United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page1of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 D intervenor. Forthereasons statedherein,allofthemotions are plaintiffs tointervene,andonedefendantmoves tocompel arbitrationastoawould-be defendants move todismiss anamended complaint, plaintiffsseekanorderallowing new FARGO BANK,N.A.;andEMVCo,LLC, BANK NATIONALASSOCIATION;WELLS PNC BANK,NATIONALASSOCIATION;U.S. (SOUTH DAKOTA),N.A.;CITIBANK, USA, NATIONALASSOCIATION;CITIBANK FINANCIAL CORPORATION;CHASEBANK OF AMERICA,N.A.;CAPITALONE DISCOVER FINANCIALSERVICES;BANK AMERICAN EXPRESSCOMPANY; INTERNATIONAL INCORPORATED; VISA, INC.;VISAUSA,MASTERCARD v. LIQUORS, LLC, B &RSUPERMARKET,INC.;GROVE ENIED IN In thisputativeclassactionforantitrustviolations involvingcredit-cardnetworks, P ART Defendants. Plaintiffs, withtheexceptionthat motion tocompel arbitrationis FOR THENORTHERNDISTRICTOFCALIFORNIA IN THEUNITEDSTATESDISTRICTCOURT INTRODUCTION / ARBITRATION MOOT MOTIONTOCOMPEL INTERVENE; (3)DENYINGAS DENYING INPARTMOTIONTO GRANTING INPARTAND MOTIONS TODISMISS;(2) AND DENYINGINPART ORDER No. C16-01150WHA G RANTED IN

(1) GRANTINGINPART D P ENIED AS ART AND M OOT . United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page2of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 these cards,itoperatesasthe network andissuer. transactions, likeanonlinepurchase ( the same daythroughchangestotheirnetwork rules,whichgoverncardtransactionswithin This istheso-calledLiabilityShift. transaction (andinsteadusedthemagstripe), themerchant became liableforanychargeback. chip card,butthemerchant failedtouseacertifiedEMVchipcardreadercomplete the changed onOctober1,2015( transactions, knownas“”( ( “dynamic” cardinformation bycreatingauniqueelectronicsignature foreachtransaction and expirationdate.AnEMVchipmore efficientlyguardsagainstfraudbecauseittransmits stripes, or“magstripes,” whichcancommunicate “static”information such asthecardnumber companies asitoperatesbothanetworkandanissuer. line of credit(Amd. Compl. (3) apayment cardnetwork;and(4)acard-issuingbank,whichissuesthemaintains a merchant; (2)an“acquiringbank,”whichprovidescardacceptanceservicestothemerchant; present motions. “Liability Shift.” Thefollowing well-pledfacts areassumed tobetruefor thepurposesof the merchants whofailedtoupgradeEMVchiptechnologybyOctober1,2015—theso-called and most ofthemajor banksallegingaconspiracytoshiftliability forfraudulentchargesto id. ¶ 61). 2 1 Thislawsuitinvolvesso-called “cardpresent” DiscoverFinancialServices issues most In theUnitedStates,eachofnetworks Prior toOctober1,2015,card-issuingbankstypicallyabsorbedliabilityforfraudulent Prior totheadoptionofEMVchiptechnology,creditcardsreliedentirelyonmagnetic A typicalcreditcardtransactioncaninvolveasmany asfourcompanies: (1)a Our plaintiffs,twoFloridamerchants, havesuedallofthemajor credit-cardnetworks

¶ 61).American ExpressCompany transactionsinvolvefewer id. id. ¶ 2–3).Startingonthatdate,ifacustomer presentedanEMV ¶ 63). id. STATEMENT (althoughnotall)ofitscredit cards( ¶¶ 3,84),atleastintheUnitedStates.Allthat transactions,asopposedto“card notpresent” 2 implemented theLiabilityShifteffectiveon 1 id. ¶¶ 59,61 ) , and,asto 2

United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page3of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 accepting payment cards( here) migrated toEMVtechnologyover thepastdecade( institutions inEurope,LatinAmerican, Asia/Pacific andCanada(includingthenetworkssued Express “offeredtoforgochargebacksof$25orless”( EMV technology,butthose liabilityshiftstookplaceatstaggeredtimes, notonthesame dayas adoption ratewasonlyat59.5%,accordingtostatistics providedbyEMVCoitself”( along theway.“Forexample, therolloutinCanadabegan2008,andasof2014, the technology inthosecountriestookyearstoaccomplish andraninto“substantialroadblocks” fee ( the UnitedStatesanyreductionofinterchangefee,merchant discountfee,ortheswipe network defendantsdidnot,unlikeintheirrolloutselsewheretheworld,offermerchants in networks nevergotaroundtocertifyingtheequipment. ready togobyOctober1,2015,butstillbeliableundertheLiabilityShiftsolelybecause ‘certified’ byDefendants”( chip-card capablesystems, forwhichtheypaid$200to$1000perterminal, havenotbeen “For millions ofmerchants, itisimpossible toprocessEMVchipcardsbecausetheir themselves “controlwhen—if ever—amerchant’s system willbe‘certified’” ( waits forcertification,andmany arestillwaiting( terminals. Thishasproventobenosmall task( only ()). each network( id. install 3 at¶108). Interchangefeesor“swipe fees”arefees The UnitedStatesisnotthefirstcountrytoimplement EMVtechnology.Financial In othercountries,thenetworksimplemented liabilityshiftsrelatedtothetransition Despite thechallengesofinstallingandobtainingcertificationforEMVterminals, the In otherwords,amerchant couldhavehaditsEMVequipment completely installedand To avoidliabilityforfraudulentcharges,theLiabilityShiftrequiresmerchants tonot EMV terminals butalso id. 3 ¶¶71,n.6,75–76(MasterCard);77–78(Visa);79–80(Discover);¶81 Afterthefilingofinstantaction,Visa,MasterCard,andAmerican id. ¶ 166,n.25). id. ¶ 3). obtain certification charged bytheissuingbankto themerchant for 3 id. id. ¶82).Merchantshaveexperiencedlengthy ¶ 85–88).Inaddition,thenetworks id. of properoperabilityof thoseEMV id. ¶ 135). ¶99).TherolloutofEMV id. at ¶84). ibid. ). United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page4of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Liability ShiftthroughEMVCo,LLC,theSmart CardAlliance,andtheEMVMigrationForum: terms). networks (soastoheadoffmerchants from steeringcustomers tousecardswithmore lenient shift inliabilityforfraudulentcharges;and(ii)making iteffectiveonthesame dayforallfour impose animportant priceterm onalltheirmerchant members by(i)adoptingthesame policy American ExpressCompany, andDiscoverFinancialServicesenteredintoanagreement to here ( six-month extensionforupgradingtechnology( certain costsforEMVupgrades( concessionstohelpdefray thecostsof theliabilityshift ordidnothavetopay defendants id. The Smart CardAllianceisanassociationthatrepresentsitself to • EMVCo, whichisjointlyownedbythenetworkdefendants andtwo • To thisend,plaintiffsallegethatdefendantshadopportunitiestoconspireregardingthe The gravamen ofouramended complaint isaform ofprice-fixing,specificallythat ¶100).Inaddition,insome countries,unlikehere,merchants wereoffered Visa, Inc.,VisaUSA,Inc.