NACS counsel provides answers about the current status of the antitrust litigation against Visa, MasterCard and the major banks.
May 27, 2016
ALEXANDRIA, Va. – NACS members continue to show interest in the status of the antitrust litigation against Visa, MasterCard and the major banks. NACS counsel, Steptoe & Johnson LLP, provided the following information and steps retailers should be taking.
Numerous antitrust class actions were filed against Visa, MasterCard and their card-issuing banks in 2005. Those suits resulted in a class settlement agreement that received preliminary approval by the U.S. District Court for the Eastern District of New York in November 2012. Following preliminary approval, notices regarding the settlement were sent to class members (merchants that accepted Visa or MasterCard payment cards between January 1, 2004, and November 30, 2012). At that time, class members had the opportunity to opt out of the monetary portion of the class settlement and to object to the settlement. Following the notice process, the District Court gave final approval to the settlement in December 2013. That approval is being challenged on appeal and arguments on the appeal were heard by the U.S. Court of Appeals for the Second Circuit in September 2015.
Merchants that Remain in the Class: If you did not opt-out of the monetary portion of the settlement in 2013, you remain part of the class. No merchant can claim funds from the settlement, however, until the appeals challenging the settlement have concluded. It is not clear when that will occur, but we are monitoring the litigation and will provide updates on the appeals as we get them.
If the settlement survives the appeals, there will be a claims process through which class members can apply for part of the settlement funds. This process is designed to be easy such that small business owners can do this on their own without the assistance of settlement firms or lawyers.
We would note that some questions have been raised about whether branded retailers or the refiner brand should apply for settlement funds. As we read the settlement and relevant law, the company that paid the interchange fees in question is entitled to recovery in the settlement. Our understanding is that retailers are the ones that paid the fees (at least, in every instance of which we have been informed). If refiners claim fees that they did not pay and do not transmit those fees to the retailers that paid them, then it will raise legal issues not only regarding the disposition of those fees but also with potential violations of the pricing terms of the contracts between retailers and those brands. After the appeals are concluded, claims forms will become available and there will be additional specificity regarding how to claim funds.
Merchants that Opted Out of the Class: For merchants that opted out of the monetary portion of the class settlement by May 28, 2013, many have become part of lawsuits to press their monetary claims against the defendants in the case. Some of those cases have settled and many are proceeding through litigation. We have identified counsel willing to put together a case with merchants of all sizes (including small businesses) to allow merchants to protect the value of their legal claims in the case while they negotiate settlement of the claims. While that case has been filed, additional companies can still work with these lawyers to get their cases filed. Those lawyers have been negotiating settlements for their merchant clients that preserve each merchant’s right to benefit from any rule changes arising from the appeals or modifications to the class settlement.
If you opted-out of the case and do not file an opt-out lawsuit, either individually or with other companies, you will not receive any money for your legal claims. In fact, if you opted-out and have not yet filed a suit, you are risking losing some of the value of your claims due to the statute of limitations with every day that passes.