Definitive Interchange Settlement Expected
The Electronic Payments Coalition expects that counsel for both sides of a proposed settlement on card interchange will file the definitive settlement agreement with the U.S. District Court in New York and make a motion on Friday for the court to approve that settlement.
The settlement has been controversial since it was first announced and retail groups have been very vocal about their opposition to it. But the EPC has argued that the retail groups are merely voicing the same arguments they tried to advance in mediation and eventually settled.
“The settlement is on track, and proceeding precisely as predicted from the beginning. It was always predicted that there would be opposition, objections and opt-outs. Legally, there is no requirement of any kind in a class action that a majority of the original plaintiffs agree to the settlement – particularly given that the volume represented by these objectors is proportionately insignificant,” wrote Robert Stolebarger, partner at Bryan Cave LLP and antitrust counsel for the Electronic Payments Coalition, in a detailed comment on the legal situation.
“There is only one test for preliminary approval – does the judge find that this settlement is sufficiently fair, reasonable and adequate (based on the years of litigation, mediation and negotiation that went into its development) that it warrants being noticed and presented to the entire class and set for hearing on final approval,” Stolebarger wrote.
“Given that the settlement agreement was effectively developed by two highly regarded mediators – with the direct oversight of Judge Gleeson, himself – and given that these recent ‘objections’ are not new in any way, nothing that hasn’t already been considered – it is difficult to imagine that the court would deny preliminary approval based on old, tired arguments that have already been given due weight or not based on merit or the lack thereof.”
Stolebarger also addressed the notion that the settlement had been secretly negotiated secretly without sufficient input from retailers.
“The notion that this settlement was developed by one side that strong-armed the other side into accepting is simply wrong,” Stolebarger maintained. “As the court has revealed, this settlement was the result of a proposal from the two highly regarded mediators in this case. For a normal case, mediation takes one day. For a complicated case, it takes a week. For a truly complicated case, mediation can take a month. This mediation took two years.
“ …The court made class counsels’ letter of Aug.t 7, 2012 public, which details that trade associations, like the National Association of Convenience Stores (NACS), participated in all aspects of the extensive negotiations, mediation and settlement conferences . . .' Both the named plaintiffs and class counsel understood that this settlement was the very best possible solution that could be reached under the circumstances.”