Take the Fifth

Designated for publication

• Pulse Network, L.L.C. v. Visa, Inc., 18-20669, appeal from S.D. Tex.
  • Duncan, J. (Smith, Willett, Duncan), antitrust, Sherman Act, recusal
  • Reversing in part dismissal of plaintiff’s Sherman Act claims for lack of antitrust standing, remanding for further proceedings, and directing reassignment to a different judge.
  • Pulse, a debit-network provider, brought suit against Visa in 2014, alleging that three policies instituted by Visa amounted to antitrust violations under the Sherman Act: (1) requirement that all issuers enable Visa’s Pinless PAVD system, guaranteeing that Visa can compete for PIN transactions on every Visa-branded card, and not just signature-based transactions; (2) institution of a Fixed Acquirer Network Fee (“FANF”) that imposed on merchants a fixed monthly fee for the right to accept Visa-branded debit cards, along with a lower per-transaction fee that incentivized merchants to route debit transactions over Visa’s debit network in order to recoup the FANF; and (3) institution of volume-based agreements with issuers and merchants that further incentivized merchants and issuers to route a certain number of debit transactions through the Visa network each month.
  • The suit sat in district court before Judge Lynn Hughes for three years, with little discovery allowed, before Visa moved for summary judgment on the merits and on antitrust standing, which motion was granted approximately a year later. The district court held that Pulse had suffered no injury-in-fact from Visa’s FANF, because the second biggest competitor in the debit network market, MasterCard, had instituted similar fixed fees that would prevent Pulse from necessarily gaining more business if Visa’s were invalidated. The district court also held that Pulse had suffered no antitrust injury because the injury from Visa’s policies was inflicted on merchants and issuers and not on competitors like Pulse. The district court therefore also held that Pulse was too remote of a plaintiff, that merchants, issuers, and acquirers were more directly positioned to challenge Visa’s policies.
  • The Court held that Pulse did not have antitrust standing to challenge the Visa’s PAVD requirement. “[T]he core of Pulse’s alleged injury,” held the Court, was that “merchants, when given the option of Visa (through PAVD) or Pulse, are choosing Visa. Pulse, understandably, would prefer that merchants be denied that choice. Antitrust law does not assist Pulse in achieving that goal. Loss from competition itself—that is, loss in the form of customers’ choosing the competitor’s goods and services over the plaintiff’s—does not constitute antitrust injury, even if the defendant is violating antitrust laws in order to offer customers that choice.”
  • The Court held, however, that Pulse does have antitrust standing to challenge the FANF scheme. The Court held that Pulse might not have antitrust standing if it were only challenging the lower per-transaction fees, but that “Pulse claims more than price competition is afoot[.] … Instead of improving its product or competing on price, however, Visa began charging the FANF to merchants—and then using some of those revenues to reduce per-transaction fees. This integrated fee structure, argues Pulse, forces merchants to pay a higher total cost (fixed plus per-transaction fees) than before, and yet Visa’s market share and profits have recovered. This alleged scheme inflicts antitrust injury on Pulse. Under Pulse’s theory, it doesn’t lose customers to Visa in a fair fight over per-transaction fees. Rather, Pulse loses customers because Visa abuses its dominance in the debit card market. Merchants have no choice but to pay Visa’s high fixed monthly fee. They recoup that expense by routing more transactions through Visa’s network, which charges lower per-transaction fees than competitors. But Visa can achieve that only by leveraging the upfront fees to artificially deflate its per-transaction fees. We must assume this pricing structure violates the antitrust laws. … Pulse is squeezed out of the market because Visa exploits its dominance to impose supra-competitive prices on merchants and simultaneously undercut competitors’ per-transaction fees. That is textbook antitrust injury.”
  • The Court held that Pulse also has antitrust standing to challenge Visa’s volume-based agreements. “Pulse has shown antitrust injury. Similar to its claims against FANF, Pulse isn’t claiming that it’s losing a fair price war against Visa. Instead, it’s claiming that Visa has used its market dominance to strong-arm merchants into avoiding Pulse Pay Express.”
  • The Court then ordered that, on remand, the case be reassigned to a different judge. “Pulse’s overarching contention is that the district judge had pre-judged the case against Pulse from the outset. This is a serious accusation, but unfortunately there is record support for it. For example, at an initial conference in 2015, the judge repeatedly insisted that the challenged Visa policies did not harm competition and that merchants ‘were not forced to pay’ the FANF. These are some of the key disputed issues underlying Pulse’s claims. Pulse also points out that the district judge candidly revealed his disdain for antitrust law and antitrust plaintiffs. For instance, the judge remarked that ‘there are more bad antitrust cases than any other single category,’ theorized that ‘[t]he only real monopolies are ones supported by the government,’ and suggested that the Standard Oil Company wasn’t a real monopoly. Viewed in isolation, any one of these admittedly gratuitous comments might be harmless. Taken together, however, they raise concerns that the judge harbored ingrained skepticism about Pulse’s claims from the jump. What happened over the ensuing four years of proceedings only sharpens those concerns. Most significantly, the district judge repeatedly stymied Pulse’s legitimate requests to engage in critical discovery.”

