Dean Witter, Discover & Co. is hailing a federal court decision last week as a major victory in its battle to gain membership in a bank credit card association.

But the two bank-owned associations, MasterCard International and Visa U.S.A., along with some independent experts, are advising Dean Witter to put the champagne back on the shelf.

"I wouldn't put too much importance on these procedural motions," Anita Boomstein, a partner in the firm of Hughes, Hubbard & Reed, said of the most recent result in U.S. district court in New York. Ms. Boomstein has represented the issuer of Discover cards in the past.

The bank card groups are waging separate legal battles against Dean Witter, each arguing that the law does not require them to admit a competitor into their systems.

Dean Witter. a recent spinoff of Sears, Roebuck and Co., has more holders of its Discover card than any single bank has MasterCard and Visa customers. Rejected in its attempts to gain MasterCard and Visa memberships for a thrift subsidiary in Utah, Dean Witter sued. It has already won a major victory against Visa.

|Top of the First Inning'

MasterCard, which was on the losing end of the latest decision, is dismissing the setback as trivial, and certainly less noteworthy than the fact that the judge - future FBI Director Louis J. Freeh - will be standing down from the case.

"It's the top of the first inning," a MasterCard lawyer said, arguing that the preliminary move last week would have little bearing on the ultimate outcome for Dean Witter.

Visa, meanwhile, said it was moving forward with its case against Dean Witter, and would file papers today as planned with the U.S. Court of Appeals for the 10th Circuit in Denver.

Antitrust Argument

The MasterCard case started in March, when the New York-based association asked the court to declare that its refusal to grant membership to Dean Witter did not violate antitrust laws.

Dean Witter then filed a motion listing ways in which it said MasterCard had violated the laws. On Aug. 26, the judge rejected MasterCard's bid to toss out that motion.

Had the decision gone the other way, experts said, it would have been devastating to Dean Witter. But they said MasterCard's legal maneuver was a long shot in the first place.

In complex cases such as this, they said, judges are inclined to allow a trial on the merits, and seldom dismiss.

MasterCard is taking the setback in stride and weighing its options: whether to appeal the decision or to move on to a trial.

Before either of those things can happen, a new judge will have to be assigned.

The Denver panel in the Visa case could hear oral arguments as early as November, as requested by Dean Witter. More likely, it will be February 1994 before that case moves ahead.

A Dean Witter spokesman asserted that the ruling against MasterCard could weigh in the thinking of the Denver appellate court.

Settlement Scenario

He also said the latest loss by the bank card associations could prompt Visa's board of directors to opt for a settlement, in order to avoid paying damages Dean Witter would seek if it prevails.

"We're talking about a serious loss of business" over the two years or more that the case has been pending, the spokesman said.

But Visa officials have been saying that Dean Witter's victory in a jury trial in Salt Lake City, where the Dean Witter affiliate that would issue Visa cards is located, was an aberration. Visa expects to get a more sympathetic hearing from a panel of judges with a sophisticated outlook on antitrust law.

No Bylaw Barring Entry

Observers have said there was a "hometown angle" to the jury trial, which came shortly after B.J. Martin, the president of Dean Witter's bank, announced a job-creating initiative in a ceremony at the state court house.

At MasterCard, officials were confident they could escape Visa's fate in a trial in New York, if it comes to that. One difference between the two cases, they said, is that MasterCard has no bylaw specifying that the former Sears unit could not join. Dean Witter argued that the Visa bylaw contained a specific exclusion that was illegal and anticompetitive.

The Dean Witter spokesman acknowledged that that argument won't be available in the MasterCard case.

Instead, Dean Witter may argue that MasterCard was inconsistent when it rejected the Sears applications.

"They do have a history of letting nonmembers in," the spokesman said, referring to such companies as American Telephone and Telegraph Co., whose credit card unit entered MasterCard in 1990.

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