ABA Banking Journal - November/December 2016 - 18


> LEGAL BRIEFS

Of Deadlocks and
a Divided Court
BY DAWN CAUSEY, TOM PINDER AND ANDREW DOERSAM

LOST IN THE media swirls surrounding the elections is the fact that the Court
still lacks a ninth justice. The possibility of a 4-4 deadlock hangs over three cases
with repercussions for the banking industry when the Court convenes in October,
because when the Court is evenly divided, it affirms the lower court opinion and sets
no national precedent.
One of the banking cases likely to
generate a 4-4 decision is Microsoft
Corp. v. Baker, a case examining
whether a federal court has jurisdiction
to review an order denying class
certification after the named plaintiffs
voluntarily dismissed their claims.
Disgruntled Xbox 360 owners sued
Microsoft for breach of contract, alleging
the Xbox drives scratched the game
disks. Class certification was denied and
the case was subsequently dismissed
after the plaintiffs settled.
Years later, the same pugnacious
plaintiffs' attorneys filed another lawsuit
with a new proposed class of gamers
asserting similar claims. Once again, the
district court denied class certification,
and the Ninth Circuit denied interlocutory
review. This time, the gamers threw a
Hail Mary by voluntarily dismissing their
claims and then filing a notice of appeal
with the Ninth Circuit. Surprisingly, the
gamers' strategy paid off and the Ninth
Circuit granted the appeal.
The Ninth Circuit ruled that because
the parties agreed to dismiss the
case without a settlement, the parties
"retained sufficient adversity to sustain
an appeal." Other circuits have rejected
this tactic, which held that plaintiffs,
rather than defendants, have the right
to appeal a denial of class certification.
Cases involving class certification tend
18

ABA BANKING JOURNAL | NOVEMBER/DECEMBER 2016

to be contentious and close; for this
reason, an eight-justice Court may make
consensus difficult.
Visa v. Osborn, the antitrust appeal
from Visa, MasterCard and several
banks addressing the requirements
for pleading a conspiracy under the
Sherman Act, should be nearly as
contentious. Sherman Act cases are
notoriously easy to plead but very
difficult to prove. The Court will decide
which facts beyond membership in
a trade association trigger Sherman
Act liability.
In 2011, consumers and independent
ATM contractors claimed that banks
and payment networks conspired to
stifle competition and inflate ATM fees.
The D.C. Circuit overturned a district
court ruling and held that banks "used
the bankcard associations to adopt and
enforce a supra-competitive pricing
regime for ATM access fees."
On appeal to the Supreme Court, the
banks and payment networks argued
the D.C. Circuit split from the Third,
Fourth and Ninth Circuits. These
circuits held that membership in a
business association was not enough to
prove a conspiracy under the Sherman
Act. ABA filed an amicus brief in this
case in support of the banks and
payment networks.

The last case on ABA's watch list is
a consolidated appeal from Bank of
America and Wells Fargo that will
examine whether a municipality can
sue banks under the Fair Housing
Act. Despite the recent disparate
impact decision in Texas v. Inclusive
Communities Project, this issue
may still be divisive. The city of
Miami claimed the banks' alleged
discriminatory lending practices caused
unprecedented foreclosures and
sought damages for reduced property
tax revenues. The Eleventh Circuit
allowed Miami to pursue its FHA claims
because the city demonstrated a nexus
between its alleged injuries and the
banks' conduct.
The banks countered that Miami did
not suffer an injury under the FHA
because the city did not buy a house,
take out a mortgage, nor experience
any racial discrimination or disparate
impact. ABA also argued in its amicus
brief that the Eleventh Circuit adopted
an overbroad view of FHA standing
to allow municipalities to sue over
economic injuries.
In the British courts, when the justices
are deadlocked, the junior-most justice,
as a matter of courtesy, declines to vote.
Unless the Supreme Court suddenly
adopts a similar tradition, several
judgments in the 2016 term may be
affirmed by an equally divided court,
thereby satisfying no one.
DAWN CAUSEY is general counsel at ABA, where
TOM PINDER is SVP for litigation and
ANDREW DOERSAM is a paralegal.



