The negotiated settlement meant to end the longstanding disputeover credit card interchange moved closer to becoming final lastweek as attorneys for both sides in the dispute proposed a finalsettlement agreement to the U.S. District Court in New York andmade a motion for its approval.

The settlement has been controversial since it was first announced and retail groupshave been very vocal about their opposition to it. But theElectronic Payments Coalition has argued that the retail groups aremerely voicing the same arguments they tried to advance inmediation and eventually settled.

Lawyers representing 13 individual retailers and six tradeassociations ranging from convenience stores to restaurants thissummer announced a $7.25 billion proposed settlement of a lawsuitfiled against Visa and MasterCard in 2005. Four of the individualcompanies and all six of the trade associations have rejected theproposal since then.

“The settlement is on track, and proceeding precisely aspredicted from the beginning. It was always predicted that therewould be opposition, objections and opt-outs. Legally, there is norequirement of any kind in a class action that a majority of theoriginal plaintiffs agree to the settlement–particularly given thatthe volume represented by these objectors is proportionatelyinsignificant,” wrote Robert Stolebarger, partner at Bryan Cave,LLP and antitrust counsel for the EPC.

“There is only one test for preliminary approval–does the judgefind that this settlement is sufficiently fair, reasonable andadequate (based on the years of litigation, mediation andnegotiation that went into its development) that it warrants beingnoticed and presented to the entire class and set for hearing onfinal approval. Given that the settlement agreement was effectivelydeveloped by two highly regarded mediators–with the directoversight of Judge Gleeson, himself–and given that these recent'objections' are not new in any way, nothing that hasn’t alreadybeen considered. It is difficult to imagine that the court woulddeny preliminary approval based on old, tired arguments that havealready been given due weight or not based on merit or the lackthereof.”

Stolebarger also addressed the notion that the settlement hadbeen negotiated “in secret” and without sufficient input fromretailers.

“The notion that this settlement was developed by one side thatstrong-armed the other side into accepting is simply wrong,”Stolebarger maintained. “As the court has revealed, this settlementwas the result of a proposal from the two highly regarded mediatorsin this case. For a normal case, mediation takes one day. For acomplicated case, it takes a week. For a truly complicated case,mediation can take a month. This mediation took two years."

Although it was not a party to the lawsuit, the National RetailFederation said a revised antitrust settlement filed in federalcourt scarcely begins to address retailers’ concerns about creditcard swipe fees charged by Visa and MasterCard that cost consumersclose to $30 billion a year.

“The proposal put on the table this summer was beyond tweaking,and the update presented today proves that fact. It remainsmanifestly unfair,” NRF Senior Vice President/General CounselMallory Duncan said. “The settlement still does virtually nothingto protect retailers or their customers from the abuses of the cardindustry, and it attempts to silence any objections for years tocome. Retailers would rather take their chances in court thanaccept this one-sided swindle written by the card industry for thecard industry.” “It should prove very significant to the court thatthe majority of the plaintiffs in this case have repudiated thesettlement, and that includes half a dozen national tradeassociations representing thousands of merchants,” Duncan said.“The lawyers and handful of retailers who support the settlement donot represent the retail industry.” The NRF said it opposes thesettlement because it does little to address high fees charged inthe past and nothing to prevent them from rising higher in thefuture.