later, but there isn't any doubt under the models that are being pressed.

[00:50:18] Speaker 10:
There wasn't any doubt in my mind in the models that are being pressed, there are any, a number of large numbers of members in the alleged classes that are not injured.

[00:50:28] Speaker 10:
There's nothing to indicate injury.

[00:50:30] Speaker 05:
So no, our position is not that you should be willing those out.

[00:50:33] Speaker 05:
Our position is that there are no uninjured class members.

[00:50:36] Speaker 10:
Every single member in all of the stated classes has been shown to be injured.

[00:50:41] Speaker 05:
In the MacMill class, we're not representing anything with respect to the other classes.

[00:50:46] Speaker 05:
I'm saying in the MacMill class, there are no uninjured class members.

[00:50:49] Speaker 05:
And there are two competing models.

[00:50:51] Speaker 05:
One, which shows that net interchange increases surcharge.

[00:50:55] Speaker 05:
Their model shows that for some limited number of banks,

[00:50:59] Speaker 05:
There's, you know, the statistics are inadequate to make a determination.

[00:51:03] Speaker 05:
But the point is that their model uses incomplete data.

[00:51:07] Speaker 05:
Our expert explained that if this court looks at nothing else in this very large joint appendix, we'd ask this court to look very closely at the section beginning at JA 8366.

[00:51:16] Speaker 05:
Our expert explains in great detail why their model, limiting only to the transactions over the visa network, is the wrong way to look at this.

[00:51:26] Speaker 05:
And that there are no uninjured class numbers, because this idea that they exist only happens because you're looking at a very limited data set, looking at only a particular kind of transaction.

[00:51:37] Speaker 05:
So the question is, what do you do when you have competing models?

[00:51:40] Speaker 05:
They try to shoehorn it into rail freight by saying it's undisputed.

[00:51:43] Speaker 05:
It's undisputed.

[00:51:44] Speaker 05:
It is disputed.

[00:51:45] Speaker 05:
Our model does not show on interclass members, their model supposedly shows on interclass members.

[00:51:51] Speaker 05:
And the question is, and whose methodology is correct.

[00:51:55] Speaker 05:
That's a classic question and they could have raised that in a motion.

[00:51:58] Speaker 05:
They chose not to.

[00:52:00] Speaker 01:
Why aren't they saying.

[00:52:01] Speaker 01:
Yeah, your data is at least our data shows your data not to be representative because we look at these visa transactions and what your expert is asserting with respect to the Wells Fargo data appears not to hold with respect to non Wells Fargo transactions.

[00:52:20] Speaker 01:
I eat these visa transactions and your response to that is

[00:52:24] Speaker 05:
Our response to that is, when you look at only the visa transaction, it distorts the entire model.

[00:52:29] Speaker 05:
In other words, you don't get a true answer for visa transactions.

[00:52:31] Speaker 05:
You just get a very, you know, questionable answer for all transactions.

[00:52:35] Speaker 05:
And the reason why, if this court looks at the charts on pages, GA 8377 and 8379, it sort of explains why, which is that the net interchange for the different networks moved at different times.

[00:52:49] Speaker 05:
And the mix of what networks were using change at different times.

[00:52:54] Speaker 05:
And as a result, if you're only looking at transactions over the visa network, you're distorting the entire model because you're looking at how surcharges change generally.

[00:53:04] Speaker 05:
But you're also you're looking at how interchange net interchange.

[00:53:08] Speaker 05:
changed only for one network, which isn't necessarily representative of the mix of networks and the mix of net interchange fees that the banks received and the banks presumably would be reacting to in raising surcharges.

[00:53:19] Speaker 05:
And I think it's also important to note that it's simply false when they say that there are banks that didn't raise surcharges at all during the class period.

[00:53:26] Speaker 05:
And I call this court's attention to JA 8398 to 99, where they say 13 banks didn't raise surcharges, that's because they started in 2010.

[00:53:35] Speaker 05:
Our class starts in 2007.

[00:53:36] Speaker 05:
And to be clear, we say that the NDRs affected net interchange long before that.

[00:53:42] Speaker 05:
And so the surcharges were high even at the start of the class period.

[00:53:47] Speaker 01:
So Citibank set it high earlier, is your view?

[00:53:52] Speaker 01:
Do I have the facts right?

[00:53:53] Speaker 01:
Citibank?

[00:53:54] Speaker 01:
Yes.

[00:53:55] Speaker 01:
You're saying that they set it high.

[00:53:56] Speaker 01:
They didn't have to raise it in response.

[00:53:58] Speaker 01:
But isn't that inconsistent with your theory, which is that it's in response to

[00:54:03] Speaker 01:
diminution of net interchange that the surcharges are raised?

[00:54:07] Speaker 05:
So, yeah, it's not inconsistent because net interchange did go down even before the class period, in fact, substantially before the class period.

