RICHARD J. LEON, District Judge.
Plaintiffs NACS (formerly, the National Association of Convenience Stores), National Retail Federation ("NRF"), Food Marketing Institute ("FMI"), Miller Oil Co., Inc. ("Miller"), Boscov's Department Store, LLC ("Boscov's") and National Restaurant Association ("NRA") (collectively, "plaintiffs") bring this action against the Board of Governors of the Federal Reserve System ("defendant" or "the Board") to overturn the Board's Final Rule setting standards for debit card interchange transaction fees ("interchange fees") and network exclusivity prohibitions. Before the Court are the parties' cross-motions for summary judgment [Dkts. ##20, 23]. Upon consideration of the pleadings, oral argument, and the entire record therein, the Court concludes that the Board has clearly disregarded Congress's statutory intent by inappropriately inflating all debit card transaction fees by billions of dollars and failing to provide merchants with multiple
Four of the six plaintiffs in this case are major trade associations in the retail industry. NACS is an international trade association comprised of more than 2,100 retail members and 1,600 supplier members in the convenience store industry, most located in the United States. Am. Compl. ¶ 15 [Dkt. #18]. NRF is "the world's largest retail trade association," representing department, specialty, discount, catalog, Internet, and independent stores, as well as chain restaurants, drug stores, and grocery stores in over 45 countries. Id. ¶ 17. FMI advocates for 1,500 food retailers and wholesalers, including large multi-store chains, regional firms, and independent supermarkets. Id., ¶ 19. NRA is the "leading national association representing th[e] [restaurant and food-service] industry, and its members account for over one-third of the industry's retail locations." Id. ¶ 23. According to plaintiffs, these trade associations and their members accept debit card payments and therefore are directly affected by the Board's interchange fee and network non-exclusivity regulations. Id. ¶¶ 16, 18, 20, 23-25.
The remaining plaintiffs are individual retail operations. Miller is a convenience store and gasoline retailer that also sells heating oil, heating and air-conditioning service, and commercial and wholesale fuels in the United States. Id. ¶ 21. Boscov's is an in-store and online retailer with a chain of forty full-service department stores located in five states in the mid-Atlantic region. Id., ¶ 22. Both accept debit cards. See id. ¶¶ 21-22.
The Board is a federal government agency responsible for the operation of the Federal Reserve System and promulgation of our nation's banking regulations. Id. ¶ 26.
Although now ubiquitous, debit cards were first introduced as a form of payment in the United States in only the late-1960s and early-1970s. See Final Rule, Debit Card and Interchange Fees and Routing, 76 Fed.Reg. 43, 394, 43, 395 (July 20, 2011) (codified at 12 C.F.R. §§ 235.1-235.10) ("Final Rule"). Unlike other payment options, debit cards allow consumers to pay for goods and services at the point of sale using cash drawn directly from their bank accounts, and to withdraw and receive cash back as part of the transaction. Id. Prior to debit cards, consumers had to use paper checks or make in-person withdrawals from human bank tellers in order to access their accounts. Id.
After decades of slow growth, the volume of debit card transactions increased rapidly in the mid-1990s, as did transactions involving other forms of electronic payment such as credit cards. Id. at 43,395 & n. 5. This upsurge in debit card usage continued into the 2000s, reaching approximately 37.9 billion transactions in 2009. Id. at 43, 395. By 2011, debit cards were "used in 35 percent of noncash payment transactions, and have eclipsed checks as the most frequently used noncash payment method." Id.
Most debit card transactions involve four parties, in addition to the network that processes the transaction. Id. at 43,395 & n. 14. These parties are: (1) the cardholder (or consumer), who provides the debit card as a method of payment to a merchant; (2) the issuer (or issuing bank), which holds the consumer's account and issues the debit card to the consumer; (3) the merchant, who accepts the consumer's debit card as a method of payment; and
There are two types of debit card transactions — PIN (or "personal identification number") and signature — each of which requires its own infrastructure. In a PIN transaction, the consumer enters a number to authorize the transaction, and the data is carried in a single message over a system evolved from automated teller machine ("ATM") networks. Id. at 43,395. In a signature transaction, the consumer authenticates the transaction by signing something (like a receipt), and the data is routed over a dual-message system utilizing credit card networks. Id.
The vast majority of debit cards (excluding prepaid cards) support authentication by both PIN and signature, but which one is used in a given transaction depends in large part on the nature of the transaction and the merchant's acceptance policy. Id. at 43, 395. For instance, hotel stays and car rentals are not easily processed on PIN-based systems because the transaction amount is unknown at the time of authorization. Id. Internet, telephone, and mail-based merchants also generally do not accept PIN transactions. Id. Of the eight million merchants in the United States that accept debit cards, the Board estimates that only one-quarter have the ability to accept PIN transactions. Id.
There are several fees associated with debit card transactions. The largest is the interchange fee, which is set by the network and paid by the acquirer to the issuer to compensate the latter for its role in the transaction. Id. at 43, 396; see also § 1693o-2(c)(8) (defining "interchange transaction fee"). The network also charges acquirers and issuers a switch fee to cover its own transaction-processing costs. 76 Fed.Reg. at 43,396; see also § 1693o-2(c)(10) (defining "network fee"). Once these fees are assessed, the acquirer credits the merchant's account for the value of its transactions, less a "merchant discount," which includes the interchange fee, network switch fees charged to the acquirer, other acquirer costs, and a markup. 76 Fed.Reg. at 43, 396.
When PIN debit cards were first introduced, most regional networks set their interchange rates at "par," offering no cost subsidization to either merchants or issuers.
As debit cards became more popular, interchange fee rates and the direction in which the fees flowed began to shift. See 76 Fed.Reg. at 43,396. By the early-2000s, acquirers were paying issuers ever-increasing interchange fees for PIN transactions. See id. Interchange fees for signature transactions, meanwhile, were modeled on credit card fees and were even higher than for PIN. Id.; Salop, supra note 1, ¶ 23.
In recent years, interchange fees have climbed sharply with PIN outpacing signature debit fees. From 1998 to 2006, merchants faced a 234 percent increase in interchange fees for PIN transactions, Mott, supra note 2, ¶ 24, and by 2009, interchange fee revenue for debit cards totaled $16.2 billion, 76 Fed.Reg. at 43,396. For most retailers, debit card fees represent the single largest operating expense behind payroll.