(together“Visa”),MasterCardInternationalIncorporated, board members, of theSmart CardAlliance( bank defendantswereontheleadershipcouncil, or weregeneral U.S. andLatinAmerica” ( industry discussionontheimpact andvalueofsmart cards inthe be the“singleindustryvoiceforsmart cardtechnology,leading member organizations( maintained. Alldecisionsaremade onaconsensusbasisamong the standards bywhichEMVchiptransactionsareprocessedand other entities,isacompany thatdevelopsandmanages thetechnical “What Will Trigger theUSPayments IndustrytoMigrate to EMV Payments andSecureID.”Themeeting includeda paneltitled, Card Alliancehostedameeting titled, “TheRoadmap toEMV just priortotheannouncements oftheLiabilityShift,Smart id. ¶¶108,109).InCanada,some networksgavemerchants a id. 4 id. ¶ 38,39). ¶ 154).Variousnetworkandissuing- id. at 112). id. ¶ 155).In2011, United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page5of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 implement theLiabilityShift. amended complaint’s allegationsthattheanti-steeringru LEXIS 17502(2dCir.Sept.26, 2016).TheSecondCirc reversed thedecisionofdistrict court. 10-CV-4496-NGG-CLP (E.D.N.Y. Feb19,2015)(JudgeNicholas American Expressliableforantitrustviolations. anti-steering rules( anti-steering rules.InJulyof2011,VisaandMasterCa United StatesDepartment ofJusticesuedVisa, merchants wouldsoonbeallowedtopushcardholdercustomers from expensivecardsto less Thus, atthetime of thedecisionstoimplement theLiabilityShift, “theNetworksknew cards,” whichallegedlytranslatedtoallowingmerchants tosteercustomers ( Durbin Amendment, networkscould“nolonger prohibitmerchants from discounting law regardinganti-steeringrulescalledtheDurbinAmendment wasenactedin2010.Underthe “imminent threat”of losingtheirexplicitanti-steeringrules( action broughtbytheUnitedStatesDepartment cards orfrom addingasurchargeforuseofcertaincards.Thatlitigation,whichincludedan networks, whichnetworkruleshadprohibitedmerchants from steeringcustomers tousecertain Liability Shifts duetoearlierlitigationregarding former “anti-steering”rulesimposed bythe 4 Thenetworksfacedpublicandprivatelitigationrega Defendants faced“uniquepressures”atthetime ofthedecisionstoimplement the The Smart CardAlliancecreatedtheEMVMigrationForum. All • before issuing EMV cards?” before issuingEMVcards?” Whatdebit, creditandprepaidcards? doissuersneedtoconsider customers forEMV?Howwillmerchants getreadytoacceptEMV among othermatters, “What arepayment brandsdoingtoprepare September 2012meeting oftheEMVMigrationForum discussed, are members oftheEMVMigrationForum ( of thenetworkdefendantsandmany oftheissuing-bankdefendants defendants attendedthismeeting ( the networkdefendantsandnearlyallofissuing-bank and What ModelWill Emerge” ( id. ¶257).American Expresscontinuedtolitig United Statesv.Am.Express Co. MasterCard, andAmerican Expressregardingcertain United Statesv.AmericanExpress Co. rd enteredintoaconsentdecreethatprohibitedcertain les wereunderattackatthetime ofthedecisions to uit’s reversaldoesnotdetract, however,from the 5 id. of Justice,leftthenetworksfacingan id. ¶ 156).Executivesfrom allof rding theanti-steeringrules.Inoneaction, ¶ 156). G.Garaufis).TheSecondCircuit hassince ate theactionanddistrictcourtfound id. id. , No.15-1672,2016U.S.App. ¶ 158).A ¶ 149). 4 Moreover,afederal , No. id. ¶¶ 148,256). their United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page6of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 in 2006,however,andVisa completed itsIPOin2008( and MasterCardwerepreviously jointventures Shift” ( to representaclassof merchants whohavebeen“unlawfully subjectedtotheso-calledLiability Fare, whichoperatestwofull-servicegrocerystores inNewYork( doing businessasMonsieurMarcel,aCalifornia restaurantandretailbusiness;(3)Fine plaintiffs: (1)rue21,anationwideretailerwith Liquors LLC.Inamotion tointerveneandamend, plaintiffsnowseektoaddthreenew named plaintiffsareB&RSupermarket, Inc.(doingbusinessasMilam’s Market)andGrove networks, sevencard-issuingbanks,andthestandards-settingentityEMVCo.Theoriginal “the cardbrandsarenotgoingtodelaytheliabilityshift date”( about howtheyworkedtogethertoimplement theLiabilityShift( steer wasforallfournetworkstoadoptthesame liabilityshiftatthesame time. implemented aLiabilityShift” ( rules, theNetworksknewmerchants wouldsteeraway from theirnetworkiftheyalone expensive forms ofpayment” ( id. The networkdefendants are Two Floridamerchants filedtheamended complaint againstfourpayment card At aMay2015FraudSummit, KristaTedderofMasterCardmade cleartoattendeesthat In 2014,CharlieScharf,theCEOofVisaInc.,made thefollowingstatement toanalysts ¶ 238). products thatexistoutthere. own problems andmaking surethatourproducts arestillthebest more broadlythanweeverdefineditbeforeisactuallysolvingour want togetdonebywhensothatwe,theindustry,definemuch together towardsgettingmuch more specificaboutwhatweall in aroom, thetradegroupsinaroom andwearealltryingtowork gotten theacquirersinaroom, themerchants inaroom, the issuers the othernetworks,istotryandget–notwehave the approachthatwehavetaken,anddonethisalongwith that youneedtomove towardsEMVbyacertaindateorelse.And would getliketheVisamemorandums sayingtheyhavedecided just say,okay,wearegoingtoputaruleout.Andliterallypeople have decidedwhatshouldbedone,wasbestandwewould Historically, thewaywewouldhavedonesomething iswewould id. id. at 149).