[00:54:15] Speaker 05:
So when they raised surcharges in 2007 to 2008, that was in response to production of net interchange.

[00:54:22] Speaker 05:
So these things happen at different points in time, and it's important to keep that in mind.

[00:54:26] Speaker 05:
I think the other important point to keep in mind is that even with their model,

[00:54:30] Speaker 05:
If you apply it to the entire class period, 95 out of the 100 banks of the top 100 banks show this relationship between net interchange and surcharge.

[00:54:41] Speaker 05:
And so for those, there's essentially no dispute that we have common evidence of classified injury.

[00:54:47] Speaker 05:
And so the question is, what about those other five?

[00:54:49] Speaker 05:
And what our argument is, is simply that if you're trying to extrapolate, because we don't have complete data for those other five, if you're trying to figure out based on the data we have, does it make more sense to extrapolate from Wells Fargo and from those 95 or to think that five banks would be such outliers?

[00:55:04] Speaker 05:
that in response to a lower net interchange, and in response to the other 95 banks keeping surcharges low because they were getting more net interchange in this butt horror world without the anti-competitive conduct, those five banks would do nothing.

[00:55:15] Speaker 05:
They would keep their surcharges extremely high and be completely anti-competitive.

[00:55:18] Speaker 05:
And our experts explain why in this market that makes absolutely no sense at all.

[00:55:23] Speaker 05:
And while this, obviously we're not asking you to decide who's making more sense, the question is, I see my time's up, but if I could continue.

[00:55:30] Speaker 05:
The question is,

[00:55:32] Speaker 05:
What are you deciding?

[00:55:33] Speaker 05:
Because it can't be that the decision is whose expert is right and whose expert is wrong.

[00:55:37] Speaker 05:
That can't be the question on class certification.

[00:55:40] Speaker 05:
And I know that, you know, the defendant's counsel says we'll take a hard look.

[00:55:44] Speaker 05:
But the question is a hard look at what?

[00:55:45] Speaker 05:
So you've taken your hard look and what are you deciding?

[00:55:48] Speaker 10:
You're taking a hard look at the evidence that's being offered to determine whether most of the members of the class are injured.

[00:55:56] Speaker 10:
So, isn't that what we're supposed to be doing?

[00:55:59] Speaker 10:
Is that what the district court judge is supposed to be doing?

[00:56:02] Speaker 10:
Are you stating a theory where what you're suggesting as the model for weighing the evidence would exclude a number of the class members?

[00:56:12] Speaker 10:
That's not good.

[00:56:12] Speaker 10:
That would fail the hard look test, right?

[00:56:15] Speaker 05:
No, respectfully, what we're not saying that you should, we're saying that what you should look at is whether the questions can be answered on a class Y base.

[00:56:23] Speaker 05:
not whether or not the questions will be answered in our favor.

[00:56:27] Speaker 05:
That's what Amgen says.

[00:56:28] Speaker 10:
So the question is whether we did prove that in fact all of us... But if the other side says, and I'm not saying anything about this case, the other side says 20%, 30% of the people in their proposed class under their model cannot possibly be shown to be injured.

[00:56:44] Speaker 10:
That fails hard look, doesn't it?

[00:56:46] Speaker 05:
Oh, if it's cannot possibly that's relevant.

[00:56:48] Speaker 05:
One.

[00:56:49] Speaker 05:
Yes.

[00:56:49] Speaker 05:
Cannot possibly.

[00:56:50] Speaker 05:
But, but, but, and we're really not.

[00:56:54] Speaker 01:
If they say cannot possibly.

[00:56:56] Speaker 05:
No, no, no.

[00:56:58] Speaker 05:
No.

[00:56:58] Speaker 05:
So relevant one says detects injury where none can exist.

[00:57:01] Speaker 05:
In other words, if not, whether they say, or we say, but whether in fact, if injury could not exist.

[00:57:07] Speaker 05:
Yes, we agree that would fail or in relative to what they're saying.

[00:57:11] Speaker 05:
Our own model shows that they're on injured class members and there is no common proof that would fail too.

[00:57:16] Speaker 05:
But when you have a dispute between the experts and the totality of the evidence on both sides of whether there are on injured class members, the question is, and Tyson explains this very well is that.

[00:57:28] Speaker 05:
had that dispute itself be resolved on a class-wide basis.

[00:57:32] Speaker 05:
And that's why Tyson said a dispute over whether data is sufficiently representative is one that can be decided on a class-wide basis and therefore does not preclude class certification.

[00:57:41] Speaker 05:
So you're certainly taking a hard look.

[00:57:43] Speaker 05:
You're taking rigorous analysis of what the evidence is and whether or not the trial, if it goes forward, could be done on a class-wide basis.