Because debit card transaction fees, including interchange fees, are set by the relevant network and paid by the acquirer (on behalf of merchants) to the issuer, perhaps the best way to understand why such fees have skyrocketed over the past two decades is to recognize the market dynamics among the networks, issuers, and merchants. Although there are many debit card networks in the United States, networks under Visa's and MasterCard's ownership account for roughly 83 percent of all debit transactions and nearly 100 percent of signature transactions.
At the same time, Visa, MasterCard, and other debit networks vie for issuers to issue cards that run on their respective networks. Id. ¶¶ 33,43. They can entice issuers by emphasizing their relative
In addition, Visa's and MasterCard's "Honor All Cards" rules force merchants that accept their networks' ubiquitous credit cards also to accept their signature debit cards with their corresponding high signature transactions fees.
The major card networks, not surprisingly, have also increased their own network fees, facilitated in part by exclusivity deals between the leading networks and debit issuers. Mott, supra note 2, ¶¶ 26-27; Salop, supra note 1, ¶¶ 30-31. Although there has been some network competition for PIN transactions, Visa and MasterCard have longstanding operating rules that disallow any other network from handling signature transactions on their cards. 76 Fed.Reg. at 43,396; Mott, supra note 2, ¶¶ 26-27; Salop, supra note 1, ¶¶ 30-31. Within the PIN market, too, Visa has agreements with particular issuers that create exclusivity via "volume commitments that are pegged to incentives such as reduced fees" or require that Interlink be their sole PIN debit network. Salop, supra note 1, ¶ 30. Thus, the dominant networks have been able to raise their network fees on merchants without concern for lost transaction volume because merchants have no other alternatives for routing transactions. Id. ¶ 31. According to information collected by the Board, total network fees exceeded $4.1 billion in 2009, with networks charging issuers and acquirers more than $2.3 billion and $1.8 billion, respectively. 76 Fed.Reg. at 43,397.
On July 21, 2010, Congress passed legislation to address the rise of debit card fees. Coined the "Durbin Amendment"
The Durbin Amendment first addresses interchange transaction fees, which are defined as "any fee established, charged or received by a payment card network for the purpose of compensating an issuer for its involvement in an electronic debit transaction." § 1693o-2(c)(8). It provides that the fee charged by the issuer "with respect to an electronic debit transaction shall be reasonable and proportional to the cost incurred by the issuer with respect to the transaction." Id. § 1693o-2(a)(2) (emphasis added). It then directs the Board to establish standards to determine whether the amount of a debit card interchange fee is "reasonable and proportional to the cost incurred by the issuer" with respect to the transaction. Id. § 1693o-2(a)(3)(A). To promulgate these standards, Congress instructs the Board that it:
Id. § 1693o-2(a)(4)(A)-(B).
Once the Board establishes this interchange transaction fee standard, Congress authorizes the Board to adjust the fee to allow for fraud-prevention costs, provided the issuer complies with standards established by the Board relating to fraud prevention:
Id. § 1693o-2(a)(5)(A).
The Durbin Amendment also instructs the Board to regulate network fees by prescribing rules related to network non-exclusivity for routing debit transactions. 76 Fed.Reg. at 43,394. Preferring a market-oriented approach to network fees,
After the enactment of the Dodd-Frank Act, the Board sought information from various industry participants to assist the agency in its initial rulemaking. The Board met with debit card issuers, payment card networks, merchant acquirers, consumer groups, and industry trade associations on a number of occasions to discuss a host of issues including debit transaction processing flows, transaction fee structures and levels, fraud-prevention activities, fraud losses, routing restrictions, card-issuing arrangements, and incentive programs.
On December 28, 2010, the Board issued a NPRM implementing the Durbin Amendment and requesting public comments. 75 Fed.Reg. at 81,722. Stemming from its determination to include "only those costs that are specifically mentioned for consideration in the statute," the Board proposed that the interchange transaction fee standard be limited to the costs associated with the authorization, clearing, and settlement ("ACS") of an electronic debit transaction that vary with the number of transactions sent to the issuer within the reporting period. Id. at 81,734-35, 81,739. The Board noted that, by focusing on the issuer's variable, per-transaction ACS costs, it was carrying out Congress's mandate to establish standards to assess whether an interchange fee is reasonable and proportional to the cost incurred by the issuer with respect to the transaction. Id. Consequently, in the NPRM, the Board suggested that network processing fees,
While merchants overwhelmingly supported the Board's plan to limit allowable costs within the interchange transaction
Drawing on its comprehensive survey data relating to debit transaction fees, the Board proposed two alternative standards to govern interchange fees. The first, which the Board called "Alternative 1," allowed each issuer to recover its actual incremental ACS costs up to a safe harbor of seven cents ($.07) per transaction if the issuer chose not to determine its individual allowable costs, and up to a cap of twelve cents ($.12) if it did. 75 Fed.Reg. at 81,736-38. The second, "Alternative 2," set a cap at a flat twelve cents ($.12) per transaction. Id. at 81,738.
With respect to network non-exclusivity for routing debit transactions, the Board requested comment on two alternative methods for implementation. The first, called "Alternative A," required at least two unaffiliated payment card networks active on each debit card, even if one network processed only signature transactions and one handled only PIN transactions. See 75 Fed.Reg. at 81,749. The second, "Alternative B" required at least two active unaffiliated payment card networks for each type of authorization method — i.e., at least two to process PIN transactions and two to process signature. 75 Fed.Reg. at 81,749. In either case, issuers and networks could not inhibit a merchant's ability to direct the routing of an electronic debit transaction over any available network. Id. at 81,751.
More than 11,500 commenters — including several of the named plaintiffs, as well as various issuers, payment card networks, consumers, consumer advocates, trade associations and members of Congress — replied to the Board's request for comment. 76 Fed.Reg. at 43,394.
The Board's Final Rule was published on July 20, 2011 and became effective on October 1, 2011. See id. As its standard for assessing whether the interchange fee for a debit transaction is reasonable and proportional to the issuer's costs, the Board adopted "a modified version of proposed Alternative 2." Id. at 43, 404. It permits each issuer to receive a fee as high as twenty-one cents ($.21) per transaction plus an ad valorem amount of five basis points of the transaction's value (0.05%). 12 C.P.R. § 235.3(b).