“Without theprotectionofaboveanti-steering * ¶ 150).Theeasywaytoeliminate themerchant incentiveto Visa, MasterCard,American Express,andDiscover.Visa 49storesinCalifornia;(2)StroukGroupLLC, 6 of issuingbanks.MasterCard completed itsIPO id. ¶¶ 274,277). id. ¶120). id. id. ¶ 141): ¶ 16–23).Plaintiffsseek United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page7of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 voluntarily dismissed them from theaction(Dkt.No.265). seeking toaddMonsieur Marcel,rue21,andFine intervening plaintiffswasdeniedwithoutprejudice. (Dkt. No.282).American Express’smotion to to transfertheclaims assertedbythenamed pl motions todismiss moot (Dkt.No.281).Asepa leave tofileanamended complaint, declinedtoaddnewplaintiffsatthattime, anddeemed the against ittotheSouthernDistrictofNewYork. dismiss andAmerican Expressmoved tocompel ar motion tointerveneaddrue21andMonsieurMarcelasplaintiffs.Defendantsmoved to and theCartwrightAct,claims forunjust an acquiringbank( defendants areeitheracquiringbanksthemselves ortheirparentcompany orsubsidiaryoperates America has a jointventurethatisbusinessassociateofEMVCo.Alltheissuing-bank Bank, N.A.ChaseandU.S.Bankaretechnical N.A.; PNCBank,NationalAssociation;U.S. Corporation; ChaseBankUSA,NationalAssoci 39). EMVCo’s decisionsaremade onaconsensusbasisamong themember organizations( Express, MasterCard,Discover,Visa,and transactions areprocessedandmaintained. EMVCoisownedinequalsharesbyAmerican 5 Theoriginalcomplaint named JCBandUnionP On July15,2016,plaintiffsfiledanamended complaint andamotion tointervene A hearingwasheldondefendants’motions On March8,2016,plaintiffsfiledacomplaint allegingviolationsoftheSherman Act The issuing-bankdefendantsareBankofAmerica, N.A.;CapitalOneFinancial Defendant EMVCodevelopsandmanages thetechnical standardsbywhichEMVchip id. ¶¶ 30–37). * two nonparties,JCBCo.LtdandUnionPay. Bank NationalAssociation;andWells Fargo enrichment. Plaintiffssubsequently fileda aintiffs onthebasisofaforum-selection clause andbusinessAssociatesofEMVCo.Bank ay asdefendantsbutplaintiffs subsequently 7 transfer withrespecttothethen-would-be ation; Citibank(SouthDakota),N.A.;Citibank, rate ordergrantedAmerican Express’smotion Fare asplaintiffs.Inaddition totheclaims bitration andtosevertransfertheclaims on June23,2016.Anordergaveplaintiffs id. 5 Allof ¶ 38, United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page8of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 798 F.3d1186,1193(9th Cir.2015)(quoting of theminds’ oftheallegedconspirators.” more,’ ‘some furtherfactualenhancement,’ a‘furthercircumstance pointingtowarda meeting where conductis to showillegality.” a conclusoryallegationofagreement atsome unidentifiedpointdoesnotsupply factsadequate U.S.A., Inc. several States,orwithforeignnations;(3)whichactuallyinjurescompetition.” by whichthepersonsorentitiesintendedtoharm orrestraintradecommerce among the contract, combination orconspiracyamong twoormore personsordistinctbusinessentities;(2) ultimate facts (suchasaconspiracy),but evidentiaryfacts which,if true,willprove:(1)a defendant isliablefortheconductalleged. plausible whentherearesufficientfactualallegationstodrawareasonableinferencethatthe accepted astrue,tostateaclaim forreliefthatisplausibleonitsface.Aclaim isfacially follows fullbriefingandoralargument. add newplaintiffs.Inaddition,Discovermoves to General BusinessLawaswellaCalifornia Unfair Competition Lawclaim. Trade PracticesAct,theNewYorkDonnellyandSections349350of complaint alsoassertsclaims undertheFloridaAntitrustAct,DeceptiveandUnfair under theSherman Act,undertheCartwrightandforunjustenrichment, theamended Under To stateaclaim underSection1oftheSherman Act,claimants must plead“notjust M To surviveamotion todismiss, acomplaint must containsufficient factual matter, 1. Defendants nowmove todismiss andplaintiffsfiledamotion tointerveneseeking , 518F.3d1042,1047(9thCir.2008). Twombly .ShermanActClaims. A. OTIONS TO OTIONS consciously Bell Atl.Corp.v.Twombly , parallelconduct—withoutmore —“doesnotsuggestconspiracy,and D parallel. ISMISS . Id. ANALYSIS at 557.Rather,“[p]laintiffsmust plead‘something In reMusicalInstruments &Equip.AntitrustLitig. Ashcroft v.Iqbal Twombly , 550U.S.544,556–57(2007).Thisissoeven 8 compel arbitrationastorue21.Thisorder ). Plaintiffsmust allegesufficientfacts , 556U.S.662,678(2009). Kendall v.Visa , United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page9of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 our courtofappealsmade clearthatunder antitrust violationsin a reasonableexpectationthatdiscoverywillrevealevidenceof illegalagreement.” circumstantial evidenceofaconspiracy astoVisa,MasterCard,andAmerican Express. evidence. facts sufficienttostatea[Section1]claim.” factorinturnandcumulatively todetermine whetherplaintiffshavealleged nonconclusory consistent withexplicitlycoordinatedaction.” “economic actionsandoutcomes that arelargelyinconsistentwithunilateralconductbut Musical Instruments, which helpdistinguish“permissible parallelconductfrom impermissible conspiracy.” violation canbepledthroughcircumstantial evidenceintheform of“certain‘plusfactors,’” 1048 answer thebasicquestions:who,didwhat,towhom (orwithwhom), where,andwhen?” that plaintiffshadnotallegedfactstosupportsuchaconclusion.“[T]hecomplaint doesnot court ofappealsconcludedthisallegationwas“nothingmore thanaconclusory statement” and participated” inanallegedscheme tofixinterchangeandmerchant discountfees. plaintiffs hadallegedthatcard-issuingba facts (suchasaconspiracy),butevidentiaryfacts.” a level.” Id. regarding thecontextofparallelconducttoraiseasuggestionoutrightcollusion. probability at1194. . Our courtofappealshasprovidedguidanceastopost An impermissible conspiracycanbealleged througheitherdirectorcircumstantial In Factual allegations“must beenoughtoraisearightreliefabovethespeculative Twombly In reMusicalInstruments In reMusicalInstruments requirement atthepleadingstage.Rather,“itsimply callsforenough facttoraise , 550U.S.544,545(2007).The 798F.3dat1194.Ourcourtofappealsexplainedthat“plusfactors”are Kendall v.VisaU.S.A.,Inc. 1 Visa, MasterCard, andAmericanExpress. (1) , , 798F.3dat1193.Here, plaintiffspleadbothdirectand