[00:57:50] Speaker 05:
What you're not doing is deciding who's right or wrong and effectively just sort of taking the merits away from the jury just because it's a class-wide case.

[00:57:59] Speaker 05:
If I could just close by saying one thing in response to Judge Rogers' question about remand.

[00:58:07] Speaker 04:
Could I just ask you, you're reading Tyson's to say what?

[00:58:14] Speaker 05:
Sure, so I think there are two critical pieces of language in Tyson.

[00:58:17] Speaker 05:
The first is that, quote, statistically inadequate, whether that is statistically inadequate or based on implausible assumptions did not raise a challenge to that and is insufficient.

[00:58:29] Speaker 05:
If they don't raise a challenge on Denver to statistical inadequacy, then.

[00:58:33] Speaker 05:
That's not a class-wide issue.

[00:58:35] Speaker 05:
And then the second piece of language in the court explains why is that because whether or not it was unrepresented or inaccurate is itself coming to the claims made by all class members.

[00:58:44] Speaker 05:
So that's ultimately the question.

[00:58:46] Speaker 05:
Can we decide this class-wide?

[00:58:48] Speaker 05:
Not who is right about it, but can we decide class-wide?

[00:58:50] Speaker 05:
And here we clearly can.

[00:58:51] Speaker 05:
They're not producing a ton of

[00:58:53] Speaker 05:
individual evidence that would force us to not resolve this in a class-wide matter, and we're here with class-wide evidence talking about whose expert is right.

[00:59:01] Speaker 05:
And so that can be done on data, that can be done on summary judgment, but it should not be done on class certification, and certainly not under a standard where you're saying just, okay, we're going to pick which expert chose the right data.

[00:59:13] Speaker 05:
Is this is not a case where our expert had to meet it at all or our model admits at all that they're on into class numbers.

[00:59:19] Speaker 05:
It's where their model using incomplete data chose for a small subset that is there's we can't tell because the data is so inadequate that we can't reach a statistical conclusion.

[00:59:28] Speaker 01:
So, if at a later time, and I'm not sure when it would be the district judge.

[00:59:33] Speaker 01:
looks further, hears from these experts at trial, I guess, and Visa and MasterCard move to have the class decertified.

[00:59:42] Speaker 01:
And the judge says, look, I'm crediting their data, not yours.

[00:59:46] Speaker 01:
The district judge could decertify the class if he credited their approach.

[00:59:52] Speaker 01:
Well, you don't have an appellate issue, but you would have to decertify the class.

[00:59:56] Speaker 05:
If it were on a summary, for example, in summary, I mean, the question is, at what stage is the judge doing that?

[01:00:01] Speaker 05:
Right.

[01:00:01] Speaker 05:
But if it were, for example, Daubert, let's say they made a Daubert motion, even though they could have made it before, but let's say.

[01:00:06] Speaker 05:
Hypothetically, they could raise one later.

[01:00:08] Speaker 05:
They make it aren't the judges know this is on the level I have to throw it out.

[01:00:11] Speaker 05:
Yes, the judge to certify the class and will 23 accounts for that rules.

[01:00:14] Speaker 05:
23 says the trial judge does have continuing obligation to look at the class and just see whether or not the class you remain certified.

[01:00:20] Speaker 05:
So we have no problem with the district judge having the authority and the discretion to look at this going forward.

[01:00:26] Speaker 05:
The only problem we have is.

[01:00:28] Speaker 05:
with this court or even on remand the district court deciding at this stage of the proceedings whose which expert is right and which expert is wrong under some nebulous standard of hard book but we're not going to say sort of what the actual reliability or plausibility standard is.

[01:00:43] Speaker 01:
So the district judge is supposed to find predominance but not make fact findings about which expert to credit

[01:00:57] Speaker 05:
Yes, I think that's correct.

[01:00:58] Speaker 05:
I think that the question is, if you look at the expert reports, can the issues that dispute between the experts and more generally whether or not all class members were injured be decided on a class-wide basis?

[01:01:11] Speaker 05:
If the nature of the reports is such that it cannot be decided on a class-wide basis, then you would fail for dominance.

[01:01:17] Speaker 01:
And what's your short answer to why the Wells Argo data is representative?

[01:01:22] Speaker 05:
So I think there are a couple of points to that.

[01:01:24] Speaker 05:
First, it is the complete data.

[01:01:26] Speaker 05:
There's no dispute that that is, in fact, the best data to use because it includes all the transactions.

[01:01:30] Speaker 05:
So that's why we use now wise Wells Fargo representative are experts playing in great detail.

[01:01:35] Speaker 05:
Why?

[01:01:36] Speaker 05:
It's about the nature of this market, which is that it's a commoditized product, ATMs, an extremely competitive market.

[01:01:42] Speaker 05:
In terms of the search charges, and if you look at the market historically to empirical analysis of it, that's the banks do move together.

