WASHINGTON— On December 10, Judge Margo Brodie of the U.S. District Court for the Eastern District of New York approved a new notice to merchants relating to the settlement in the long-running litigation brought by NACS and other merchants against Visa, MasterCard and the largest card-issuing banks (In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL 1720). The notice addresses concerns raised by NACS members and others that at least one oil brand had settled their merchants’ claims in the case without being authorized to do so. There were also concerns that additional oil brands (and perhaps franchisors in other retail sectors) intended to do the same thing.
The notice provides merchants, whose claims were settled without their authorization, to inform the court and request to be included in the monetary settlement of the class action. The notice indicates that merchants whose claims were settled without their authorization can request and receive funds from the class settlement. Merchants who were originally excluded from the class settlement but now want to be included, however, must respond to the notice and let the settlement administrator know that they want to receive funds from the class settlement. A deadline for informing the administrator has not yet been set, but it will be part of the notice when merchants receive it.
The notice does not indicate what will happen if additional oil brands settled claims on behalf of their merchants without authorization. During the fairness hearing, counsel for the defendants indicated that they understood that entering into any such settlements would carry risk that they would have to pay the oil brand and separately pay the merchant if the oil brand did not have authority to settle that merchant’s claim. It remains to be seen how any disputes about a brand’s authority to settle on behalf of their outlets will be resolved.
The class settlement itself has not yet been approved, though that formal approval could happen soon. For now, NACS members should look for the new notice and respond promptly if their brand settled for them without authorization.