Southtrust Corp. v. Plus System, Inc.

913 F. Supp. 1517, 1995 U.S. Dist. LEXIS 16232, 1995 WL 786107
CourtDistrict Court, N.D. Alabama
DecidedAugust 10, 1995
DocketCV-93-P-2291-S
StatusPublished
Cited by1 cases

This text of 913 F. Supp. 1517 (Southtrust Corp. v. Plus System, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southtrust Corp. v. Plus System, Inc., 913 F. Supp. 1517, 1995 U.S. Dist. LEXIS 16232, 1995 WL 786107 (N.D. Ala. 1995).

Opinion

MEMORANDUM OPINION

POINTER, Chief Judge.

INTRODUCTION

This matter is before the court to consider Plus System, Inc.’s (“Plus”) motion for summary judgment. This case involves a claim by plaintiff, SouthTrust Corporation (“South-Trust”), that the defendants, Plus Systems, Inc., Alabama Network, Inc., (“Alert”) and Southeast Switch, Inc., (“Honor”) violated the Sherman Antitrust Act, causing plaintiff damages. The plaintiff alleges that the provision in its contract with the defendants prohibiting the levying of a surcharge for automated teller machine (ATM) transactions performed at SouthTrust ATMs by non-SouthTrust customers is unlawful price-fixing in violation of the antitrust laws. SouthTrust further asserts that Plus is illegally tying the availability of its trademark rights to the alleged price-fixing scheme. SouthTrust seeks treble damages and injunctive relief for the defendant’s alleged antitrust violations and invoked this court’s jurisdiction pursuant to Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 15/26" style="color:var(--green);border-bottom:1px solid var(--green-border)">26. SouthTrust also claims the defendants have violated Alabama’s common-law and the Alabama Code §§ 8-10-3 and 6-5-60. Plus Systems, Inc. asserted a counterclaim against SouthTrust. The defendant’s counterclaim is not addressed by this opinion.

The question presented by Plus’ motion for summary judgment is whether SouthTrust’s complaint, challenging the contractual re *1519 striction on surcharging, sufficiently alleges antitrust injury under Sections 4 and 16 of the Clayton Act, and, if so, whether the regulation should properly be analyzed as a per se restraint of trade or under' the rule of reason. For the reasons set forth below, the court finds that the defendant Plus’ motion for summary judgment is due to be granted.

STANDARD FOR SUMMARY JUDGMENT

The basic principles governing summary judgment under Fed.R.Civ.P. 56 were clarified in the trilogy of cases decided by the Supreme Court in 1986: Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Summary judgment is proper if the evidence is so one-sided that one party must prevail as a matter of law. On a motion for summary judgment, the inferences to be drawn from the underlying facts contained in the materials submitted must be viewed in the light most favorable to the party opposing the motion. Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d 142 (1970). In deciding whether a party is entitled to summary judgment, the court uses the same standards and burdens of production and persuasion that would apply at a jury trial.

FACTS

The following facts are either undisputed or are taken in the light most favorable to SouthTrust, the non-moving party:

Defendant, Plus Systems, Inc., is a corporation organized to administer a national network of automated teller machines. Defendant, Alabama Network, Inc., is a corporation organized to administer a state-wide ATM network in Alabama. Defendant, Southeast Switch, Inc., is a corporation organized to administer a regional ATM network in Florida and other southeastern states. Plaintiff, SouthTrust Corporation, is a registered bank holding company and corporation engaged in providing banking services to customers in Alabama, Florida, and other states and is a sponsored financial institution of the Plus network.

Plus, a joint venture comprised of licensed member financial institutions and VISA U.S.A. Inc., is one of two national networks providing ATM services. A hierarchical system exists in the ATM industry, with national networks in the top tier, regional and statewide networks in the intermediate tier, and local banking institutions in the third tier. Alert and Honor are members and licensees of Plus, and they in turn sponsor and sublicense other financial institutions’ participation in the Plus network. South-Trust became a sponsored member and subli-censee of the Plus network in 1991, through Alert.

Licensed member financial institutions, including SouthTrust, issue plastic cards bearing federally registered “Plus marks,” and any card bearing the Plus marks may be used at any ATM bearing the Plus marks anywhere in the United States and around the world. Cards bearing the Plus marks may be issued only by licensed member financial institutions. Such cards may be ATM cards — which access the consumer’s demand deposit or checking account, allowing the consumer to withdraw cash, transfer funds, or obtain an account balance — or credit cards, which allow the consumer to obtain a cash advance against a line of credit.

Transactions performed by cardholders at their own bank’s ATMs are called “on-us” transactions and are processed by the cardholder’s bank without use of a shared ATM network. Transactions processed through the Plus network are three-party transactions involving a cardholder, an issuing bank (the bank that issued the ATM card to the cardholder), and an acquirer (the bank that owns the ATM at which the transaction is initiated). When a cardholder of a licensed member financial institution of the Plus network initiates a transaction at an ATM owned by another member institution, the transaction is called a “foreign transaction.” A foreign transaction is routed through the Plus network and electronically processed, or “switched,” by a large- computer located at Plus’ headquarters, unless the acquirer *1520 chooses to route the transaction through another network of which it is a member.

When a cardholder initiates a transaction which is routed through the Plus network, the Plus “switch” obtains verification from the issuing bank of the sufficiency of cardholder funds, and, if authorization is received, the switch relays the authorization to the acquirer, which dispenses the cash to the consumer. Each day, the switch totals the transactions performed at member banks’ ATMs and then “settles” the accounts of member banks by crediting and debiting the banks’ accounts. For this electronic processing service, the issuing bank pays Plus a 5 (five) cent “switch fee” for each transaction. The issuing bank also pays the acquiring bank 50 (fifty) cents per transaction to offset costs incurred by the acquiring bank in providing ATM services.

Only banks that agree to abide by Plus’ rules and regulations may become licensed to use the Plus marks. The rules apply only when the acquiring bank chooses to route the ATM transaction through the Plus switch.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Griffiths v. Blue Cross and Blue Shield of Alabama
147 F. Supp. 2d 1203 (N.D. Alabama, 2001)

Cite This Page — Counsel Stack

Bluebook (online)
913 F. Supp. 1517, 1995 U.S. Dist. LEXIS 16232, 1995 WL 786107, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southtrust-corp-v-plus-system-inc-alnd-1995.