our courtofappealsacknowledgedthatanantitrust nks had“knowingly,intentionallyandactively Twombly Ibid Ibid. 9 . and Twombly , aplaintiff must plead“notjustultimate Acourtmust “considereachpurported Kendall, In reMusicalInstruments standard, however,doesnotimpose 518F.3dat1047.Inthatcase,the -Twombly pleading standardsfor . In Ibid. Id. Kendall at 556. In re Our Id. , at United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page10of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 exercise infutility,andtheCourt willnottakejudi sole sourceofthestatement, atleasttheRule12 discussion. TheCourtcannot simply takethenetworklawy the blogger.Itispossiblethat thebloggercouldha But itisamatter forevidenceastowhetherornot the transcriptisonlysourceofinformation relieduponby blogger. Itistruethatthetranscript submitted suggests MasterCard assertsthatatranscriptofthepaneldi the Courtfindsnowrongdoingbyplaintiffsinrelyingonthis source.Inaddition,thesubmission by shift date,MasterCard’sTedderstressed.”Thisisvery blog maintained byafinancialservicesjournalistwhosa hearing. Counselthenfileda46-pagesubmission. Th on theflyatoralargument. Nevertheless,theCourta could beprovenbyreferencetotheoriginalstatement. just say,okay,wearegoingtoputaruleout”( done something iswewouldhavedecidedwhat how decisionsastonetworkrulesarenormally made: “[h]istorically, thewaywewouldhave entered intoaconspiracyin2011.Thistiming argument ignoresthevalueofstatement asto Mr. Scharfmay havebeenreferring toconductthatoccurred to theLiabilityShift: different approach—gettingeveryone“inaroom” to“worktogether”—occurredwithrespect offer more competitive terms. collusion, fortruecompetition wouldhavedrivenoneormore networkstobreakranksand not speaksoconfidentlyonbehalfof brands arenotgoingtodelaytheliabilityshiftdate”(Amd. Compl. ¶120).Ms.Teddercould direct evidenceofaconspiracy.Ms.Tedder, 6 Atthehearing,counselforMasterCardassertedth Charlie Scharf,CEOofVisa,beganhisstat At ourhearing,counselforVisapointedout The statements byCharlieScharf of VisaandKristaTedderof MasterCardconstitute still thebestproductsthatexistoutthere. solving ourownproblems andmaking surethatourproductsare much more broadlythanweeverdefineditbeforeisactually we allwanttogetdonebywhensothatwe,theindustry,define to worktogethertowardsgettingmuch more specificaboutwhat issuers inaroom, thetradegroupsinaroom andwearealltrying have gottentheacquirersinaroom, themerchants inaroom, the with theothernetworks,istotryandget—notwe And theapproachthatwehavetaken,anddonethisalong 6

all networkssaveandexceptforherknowledgeof scussion doesnotsupporttheconclusorystatement bythe cial noticeofthesubmitted evidentiarymaterials. stage. Therefore,thisentirefollow-up hasbecome an ve spokenwithMs.Tedderbefore orafterthepanel llowed counseltosubmit theoriginalstatement afterthe e amended complaint apparentlybasesitsallegationsona This pointwasnotraisedinthebriefsbutcame uponly close towhatwasallegedintheamended complaint and it isnotasclearcutthesubmitted statement suggests. id “thecardbrandsarenotgoingtodelaytheliability id. 10 Vice PresidentofMasterCard,stated:“thecard shouldbedone,whatwasbestandwewould er’s wordfortheassertionthat thetranscriptis at thestatement was nevermade andthatthispoint ¶ 141).Mr.Scharfthenexplainedthata ement (quotedabove)withanexplanationof that thecontextofstatement suggests after defendantshadallegedly United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page11of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Canada, andthenondifferent datesthantheothernetwor independent scheduleandmeans” ( alleges that“American Expressimplemented itsliability MasterCard implemented aliabilityshiftonthesame days( countries, byreducinginterchangefees( ( Implementation waslargelystaggeredinothercountries,meaning nocommon effectivedate in othercountries,theyunfoldedquitedifferentlyfrom whatlateroccurredintheUnitedStates. preexisting patternelsewhereintheworld.When thenetworkshadimplemented liabilityshifts MasterCard, andAmerican Express. cumulatively, nudgetheallegedconspiracyfrom conceivabletoplausibleasVisa, plaintiffs, aretheonestosufferunderLiabilityShift. the planning,fortheywouldbefirsttogetcertified. conspiracy implausible. Notreally.We wouldexpectthegiantretailchainstobeinvolvedin defendants, forallafter-the-factadmissions involvesuchtiming differences. done backin2011—getaroom andworktogether.Thetiming differencehardlyrescues to thepoint,hisstatement in2014lookslikeaCEOrepeatingwhathisreportssaidtheyhad that defendants“gotinaroom” andfixedacommon penaltyeffectiveonacommon date.More establishing, attheveryleast,a network defendants“knewmerchants wouldsteer the lock-steprolloutinUnitedStatesflowed from conspiracy,notparallelconduct. the deviationfrom priorrolloutspointsafinger the world,networksdidnotmarch inlockstepastheydidhere.Thisorderconcludesthat and providingadditionaltime withinwhichtoinstallEMVterminals ( id . ¶100). 7 Defendantspointoutthatin the Asia/Pacificre First In addition,plaintiffshavealsoallegedcertain“plusfactors”that,whenconsidered Defendants alsoarguethatthepresenceofmerchants “intheroom” rendersthealleged Second 7 Moreover,some ofthenetworks offeredcertainaccommodations inother , theimplementation of theLiabilityShift intheUnitedStatesdepartedfrom the , becauseofthethen-impending demise ofthenetworks’anti-steeringrules, id. ¶ 107).Discoveronlyimplemented aliabilityshift inMexicoand continuing id . ¶108),implementing gradualrollouts( conspiracy. From thestatement, ajurycouldfind shift policiesinternationally— ifatall—onitsown ks. Thefournetworksdidnot move uniformly abroad. gion andintheMiddleEast/Africa regionVisaand 11 of plausiblesuspicion,andtendstoshowthat id. awayfrom theirnetworkiftheyalone ¶ 100).Theamended complaint, however,