[01:01:49] Speaker 05:
That is to say, you don't have these outliers where a bank just chooses to be completely noncompetitive.

[01:01:54] Speaker 05:
So.

[01:01:55] Speaker 05:
Wells Fargo is one of the largest banks in the country.

[01:01:57] Speaker 05:
It exhibited this relationship.

[01:01:59] Speaker 05:
Even using their own incomplete data, 95 out of 100 exhibited this relationship.

[01:02:03] Speaker 05:
It is more than a reasonable conclusion from all of that and from their, frankly, a ton of documentary evidence showing that this is in fact actually what happened.

[01:02:12] Speaker 05:
It's a far more than reasonable conclusion to say that, yes, there is this relationship and this relationship exists for all of the banks.

[01:02:19] Speaker 05:
And so that's what our experts said.

[01:02:22] Speaker 05:
And the district was well within its discretion in accepting that conclusion.

[01:02:26] Speaker 01:
Right.

[01:02:27] Speaker 01:
Questions from my colleagues?

[01:02:29] Speaker 01:
No.

[01:02:30] Speaker 01:
Right.

[01:02:31] Speaker 01:
And we will now hear, thank you, Mr. Cooper.

[01:02:35] Speaker 01:
We'll now hear from Mr., is it Lovell or Lovell?

[01:02:38] Speaker 01:
Lovell.

[01:02:39] Speaker 01:
Lovell for the Burke plaintiffs.

[01:02:46] Speaker 08:
I'd like to start to try to address Judge Edwards' questions.

[01:02:51] Speaker 08:
First, this legal standard for antitrust injury is

[01:02:56] Speaker 08:
whether the prices paid in the actual world are higher than what the prices would have been in the but for world.

[01:03:07] Speaker 08:
So that prices can go down in the actual world.

[01:03:12] Speaker 08:
The conspiratorial environment, prices can go down.

[01:03:15] Speaker 08:
In footnote two of our brief, we cite the load trend, LCD, lots of cases which haven't been contested.

[01:03:22] Speaker 08:
that in high-tech cases, in rare e-books, et cetera, real world prices go down.

[01:03:30] Speaker 08:
But those prices are higher than they would have been in the absence of the conspiracy.

[01:03:35] Speaker 08:
So the trick is to look at the poor world for the antitrust injury.

[01:03:41] Speaker 08:
Now, so their whole standard, this thing, is a false construct.

[01:03:46] Speaker 08:
Prices had to go up during the conspiracy period.

[01:03:52] Speaker 08:
address the differences between this case.

[01:03:55] Speaker 08:
You have to go to the facts to some extent.

[01:03:57] Speaker 08:
The differences between this case and rail freight, too.

[01:04:00] Speaker 08:
In this case, the price-fixing rules existed for every transaction, every day, every year for 30 years from the mid-1990s until today.

[01:04:11] Speaker 08:
And there was no chance for a competitive market to develop.

[01:04:18] Speaker 08:
In rail freight, there was a before period where there was no conspiracy.

[01:04:23] Speaker 08:
There was a during period where an alleged conspiracy to fix the fuel surcharge started up.

[01:04:30] Speaker 08:
The plaintiff's model using the before period or a clean period, their regression, and they came in and they showed that 12.7% of the people had a gain, had negative damages.

[01:04:42] Speaker 08:
And that was it.

[01:04:43] Speaker 08:
I mean, there's a lot of, Rail 32 has a lot of interesting

[01:04:50] Speaker 08:
comments, but what it comes down to is that Judge Freeman was within his discretion to find that 12.7% is way too much and it's uncontested and there's no way to get around your own model, what it shows.

[01:05:05] Speaker 08:
Here, and here there is no before period.

[01:05:09] Speaker 08:
We can't run a regression.

[01:05:10] Speaker 08:
We're being held to a false standard from a different case where they could have a before period and do a regression.

[01:05:18] Speaker 08:
In our case,

[01:05:19] Speaker 08:
All the transactions have been conducted in a conspiratorial environment and you can't do proper regression in that environment.

[01:05:27] Speaker 08:
And then now turn to the admissions that were before Judge Leon by Venice expert, Dr. Hubbard.

[01:05:36] Speaker 08:
He admitted that his study that purported to show that a small minority of the ATMs did not raise their third charges.

[01:05:46] Speaker 08:
Small minority, it was 99% of the transactions

[01:05:49] Speaker 08:
we're subject to raise the search harvest and Dr. Lair's rerun.

[01:05:53] Speaker 08:
It was 96% of the transactions in Dr. Hubbard's own, the dependence experts own run.

[01:06:01] Speaker 08:
And putting that in, he said in his deposition, I'm not, he was very fastidious.

[01:06:07] Speaker 08:
I am not saying that there's no relationship.