The Board increased the allowable interchange fee (from twelve cents in Alternative 2 to twenty-one cents in the Final Rule) after concluding that the language and purpose of the Durbin Amendment allow the Board to consider additional costs not explicitly excluded from consideration by the statute. Id. at 43, 426-27. According to the Board, § 1693o-2(a)(4)(B)
In setting the final interchange transaction fee standard, the Board considered all costs for which it had data, other than those prohibited under subsection (a)(4)(B). Id. Based on survey data and public comments, the Board found that issuers incur transaction costs other than the variable ACS costs that the Board originally proposed as the only allowable costs in the interchange fee, and that "no electronic debit transaction can occur without incurring these [non-variable ACS] costs, making them ... specific to each and every electronic debit transaction" under the statute. Id. at 43, 427; see also id. at 43, 404. Consequently, the Board amended its final interchange transaction fee standard to include, in addition to variable ACS costs: (1) fixed costs related to processing a particular transaction, such as network connectivity and software, hardware, equipment, and labor; (2) transaction monitoring costs; (3) an allowance for fraud losses (the ad valorem component); and (4) network processing fees. Id. at 43,404, 43, 429-31.
As to the network non-exclusivity rule, the Board concluded that "[t]he plain language of the statute does not require that there be two unaffiliated payment card networks available to the merchant for each method of authentication." Id. at 43,447; see also id. ("[T]he statute does not expressly require issuers to offer multiple unaffiliated signature and multiple unaffiliated PIN debit card network choices on each card." (emphasis added)). Hence, the Board adopted Alternative A, which requires only that two unaffiliated networks be available for each debit card, not for each authorization method. 12 C.F.R. § 235.7(a)(2) & Official Cmt. 1; 76 Fed.Reg. at 43, 404.
On the same day that the Board adopted its Final Rule on debit card interchange fees and network non-exclusivity, it also published a separate Interim Final Rule on a proposed adjustment to the interchange fee for fraud-prevention costs under 15 U.S.C. § 1693o-2(a)(5). See 76 Fed.Reg. at 43, 478. The Board has since finished that rulemaking, and on August 2, 2012 it adopted a final rule governing the fraud-prevention cost adjustment. See 77 Fed.Reg. 46,258; 12 C.F.R. § 235.4.
On November 22, 2011, plaintiffs sued the Board, seeking a declaratory judgment
As individual retailers that accept debit cards and trade associations comprised of merchants, see supra p. 87, plaintiffs contend that the Final Rule is an unreasonable interpretation of the Durbin Amendment because it ignores Congress's directives regarding interchange fees and network exclusivity. See Am. Compl. ¶¶ 5, 11. As to the former, plaintiffs assert that the Durbin Amendment limits the Board's consideration of allowable costs to the "incremental cost" of "authorization, clearance and settlement of a particular electronic debit transaction," and that, by including other costs in the fee standard, the Board "acted unreasonably and in excess of its statutory authority." Id. ¶¶ 6, 70-73, 82-83. Regarding the latter, plaintiffs argue that the Board disregarded the plain meaning of the Durbin Amendment and misconstrued the statute by adopting a network non-exclusivity rule requiring all debit cards be interoperable with at least two unaffiliated payment networks, rather than requiring that all debit transactions be able to run over at least two unaffiliated networks. Id. ¶¶ 9-10, 91-93.
Plaintiffs moved for summary judgment on March 2, 2012, arguing that the Final Rule's interchange transaction fee and network non-exclusivity regulations should be declared invalid under the Administrative Procedure Act ("APA"), 5 U.S.C. § 706(2), because the Board impermissibly implemented the Durbin Amendment's statutory command and thus exceeded its authority. Pls.' Mot. for Summ. J. ("Pls.'s Mot.") at 1 [Dkt. #20]; Pis.' Mem. in Supp. of Pls.' Mot. for Summ. J. ("Pls.' Mem.") at 2 [Dkt. #20]. The Court permitted amicus curiae briefs to be filed by three different parties: (1) a consortium of major nationwide bank and credit union trade associations in the United States;
On April 13, 2012, the Board filed a cross-motion for summary judgment, contending that plaintiffs' claims lack merit and that the Board is entitled to judgment as a matter of law. Def.'s Cross-Mot. for Summ. J. ("Def.'s Cross-Mot.") at 1 [Dkt.
Summary judgment is appropriate when the record evidence demonstrates that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden is on the moving party to demonstrate an "absence of a genuine issue of material fact" in dispute. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. In a case involving judicial review of final agency action under the APA, however, "the Court's role is limited to reviewing the administrative record." Air Transp. Ass'n of Am. v. Nat'l Mediation Bd., 719 F.Supp.2d 26, 32 (D.D.C. 2010) (citations omitted). "[T]he function of the district court is to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to made the decision it did." Select Specialty Hosp.-Bloomington, Inc. v. Sebelius, 893 F.Supp.2d 1, 4 (D.D.C.2012) (citations and internal quotation marks omitted).
Under the APA, the Court must set aside agency action that exceeds the agency's "statutory jurisdiction, authority, or limitations." 5 U.S.C. § 706(2)(C). To determine whether an agency has acted outside its authority, I must apply the two-step framework under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). See Ass'n of Private Sector Colls. & Univs. v. Duncan, 681 F.3d 427, 441 (D.C.Cir.2012).
A Chevron analysis first requires the reviewing court to determine "whether Congress has directly spoken to the precise question at issue." Chevron, 467 U.S. at 842, 104 S.Ct. 2778. To resolve whether "the intent of Congress is clear" under this first step, id., the court must exhaust the "traditional tools of statutory construction," including textual analysis, structural analysis, and (when appropriate) legislative history, id. at 843 n. 9, 104 S.Ct. 2778; Bell Atl. Tel. Cos. v. FCC, 131 F.3d 1044, 1047 (D.C.Cir.1997). "If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778.
If after employing these tools, however, the Court concludes that the statute is silent or ambiguous on the specific issue, the Court moves on to step two and defers to any agency interpretation that is based on a permissible construction of the statute. Id. at 843, 104 S.Ct. 2778. An agency's construction is permissible "unless it is arbitrary or capricious in substance, or manifestly contrary to the statute." Mayo Found. for Med. Educ. & Research v. United States, ___ U.S. ___, 131 S.Ct. 704, 711, 178 L.Ed.2d 588 (2011) (citations and internal quotation marks omitted). "[T]he whole point of Chevron is to leave the discretion provided by the ambiguities of a statute with the implementing agency." Ass'n of Private Sector Colls., 681 F.3d at 441 (citations and internal quotation marks omitted).