Run-of-the-mill merchants, likeour id. ¶ 112).Intherestof id. ¶ 110), United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page12of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 instant action,andeven then inlockstep(onlyDiscoverdeclinedtooffer suchabreak)( American Express“offeredtoforgochargebacks of$25orless”onlyafterthefiling of areducedinterchangefeeordelayedstartdate ( rules. Moreover,noneofthenetworkdefendants offeredmerchants anyconcessionintheform would havebenefitted from competition made possiblewiththedemise of theanti-steering networks imposed theLiabilityShift —despite the fact thatanynetworkwhobrokeranks themselves to impose thesame penaltyonthesame daytoheadoffsteering. do notundotheplausibilityofplaintiffs’propositi and networkvulnerability(Dkt.No.321at4).Thesearguments may convinceajurybutthey on thesame timetable — promoting merchant convenienceandavoidingmerchant confusion Liability Shift. attack onsteeringbyeliminating anypossiblecompetition among thecardsbasedon altered economic landscape.Colludingonalock-stepLiabilityShiftsuppliedanalternative rules threatenedtointroducecompetition wherenonehadexisted.Thenetworksfacedan to agarden-varietymotive toincrease profits. in combination withotherplusfactors.Moreover,thecommon motive allegedhereisnotakin agreement withitscompetitors.” Thecommon motive allegedhere,however,hasbeen that believesitcouldincreaseprofitsbyraisingpriceshasamotive toreachanadvance In reMusicalInstruments of theLiabilityShift,especiallyinlight Liability Shift. Therewasaclearcommon motive toconspireasauniform implementation Liability Shift, thenmerchants wouldsimply steercustomers tousecardsunencumbered bythe implemented aLiabilityShift” ( 135). Plaintiffscontend that“atleastoneof Third Defendants arguethatmore benignreasonsmotivated imposition of theLiabilityShift This orderrecognizesthatcommon motive alonedoesnotsuggestanillegalagreement. , theabsenceof competitive behaviorcutsinfavor of plausibility.Allof the , 798F.3dat1194–5.Ourcourtofappealshasnoted:“[a]nyfirm id. ¶150).Thatis,ifasinglenetworkwentfirstwith the networks’pre-existingsensitivitytosteering. theseentitieswouldorshould havebrokenranks Thethen-impending demise oftheanti-steering 12 on thatthenetworksexpresslyagreedamong id. ¶108,119–120).Visa,MasterCard,and id. ¶ United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page13of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 MasterCard, andAmerican Expressinthealleged conspiracy:the“who,didwhat,towhom (or Musical Instruments, plausible andreasonablesuggestionofcollusion “inaroom” ratherthanparallelconduct. and American Express.Theamended complaint sufficientlyallegesacontextthatraises concludes thatplaintiffsplausiblyallegeanim plausibility of theimpermissible conspiracyalleged. factors discussedherein,theallegationsregardingopportunitiestocolludesupport complaint here,however,allegesmore thanmere participation.Combined withtheotherplus alone suggestanillegalagreement. specific employees from eachnetworkwhoattended theconference( Migrate toEMVandWhat ModelWill Emerge” ( Secure ID”andwhichincludedapaneltitled,“What Will TriggertheUSPayments Industryto at aSmart CardAllianceconference, which wastitled,“TheRoadmap toEMVPayments and operates ona“consensus”basis( through EMVCoandtheSmart CardAlliance.Here,thenetworksjointlyownEMVCo,which that implemented aliabilityshift. short delayinimplementation oftheLiabilityShift,astookplaceinsome oftheothercountries would havemade atleastminor concessionssuchasreductionstotheinterchangefeesora plausible inference canbedrawnthatinatrulycompetitive environment oneof thenetworks breaking ranksoutweighedthebenefits of imposing theLiabilityShift. Atthepleadingstage,a plausible ( and offered merchants abreakonanynumber of terms” ina“trulycompetitive environment” is Plaintiffs havesufficiently pledthebasicev Considering theseplusfactorsasawhole,t This orderrecognizesthatmere participationintrade-organizationmeetings doesnot Fourth Defendants contendthattheamended complaint failstoallegethatthebenefitof id. ¶ 9).Thisinferenceisplausible. , plaintiffssufficientlyallegethatthenetworkshadanopportunitytocollude 798 F.3dat1194. id. * In reMusicalInstruments ¶ 152).Moreover,networkemployees met witheachother permissible conspiracyastoVisa,MasterCard, 13 id. ogether withthedirectevidence,thisorder identiary factsastoinvolvement inVisa, ¶ 156).Theamended complaint lists , 798F.3dat1196.Theamended ibid. ). In re United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page14of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 apply toDiscover. the same dayasintheUnitedStates—October1,2015.Thisplusfactortherefore doesnot shift inCanadaandMexicoonly,thosetwo countriesitimplemented theliabilityshifton can bedistinguishedfrom theothernetworks. Internationally,Discoverimplemented aliability comparison totheearlierrolloutof liability shifts internationally.Astothatfactor, Discover Discover. For now,thesestatements areplausiblysuggestiveofanimpermissible conspiracy involving room toworktogether,Mr.Scharfstated“wehavedonethisalongwith theothernetworks.” would