[01:06:11] Speaker 08:
I'm not saying that there's not the negative relationship.

[01:06:13] Speaker 08:
I'm only saying that the plaintiffs have not demonstrated

[01:06:18] Speaker 08:
Well, Dr. Hubbard, have you given a good analysis?

[01:06:23] Speaker 08:
No, it pains me to say that my analysis is not a good analysis.

[01:06:26] Speaker 08:
We quote this in our, it's JA7433-34 and 7458.

[01:06:36] Speaker 08:
Dr. Hubbard said he doesn't have a good analysis.

[01:06:38] Speaker 08:
Well, why do you have the analysis?

[01:06:40] Speaker 08:
It's really plaintiff's analysis, he said.

[01:06:42] Speaker 08:
I'm taking what plaintiffs would have done.

[01:06:44] Speaker 08:
And so then Dr. Laird, the economist for the Burke plaintiffs, comes back and rebuttal and points out the data that Dr. Hubbard selected was not at the ATM level.

[01:06:59] Speaker 08:
Dr. Lair in the rebuttal of ran regressions at the ATM level and had statistically significant one to one relationship result.

[01:07:09] Speaker 08:
Dr. Lair points out that what Dr. Hubbard did was to take what's called ISOs, which are ATMs are coming in and coming out, coming in and coming out month by month.

[01:07:23] Speaker 08:
The thing is changing.

[01:07:24] Speaker 08:
So then while it's changing,

[01:07:28] Speaker 08:
Dr. Hubbard is averaging within these periods, and as the periods go forward, he still finds that 92% of the ATMs, which have 96% of the transactions, have the prices go up.

[01:07:43] Speaker 08:
Not the legal standard, it's just whether it's higher in a conspiracy.

[01:07:47] Speaker 08:
But he finds that, and Dr. Laird finds it's 99%.

[01:07:49] Speaker 08:
And Dr. Laird's rebuttal says his analysis was doomed to fail.

[01:07:55] Speaker 08:
It was doomed to fail because he only looks up one level above the ATM.

[01:08:00] Speaker 08:
There's all these mixes going on.

[01:08:02] Speaker 08:
He didn't say it's a miracle that it worked out in our favor, but he does reaffirm the industry-wide tax principle.

[01:08:11] Speaker 01:
So we're not

[01:08:15] Speaker 01:
deciding this issue in the first instance.

[01:08:18] Speaker 01:
What do we do with the fact that there is language in the district court opinion referring to colorable method, referring to a critique of Professor, I know this is not your client, but referring to a critique of Professor Carlton's reliance on only on Wells Fargo,

[01:08:36] Speaker 01:
data as better suited for adjudication of plaintiffs' injury and damage on the merits.

[01:08:42] Speaker 01:
What do we do with what seem to be references to colorable method rather than, for example, a common method?

[01:08:53] Speaker 01:
How can we affirm if those are not legally correct?

[01:08:59] Speaker 08:
What constitutes a hard look?

[01:09:01] Speaker 08:
depends upon the disputes before the court.

[01:09:04] Speaker 08:
There's many other distinctions between rail freight and Comcast, as your honor mentioned, with the mismatch between the claims and what was shown.

[01:09:15] Speaker 08:
And rail freight one, which had the legacy contracts that couldn't have been subject to price fixing because they were made beforehand in the class.

[01:09:23] Speaker 08:
So we don't have any of that here.

[01:09:25] Speaker 08:
So what constitutes a hard look in this situation, I say,

[01:09:31] Speaker 08:
I submit your honors have to look at the decision compared to the record.

[01:09:38] Speaker 08:
And there is a finding, as your honors pointed out, Judge Board, right at the beginning, it satisfies the standard.

[01:09:45] Speaker 08:
And there are infelicitous words that show up in a detailed analysis of going through what the judge thinks about three complicated cases and

[01:09:56] Speaker 08:
So the law evolves, Rail Freight 2 happened.

[01:09:59] Speaker 08:
Now we're going on to a totally different fact situation where the judge did not use the exact right words, two points or three points in the opinion.

[01:10:08] Speaker 08:
That's where the law is.

[01:10:10] Speaker 08:
And what are we going to do?

[01:10:12] Speaker 08:
Your honor is no better than I, but I'll give it.

[01:10:15] Speaker 08:
Judge Marrero has a law review article in the Cardozo Law Review.

[01:10:19] Speaker 08:
He's a district court judge in New York about how long it takes to do a complicated case nowadays.

[01:10:25] Speaker 08:
If the judge does not get rid of a complicated case in the district courts in New York, the judge is signing on for all these big papers over and over.

[01:10:34] Speaker 08:
And the search for any problem with every ruling is intense because of the amount of money.