• Seigler v. Wal-Mart Stores Texas, L.L.C., 20-11080, appeal from N.D. Tex.
  • Dennis, J. (Dennis, Higginson, Costa), personal tort
  • In slip-and-fall case, reversing the district court’s exclusion of plaintiff’s affidavit under the sham-affidavit doctrine and grant of summary judgment in favor of defendant, and remanding for further proceedings.
  • “[T]he ‘sham-affidavit doctrine’ is an exception to this general rule [that a district court must consider all summary judgment evidence before it and cannot disregard a party’s affidavit just because it conflicts somewhat with earlier deposition testimony] by which this court does not allow a party to defeat a motion for summary judgment using an affidavit that impeaches, without explanation, sworn testimony. … However, not every discrepancy in an affidavit justifies disregarding it when evaluating summary judgment evidence. Instead, the bar for applying the doctrine is a high one, typically requiring affidavit testimony that is inherently inconsistent with prior testimony.” (Internal quotation marks and citation omitted). The Court held here that there were no inherent inconsistencies between the plaintiff’s affidavit and deposition testimony, that the inconsistencies identified by the district court were either supplemental to the deposition testimony or merely went to the credibility of the affidavit.
  • The Court then held that, with the affidavit in evidence, there was sufficient evidence presented by the plaintiff to maintain a genuine issue of material fact with regard to the element of the defendant’s constructive notice of the presence of grease on the floor, to support the plaintiff’s premises liability claim.

Unpublished

• U.S. v. Runnels, 17-11156, appeal from N.D. Tex.
  • per curiam (Davis, Duncan, Oldham), habeas corpus
  • “Because conspiracy to commit bank robbery no longer qualifies as a ‘crime of violence’ under § 924(c), we REVERSE the district court’s judgment denying Runnels § 2255 relief as to his seven § 924(c) convictions predicated on conspiracy to commit bank robbery and REMAND for correction of the criminal judgment. As to Runnels’s challenge to the life sentences imposed under § 3559(c), we VACATE the district court’s judgment denying that claim as untimely and REMAND to allow the district court to reconsider its ruling, as well as to address the merits of Runnels’s § 3559(c) arguments, the Government’s procedural default defense, and whether any exception to the defense applies in light of intervening decisions issued during the pendency of this appeal.”

• Andrade-Vindel v. Garland, 19-60533, petition for review of BIA order
  • per curiam (Barksdale, Willett, Duncan), immigration
  • Granting in part and denying in part Honduran citizen’s petition for review of BIA order affirming the Immigration Judge’s (IJ) denial of his claims for withholding of removal and cancellation of removal.