Table of Contents for the Digital Edition of ABA Banking Journal - November/December 2016

Chairman’s View
Upfront
Picture This
Banking’s ‘Amazon Moment’
Special Report on Innovation and Technology
Building an ‘Internet of Value’
Do You Do What the Data Tell You?
Innovation in the Bank
Core Exercises
Cover Story Pillar of Her Community
Maintaining a Commitment to Ag Customers
Who You Gonna Call?
Anti-Money Laundering
Power Up Profile
Compliance ‘When Can I Call My Customer?’
Risk Management
ABA Compliance Center Inbox
From the States
Corporate Social Responsibility
Index of Advertisers
ABA Banking Journal - November/December 2016 - bellyband1
ABA Banking Journal - November/December 2016 - bellyband2
ABA Banking Journal - November/December 2016 - cover1
ABA Banking Journal - November/December 2016 - cover2
ABA Banking Journal - November/December 2016 - 3
ABA Banking Journal - November/December 2016 - 4
ABA Banking Journal - November/December 2016 - 5
ABA Banking Journal - November/December 2016 - 6
ABA Banking Journal - November/December 2016 - 7
ABA Banking Journal - November/December 2016 - Chairman’s View
ABA Banking Journal - November/December 2016 - 9
ABA Banking Journal - November/December 2016 - 10
ABA Banking Journal - November/December 2016 - Upfront
ABA Banking Journal - November/December 2016 - 12
ABA Banking Journal - November/December 2016 - 13
ABA Banking Journal - November/December 2016 - 14
ABA Banking Journal - November/December 2016 - 15
ABA Banking Journal - November/December 2016 - Picture This
ABA Banking Journal - November/December 2016 - 17
ABA Banking Journal - November/December 2016 - 18
ABA Banking Journal - November/December 2016 - 19
ABA Banking Journal - November/December 2016 - Special Report on Innovation and Technology
ABA Banking Journal - November/December 2016 - 21
ABA Banking Journal - November/December 2016 - 22
ABA Banking Journal - November/December 2016 - Building an ‘Internet of Value’
ABA Banking Journal - November/December 2016 - 24
ABA Banking Journal - November/December 2016 - 25
ABA Banking Journal - November/December 2016 - Do You Do What the Data Tell You?
ABA Banking Journal - November/December 2016 - 27
ABA Banking Journal - November/December 2016 - insert1
ABA Banking Journal - November/December 2016 - insert2
ABA Banking Journal - November/December 2016 - Innovation in the Bank
ABA Banking Journal - November/December 2016 - 29
ABA Banking Journal - November/December 2016 - 30
ABA Banking Journal - November/December 2016 - Core Exercises
ABA Banking Journal - November/December 2016 - Cover Story Pillar of Her Community
ABA Banking Journal - November/December 2016 - 33
ABA Banking Journal - November/December 2016 - 34
ABA Banking Journal - November/December 2016 - 35
ABA Banking Journal - November/December 2016 - 36
ABA Banking Journal - November/December 2016 - 37
ABA Banking Journal - November/December 2016 - Maintaining a Commitment to Ag Customers
ABA Banking Journal - November/December 2016 - 39
ABA Banking Journal - November/December 2016 - 40
ABA Banking Journal - November/December 2016 - Who You Gonna Call?
ABA Banking Journal - November/December 2016 - 42
ABA Banking Journal - November/December 2016 - 43
ABA Banking Journal - November/December 2016 - Anti-Money Laundering
ABA Banking Journal - November/December 2016 - 45
ABA Banking Journal - November/December 2016 - 46
ABA Banking Journal - November/December 2016 - Power Up Profile
ABA Banking Journal - November/December 2016 - 48
ABA Banking Journal - November/December 2016 - Compliance ‘When Can I Call My Customer?’
ABA Banking Journal - November/December 2016 - 50
ABA Banking Journal - November/December 2016 - Risk Management
ABA Banking Journal - November/December 2016 - ABA Compliance Center Inbox
ABA Banking Journal - November/December 2016 - 53
ABA Banking Journal - November/December 2016 - 54
ABA Banking Journal - November/December 2016 - From the States
ABA Banking Journal - November/December 2016 - 56
ABA Banking Journal - November/December 2016 - Corporate Social Responsibility
ABA Banking Journal - November/December 2016 - Index of Advertisers
ABA Banking Journal - November/December 2016 - cover3
ABA Banking Journal - November/December 2016 - cover4
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