[01:10:42] Speaker 08:
And in my practice, which is class actions, I see that

[01:10:50] Speaker 08:
Papers are put in where it seems to me the strategy of the defense is to provoke us to put in a long paper to rebut it.

[01:10:58] Speaker 08:
And it all adds to the district court's work.

[01:11:01] Speaker 08:
So maybe you could take that back into consideration as a policy issue of what's going on in the court.

[01:11:08] Speaker 04:
Well, the problem, of course, is that district courts may have to work harder.

[01:11:14] Speaker 04:
But they've also got to comply with the standards

[01:11:20] Speaker 04:
that are applicable at the time they're deciding the case.

[01:11:25] Speaker 04:
And I think you make some nice arguments.

[01:11:27] Speaker 04:
And the question I keep thinking about in my mind is what counsel seem to be asking the appellate court here to do is to go through this very detailed analysis that you cannot find in the district court's opinion

[01:11:48] Speaker 04:
other than some sort of conclusory sentences with some examples and giving the benefit to the district court, we tried to read his opinion consonant with the correct law.

[01:12:08] Speaker 03:
And

[01:12:13] Speaker 03:
I guess at some point when the district court cites the standard in vitamins and the law has just moved on since then, that is very troubling.

[01:12:26] Speaker 03:
If on remand the district court were to reference the correct standard, it is not inconceivable to me

[01:12:40] Speaker 04:
that some of the analysis you and other council have suggested to this court today and in your briefs could still decide having taken a hard look to certify the class.

[01:13:03] Speaker 03:
And I know nobody wants to stretch this out further.

[01:13:06] Speaker 04:
Nobody wants to multiply the district court's burden

[01:13:11] Speaker 04:
But I have seen appellate courts write opinions that say, well, the district court didn't say beyond a reasonable doubt, but he said it was pretty clear the defendant was pretty guilty.

[01:13:25] Speaker 04:
It's not good enough.

[01:13:27] Speaker 04:
This isn't a criminal case, I understand.

[01:13:29] Speaker 04:
But it's a whole industry involved and major statutory provisions.

[01:13:35] Speaker 04:
So I guess that's where I'm troubled here.

[01:13:41] Speaker 04:
And I think a lot of the questions that Judge Pillard raised make some excellent points, that Judge Edwards raised make some excellent points.

[01:13:52] Speaker 04:
And then sort of what do we do now?

[01:13:57] Speaker 04:
And reading another judge's analysis about it's gotten very burdensome to be a district court judge these days because of the complexity of the cases.

[01:14:07] Speaker 04:
Well, try being on the Court of Appeals too.

[01:14:11] Speaker 04:
I don't think that helps us much, but that doesn't mean I don't think other parts of your argument have been, and of council, other council's arguments have been very helpful.

[01:14:24] Speaker 08:
Well, Judge Rogers, I don't mean to shift the burden to this court.

[01:14:29] Speaker 08:
And I know that the more that the district court does, the better for this court.

[01:14:34] Speaker 08:
And the question is how to get there.

[01:14:35] Speaker 08:
In this case, how to decide this case and get to where you want to get.

[01:14:39] Speaker 08:
And you wouldn't want to, if you knew enough about the record without burdening yourself too much, you wouldn't want to throw the baby out with the bath water.

[01:14:49] Speaker 08:
If the facts here are strongly in favor of the plaintiffs, it's just under the antitrust injury standard of paying higher amounts in the actual world, in the but for world, when there's been a price fixing rule for 30 years, and where there is winnowing.

[01:15:08] Speaker 08:
Each one of these terminals has a number in the code.

[01:15:13] Speaker 08:
The winnowing, which is recognized by Rail Freight 2 as a way out of even the de minimis.

[01:15:18] Speaker 08:
There is no de minimis.

[01:15:20] Speaker 08:
Dr. Hubbard does not offer the opinion there's a de minimis.

[01:15:24] Speaker 08:
Dr. Hubbard projects what he did as the plaintiffs work.

[01:15:27] Speaker 08:
It's not.

[01:15:28] Speaker 08:
But getting back to the main point, how to get there does not require, in this case, vacating or reversing.

[01:15:38] Speaker 08:
It requires, if your honors reach the state of mind that I'm arguing for, it requires us saying that you can't do this and you can't do this in the future, but the hard look that the judge took and the record, we're satisfied that in this case, there is not a class certification issue

[01:16:03] Speaker 08:
that doesn't have winnowing, that there's an error.

[01:16:07] Speaker 08:
There's an error in a couple of words.

[01:16:10] Speaker 08:
There's some dated words in the opinion for the reasoning.

[01:16:13] Speaker 08:
But when you apply the non-erroneous words, which are unqualifiedly correct resolutions of a very clear record, unlike the concessions in Rail Freight 2, Rail Freight 1, Comcast.

