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In a Surprise Move, the DoJ Asks the Supreme Court Not to Take AmEx Steering Case
August 11, 2017

By John Stewart

In a brief filed Aug. 7, the U.S. Department of Justice has asked the Supreme Court not to take up an appeal over a lower-court ruling upholding a so-called steering practice by American Express Co. The DoJ, which in 2010 joined 17 states in suing AmEx over the practice, argues in its brief that the case needs to be more completely argued in lower courts, according to a report in Bloomberg BNA.

“Consistent with its usual practice of awaiting further percolation in the lower courts before taking up such novel legal issues, the court should deny review here,” the DoJ argues, according to Bloomberg. The government's decision not to appeal doesn't mean it has changed its mind on the merits of the case, according to the report, as it argues in its brief that the lower-court decision "leaves in place restraints that thwart price competition in an important sector of the economy and inflate the retail prices paid by all consumers."

Led by Ohio, eleven states appealed to the Supreme Court in June but were not joined by the DoJ, a move that at the time puzzled some observers, as the government had been an avid plaintiff in the long-running case against the card company.

The U.S. Court of Appeals for the Second Circuit in September reversed a ruling that had determined AmEx's anti-steering rules violated the Sherman Antitrust Act. That earlier ruling had been handed down in February 2015 by a federal court in Brooklyn and appeared to award the states and the DoJ a signal victory. Steering refers to AmEx's practice of banning merchants from encouraging customers to use other card brands that carry lower acceptance costs.

In reversing the Brooklyn court's ruling, the appellate court based much of its reasoning on the notion that networks like AmEx must do business not only with merchants but also with cardholders, and that the offers and rewards necessary to attract consumers and get them to spend on the card ultimately benefit merchants at the network’s expense.

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