• U.S. v. Mahmood, 20-40421, appeal from E.D. Tex.
  • per curiam (Davis, Jones, Elrod), habeas corpus
  • Affirming denial of a 28 U.S.C. § 2255 motion challenging petitioner’s convictions for aggravated identity theft under 18 U.S.C. § 1028A.

• Ponce-Cabrales v. Garland, 20-61125, petition for review of BIA order
  • per curiam (King, Costa, Ho), immigration
  • Denying Mexican citizen’s petition for review of BIA order dismissing his appeal from the denial of his application for cancellation of removal.

• Torres v. Garland, 20-61213, petition for review of BIA order
  • per curiam (Southwick, Oldham, Wilson), immigration
  • Denying in part and dismissing in part Mexican citizen’s petition for review of BIA order dismissing her appeal from the denial of her application for cancellation of removal and request for voluntary departure.

• U.S. v. Aguilar, 21-10080, appeal from N.D. Tex.
  • per curiam (King, Costa, Ho), criminal, First Step Act
  • Vacating denial of motion for sentence reduction under the First Step Act, and remanding for consideration in light of United States v. Shkambi, 993 F.3d 388 (5th Cir. 2021).

• U.S. v. Mungia, 21-10624, appeal from N.D. Tex.
  • per curiam (Wiener, Dennis, Haynes), criminal, compassionate release
  • Affirming denial of motion for compassionate release.

• Prescott v. Doe, 21-20151, appeal from S.D. Tex.
  • per curiam (Jones, Duncan, Engelhardt), prisoner suit
  • Dismissing as frivolous appeal from dismissal of prisoner’s § 1983 claim.

• U.S. v. Garcia, 21-20309, appeal from S.D. Tex.
  • per curiam (Higginson, Willett, Ho), criminal, sentencing
  • Affirming 40-month sentence on conviction of one count of false information and hoaxes for repeatedly calling 911 to falsely report that defendant’s neighbors, with whom she was feuding, were committing drug and federal firearms offenses, which subsequently resulted in their death by law enforcement officers while responding to a no-knock warrant based on those false reports.

• U.S. v. Queseda-Hernandez, 21-20529, appeal from S.D. Tex.
  • per curiam (Wiener, Dennis, Haynes), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• Barrios v. River Ventures, L.L.C., 21-30431, appeal from E.D. La.
  • per curiam (Barksdale, Stewart, Dennis), insurance
  • Affirming district court’s judgment that insurer did not owe coverage due to Crew/Employee Exclusion in maritime insurance policy.

• U.S. v. Jones, 21-30546, appeal from W.D. La.
  • per curiam (Southwick, Oldham, Wilson), criminal, sentencing
  • Affirming 57-month sentence on conviction of possession of a firearm by a felon.

• U.S. v. Lemus, 21-40633, appeal from E.D. Tex.
  • per curiam (Southwick, Oldham, Wilson), criminal, sentencing
  • Affirming 327-month sentence on conviction of conspiracy to distribute five kilograms or more of cocaine, intending, knowing, or with reasonable cause to believe it would be unlawfully imported into the United States; and manufacturing and distributing five kilograms or more of cocaine, intending, knowing, or with reasonable cause to believe it would be unlawfully imported into the United States.

• U.S. v. Guerrero, 21-50710, appeal from W.D. Tex.
  • per curiam (Southwick, Oldham, Wilson), criminal, sentencing
  • Affirming 27-month sentence on conviction of illegal reentry.

• Diaz v. Garland, 21-60003, petition for review of BIA order
  • per curiam (King, Costa, Ho), immigration
  • Denying Cuban citizen’s petition for review of BIA order dismissing his appeal from the denial of his application for asylum, withholding of removal, and relief under the Convention Against Torture.

• U.S. v. Bishop, 21-60639, appeal from S.D. Miss.
  • per curiam (Jolly, Willett, Engelhardt), criminal, sentencing
  • Affirming 120-month sentence on conviction of possession of a firearm by a convicted felon.