Card Brands, Issuers, File Suit to End Suits
Visa, MasterCard and a number of large card issuers have filed suit in federal court seeking a judgment that their card interchange practices used during previous antitrust litigation are lawful.
The brands and issuers are seeking the judgment to help forestall additional antitrust litigation which retailers who are unhappy with the settlement of the latest round of card interchange litigation have brought or might bring.
“A declaration in plaintiff's favor against the defendants is necessary to prevent the continuation of endless, wasteful litigation between defendants and plaintiffs,” the brands and issuers argued in their complaint just filed with U.S. District Judge John Gleeson in Brooklyn, N.Y.
“In fact, the interchange settlement is not the first settlement between Visa and MasterCard and the merchant community,” the complaint said. “In 2003, plaintiffs Visa and MasterCard settled … in exchange for payment of a substantial sum of money.” Despite that settlement, the complaint said, the interchange fee litigation was initiated, thereby subjecting Visa and MasterCard and the bank plaintiffs to a further class action challenging essentially the same conduct.
A number of retailers and retail associations, some of which were parties to the interchange litigation and some not, have announced their intentions to opt out of the current interchange settlement.
This suit names only retail associations which were plaintiffs in the latest round of antitrust litigation.
Meanwhile, the National Retail Federation and other retailers Tuesday formally asked the court to disapprove the current settlement.
“This is an empty settlement,” NRF Senior Vice President and General Counsel Mallory Duncan said. “It fails to address the price fixing that harms merchants and their customers, it takes away retailers’ legal rights to ever try again, and it offers virtually nothing in return. It should be tossed out of court as the failure that it is. “Retailers simply cannot understand how the American system of justice can permit class action lawyers whom they have never met and who know nothing about their business to craft a ‘settlement’ that will preclude them forevermore from seeking redress on future losses without so much as offering them the opportunity to opt out.
“It gives the credit card networks carte blanche to set and manipulate interchange rates going forward without fear of future private suits. There is nothing that the credit card networks could give that is worth this unbridled loss of control.”