notdelaytheLiabilityShift.IndescribingeffortsVisahadtakentogeteveryoneina direct evidenceofaconspiracyinvolvingDiscove circumstantial evidenceofaconspiracyastoDiscover. a reducedinterchangefee oradelayedstartdatetocompete forbusiness( demise oftheanti-steeringrules. motive toconspire astoauniform implementation of theLiabilityShift giventhe impending American Expressis ( with noconcessionsastotiming orincentivessuchasreductionstointerchangefees agreement to:(1)applythesame penalty(theLiabilityShift); (2)onthesame date;and(3) Liability Shift ( meeting and2012EMVMigrationForum, andagreedtoauniform implementation ofthe defendants, throughtheirexecutives,“gotinaroom,” suchasatthe2011Smart CardAlliance with whom), where,andwhen.” id. ¶¶108,120). The otherplusfactors,however,alsoapplytoDiscover. All oftheplusfactorsdiscussedabovealsoapplytoDiscoverexceptforone: The statements byCharlieScharfofVisaandKristaTedderMasterCard provide This orderconcludesthatplaintiffshave For thereasonsdiscussedherein,motion todismiss astoVisa,MasterCard,and id. ¶¶139,150).Theuniform implementation oftheLiabilityShiftincludedan D 2 Discover. (2) ENIED . Kendall Second , Discoverdeclinedtooffer concessionsintheform of , 518F.3dat1048.Plaintiffsallegethatthenetwork 14 alsosufficientlypledbothdirectand r. Ms.Tedderstatedthatthe“cardbrands” First , therewasacommon id. ¶108,119–120). United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page15of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 or relatedtoanacquiring bankthroughaparentcompany orsubsidiary( complaint allegesthatallofthe issuing-bankdefendantsareeitheracquiringbanks themselves concludes that to steercustomers toDiscoverhaditofferedconcessions. This issodespitetheroll-backof theanti-steeringrules,whichwould havepermitted merchants standing toseekdamages undertheindirect purchaserruleof 120). with noconcessionsastotiming orincentivessuchasreductions tointerchangefees( agreement to:(1)apply thesame penalty(theLiabilityShift); (2)onthesame date;and(3) Liability Shift ( meeting and2012EMVMigrationForum, andagreedtoauniform implementation ofthe defendants, throughtheirexecutives,“gotinaroom,” suchasatthe2011Smart CardAlliance when.” Discover intheallegedconspiracy:“who,didwhat,towhom (orwith whom), where,and its backonthisopportunityishardtoexplainandsuggestiveofcollusion. competitive windfall as merchants steeredcustomers toDiscovercards.Thatturned Liability Shift —especiallyinlightof extensivedelaysincertifications —andtherebyreapa Shift shouldhavebeenafineopportunityforDiscovertodelayitsimplementation ofthe in lockstepwiththebigthreeimplementing been avictim ofsteering.Butthisunderscoresallthemore theanomaly ofDiscovermarching Discover. direct evidenceofaconspiracy,plausibly This orderconcludesthattheseplusfactors,whenviewedcumulatively, andintandem withthe EMVCo, whichitjointlyowns,andSmart CardAlliancemeetings in2011( alleges Discoverhadopportunitiestocollude(liketheothernetworkdefendants)through Finally,alldefendantsbutDiscoverhave Plaintiffs havesufficientlypledthebasicevidentiaryfactsastoinvolvement by Unlike theotherthree,Discoverclaims itneverhadanti-steeringrulesandinfact Kendall Illinois Brick id. , 518F.3dat1048.PlaintiffsallegethatDiscover,alongwiththeothernetwork ¶¶139,150).Theuniform implementation oftheLiabilityShiftincludedan is notabartoplaintiffs’ claim fordamages. Theamended llege animpermissible conspiracyinvolving the liabilityshift. Putdifferently, theLiability 15 abandoned theargument thatplaintiffslack Third Illinois Brick , theamended complaint id. ¶¶30–37).This . Thisorder id. ¶¶ 152,156). id. ¶¶ 108, United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page16of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 gave them vetopowerovercertainof post-IPOMasterCard’sdecisions.”Plaintiffsfail to ‘Class M’sharethatallowed them to elect upto25%ofthepost-IPOMasterCardboard and MasterCard hadanIPO in 2006,butallegethat“themember bankseachreceived asingle and MasterCardarevagueconclusory. when”). insufficient whereitfailedtoplead“who,didwhat, towhom (orwithwhom), where,and defendants —whattheyagreedtodo. result, theamended complaint failstoplead“thewhat”oftheconspiracyasissuing-bank chip-and-signature cards.Forthereasonsdiscussedbelow,boththeoriescome upshort.Asa expressly agreedtoa MasterCard post-IPO;and(2)thatthenetw through twoseparatetheories:(1)thattheissuing-bankdefendantscontinuetocontrolVisaand issuing-bank defendantstopleadanimpermissi Kendall insufficient asamatter of lawtoconstituteaviolationof Section1of theSherman Act.” issuing banks,“merely charging,adoptingorfollowingthefeessetbya[network]is merchant discountfeeschargedtomerchants. Ourcourtofappealsconcludedthat,astothe Visa andMasterCardvariousissuingbanksallegingaconspiracytosetinterchange not amount toanimpermissible conspiracy. holding ofourcourtappealsthatmere adop F.3d 1133,1145–46(9thCir.2003). possibility thatthedirectpurchaserwillsue.” order concludesthatplaintiffshavestandingtoseekdamages becausethereis“norealistic First As pled,theLiabilityShiftherewasimplemented throughnetworksrules.Under An analysisoftheallegationsagainstissuing-bankdefendantsmust beginwiththe For thereasonsdiscussedherein,motion todismiss astoDiscoveris , plaintiffsmust pleadsomething more thanmere adoptionofnetworkrulesbythe , plaintiffs’ allegationsthattheissui quid proquo 3 The Issuing-BankDefendants. (3) arrangement relatedtotheLiabilityShiftandadoptionof Kendall, ork defendantsandtheissuing-bank As toMasterCard,plaintiffsconcedethat Kendall tion ofanetwork’srulesbyanissuingbankdoes Freeman v.SanDiegoAss’nofRealtors 16 ble conspiracy.Plaintiffsattempt todoso 518F.3dat1048 ng-bank defendantscontinuetocontrolVisa , 518F.3dat1048.There,plaintiffssued

(holding acomplaint D ENIED , 322 . Ibid.

