A veteran of the interchange battles said the merchants that are suing Visa U.S.A. Inc. and MasterCard Inc. cannot extract as favorable a settlement as the one in the Wal-Mart case.
Thomas Brown, a partner at O’Melveny & Myers LLP and a former counsel for Visa, also said Friday that the current lawsuits, which the merchants are trying to consolidate, may not last as long as the Wal-Mart case, which was filed in 1996 and settled in 2003 just before a trial was to begin. The current suits, filed last year, are four to six years away from a resolution, he said.
In the Wal-Mart case, Mr. Brown said, Lloyd Constantine, the lead attorney for the plaintiffs, organized a group of large merchants, such as Sears, Roebuck and Co. By contrast, “these plaintiffs for the most part represent a consortium of merchants that no one has ever heard of, and that immediately begins to suggest that the cohesiveness that Lloyd was able to present … is not apparent here.”
Mr. Brown made his remarks during a teleconference organized by Janney Montgomery Scott LLC.
K. Craig Wildfang, the plaintiffs’ lead attorney in the current case, said Mr. Brown “has no basis” for his claim about the plaintiffs. “We have some very substantial merchants,” including Payless Shoes Inc., and “almost all of the merchant associations.”
“As for cohesion, he doesn’t talk to my clients,” Mr. Wildfang said. “I think there is a remarkable degree of cohesion among merchants around this issue.”
Mr. Brown, whose San Francisco law firm does not represent Visa in the current litigation but consults for the card association, said that the defendants could defeat class certification, and that such a ruling would cause some of the cases to be dropped.
The merchants have to show Judge Thomas Gleeson of the U.S. District Court for the Eastern District of New York, that society would be better off without interchange, and they will have to present an alternative, Mr. Brown said. “My own view is that they can’t show that.”
Some analysts have said that MasterCard, which went public in May, will seek a settlement to avoid bad headlines.
Robert W. Selander, its chief executive, said in July that he wants to get beyond “legacy” lawsuits.
Asked during an interview after the teleconference what Visa would do if MasterCard settled, Mr. Brown said, “Sometimes it pays to be the last man standing.”
