Wilson v. Mastercard Inc.

Background

Tiffany Wilson filed a proposed class action against Mastercard Inc. and Mastercard International Inc. She alleged that, between November 2018 and February 2020, Mastercard charged improperly high exchange rates when processing foreign-currency transactions on her Mastercard credit card issued by Capital One. She asserted claims for unjust enrichment and violations of the North Carolina Unfair Trade Practices Act.

Wilson alleged that Mastercard’s procedures required it to use either a government-mandated exchange rate or a wholesale market rate when converting currencies. According to Wilson, Mastercard instead selected exchange rates that maximized the difference between the price at which currency could be sold and the price at which it could be purchased. She claimed that this practice caused customers to pay more than they should have and gave Mastercard additional profits.

Wilson identified one transaction involving Vanuatu vatu for which she said she was charged $515.48. She also alleged that her analysis of Mastercard’s historical exchange-rate data showed that rates for unspecified currencies exceeded wholesale-market ranges on a majority of days during part of the period she analyzed.

Mastercard’s Motion

Mastercard moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6), which addresses failure to state a legally sufficient claim, and Rule 9(b), which requires fraud allegations to be stated with particularity. Wilson opposed the motion.

Although neither side raised the issue, the court considered whether Wilson had standing—the required personal connection to a dispute that allows a person to sue in federal court. The court explained that standing requires a concrete and particularized injury that is actual or imminent, caused by the challenged conduct, and likely to be remedied by a favorable decision.

Standing Analysis

The court concluded that Wilson had not plausibly alleged a concrete financial injury. For the Vanuatu-vatu transaction, she did not state the amount of currency involved, the exchange rate Mastercard used, the exchange rate she believed should have been used, the amount of any overcharge, or the date Mastercard processed the transaction. The court therefore could not reasonably infer that she had been overcharged.

The court also found that Wilson’s broader allegations were insufficient. She did not identify the currencies covered by her analysis or allege that she personally made purchases in those currencies. She alleged only that Mastercard had overcharged customers on a majority of days and that she had made an unspecified number of foreign transactions. The court held that these allegations did not show either that she was overcharged in a specific transaction or that she traded frequently enough in a market with widespread overcharging for her injury to be inferred.

Disposition

The court dismissed the amended complaint without prejudice for lack of subject-matter jurisdiction. Because the court lacked jurisdiction, it declined to decide Mastercard’s arguments under Rules 12(b)(6) and 9(b). Judge Valerie Caproni explained that a dismissal for lack of Article III standing must be without prejudice because a court without jurisdiction cannot decide the merits.