Curiously, the Board contends in a footnote that plaintiffs have failed to establish Article III standing because they failed in their opening brief to provide affidavits or other evidence that set forth specific facts demonstrating standing. See Def.'s Mem. at 13 n. 7 (citing Sierra Club v. EPA, 292 F.3d 895, 899 (D.C.Cir.2002)). But reading on, the Sierra Club court explicitly recognized that:
292 F.3d at 899-900 (citation and internal quotation marks omitted).
Indeed, our Court of Appeals has expressly rejected the use of the Sierra Club rule as a procedural "gotcha" in cases where standing was reasonably thought to be self-evident. See Am. Library Ass'n v. FCC, 401 F.3d 489, 493-95 (D.C.Cir.2005); see also Fund for Animals, Inc. v. Norton, 322 F.3d 728, 733 (D.C.Cir.2003) ("Sierra Club, however, does not require parties to file evidentiary submissions in support of standing in every case. To the contrary, our decision made clear that `[i]n many if not most cases the petitioner's standing to seek review of administrative action is self-evident.'"). For instance, in American Library Association, our Circuit Court explained that interpreting Sierra Club as requiring long jurisdictional statements in opening briefs was inconsistent with precedent, a waste of judicial resources, and an unnecessary burden on litigants. 401 F.3d at 494. Indeed, the court went on to clarify that Sierra Club need only "remind[] petitioners challenging administrative actions that, when they have good reason to know that their standing is not self-evident, they should explain the basis for their standing at the earliest appropriate stage in the litigation." Id. at 493.
Here, plaintiffs had every reason to believe that their standing was self-evident and no cause to suspect that standing would be challenged in this court at all, much less in a footnote on summary judgment!
Plaintiffs contend that the Final Rule's interchange transaction fee standard, 12 C.F.R. § 235.3(b), is plainly foreclosed by the text, structure, and purpose of the Durbin Amendment and is arbitrary, capricious, and contrary to law. According to plaintiffs, the plain language and legislative history of the statute make clear which issuer costs may be included in the interchange transaction fee standard, and the Board's inclusion of other costs cannot survive scrutiny under Chevron's first step. The Board, meanwhile, takes the position that the Durbin Amendment is silent, and therefore ambiguous, with respect to issuer costs not explicitly addressed in the statute. And because the final interchange fee provision is a reasonable construction of the statute, says the Board, it is entitled to Chevron deference. For the following reasons, I agree with the plaintiffs.
Determining whether Congress has spoken to the precise question at issue through "the [statutory] language itself, the specific context in which that language is used, and the broader context of the statute as a whole" is, of course, this Court's first task. Robinson v. Shell Oil Co., 519 U.S. 337, 341, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997). Our Court of Appeals has directed this Court to use "all traditional tools of statutory interpretation, including text, structure, purpose, and legislative history, to ascertain Congress's intent at Chevron step one." Nat'l Cable & Telecomms., Ass'n v. FCC, 567 F.3d 659, 663 (D.C.Cir.2009) (citation and internal quotation marks omitted). If this examination yields a clear result, "then Congress has expressed its intention as to the question, and deference is not appropriate." Natural Res., Def. Council, Inc. v. Daley, 209 F.3d 747, 752 (D.C.Cir.2000).
To discern the text's plain meaning, the Court is to look to "the language of the statute itself." Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, ___ U.S. ___, 132 S.Ct. 1670, 1680, 182 L.Ed.2d 678 (2012) (citation omitted). "[W]hen the statute's language is plain, the sole function of the courts — at least where the disposition required by the text is not absurd — is to
An analysis of the statutory text, however "does not end here, but must continue to `the language and design of the statute as a whole.'" Am. Scholastic TV Programming Found. v. FCC, 46 F.3d 1173, 1178 (D.C.Cir.1995) (quoting Fort Stewart Sch. v. FLRA, 495 U.S. 641, 645, 110 S.Ct. 2043, 109 L.Ed.2d 659 (1990)).
The Durbin Amendment instructs the Board to ensure that any interchange fee charged by an issuer "is reasonable and proportional to the cost incurred by the issuer with respect to the transaction," § 1693o-2(a)(3), and in so doing it must "distinguish between" two categories of costs. Id. § 1693o-2(a)(4)(B)(i)-(ii). Plaintiffs contend that these categories bifurcate the entire universe of costs into two, and only two, groups: (1) costs that are "incremental" or variable, incurred by an issuer for its role in the "authorization, clearance, or settlement," and that relate to a "particular" or single electronic debit transaction, which "shall be considered," § 1693o-2(a)(4)(B)(i) (emphasis added); and (2) "other costs" "incurred by an issuer which are not specific to a particular electronic debit transaction," which "shall not be considered," § 1693o-2(a)(4)(B)(ii) (emphasis added). The Board disagrees, arguing that subsection (a)(4)(B) is silent when it comes to costs that are specific to a particular electronic debit transaction but that are not incremental ACS costs, as those costs do not fit into either subsection (a)(4)(B)(i) or (a)(4)(B)(ii). According to the Board, this creates ambiguity that the Board has the discretion to resolve. How convenient.
Starting with subsection (a)(4)(B)'s text, I have no difficulty concluding that the statutory language evidences an intent by Congress to bifurcate the entire universe of costs associated with interchange fees. Indeed, Congress directed the Board to "distinguish between" — or, according to its plain and ordinary meaning, "separate into different categories" or "make a distinction"
Furthermore, Congress used the inclusive phrase "other costs," as opposed to just "costs," to refer to those costs not to be considered in the interchange transaction fee standard. The plain import of Congress's word choice, according to the ordinary definition of "other" and relevant case law, is that this second, prohibited category of "other costs" was intended to subsume all costs not explicitly addressed in the first, permissible category of costs. See Merriam-Webster's Collegiate Dictionary 878-79 (11th ed.2009) (defining "other" as "being the one (as of two or more) remaining or not included; being the one or ones distinct from that or those first mentioned or implied").
