The Second Circuit Court of Appeals has overturned the class-action settlement in the case “Payment Card Interchange Fee and Merchant Discount Antitrust Litigation.” That case led to a proposed settlement valued at $7.25 billion in 2012.
The National Association of Convenience Stores (NACS) and other groups led efforts to oppose the $7.25 billion proposed settlement when it was announced in July 2012 because the relief it offered was inadequate and the release was overly broad.
NACS opted out and objected to the proposed settlement because it offered class members money damages of only about two months’ worth of interchange and, among other things, limited modifications to Visa’s and MasterCard’s surcharging rules. NACS officials also cited that the proposed settlement required class members to release Visa and MasterCard from liability, forever, for any anticompetitive rules currently in place (including the interchange or swipe fee rules) and/or any “substantially similar rules” instituted at any time in the future.
In addition to opposition from NACS, the proposed settlement was opposed by the majority of named plaintiffs, and approximately 1,200 additional merchants and retailer groups filed papers objecting to preliminary approval of the proposed settlement.
“We are pleased that the Second Circuit Court of Appeals has thoughtfully addressed the problems we have long identified with this proposed settlement. We will work to help ensure that this moves forward in a way that recognizes the best interests of merchants and the consumers they serve,” said NACS President and CEO Henry Armour.
Peter J. Larkin, president and CEO of the National Grocers Association, said the NGA joined with numerous other merchants and trade associations that opposed the settlement because the class was improperly certified and the settlement was unreasonable and inadequate.
“Today’s decision confirms that,” he said. “When NGA joined the lawsuit over 11 years ago, it did so to bring about real reforms that included increased competition and transparency of the anti-competitive credit card swipe fee system. NGA opposed the settlement agreement because it failed in this regard by not enacting competition and transparency into the marketplace, allowing Visa and MasterCard to continue their anti-competitive practices. NGA will continue to fight to bring about true reforms to the marketplace.”
