NEW YORK – The National Association of Convenience Stores, the Association for Convenience & Fuel Retailing, and other plaintiffs in the 2005 antitrust suit against Visa and MasterCard are preparing a legal challenge of Friday's ruling granting preliminary approval of a $7.2-billion settlement in the case.
The plaintiffs who oppose the deal are filing a notice of appeal to challenge U.S. District Court Judge John Gleeson's ruling handed down Nov. 9 in U.S. District Court for the Eastern District of New York in Brooklyn, N.Y. The proposed settlement -- which was reached in July -- would bring to a close an antitrust class action lawsuit filed by merchants against Visa, MasterCard, and several big banks.
A majority of the 19 named plaintiffs have indicated that they will ask the U.S. Court of Appeals for the Second Circuit to deny preliminary approval due to the legal defects in the proposed settlement.
"We will ask the U.S. Court of Appeals for the Second Circuit to deny preliminary approval due to the legal defects in the proposed settlement," said Hank Armour, president of the convenience stores group. "It is unclear whether a stay will be issued to prevent notices of the settlement going to the millions of merchants who accept credit cards."
The majority of named plaintiffs have rejected the proposed settlement, and approximately 1,200 additional merchants and retailer groups have filed papers objecting to preliminary approval of the proposed settlement.
"This settlement has fatal legal defects. We look forward to presenting the problems we see in this proposal to the Second Circuit Court of Appeals," said Jeffrey Shinder, counsel to the merchants objecting to the proposed settlement.
The named class plaintiffs opposing the proposed settlement of the case are: NACS, Affiliated Foods Midwest, Coborn's Inc., D'Agostino Supermarkets, Jetro Holdings LLC, NATSO, National Community Pharmacists Association, National Cooperative Grocers Association, National Grocers Association and National Restaurant Association.
"This battle is not close to being over, and NACS and the other objectors will fight at every opportunity to either scuttle this flawed settlement and begin earnest negotiations, or take the case to court," Armour said.
If the proposed settlement gets final approval, it would be the largest federal antitrust settlement in U.S. history, offering nearly eight million merchants $7.2 billion in cash and temporary reductions in interchange, or swipe fees, which stores must pay to process credit and debit transactions.
