NEW YORK May 24 (Reuters) - Visa Inc and MasterCard Inc, opening another front in an eight-year battle over credit card fees paid by retailers, on Friday asked a federal judge to declare that the fees do not violate antitrust law.
The lawsuit seeks to give the card companies legal ammunition against some retailers who are trying to opt out a proposed settlement under which they would receive a share of $7.2 billion in cash and fee discounts from the card companies.
The complaint filed Friday in Brooklyn federal court by the credit card giants and a number of banks that issue their cards asks U.S. District Judge John Gleeson to declare that interchange, or swipe, fees are lawful and pro-competitive.
On Thursday, Target Corp and other retailers, including JC Penney and Kohl's, broke away from the pact. The retailers filed a lawsuit in Manhattan federal court against the credit card companies alleging past antitrust violations and seeking damages.
The proposed settlement would end eight years of litigation by merchants who accused Visa and Mastercard of inflating swipe fees.
Friday's complaint was brought against retailers and trade groups who were named plaintiffs in the swipe fee litigation, but later opted out. If Gleeson rules that the swipe fees do not violate antitrust law, it could prevent them from pursuing separate damage actions.
It could also affect the ability of other retailers who opt out to seek damages over swipe fees.
"A declaration in plaintiffs' favor against the defendants is necessary to prevent the continuation of endless, wasteful litigation between defendants and plaintiffs," the complaint on Friday said.
The motion from the card companies is the latest volley in a fierce legal fight over the settlement, which Gleeson preliminarily approved in November. If granted final approval, it would be the largest private antitrust settlement in U.S. history.
On Tuesday, Wal-Mart and 18 other major retailers said they would opt out of receiving damages from the proposed settlement and consider separate legal action. They say the pact offers inadequate compensation for the billions of dollars they pay each year in interchange fees and forces them to sign broad litigation releases that could shield Visa and Mastercard from future lawsuits over antitrust violations.
May 28 is the deadline for nearly 8 million merchants to decide whether to opt out of receiving monetary damages from the settlement.
Visa and Mastercard, as well as lawyers for merchants that support the deal, have said they are confident the settlement will be approved.
"Enough is enough - this battle needs to be put to bed," Trish Wexler, a spokeswoman for the Electronic Payments Coalition, a trade group representing the payment card industry, said Friday in a statement responding to the filing.
If merchants that account for 25 percent or more of credit-card volume opt out of receiving damages, Visa and Mastercard have the option of terminating the proposed settlement.
A lawyer representing some of the merchants and trade groups that have opted out of the settlement, Jeff Shinder, declined to immediately comment on the filing.