Visa has won another round in its dispute with Dean Witter, Discover & Co.
In a procedural decision that sets the stage for an appeal to the Supreme Court, the federal appellate court in Denver last week denied Dean Witter's request to reverse its earlier decision.
In that September decision, a three-judge panel in the U.S. court of appeals for the 10th circuit overturned a 1992 jury verdict that would have allowed Dean Witter to issue Visa cards.
Dean Witter sought a "rehearing en banc," in which all the judges in the 10th circuit would have reexamined the decision that went against Dean Witter.
As is customary for such procedures, the court denied Dean Witter's request on Dec. 5 without issuing an opinion.
Officials for Visa would not comment on this latest development in its long-running battle with the nonbank credit card competitor.
Dean Witter, however, made the following statement: "The denial of a hearing by the 10th circuit of appeals was disappointing though not unexpected, since requests for rehearings are rarely granted by the court.
"We expect to move forward from here and to ask the Supreme Court to review.
We feel that there are important issues to be addressed in this case, issues that affect consumer choice and market competition."
Dean Witter has 90 days to ask the Supreme Court to hear the case. Legal experts believe that the company has a slim chance of making it to the highest court.
"It is unlikely that Dean Witter will get heard," but several factors work in the company's favor, said Lloyd Constantine, the former assistant attorney general in charge of New York antitrust enforcement who now runs a private practice in New York, Constantine & Partners.
Mr. Constantine pointed out that the Supreme Court has not heard an antitrust case in a while, which could be a plus for Dean Witter.
Also Dean Witter's victory in 1992 strengthens its position.
Although Mr. Constantine agrees with the September ruling in Visa's favor, he believes the 10th circuit court of appeals "wrote a lousy opinion," which Dean Witter can use to present a persuasive case to the court.
To win the Supreme Court's ear, Dean Witter must convince the justices that the appeals court made an important error in its ruling and that the case is significant because it sets a precedent that will have a far-reaching impact on society.
"The new legal standard announced by the panel opinion will undermine effective enforcement of the antitrust laws, not just in the charge card industry but throughout our economy," Dean Witter's request for a rehearing with the 10th circuit stated.
"Allowing the panel opinion to stand would thus adversely affect consumers nationwide."
On average, the Supreme Court accepts between 120 and 150 cases a year, and so far it has heard 35.
If it agrees to rule on the Dean Witter-Visa litigation, the case would probably be heard at the beginning of the new term in October 1995, said Mr. Constantine.
Antitrust issues are at the crux of the conflict between the San Francisco-based bank card association and the New York-based financial services company.
Visa maintains that Dean Witter's entry into the Visa system would violate the association's bylaw that does not allow competitors of banks, also including American Express, to issue the Visa brand.
Dean Witter, which owns the Discover brand, argues that in refusing to allow it to issue Visa cards, Visa is preventing Dean Witter from competing against banks, and therefore violating antitrust laws.
History of the Case
Dean Witter applies for entry into Visa through a failed thrift it acquired.
Visa blocks application and is sued by the thrift, Mountain West Financial in Salt Lake City
Jury finds that Visa violated antitrust laws. Rules in Dean Witter's favor.
Trial judge in Salt Lake City upholds jury verdict. Says, however, that he would have "hung the jury."
September: 10th circuit in Denver overturns jury verdict -- Visa wins. December: Dean Witter is denied rehearing