The tentative approval of Visa Inc. and MasterCard Inc.'s proposed $7.25 billion settlement of a merchant fee price-fixing case will be challenged in a federal appeals court, according to a notice filed by objecting plaintiffs in Brooklyn, New York.

Four retailers and six trade groups today filed the notice that they are appealing a component of U.S. District Judge John Gleeson's approval order barring merchants from suing the payment firms over the fees.

About 1,200 retailers and trade organizations opposed the accord, which would end seven years of litigation over interchange, or swipe, fees that retailers are charged when customers pay with credit cards. Lawyers for the objectors argued at a Nov. 10 hearing that the agreement is unfair because it strips merchants of the right to sue over the fees in the future.

"This settlement has fatal legal defects and should not get preliminary approval," Jeffrey Shinder, a lawyer for objectors, said today in a statement. "We look forward to presenting the problems we see in this proposal to the Second Circuit Court of Appeals."

Covering more than 7 million merchants, the accord would be the largest-ever antitrust settlement, according to lawyers for plaintiffs. Gleeson granted preliminary approval Nov. 10, saying some issues still "require significant scrutiny." The settlement is subject to final approval later.

"This obscure appeal is just a badly underthrown legal Hail Mary that shouldn't give anyone any concern," Trish Wexler, a spokeswoman for the Electronic Payments Coalition, a credit-and-debit-card industry trade group advising defendants in the case, said today in a statement.

"The retailer objectors are focusing on an extremely limited and technical issue," she said. The move "does nothing to slow or change the settlement process," she said.

The case is In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 05-md-01720, U.S. District Court, Eastern District of New York (Brooklyn).

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