By Christie Smythe - Nov 2, 2012
Retailer groups opposed to Visa Inc. (V) and MasterCard Inc. (MA)’s $7.25 billion settlement of a lawsuit over merchant credit-card fees said they have garnered support from about 1,200 businesses covered by the deal.
Trade associations including the National Association of Convenience Stores, the National Community Pharmacists Association and the National Restaurant Association urged U.S. District Judge John Gleeson in Brooklyn, New York, not to grant initial approval to the settlement, according to objection papers the parties are preparing to submit.
The settlement, estimated to cost the card companies and major banks as much as $7.25 billion, would cover about 7 million retailers nationwide. In an order filed Oct. 24, Gleeson said he will probably approve the deal. That could end about seven years of litigation over an alleged conspiracy by the card companies and banks to fix the so-called interchange fees that retailers are charged when customers pay with cards.
In a paper the opposition intends to submit, a lawyer for some of the objecting groups, Jeffrey Shinder, said the settlement “will neither introduce transparency nor give merchants the ability to inject competition in a market that has not functioned competitively for decades.”
Altogether, almost 1,200 businesses and trade associations are submitting court papers supporting those contentions including The Neiman Marcus Group Inc., Saks Inc. (SKS), 7-Eleven, Dollar General, Expedia, The Gap Inc. (GPS) and Limited Brands Inc. (LTD), Shinder said.
“This group represents trillions in retail sales and a substantial portion of the putative class, and its massive and diverse breadth is a powerful signal that something is obviously wrong with this settlement,” Shinder said in the filing.
The objection papers were provided to Bloomberg News by Shinder and representatives from some of the objecting groups. Technology difficulties at the federal court from Hurricane Sandy prevented them from filing the papers yesterday. Lawyers who are seeking to have the settlement approved, K. Craig Wildfang and Patrick Coughlin, confirmed that they have received the filing. They declined to make an immediate comment.
The case is In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 05-md-01720, U.S. District Court, Eastern District of New York (Brooklyn). . . .