Retailers Request Supreme Court Filing Extension
Retailers hope the billions of dollars consumers spend each year using their debit cards will convince the U.S. Supreme Court to keep their fight alive against the Federal Reserve.
The National Association of Retailers and other groups asked the Supreme Court to extend the deadline for appealing a lower court ruling until July 21. The current appeal deadline is June 19.
“By ignoring the plain command of the statute, the (Fed) has allowed (card) networks and banks to continue to reap unreasonable and excessive fees from merchants and consumers,” the group wrote in its application for appeal. “The District Court understood the implications of the (Fed’s) statutory misinterpretation, but the Court of Appeals disregarded the plain letter of the statue.”
The fight between the groups and the Fed began in July 2013, when U.S. District Judge Richard Leon sided firmly with retailers in their complaint about the Fed’s debit interchange rule and issued a decision which largely gutted the regulation.
The retailers had argued the Fed rule adopted a more expansive understanding of the statute than Congress intended and, as a result, the agency allowed debit card issuers with more than $10 billion in interchange to receive too much interchange per transaction. They also contended the Fed erred in requiring each debit card carry only two independent debit networks instead of requiring more or adopting another approach to bring greater competition to debit transaction processing.
But the Federal Reserve appealed Leon's decision in March 2014. At the time of that decision, the retailers said they might appeal to the Supreme Court.
“The Supreme Court is interested in cases that are about big things and we believe something which affects almost every consumer and transfers tens of billions of dollars in the economy qualifies as a pretty big thing,” explained NAR Chief Counsel Mallory Duncan.
“This is a huge grab by the banks – through the Fed – in direct contradiction of what Congress passed,” he added. “We have decided that the issues are sufficiently important that we ought to present them to the Supreme Court.”
The groups asked for more time to file their appeal because they said their size and the scope of the complaint required additional preparation.
“Petitioners include large merchant trade associations made up of large, diverse memberships,” the groups wrote in their filing. “Since the D.C. Circuit's decision in this case, petitioners have been briefing their members and coordinating with counsel about appropriate avenues for relief from this judgment.”
The groups also cited having hired additional counsel who specialize in Supreme Court cases as a reason they needed more time.
The new counsel, Thomas Goldstein, is a partner in the small Washington firm of Goldstein and Russell, and claims to have represented clients before the high court in roughly 100 cases over the last 15 years.
Doug Kantor, a partner in the Washington office of Steptoe and Johnson, who serves as counsel for the group, explained the group needed experienced counsel for this phase of the case due to the specialized nature of the Supreme Court.
“It's really not like any other part of the process to this point,” Kantor said, “because the Supreme Court decides which cases it takes. In a lower court, if a case is appealed, it’s appealed and the process moves forward. But not with the Supreme Court.”
The Supreme Court’s ability to consider whether or not to hear a case could spur additional mini-cases.
For example, Kantor explained, assuming the Supreme Court grants the request for extra time, the retailers will file their brief in July. Then the Fed will have an opportunity to file an argument addressing why the court should not hear the case. And, organizations or individuals with a stake in the case, such as credit unions or other retail groups, will also have a chance to weigh in, Kantor said, adding the Supreme Court may not announce whether or not it will hear the case until early 2015.
If it does, the case will join elite ranks. According to the Supreme Court's website, more than 10,000 cases are appealed each year to the Supreme Court, but the judges only take 75-80 of them.