[01:16:28] Speaker 08:
But the expert in Comcast said, no, my model doesn't satisfy the only claim that happened

[01:16:33] Speaker 08:
You're at, now that the law's moved on, you're in this new fact situation.

[01:16:37] Speaker 08:
You don't have to, in my humble opinion, you don't have to reverse or vacate in order to fully do and give instructions to the district courts.

[01:16:46] Speaker 08:
I think I've gone over my time here.

[01:16:48] Speaker 01:
All right, yeah.

[01:16:48] Speaker 01:
Well, everybody did and it's helpful to have your answers to our questions.

[01:16:53] Speaker 01:
We appreciate the guidance.

[01:16:54] Speaker 01:
I think we have, thank you, Mr. Lovell.

[01:16:57] Speaker 01:
We have a rebuttal from Mr. Anderson

[01:17:03] Speaker 01:
for the appellant.

[01:17:07] Speaker 01:
And Mr. Anderson did not have remaining time.

[01:17:10] Speaker 01:
He had requested five minutes.

[01:17:15] Speaker 01:
We'll give you three.

[01:17:16] Speaker 06:
Thank you, Your Honor.

[01:17:19] Speaker 06:
I'd like to begin with addressing the question of what should the court do.

[01:17:23] Speaker 06:
We propose that in light of what we consider to be the clarity of the evidence, there is an injured class member in each class

[01:17:31] Speaker 06:
and applying the appropriate legal standard, there's really nothing more for the district court to do.

[01:17:35] Speaker 06:
And in the interest of judicial economy, this court would simply reverse.

[01:17:40] Speaker 06:
It is certainly within the court's discretion, if it includes that the record is not as clear as MasterCard and BSEF presented.

[01:17:47] Speaker 06:
To vacate and remand to the district court for Judge Leon to do in the first instance what rail freight requires, which is to take a hard look at whether the classes presented models that can show

[01:18:00] Speaker 06:
common evidence establishes class-wide injury.

[01:18:04] Speaker 06:
As to the arguments that we've heard from plaintiff's counsel, why this court should not, they were all presented in either rail freight one or rail freight two.

[01:18:16] Speaker 06:
For example, I just heard Mr. Lovell argue that he can't be held to show class-wide injury with common proof because it's complicated and our expert didn't come forward and disprove his theory.

[01:18:30] Speaker 06:
And both of the Burke class and the independent operator class argue that absence of evidence doesn't indicate evidence of absence, shifting their burden to prove predominance to the defendants to disprove it.

[01:18:44] Speaker 06:
That was addressed in the first Ralph Ray decision quite clearly, where this court said, you can't shift the burden to defendants to disprove that common evidence can support injury.

[01:18:56] Speaker 06:
You need to come forward with common evidence showing class-wide injury.

[01:19:00] Speaker 06:
This is also not a battle of the experts, as the lawyer for Macklin was arguing.

[01:19:06] Speaker 06:
When I presented earlier, I did not argue what Dr. Hubbard showed.

[01:19:10] Speaker 06:
I described their model.

[01:19:12] Speaker 06:
Their model is a one-to-one relationship between decreases in net interchange and increases in surcharge.

[01:19:18] Speaker 06:
That's their theory, not Dr. Hubbard's theory.

[01:19:20] Speaker 06:
We then looked at data to see whether it is, in fact, the case that when net interchange goes down, surcharges go up.

[01:19:29] Speaker 06:
Dr. Hubbard found 15 banks where it didn't, and 13 where it didn't increase at all during the relevant time period, which was 2015.

[01:19:37] Speaker 06:
Who chose that time period?

[01:19:38] Speaker 06:
Professor Carlson, their expert.

[01:19:40] Speaker 06:
We used that time period because that's what their expert determined was appropriate based on, and I'll refer the court to Joint Appendix 3082, the fact that in 2010, there was a significant reduction in net interchange.

[01:19:54] Speaker 06:
That's why all of these cases were filed in 2011,

[01:19:57] Speaker 06:
And that's why the only question that is relevant here is what happened after that in this wide reduction?

[01:20:03] Speaker 01:
Well, they say something different.

[01:20:04] Speaker 01:
They say that there was a drop also in, I think it was 2006, 2007.

[01:20:11] Speaker 01:
Don't quote me if I conflict with what's in the record on that.

[01:20:16] Speaker 01:
And that there was another raise in access fees earlier.

[01:20:21] Speaker 01:
And that the limitation to 2010 worked

[01:20:27] Speaker 01:
with the data they were using, but was distorting with the data that your expert was using.

[01:20:31] Speaker 01:
So without resolving that, those all are, according to the district court, issues that don't break the sort of general wholesale nature, yay or nay, of the issues presented down the road.

[01:20:50] Speaker 06:
I understand, but they had an obligation to move forward with a model of injury.

