Appeals Court Upholds Monetary Settlement in Swipe Fee Case

Retailers had raised concerns about oil brands, franchisors.

March 22, 2023

NEW YORK—The U.S. Court of Appeals for the Second Circuit recently upheld a monetary settlement in long-running swipe fee litigation. The settlement covers businesses that are members of the class action case. It does not address changes to Visa’s and Mastercard’s rules—that part of the case is still being litigated by the class, NACS and other plaintiffs.

The monetary settlement had been challenged principally by members of the motor fuel retailing industry. They argued that it was not clear whether oil brands (and franchisors) or retailers (and franchisees) would receive the settlement funds. Because those decisions had not been made, the group argued that they could not properly decide whether to be part of the class or to opt-out.

The Second Circuit court ruled against those objections. It decided that questions regarding which business would receive specific funds would be decided later by the special master appointed by the court on a case-by-case basis.

It remains possible that there will be additional appeals of the decision. If not, the case will be returned to the U.S. District Court for the Eastern District of New York and that court will oversee the notification and distribution process for the settlement funds. The monetary relief made available by the settlement was originally valued at $6.2 billion but has been reduced to $5.6 billion due to the number of companies that opted out of its terms.

The decision leaves many retailers uncertain about whether they will receive settlement funds or not. It heightens the importance of the claims process—businesses must submit a claim to have a chance to receive any funds from the class settlement. For more information regarding the status of the settlement and how the claims process will work once it gets underway, visit Payment Card Settlement | Official Court-Authorized Website - Home. That is the official website for the settlement and will include all official court notices relating to the settlement.

The monetary settlement never covered the legal questions regarding Visa’s and Mastercard’s rules. Reform of those rules has been a primary goal of many of the litigants in the case. Those questions are still being contested and litigants are awaiting a decision from the District Court regarding motions from each side for summary judgment. If neither side wins the case on summary judgment, the Court may soon decide to set a date for a trial. NACS remains a plaintiff advocating for significant reforms to Visa’s and Mastercard’s rules.