The Board's counterargument — that Congress directed it not to consider "other costs incurred by an issuer which are not specific to a particular electronic debit transaction," § 1693o-2(a)(4)(B)(ii) (emphasis added), meaning that only costs "not specific to a particular ... transaction" are barred from consideration — is wholly unpersuasive. See Def.'s Mem. at 20-21. The non-restrictive pronoun "which" is a descriptor, rather than a qualifier, and Congress has repeatedly utilized this term to further describe the preceding phrase — here, "other costs" — rather than to condition or limit it. See United States v. Indoor Cultivation Equip. from High Tech Indoor Garden Supply, 55 F.3d 1311, 1315 (7th Cir.1995) (concluding that Congress's use of the pronoun "which," as in "[a]ll conveyances, including aircraft, vehicles, or vessels, which are used to ... facilitate [drug transactions]," did not limit the meaning of the word it amended, "conveyance," to a vehicle or vessel used or intended to be used to facilitate a drug transaction).
Finally, statements by Senator Richard J. Durbin, the Amendment's chief sponsor, confirm that Congress intended to bifurcate the universe of costs into incremental ACS costs includable in the interchange transaction fee standard and all other costs to be excluded. Specifically, in addressing the meaning of the Amendment on the floor of the Senate prior to its final passage, Senator Durbin stated:
Further parsing of the statute confirms that Congress intended to narrow the scope of costs considered in the interchange transaction fee standard. Subsection (a)(4)(B)(i) directs the Board to include in the standard those ACS costs that are "incremental [to the] cost incurred by an issuer for the role of the issuer in ... a particular electronic debit transaction." § 1693o-2(a)(4)(B)(i) (emphasis added). The term "incremental" limits the includable costs to "variable, as opposed to fixed," ACS costs. Me. Pub. Serv. Co. v. FERC, 964 F.2d 5, 9 (D.C.Cir.1992).
In addition, subsection (a)(4)(B)(ii) instructs the Board to exclude from the standard any "other costs incurred by an issuer which are not specific to a particular... transaction." § 1693o-2(a)(4)(B)(ii)
The Board contends that the statute's failure to define the terms "incremental cost" or "authorization, clearance, or settlement," or to delineate which types of costs are "not specific to a particular electronic debit transaction," renders those terms ambiguous, thereby giving the Board the authority to fill those statutory gaps. See Def.'s Mem. at 26-27. Not quite! If I were to accept the Board's argument, then every term in the statute would have to be specifically defined or otherwise be deemed ambiguous. This result makes no sense, and more importantly, it is not the law. When a term is not defined in a statute, a court must assume that "the legislative purpose is expressed by the ordinary meaning of the words used." AT & T, 131 S.Ct. at 1182; United States v. Locke, 471 U.S. 84, 95, 105 S.Ct. 1785, 85 L.Ed.2d 64 (1985) (distinguishing "filling a gap left by Congress' silence" from "rewriting rules that Congress has affirmatively and specifically enacted") (citation omitted).
"[T]he meaning of statutory language, plain or not, depends on context," King v. St. Vincent's Hasp., 502 U.S. 215, 221, 112 S.Ct. 570, 116 L.Ed.2d 578 (1991), and the relevant provisions, statutory design, and legislative history here clearly support my reading of the statute. First, the statute's information collection provision explicitly requires public disclosure only of information "concerning the costs incurred, and interchange transaction fees charged or received ... in connection with the authorization, clearance or settlement of electronic debit transactions." § 1693o-2(a)(3)(B) (emphasis added). That disclosure is limited to the same costs specified in subsection (a)(4)(B)(i) reinforces that those ACS costs are the only ones Congress intended to include in the interchange transaction fee standard.
Subsection (a)(4)(A) of the statute also directs the Board to consider the "functional similarity" between "electronic debit transactions" and "checking transactions that are required within the Federal Reserve bank system to clear at par" when prescribing standards used to assess whether an interchange transaction fee is reasonable and proportional to the issuer's transactions. § 1693o-2(a)(4)(A) (emphasis added). The Board is thus required to consider how debit and checking transactions are "like" or "[r]esembling though not completely identical" in terms of their "capab[ility] of performing" or "ab[ility] to perform a regular function."
The Board argues that the plain language of subsection (a)(4)(A) merely requires the Board to consider the functional similarity between electronic debit transactions and checking transactions in determining its interchange fee standard (which it did) and does not preclude the Board's consideration of differences. "Were courts to presume a delegation of power absent an express withholding of such power," however, "agencies would enjoy virtually limitless hegemony, a result plainly out of keeping with Chevron[.]" Ry. Labor Execs. Ass'n v. Nat'l Mediation Bd., 29 F.3d 655, 671 (D.C.Cir.1994); see also Am. Bar Ass'n v. FTC, 430 F.3d 457, 468 (D.C.Cir. 2005) ("[I]f there is the sort of ambiguity that supports an implicit congressional delegation of authority to the agency to make a deference-worthy interpretation of the statute, we must look elsewhere than the [statute's] failure to negate[.]"). In fact, it defies common sense to read an explicit directive to consider "functional similarity" as authorization to consider differences, as well
Lastly, subsection (a)(5)(A)(i) directs the Board "to make allowance for costs incurred by the issuer in preventing fraud" via an "adjustment to the fee amount received or charged by an issuer" under the interchange fee standard. § 1693o-2(a)(5)(A)(i) (emphasis added). At first glance, Congress's choice of words here appears to sanction a wholesale inclusion of fraud-prevention costs within the interchange transaction fee standard. However, subsection (a)(5)(A)(i) limits "any fraud-related adjustment" to the amount "reasonably necessary ... to prevent[] fraud in relation to electronic debit transactions involving that issuer," and (a)(5)(A)(ii) conditions that adjustment on an issuer's compliance with fraud-related standards that "require issuers to take effective steps to reduce the occurrences and costs of, and costs from, fraud in relation to electronic debit transactions." § 1693o-2(a)(5)(A)(i)(ii). Senator Durbin's discussion of subsection (a)(5) sheds further light on this provision:
Accordingly, I find that the text and structure of the Durbin Amendment, as reinforced by its legislative history, are clear with regard to what costs the Board may consider in setting the interchange fee standard: Incremental ACS costs of individual transactions incurred by issuers may be considered. That's it!
