NEW YORK – On December 6, the US District Court for the Eastern District of New York held a hearing on the preliminary approval of the proposed settlement in the case In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. This is the long-running challenge by merchants to interchange fees and Visa’s and MasterCard’s operating rules. The settlement being considered only covers legal claims for monetary relief. It does not cover any changes to Visa’s and MasterCard’s rules—the rules part of the case is ongoing.
During the hearing, Judge Brodie said that she will grant preliminary approval. She heard arguments on a number of topics, including objections raised by branded retail motor fuel outlets. On that issue, her view was that those questions would get decided by the settlement administrator later in the case. She was not moved by the concern that retailers would have difficulty deciding whether or not to opt out without knowing whether they would recover in the settlement. The one possibility she raised was that there may need to be an additional notice to retailers whose oil brands opted them out of the case and settled the claims. Such an additional notice could alert a larger group of retailers of potential problems with the settlement. But, it was not made clear at the hearing whether that additional notice will happen. Judge Brodie plans to write a full opinion on preliminary approval along with an order so the approval is not yet formally granted until those things are completed.
There were other issues raised during the hearing as well. Significantly, the judge discussed concerns about the scope of the release of legal claims in the case. The main concern she had was clarity and the notice language may be changed to ensure that it is clear to class members. There was also a concern raised by the lawyers representing the injunctive relief class (challenging the Visa/MasterCard rules) that language in the release may be too broad and foreclose some injunctive claims. The lawyers specifically said they intended to raise later in the case a claim for a cap on interchange fees. The parties are negotiating to ensure that the release would not foreclose that type of claim (though MasterCard registered concern about it during the discussion).
NACS will provide updates as the case moves through the legal process.