Visa Wins Another Round in Sears Fight
Appeals Court Bars a Rollout of No-Fee Card Pending Final Ruling
Visa U.S.A. has won the latest round in its battle to prevent Sears, Roebuck and Co. from offering a no-fee Visa card.
A federal appeals court in Denver said late Tuesday that Sears could not launch a Visa program while its antitrust suit winds its way through the courts.
The Chicago-based retailer filed suit against the bank card association in January, seeking to issue Visa cards through a failed Utah thrift it bought in 1990 from the federal government.
"It's another temporary setback to our rolling out the card, but we still think we are going to prevail," a spokeswoman for Sears' Dean Witter Financial Services Group said of the court ruling. Sears is challenging a 1989 Visa bylaw that prohibits Sears and American Express Co. from joining the bank card group.
Claims and Counterclaims
Earlier this year, a federal district court in Salt Lake City granted Sears a preliminary injunction in the case. That ruling would have allowed the retailer to mail solicitations for its "Prime Option" Visa card to some 6,000 consumers beginning on March 18.
But Visa quickly appealed that decision in the federal appeals court in Denver. On Tuesday, Visa won its appeal.
"We believe allowing Sears to move ahead with its Visa program would not be in the best interests of the consumer," a Visa spokesman said Wednesday.
No Date for Next Hearing
Such a move, he said, would limit competition between Visa and the Discover card -- Sears' general-purpose credit card.
The Sears antitrust suit now returns to the district court in Salt Lake City. Neither side could predict when the case will be heard.
Meanwhile, Mountain West Financial, Sears' Utah thrift and a longtime Visa member, continues to issue Visa cards. It has 6,000 accounts outstanding, the spokeswoman said.