United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page17of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 networks, most (althoughnotall)ofthe plusf concludes thattheallegations donotsupporttheinferenceofa issuing-bank defendantswereinapositiontocontrol theadoptionprocess.Thisorder about theprocessforadoptingoneversionofEMV cardsovertheother—andwhether defendants controlledadoptionofchip-and-signature cards.Butthecomplaint lacksdetails fees thanchip-and-pincards.Suchaquid-pro-quo arrangement assumes that theissuing-bank the networksreceivedbenefitofchip-and-signature cards,from whichtheyaccruedhigher to a networks andbanksalsofails.Plaintiffsallege Shift. defendants controlledVisaandMasterCardatthetime of thedecisionsregardingLiability This orderconcludesthattheallegationsdonotsupportinferenceissuing-bank banks continuedtomaintain inVisa,orhowtheyallegedlycontinuedtoexertcontroloverVisa. From theseallegations,itisnotpossibletodetermine exactlywhatkindofstakethemember demonstrate controloverMasterCard’sdecisions. Liability Shift.Evenassuming thisarrangement continuedinto2011,thisallegationfailsto allegation pertainstoownershiprightsasof2006,notatthetime ofthedecisionsrelatedto describe thespecificvetopowermaintained bythemember banks.Moreover,aspled,this quid proquo Because theallegationsfail toshowthattheissuing-bankdefendantscontrolled the Second The allegationsastoVisaareevenmore vague: , plaintiffs’speculativeassertionofa other banksreceivedClassCcommon stock. stock. Members ofVisaU.S.A.acquiredClassBcommon stock; the member banksintheform ofClassBandCcommon approximately 270million sharesofVisastockpreviouslyheldby in Visathroughtheredemption andreclassificationof acquisition byVisaInc.ofcertainmember banks’ownershiprights of ClassAcommon stock.Thisprocesswasessentiallythe completed, VisaInc.conductedanIPOofover400,000,000shares members ofeachsubsidiary.Oncetherestructuringwas were unifiedinVisaInc.,thestockwasacquiredformer Delaware corporationknownasVisaInc.Afterthesubsidiaries International, VisaCanada,andInovantbecame subsidiariesofa of transactionsthatculminated intheIPO,VisaU.S.A., On March19,2008,Visacompleted itsownIPO.Underaseries arrangement whereinthebanksreceived benefitoftheLiabilityShiftand actors eitherdonotapply totheissuing-bank 17 thattheissuingbanksandnetworksagreed quid proquo quid proquo arrangement betweenthe arrangement. United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page18of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 order concludesthatplaintiffs havenotsuffici requires toomuch speculation tomeet the consideration cutsagainsttheissuing-bankdefendants. Nevertheless,theamended complaint Shift sinceliability for chargebacksshifted awayfrom them andontothemerchants. This allegations astotheissuing-bankdefendantsfrom possibletoplausible. defendants orapplytoalesserextent.Viewedaswhole,theseplusfactorsfailnudgethe • This orderrecognizesthattheissuing-bankdefendants benefittedfrom theLiability • • American Expresscards( degree astotheissuing-bankdefendants.Noneofthem issue Discover cards( Anti-Steering Rules. defendants. abroad isnotsuggestiveofaconspiracyastotheissuing-bank controlled thenetworks,departurefrom thepatternofrollouts complaint failstosufficientlyallegetheissuing-bankdefendants networks ( attributes therolloutsof theliabilityshifts hereandabroadtothe the issuing-bankdefendants. sufficient facts toattributetheabsenceof competitive behaviorto network rules.Thus,theamended complaint failstoallege alleges thattheLiabilityShiftwasimplemented throughthe The AbsenceofCompetitiveBehavior. more tolosefrom steering. not asstrongagainstthebanksnetworks,whohad threat totheissuing-bankdefendantsaswell.Butthisplusfactoris to American Express orDiscovercardsthereforearguablyposeda Departure fromRolloutsAbroad. id. ¶¶71,n.6,75–81,100).Becausetheamended id. ¶ 58).Thepossibilityof steering bymerchants Theanti-steeringplusfactorispresenttosome id. Twombly ¶¶ 58,59),andonlyafewissue ently allegedaconspiracy onthepartof 18

The amended complaint testastotheissuing-bank defendants.This Theamended complaint United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page19of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 EMVCo istherefore allegations astoEMVCofail tomeet the functions. Supreme Courthasrecognized,however,thattradeassociationsoftenservelegitimate ( website EMVCodeniedparticipatingintheLiabilityShift after plaintiffs filed theinstantaction contains nospecificallegationsastoactstakenbyEMVco,otherthanallegethatonits allegations thatEMVCowasthemeans throughwhichtheconspiracywasaccomplished, it issuing-bank defendantsmust preserveevidence. motion toamend basedonnewlydiscoveredevidencewillbeallowed.Consequently,the remains thatevidencewillbedevelopedtoshowcomplicity bythe issuingbankssuchthata that theissuingbankswillberequiredtoprovidediscovery(asnonparties),possibility & Howell Act, andthepleadingrequirements underthetwo statutesaresimilar. Prof. Code§§16700-16760.TheCartwrightAct waspatternedafterSection1oftheSherman evidence willbeallowed.Consequently,EMVCo must preserve evidence. be developedtoshowcomplicity byitsuchthatamotion toamend basedonnewlydiscovered will berequiredtoprovidediscovery(asanonparty),thepossibilityremains thatevidencewill G issuing-bank defendants.Themotion todismiss id. RANTED ¶153).TheotherallegationsdescribeEMVCo’sroleasastandard-settingentity. The allegationsastoEMVCoarealsosparse.While theamended complaint includes Given, however,thatthecasewillgoforward againstthenetworkdefendants, andgiven Plaintiffs’secondclaim forreliefarisesunde Given thatthecasewillgoforward againsttheotherdefendants, andgiventhatEMVCo , 803F.2d1473,1476-77 (9thCir.1986).A“highdegreeofparticularity” inthe . See MapleFlooringMfrs.Ass’nv.UnitedStates .StateLaw Claims. B. G 4 EMVCo. (4) .CartwrightActClaims. 