[01:20:54] Speaker 06:
In Ralph Grant II, the court said that,

[01:20:58] Speaker 06:
In antitrust actions, common questions can't predominate.

[01:21:02] Speaker 06:
They can't predominate without reliable means of proving class-wide injury.

[01:21:06] Speaker 01:
They had to come forward with a model.

[01:21:08] Speaker 01:
That is something that Judge Leon held.

[01:21:11] Speaker 01:
He said they have standard and reliable means of showing class-wide injury.

[01:21:15] Speaker 01:
He didn't go in as much chapter and verse to explaining why that wasn't taken down by your counter evidence, but he did.

[01:21:23] Speaker 01:
He did make that determination.

[01:21:25] Speaker 06:
Use words.

[01:21:26] Speaker 06:
Without, but he didn't do the work, Your Honor.

[01:21:28] Speaker 06:
He was supposed to take a hard look at the evidence we presented, grapple with, explain.

[01:21:32] Speaker 06:
He didn't just, and Judge Rogers mentioned that he announced the wrong standard in his decision.

[01:21:38] Speaker 06:
He didn't just announce the wrong standard, he applied the wrong standard.

[01:21:40] Speaker 06:
Every single paragraph of the two pages in his decision, where he explains why plaintiff's models were sufficient, refers to them as either, quote, colorable, reasonable, well established, well accepted,

[01:21:58] Speaker 06:
Colorable, well-accepted, colorable.

[01:22:01] Speaker 06:
These are words that are not just in the standard that isn't correct.

[01:22:05] Speaker 04:
He also applies other words that are closer to what I think was the standard he was supposed to apply.

[01:22:14] Speaker 04:
And the fact that he didn't write an opinion that was 300 pages long is not critical here, it seems to me.

[01:22:21] Speaker 04:
I agree.

[01:22:24] Speaker 04:
And the question in my mind still is,

[01:22:28] Speaker 04:
the legal standard he applied and some of the statements Judge Pillard was referring to.

[01:22:36] Speaker 04:
In addition, there are statements where the district court found that the plaintiffs could rely on reliable data, that sort of thing.

[01:22:46] Speaker 04:
I think we understand this argument with all due respect.

[01:22:55] Speaker 06:
With respect to the representative nature of the representatives of the data, if you're honored, you would ask about whether someone who banked at Citibank could rely on the Wells Fargo data to prove his or her injury.

[01:23:07] Speaker 06:
And that's exactly the right question.

[01:23:08] Speaker 06:
Under Tyson, you can come forward with representative evidence if any individual in the class could rely on that evidence to prove his or her case of trial.

[01:23:18] Speaker 06:
If you are someone who withdrew cash from a Citibank ATM that did not increase her charge, you cannot come into court and say,

[01:23:25] Speaker 06:
Well, they increased it over there at Wells Fargo.

[01:23:28] Speaker 01:
But that is the underlying factual dispute, whether Citibank did not increase surcharge.

[01:23:33] Speaker 01:
And the plaintiffs are saying, our evidence showed Citibank to increase surcharge off the end that you were looking at.

[01:23:41] Speaker 01:
And I understand that's a dispute that remains pending.

[01:23:45] Speaker 01:
But whether it's susceptible of class-wide determination, you haven't made

[01:23:54] Speaker 01:
crystal clear to me, why not?

[01:23:58] Speaker 01:
Because how would you, based on the models... Why don't you wrap up and we'll take the case.

[01:24:05] Speaker 06:
Based on the models that the plaintiffs put forward, what is the win-win mechanism?

[01:24:10] Speaker 06:
How is the district court supposed to remove the class members who withdrew cash only from Citibank and all the other ATMs that didn't increase surcharges?

[01:24:20] Speaker 06:
No plaintiff has come forward with a model that says

[01:24:23] Speaker 06:
plug this data in, plug this data in, and we'll see which expert is right.

[01:24:27] Speaker 06:
But if we're right, if they all increase surcharges, that'll be fine.

[01:24:31] Speaker 06:
If defendants are right, the jury accepts evidence that some ATMs did not increase surcharges.

[01:24:36] Speaker 06:
Plug that model in, we can whittle out the uninjured.

[01:24:40] Speaker 06:
They have not come forward with that.

[01:24:41] Speaker 06:
They reject that they even have the burden of it, because they rely on a simplistic theory of injury, which is one-to-one.

[01:24:48] Speaker 06:
And they had 10 years to develop it.

[01:24:49] Speaker 06:
They had full access to discovery.

[01:24:52] Speaker 06:
and they have the assistance of able counsel and a talented economist.

[01:24:56] Speaker 06:
And that was what they submitted that is insufficient under rail freight.

[01:24:59] Speaker 06:
This court should reverse the district court's decision.

[01:25:02] Speaker 06:
Thank you.

[01:25:03] Speaker 01:
Thank you so much.