Supreme Court Denies Appeal Against Visa : Law: Banks owned by Dean Witter, Discover & Co. will not have the right to issue the company’s credit cards.
The U.S. Supreme Court on Monday denied an appeal by Dean Witter, Discover & Co. over its antitrust lawsuit against Visa U.S.A., allowing Visa to exclude from its franchise those banks that are owned by the rival card issuer.
Separately, the court agreed to review a lower federal court ruling refusing to recognize the settlement of shareholder litigation stemming from Matsushita Electric Industrial Co.’s 1990 acquisition of MCA Inc. Matsushita said in its appeal to the Supreme Court that the lower-court decision could expose the company “to a multibillion-dollar liability.”
Matsushita this year agreed to sell MCA to Seagram Co.
In the Visa case, the justices, without comment or dissent, let stand a ruling last year by a U.S. Court of Appeals in Denver that reversed a 1992 jury verdict in Dean Witter’s favor.
The case dates to 1988, when Sears, Roebuck & Co., then owner of Dean Witter and the Discover card, had sought Visa membership for its bank in Delaware that issues the card. Visa, which seeks to keep its products, technologies and trade secrets from competitors, rejected the request. Visa allows any bank to join its franchise except for those owned by Dean Witter or American Express Co.
In 1990, Dean Witter bought the failed MountainWest Savings & Loan in Salt Lake City from the Resolution Trust Corp., the government agency formed to clean up the savings and loan mess. The bank was a Visa member. It had planned to start issuing a new Visa card but was stopped after Visa found out it had been acquired by Dean Witter.
Dean Witter appealed to the Supreme Court, alleging that the Visa network was a joint venture whose actions exerted a powerful restraint on trade, preventing more competition without creating any benefit in efficiency. American Express and several consumer organizations supported Dean Witter’s appeal.
The justices sided with Visa in turning down the appeal, leaving intact the appellate court’s decision for Visa.
Dean Witter’s stock rose 25 cents to $46.50 on the New York Stock Exchange on Monday.