1. RANTED . Twombly 19 as totheissuing-bankdefendantsistherefore test. Themotion todismiss withrespectto r California’sCartwrightAct,Cal.Bus.& , 268U.S.563,567(1925).The See Dimidowichv.Bell United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page20of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 claim aretherefore facts tosupportaclaim undertheCartwrightAct. conspiracy underSection1astothenetworkde 195 Cal.Rptr.211(Ct.App.1983). Act. Themotions todismiss astotheDonnellyAct claim aretherefore network defendants,plaintiffs havealsostat law claims aretherefore Trade PracticesActandtheFloridaAntitrustAct. Themotions todismiss astotheFloridastate network defendants,plaintiffshavealsostat D standalone causeofaction,themotions todismiss theclaim forunjustenrichment are would beapossibleform ofrelief.With theunderstandingthatunjustenrichment isnota McBride v.Boughton principle, underlyingvariouslegaldoctrinesandremedies. Itissynonymous withrestitution.” pleadings isrequiredofaCartwrightclaim. the UCL’sunfairandunlawfulprongs.Themoti under theSherman Actastothe networkdefendant California’s UnfairCompetition Law(UCL).Because ENIED For thesame reasonsthatplaintiffs’complaint sufficientlypleads an inferenceof Because plaintiffshavesufficientlystatedaclaim undertheSherman Act as tothe Because plaintiffshavesufficientlystatedaclaim undertheSherman Actastothe Unjust enrichment isnotacauseofactionorevenremedy “butratherageneral Plaintiffsallegeviolationofthe . D ENIED , 123Cal.App.4th379,387(2004).Attheremedy stage,restitution .New YorkStateClaims. 5. FloridaStateLaw Claims. 4. ClaimforUnjustEnrichment. 2. .California’sUnfairCompetitionLaw. 3. D ENIED . . unfair andunlawfulprongsofSection17200 ed aclaim forviolationofNewYork’sDonnelly ed claims undertheFloridaDeceptiveandUnfair G.H.I.I.v.MTS,Inc. 20 fendants, plaintiffs’complaint pleadssufficient ons todismiss plaintiffs’UCLclaim are Themotions todismiss plaintiffs’Cartwright s, plaintiffshavealsostatedaclaim under plaintiffshavesufficientlystatedaclaim , 147Cal.App.3d256,265, D ENIED . D ENIED . United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page21of22PageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Express willlikelybesusceptible to clause andarbitrationagreement. Aprior ordernoted issuing-bank defendantsorsomeone else. to interveneis appropriate butthatinterventionastorue21isduplicativeandundulycomplicated. Themotion through Rule24(b)’sprovisionforpermissive intervention. plaintiffs. Therefore, interveningplaintiffs may bepermitted tointervene—if atall —only matter ofrightbecausethenamed plaintiffsadequa P respect torue21isdenied,themotion tocompel arbitrationastorue21is G to theclaims underSections349and350oftheNewYorkGeneralBusinessLawaretherefore failed “tomeet thethresholdrequirement ofconsumer orientation”).Themotions todismiss as Direct, LLC consumer deceptionisnotwithintheambit ofthestatute”); 812 F.Supp.2d390,410(S.D.N.Y.2011)(“[A]nticompetitive conductthatisnotpremised on Law failbecauseplaintiffsarebusinessesnotconsumers. ART RANTED withtheexceptionthatmotion tocompel arbitrationis 8 American Expressobjectstointervention byMons Further, leavetoamend willnotbegrantedunlessdiscoveryshowsliabilitybythe This orderconcludesthatinterventionastoMonsieurMarcelandFineFareis M This orderconcludesthatinterveningplaintiffs arenotentitledtointerventionasa 2. For thereasonsstatedherein,allofmotions are M Discover moves tocompel arbitrationastorue21.Becausethemotion tointervenewith 3. In contrast,theclaims underSections349and350oftheNewYorkGeneralBusiness . , 696F.Supp.2d296,303(E.D.N.Y.2010)(dismissing claims wheretheplaintiff G RANTED OTION TO OTION TO OTION astoMonsieurMarcelandFineFarebut C I NTERVENE a motion totransfer(Dkt.No.282). OMPEL A RBITRATION CONCLUSION . The issuing-bankdefendantsandEMVCo,though thatanyclaims byMonsieurMarcelagainstAmerican 21 ieur Marcelonthebasisofa forum-selection tely representtheinterestsofintervening . In reDigitalMusicAntitrustLitig G see alsoSpiritLocker,Inc.v.EVO RANTED IN D ENIED AS D ENIED P D ART AND astorue21. ENIED AS M OOT . D M ENIED IN 8 OOT . ., United States District Court For the Northern District of California Case 1:17-cv-02738-MKB-VMSDocument346Filed09/30/16Page22ofPageID#: 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 ae: etme 0 06 Dated: September 30,2016. other potentialevidencerelevanttotheLiabilityShift andthecircumstances thatleduptoit. out ofthecasefornow,areorderedtoretainallemails, memorandums, textmessages, orany IT ISSOORDERED. 22 U W NITED ILLIAM S TATES A LSUP D ISTRICT J UDGE