The Durbin Amendment is explicit about what costs the Board could consider in setting the interchange transaction fee, and the Board was required "to give effect to the unambiguously expressed intent of Congress." Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778. As the "final authority on issues of statutory construction," federal courts are charged with "reject[ing] administrative constructions which are contrary to clear congressional intent." Id. at 843 n. 9, 104 S.Ct. 2778. For the following reasons, I reject the Board's construction of the Durbin Amendment as non-compliant with Congress's clear mandate.
First, the Board's understanding that a third category of costs can be recovered under the interchange transaction fee standard is irreconcilable with the statute. In its Final Rule, the Board concluded that it could, in its discretion, factor into the interchange fee any costs "that are specific to a particular electronic debit transaction but that are not incremental costs related to the issuer's role in authorization, clearance, and settlement." 76 Fed.Reg. at 43, 426. According to the Board, the statute is silent as to costs not addressed in § 1693o-2(a)(4)(B)(i) or (ii), and Congress did "not restrict the factors the Board may consider in establishing standards for assessing whether interchange transaction fees are reasonable and proportional to cost." 76 Fed.Reg. at 43, 424.
In exercising this purported discretion, the Board reads the statutory language prohibiting it from considering costs "not specific to a particular electronic debit transaction," § 1693o-2(a)(4)(B)(ii), as prohibiting it from considering only "those costs that are not incurred in the course of effecting any electronic debit transaction," 76 Fed.Reg. at 43, 426 (emphasis added). The Board, to its credit, still did not consider costs associated with corporate overhead (e.g., executive compensation), establishing and maintaining an account relationship, debit card production and delivery, marketing, research and development, insufficient funds handling, network membership fees, reward programs, and customer support, id. at 43,427-29. But the Board did, contrary to the expressed will of Congress, consider "any cost that is not prohibited — i.e., any cost that is incurred in the course of effecting an electronic debit transaction," id. at 43, 426, including fixed costs (i.e., network connectivity and software, hardware, equipment, and associated labor), network processing fees, transaction monitoring,
This interpretation runs completely afoul of the text, design and purpose of the Durbin Amendment. By improperly narrowing the scope of excluded costs in subsection (a)(4)(B)(ii) to only those costs "not incurred in the course of effecting any electronic debit transaction," the Board expanded the range of allowable costs in subsection (a)(4)(B)(i) to "any cost that is incurred in the course of effecting an electronic debit transaction." 76 Fed.Reg. at 43,326. In so doing, the Board not only ignored critical statutory terms such as "distinguish between," "other," "specific," "particular," "incremental," and "authorization, clearance, or settlement"
Under the Final Rule, it is inconsequential whether costs are variable and result only from an individual transaction or are fixed and common to all transactions; so long as a cost is incurred to effect "debit card transactions as a whole," the Board concluded that it may be considered in its interchange fee standard. 76 Fed.Reg. at 43,426; see also Def.'s Mem. at 27 ("The Board further determined that a cost is specific to a particular electronic debit transaction if no such transaction can occur without incurring that cost."). Please! This reading of the law contradicts Congress's clear mandate that the Board is precluded from considering all costs, other than an issuer's variable ACS costs related to an individual debit transaction, in setting the interchange standard. Costs that are "not specific to a particular debit transaction," § 1693o-2(a)(4)(B)(ii) (emphasis added), simply are not the same as costs that are "not specific to debit transactions as a whole," 76 Fed.Reg. at 43, 426 (emphasis added). And "the incremental cost incurred by an issuer for the role of the issuer in the authorization, clearance, or settlement of a particular electronic debit transaction,"§ 1693o-2(a)(4)(B)(i), is not the same as "any cost that is incurred in the course of effecting an electronic debit transaction," 76 Fed.Reg. at 43, 426 (emphasis added).
In short, the Board's interpretation is utterly indefensible. As explained above, the statute is not silent or ambiguous. Rather, the plain text of subsection (a)(4)(B) and the statutory structure and legislative history of the Durbin Amendment clearly demonstrate that Congress intended for the Board to exclude all "other costs" not specified in the statute as requiring consideration in the interchange transaction fee standard. That Congress could have used other, more definitive language, as the Board argues, see Def.'s Mem. at 18-19, is irrelevant when its statutory import is nonetheless clear.
Although the Board recognizes that the plain language of subsection (a)(5)(A) provides a separate adjustment to the interchange transaction fee standard for fraud-prevention costs, it nonetheless takes the position that the statute does not prohibit the consideration of those costs when setting the interchange fee standard. See Def.'s Mem. at 43. No so. It would be nonsensical for Congress to make fraud-prevention costs the basis for a conditional adjustment to the interchange fee standard, and at the same time implicitly allow for fraud-prevention costs to factor into the standard itself without any conditions being met. To the contrary, by linking the fraud-prevention adjustment with a statutory requirement that the issuer comply with fraud-related standards, Congress sought to prevent what the Board has allowed: rewarding every issuer with an interchange fee increase to cover fraud-prevention costs, regardless of whether the issuer complies with the fraud-related standards established under subsection (a)(5)(B). As Senator Durbin explained in a comment letter, "The current system of network-established interchange fees creates precisely the wrong incentives for issuers when it comes to fraud prevention" because "[u]nder the current system, all issuing banks in a network receive the same network-established interchange fee rates" regardless of whether they minimize actual fraud. Durbin Comments, supra note 5, at 9. "In contrast to the current inefficient system, [15 U.S.C. § 1693o-2(a)(5)] will incentivize regulated issuing banks to reduce fraud by allowing banks that take successful fraud prevention steps to receive increased interchange fees." Id.
