Judge's Ruling Limits Scope of Discover Lawsuit

Ed Kountz | August 28, 2008, 08:51 AM

Judge Barbara Jones, the Federal judge overseeing Discover’s antitrust lawsuit against MasterCard and Visa, reduced the scope of Discover’s suit in a ruling that generated responses from both MasterCard and Visa over the last few days.

Judge Jones, responding to a summary judgement motion filed by MasterCard, ruled no evidence of an inter-association conspiracy existed between Visa and MasterCard, and also dismissed certain debit-related claims, concentrating on the operation of MasterCard’s Competitive Programs Policy, which Discover had previously filed.

MasterCard’s statement said that it was “pleased” that Judge Jones had narrowed the scope of Discover’s suit, a decision it indicated “recognizes the intense competition between MasterCard and Visa.”

However, MasterCard further indicated that it was “disappointed” by the Court’s decision to grant “aspects of Discover’s summary judgement motion seeking to apply collateral estoppel in its claims against MasterCard, but pleased it rejected Discover’s attempt to obtain broader findings.”

Collateral estoppel refers to the application of findings obtained from one lawsuit to a different suit.

Visa’s statement on the decision noted that “Discover cannot challenge the legality of the agreements Visa (has) with its debit issuance partners,” and indicated the suit would be unlikely to have a “significant impact” on Visa’s ongoing operations.

Both organizations have noted that Discover must still prove the remaining points of its case at trial. The Discover suit is one of several that have been winding their way through the courts system in relation to the business models, or other business elements, of the two major cards brands in recent years.