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IN RE CURRENCY CONVERSION FEE ANTITRUST LITIGATION

June 16, 2005.

IN RE CURRENCY CONVERSION FEE ANTITRUST LITIGATION.


The opinion of the court was delivered by: WILLIAM PAULEY, District Judge

MEMORANDUM AND ORDER

These class actions are consolidated for pretrial proceedings. Plaintiffs allege violations of the Sherman Act, 15 U.S.C. § 1 et seq., the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq., and the South Dakota Deceptive Trade Practices Act ("DTPA"), arising from an alleged price-fixing conspiracy among VISA, MasterCard and their member banks (collectively "defendants") concerning foreign currency conversion fees. Plaintiffs move for reconsideration of this Court's March 9, 2005 Memorandum and Order with respect to those portions that resulted from defendants' motions to stay litigation pending arbitration. For the reasons set forth below, plaintiffs' motion is denied.

BACKGROUND

  The factual background underlying these actions is set forth in this Court's prior opinions. See In re Currency Conversion Fee Antitrust Litig., 361 F. Supp. 2d 237 (S.D.N.Y. 2005) ("Currency Conversion III"); In re Currency Conversion Fee Antitrust Litig., 224 F.R.D. 555 (S.D.N.Y. 2004) ("Currency Conversion II"); In re Currency Conversion Fee Antitrust Litig., 265 F. Supp. 2d 385 (S.D.N.Y. 2003) ("Currency Conversion I"). PROCEDURAL HISTORY

  On November 12, 2003, plaintiffs moved for class certification. Defendants opposed plaintiffs' motion, arguing inter alia that "most putative class members voluntarily signed a binding arbitration agreement with their credit card issuers" that precludes their participation in the defined classes. Currency Conversion II, 224 F.R.D. at 569. Defendants also requested that cardholders with binding arbitration agreements be estopped from litigating their claims against other card issuing banks and the network defendants. Currency Conversion II, 224 F.R.D. at 570. This Court rejected that request with respect to the non-issuing banks "because the non-issuing defendant banks were not parties to those agreements, and the contract provisions did not extend to them." Currency Conversion II, 224 F.R.D. at 570.

  Subsequently, on November 3, 2004, defendants filed a joint motion for reconsideration, arguing that the Second Circuit's intervening decision in JLM Industries, Inc. v. Stolt-Nielsen SA, 387 F.3d 163 (2d Cir. 2004), requires this Court to apply the estoppel doctrine to claims against non-issuing banks and the network defendants. In addition, defendants jointly moved to stay litigation pending arbitration. This Court agreed, holding that the "arbitration agreements entered into before this litigation are enforceable against the cardholders by the signatories, network defendants and the non-signatory banks," based on the estoppel doctrine enunciated in JLM. Currency Conversion III, 361 F. Supp. 2d at 245. Plaintiffs now move for reconsideration of only those portions that resulted from defendants' stay motions. (Plaintiffs' Reply in Support of Motion for Reconsideration, dated Apr. 27, 2005 ("Pl. Reply") at 5.) DISCUSSION

  I. Motion for Reconsideration Standard

  Motions for reconsideration are governed by Local Civil Rule 6.3, which is "narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the court." Dietrich v. Bauer, 76 F. Supp. 2d 312, 327 (S.D.N.Y. 1999). A motion for reconsideration must include "a memorandum setting forth concisely the matters or controlling decisions which counsel believes the court has overlooked." Local Rule 6.3; see also Consol. Gold Fields v. Anglo Am. Corp., 713 F. Supp. 1457, 1476 (S.D.N.Y. 1989); Dietrich, 76 F. Supp. 2d at 327. Thus, a motion for reconsideration cannot assert new arguments or claims which were not before the court on the original motion. See, e.g., Kunica v. St. Jean Fin., Inc., 63 F. Supp. 2d 342, 346 (S.D.N.Y. 1999) ("[A] party in its motion for reargument may not advance new facts, issues or arguments not previously presented to the court." (citation and internal quotation marks omitted)).

  The decision to grant or deny a motion for reconsideration is within the sound discretion of the district court. A motion for reconsideration is an "extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources." In re Health Mgmt. Sys., Inc. Sec. Litig., 113 F. Supp. 2d 613, 614 (S.D.N.Y. 2000) (citation and internal quotation marks omitted).

  II. Waiver of Arbitration Rights

  "[T]here is a strong presumption in favor of arbitration[, and] waiver of the right to arbitration is not to be lightly inferred." Coca-Cola Bottling Co. v. Soft Drink & Brewery Workers Union Local 812, 242 F.3d 52, 57 (2d Cir. 2001) (internal quotation marks omitted); see Oldroyd v. Elmira Sav. Bank, FSB, 134 F.3d 72, 76 (2d Cir. 1998). Any doubts regarding the issue of waiver should be resolved in favor of arbitration. See PPG Indus., Inc. v. Webster Auto Parts Inc., 128 F.3d 103, 107 (2d Cir. 1997); see also Leadertex, Inc. v. Morganton Dyeing & Finishing Corp., 67 F.3d 20, 25 (2d Cir. 1995) (citing Moses H. Cone Mem'l. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)). "The waiver determination necessarily depends upon the facts of the particular case and is not susceptible to bright line rules." Cotton v. Slone, 4 F.3d 176, 179 (2d Cir. 1993).

  "A party seeking to prove waiver of a right to arbitrate must demonstrate (1) knowledge of an existing right to compel arbitration; (2) acts inconsistent with that existing right; and (3) prejudice to the party opposing arbitration resulting from such inconsistent acts." Britton v. Co-op Banking Group, 916 F.2d 1405, 1412 (9th Cir. 1990); see also Ivax Corp. v. B. Braun of Am., Inc., 286 F.3d 1309, 1315-16 (11th Cir. 2002); Stifel, Nicolaus & Co. v. Freeman, 924 F.2d 157, 158 (8th Cir. 1991).

  A. VISA and MasterCard

  Plaintiffs argue that this Court should find that defendants VISA and MasterCard (collectively, the "network defendants") waived their right to stay litigation pending arbitration under the equitable estoppel doctrine. (Plaintiffs' Memorandum in Support of Motion for Reconsideration, dated Mar. 23, 2005 ("Pl. Mem.") at 1.) Plaintiffs contend that while this Court found that Chase and Citibank waived their right to stay litigation, it did not address the issue with respect to VISA and MasterCard. (Pl. Mem. at 1.) They further argue that the network defendants should have moved to compel arbitration based on the estoppel doctrine after this Court's July 7, 2003 opinion. By way of background, on July 7, 2003, this Court ruled on the motion by defendants Bank One Delaware (f.k.a. First USA), Bank of America, MBNA and their respective parent corporations to refer the claims against them by their own cardholders to arbitration.*fn1 Currency Conversion I, 265 F. Supp. 2d 385. As there were no MBNA cardholder plaintiffs at that time, this Court did not consider whether their claims belonged in arbitration. Currency Conversion I, 265 F. Supp. 2d at 398. However, this Court held that Bank One Delaware (f.k.a. First USA) and Bank of America cardholders were required to proceed to arbitration. Currency Conversion I, 265 F. Supp. 2d at 416. Specifically, this Court held ...


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