Ultimately, the Board asserts that it was given broad discretion to fill statutory gaps in establishing the interchange transaction fee standard. See Def.'s Mem. at 23-26. But even if this were true, which it is not, such discretion does not give the Board the authority to ignore the expressed will of Congress. See Bd. of Governors of the Fed. Reserve Sys. v. Dimension Fin. Corp., 474 U.S. 361, 374, 106 S.Ct. 681, 88 L.Ed.2d 691 (1986) ("The statute may be imperfect, but the Board has no power to correct flaws that it perceives in the statute it is empowered to administer. Its rulemaking power is limited to adopting regulations to carry into effect the will of Congress as expressed in the statute."); Ry. Labor Execs. Ass'n, 29 F.3d at 671 ("`Congress has directly spoken to the precise question at issue' in this case ... so there is no gap for the agency to fill." (citation omitted)). By including in the interchange fee standard costs that are expressly prohibited by the statute, the final regulation represents a significant price increase over pre-Durbin Amendment rates for small-ticket debit transactions under the $12 threshold. See 7-Eleven Amicus Br. at 17-18; see also Durbin Amicus Br. at 23 ("[B]y setting a high fee cap that far exceeds the customary fees levied on small ticket transactions, the [Board] has given its regulatory blessing to the setting of interchange rates by Visa and MasterCard that are over three times larger than rates previously charged on small dollar transactions."). Congress did not empower the Board to make policy judgments that would result in significantly higher interchange rates. Accordingly, the Board's interpretation of the interchange fee standard is foreclosed by the law and must be invalidated under Chevron's first step.
Subsection (b)(1)(A) of the Durbin Amendment directs the Board to issue regulations prohibiting issuers and networks from "restrict[ing] the number of payment card networks on which an electronic debit transaction may be processed"
Plaintiffs argue that this interpretation disregards the statute's language and purpose, which require that merchants be given a choice between multiple unaffiliated networks not only for each card, but for each transaction. They say that the Board's non-exclusivity regulation cannot survive Chevron step one because it contravenes both the letter and spirit of the Durbin Amendment. The Board characterizes plaintiffs' arguments as being "unmoored from the statutory text," which the Board says is ambiguous on this issue. Moreover, the Board claims that its interpretation of the law is permissible and fully implements Congress's directive. I disagree. The plaintiffs' interpretation is, in my judgment, the one true to Congress's intent. How so?
First, the Court must determine "whether Congress has directly spoken to the precise question at issue," Chevron, 467 U.S. at 842, 104 S.Ct. 2778, by considering whether "the statute unambiguously forecloses the agency's interpretation, and therefore contains no gap for the agency to fill," Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 982-83, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005). In determining whether Congress has spoken to the issue, the Court, of course, begins with the plain meaning of the statutory text. S. Cal. Edison, 195 F.3d at 23.
The language of the network non-exclusivity provision favors the plaintiffs' interpretation at Chevron step one. First, there is no question that subsection (b)(1)(A) mandates that "an issuer or payment card network shall not ... restrict the number of payment card networks on which an electronic debit transaction may be processed" to fewer than two unaffiliated networks, and that the Board must promulgate regulations to enforce this restriction. § 1693o-2(b)(1)(A) (emphasis added); see Zivotofsky v. Sec'y of State, 571 F.3d 1227, 1243 (D.C.Cir.2009) ("`Shall' has long been understood as `the language of command.'" (citation omitted)). Put differently, the statute instructs the Board to ensure that issuers and networks stop restricting merchants' ability to route each transaction over different networks. Congress's focus was on the number of networks over which each transaction — as opposed to each debit card — can be processed.
Although the Board admits that the statute calls for debit cards to be able to function over two or more unaffiliated networks, it insists that the law is silent as to whether merchants must have routing choices for each transaction. Def.'s Reply to Pis.' Reply Mem. in Supp. of Pis.' Mot. for Summ. J. and in Opp'n to Def.'s Mot. for Summ. J. ("Def.'s Reply") at 31 [Dkt. #32]. Congress resolved this uncertainty, however, by using the statutorily defined term "electronic debit transaction." See § 1693o-2(c)(5) (defining "electronic debit
Indeed, the Durbin Amendment's legislative history confirms my reading of the statute. It is axiomatic when interpreting a Congressional statute that this Court must consider, among other things, the problem Congress sought to resolve when it adopted the law at issue. PDK Labs., Inc. v. DEA, 362 F.3d 786, 796 (D.C.Cir. 2004). Even when the statute's plain meaning is clear from its terms, legislative history can be "equally illuminating." Planned Parenthood Fed'n of Am., Inc. v. Heckler, 712 F.2d 650, 656-57 (D.C.Cir. 1983).
As Senator Durbin explained, the Amendment was enacted at a time when network fees were on the rise due to exclusivity deals between dominant card networks and issuers.
75 Fed.Reg. at 81,748.
Congress adopted the network non-exclusivity and routing provisions "to inhibit the continued consolidation of the dominant debit networks' market power and to ensure competition and choice in the debit network market." Durbin Comments, supra note 5, at 11; see also 156 Cong. Rec. S5,926 (daily ed. July 15, 2010) (statement of Sen. Richard J. Durbin) ("All these provisions say is that [f]ederal law now blocks payment card networks from engaging in certain specific enumerated anti-competitive practices, and the provisions describe precisely the boundaries over which payment card networks cannot cross with respect
Accordingly, it defies both the letter and purpose of the Durbin Amendment to read the statute as allowing networks and issuers to continue restricting the number of networks on which an electronic debit transaction may be processed to fewer than two per transaction. Indeed, prior to the Amendment's passage, Senator Durbin explicitly confirmed that Congress wanted subsection (b)(1)(A) to ensure the availability of at least two competing networks for each method of cardholder authentication on which an electronic debit transaction may be processed:
156 Cong. Rec. S5,926 (daily ed. July 15, 2010) (statement of Sen. Richard J. Durbin) (emphases added). In short, Congress adopted the network non-exclusivity and routing provisions to ensure that for multiple unaffiliated routing options were available for each debit card transaction, regardless of the method of authentication. The Board's Final Rule not only fails to carry out Congress's intention; it effectively countermands it!
The Board's network non-exclusivity regulation requires at least two unaffiliated payment card networks be enabled on each debit card, meaning that a card complies with the regulation if it has been enabled with only one PIN network and one signature network. 12 C.F.R. § 235.7(a)(2) & Official Cmt. 1; see also 76 Fed.Reg. at 43, 447-48. According to the Board, "[t]he plain language of the statute does not require that there by two unaffiliated payment card networks available to the merchant for each method of authentication." 76 Fed.Reg. at 43, 447. I disagree.
