Judge in U.S. credit-card fees case assails critics' website
NEW YORK, April 11
NEW YORK, April 11 (Reuters) - A U.S. judge on Thursday scolded retail trade groups for creating websites urging millions of fellow merchants to reject a proposed $7.2 billion settlement with Visa Inc and Mastercard Inc over credit card fees.
U.S. District Judge John Gleeson singled out the merchantsobject.com website of the National Association of Convenience Stores (NACS), which tells merchants to "take action" and says their options are to "opt out" or "object."
He said the wording of the websites could prompt merchants to think that accepting a settlement was not an option.
"It's not fair," Gleeson said during a 15-minute hearing in Brooklyn federal court prompted by a complaint from the lead class counsel for a proposed class of 8 million merchants. "It's completely misleading."
He gave the lawyers for pro- and anti-settlement retailers one week to submit proposals on appropriate relief. He said he would not order the sites be taken down but would be willing to consider such relief as a website banner telling visitors that he had found information previously posted to be misleading.
The websites are the latest flashpoint in eight years of antitrust litigation that accuses Visa and Mastercard of conspiring to inflate retailers' interchange, or swipe, fees on credit card transactions.
The judge gave preliminary approval to the $7.2 billion proposal in November. It would be the largest private antitrust settlement in U.S. history if given final approval, but some of the country's largest retailers have voiced dissatisfaction.
Merchants have until May 28 to object or opt out of the settlement. If they object, they will still receive their share of monetary damages if the settlement is approved. If they opt out, they will not.
Seven other trade groups, including the Retail Industry Leaders Association and National Restaurant Association, have voiced support for the NACS site.
The trade groups said in court papers that they had not presented any misleading information and that class counsel were trying to chill their rights to freely communicate with stores about the deal.
Attorney Jeffrey Shinder, representing some of the objectors, told Reuters after the hearing: "We will work within the court's order to ensure that no one has objected or opted out under any kind of misconception."
Craig Wildfang, a lawyer for stores supporting the deal, said Gleeson's narrowly tailored order would "help fix the damage done" by the sites.
The fight comes as class counsel and defendants are gearing up to defend the deal. Visa and Mastercard have said they are confident the deal will receive Gleeson's support. But they have the option of terminating the settlement if merchants generating 25 percent of more of credit-card volume opt not to participate.
A hearing on final approval is set for September.
The case is In re Payment Interchange Fee and Merchant Discount Antitrust Litigation, U.S. District Court for the Eastern District of New York, No. 05-1720. For the plaintiffs (co-lead class counsel): Laddie Montague, Merrill Davidoff, Bart Cohen and Michael Kane of Berger & Montague; Craig Wildfang, Thomas Undlin and Ryan Marth of Robins Kaplan Miller & Ciresi; Patrick Coughlin, Bonny Sweeney, David Mitchell, Alexandra Bernay and Carmen Medici of Robbins Geller Rudman & Dowd. For objecting plaintiffs: Jeffrey Shinder of Constantine Cannon. For Visa: Robert Vizas, Robert Mason and Mark Merley of Arnold & Porter. For Mastercard: Keila Ravelo, Wesley Powell and Matthew Freimuth of Willkie Farr & Gallagher; Kenneth Gallo, Joseph Simons, Andrew Finch and Gary Carney of Paul Weiss Rifkind Wharton & Garrison.
- Total CEO de Margerie killed in Moscow as jet hits snow plow |
- Pistorius starts five-year term for killing Reeva Steenkamp
- Ebola crisis turns a corner as U.S. issues new treatment protocols
- Fashion designer Oscar de la Renta dead at 82 |
- U.S. Congress examining deal between NSA official, ex-agency chief