| NEW YORK, April 11
NEW YORK, April 11 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
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 &
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 &