The Board's interpretation of subsection (b)(1)(A) cannot be reconciled with the plain meaning or spirit of the statute because it still allows networks and issuers to make only one network available for many transactions. Indeed, by the Board's own admission, several common transaction types cannot be authenticated using the PIN method, leaving signature-debit as the only available option. See 76 Fed.Reg. 43,395. "[H]otel stays or car rentals," not to mention "Internet, telephone, and mail transactions," are typically incompatible with PIN authorization technology. Id. Under a rule that allows issuers to provide just one signature network and one PIN network per card, merchants in these signature-only industries are left with no network options. See 75 Fed.Reg. at 81,748. This result cannot be reconciled with Congress's goal of providing all merchants with a choice between multiple unaffiliated networks for every transaction.
The Board contends that where a merchant can process both signature and PIN transactions, the customer determines the authentication method at the point of sale by choosing "debit" for PIN authentication
The Board's network non-exclusivity regulation is also inconsistent with other related statutory provisions. For example, subsection (b)(1)(B) instructs the Board to establish regulations that bar issuers and networks from "inhibit[ing] the ability of any person who accepts debit cards for payments to direct the routing of electronic debit transactions for processing over any payment card network that may process such transactions." § 1693o-2(b)(1)(B). This sister provision to subsection (b)(1)(A) makes sense only if merchants have a choice between multiple networks. It would defy all logic for Congress to safeguard merchants' ability to route transactions over the networks of their choosing while at the same time leaving it up to the Board to decide whether issuers give merchants any choice in the first place. See Greenlaw v. United States, 554 U.S. 237, 251, 128 S.Ct. 2559, 171 L.Ed.2d 399 (2008) ("We resist attributing to Congress an intention to render a statute so internally inconsistent."); Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 575, 102 S.Ct. 3245, 73 L.Ed.2d 973 (1982) ("It is true that interpretations of a statute which would produce absurd results are to be avoided if alternative interpretations consistent with the legislative purpose are available."). Even the Board has recognized that its interpretation of subsection (b)(1)(A) limits the effectiveness of subsection (b)(1)(B) under the Durbin Amendment.
The Board further defends its network non-exclusivity regulation by pointing out that it is not "the most aggressively pro-merchant position" that the Board could have taken. Def.'s Reply at 27. The Board obviously misses the point! Where a court concludes that a statute is unambiguous, an agency's interpretation must be rejected if it is inconsistent with clearly expressed legislative intent. See Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778; Vill. of Barrington, 636 F.3d at 659-60. It is not about whether the rule favors merchants or issuers; rather, it is about whether the rule implements Congress's will. And Congress's use of clear, defined language in the network non-exclusivity and routing provisions leaves no ambiguity or statutory gap for the agency to fill. See United States v. Home Concrete & Supply, LLC, ___ U.S. ___, 132 S.Ct. 1836, 1843, 182 L.Ed.2d 746 (2012) ("Chevron and later cases find in unambiguous language a clear sign that Congress did not delegate gap-filling authority to an agency[.]").
Lastly, the Board noted that its two-networks-per-card approach "minimiz[es] the compliance burden on institutions" and
The Court concludes that the proper remedy here is to remand to the Board with instructions to vacate the Board's interchange transaction fee (12 C.F.R. § 235.3(b)) and network non-exclusivity (12 C.F.R. § 235.7(a)(2)) regulations. See 5 U.S.C. § 706(2) (directing that a court "shall ... set aside agency action ... found to be arbitrary, capricious ... or otherwise not in accordance with law."). Although I recognize that vacatur is not required by our Circuit, Advocates for Highway & Auto Safety v. Fed. Motor Carrier Safety Admin., 429 F.3d 1136, 1151 (D.C.Cir.2005), I conclude that both factors to be considered when deciding whether to vacate — (1) "the seriousness of the [regulation's] deficiencies" and (2) "the disruptive consequences of an interim change that may itself be changed," Allied-Signal Inc. v. U.S. Nuclear Regulatory Comm'n, 988 F.2d 146, 150-51 (D.C.Cir. 1993) (citation omitted) — weigh in favor of vacating the specified regulations before remanding to the Board.
First, the interchange transaction fee and network non-exclusivity regulations are fundamentally deficient. It appears that the Board completely misunderstood the Durbin Amendment's statutory directive and interpreted the law in ways that were clearly foreclosed by Congress. Because "[t]he Court cannot be sure that the agency will interpret the statute in the same way and arrive at the same conclusion after further review," Int'l Swaps & Derivatives Ass'n v. U.S. Commodity Futures Trading Comm'n, 887 F.Supp.2d 259, 284 (D.D.C.2012), let alone whether, "on further judicial review, this or a similar Final Rule will withstand challenge under the APA," Humane Soc'y of U.S. v. Kempthorne, 579 F.Supp.2d 7, 21 (D.D.C.
Second, any disruptive effect of vacatur can be curtailed by a stay. This Court is mindful that interchange and network fees are critical components of the debit card system, and that the Board's Final Rule has been in effect since October 1, 2011, such that regulated interests have already made extensive commitments in reliance on it.
To properly effect the stay of vacatur, two issues remain: (1) the appropriate length of the stay; and (2) whether current standards should remain in place until they are replaced by valid regulations or the Board should develop interim standards sufficient to allow the Court to lift the stay. See, e.g., Friends of the Earth, Inc. v. EPA, 446 F.3d 140, 148 (D.C.Cir. 2006); Cement Kiln Recycling Coal. v. EPA, 255 F.3d 855, 872 (D.C.Cir.2001); Columbia Falls Aluminum Co. v. EPA, 139 F.3d 914, 924 (D.C.Cir.1998); Anacostia Riverkeeper, 713 F.Supp.2d at 52-55. Because the parties failed to address the proper remedy in their motions, the Court will invite supplemental briefing on these issues, keeping in mind that I am inclined toward a stay of vacatur "for months, not years," Natural Res. Def. Council v. EPA, 489 F.3d 1250, 1265 (D.C.Cir.2007) (Rogers, J., concurring in part and dissenting in part) (citations omitted).
For the foregoing reasons, the Court GRANTS plaintiffs' Motion for Summary Judgment and DENIES defendant's Cross-Motion for Summary Judgment. Accordingly, the Court will vacate the interchange transaction fee (12 C.F.R. § 235.3(b)) and network non-exclusivity (12 C.F.R. § 235.7(a)(2)) regulations, staying vacatur until further Order of this Court, and will remand to the Board for further proceedings consistent with this Memorandum
For the reasons set forth in the Memorandum Opinion entered this date, it is this 31st day of July, 2013, hereby
