“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,” says NACS CEO.
NACS and other named plaintiffs are filing a notice of appeal to challenge last Friday’s ruling by the U.S. District Court for the Eastern District of New York, which grants preliminary approval to a proposed settlement of a long-standing antitrust class action filed by merchants against Visa, MasterCard and the largest 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 NACS President and CEO Hank Armour. “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— including NACS—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.
Additionally, the National Federation of Independent Businesses (NFIB) and the Public Interest Research Group (PIRG) each filed Amicus briefs in support of our opposition.
“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, managing partner, Constantine Cannon LLC, counsel to the merchants objecting to the proposed settlement.
The named class plaintiffs opposing the proposed settlement of the case, which is known as “In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation,” are NACS, Affiliated Foods Midwest, Coborn’s Inc., D’Agostino Supermarkets, Jetro Holdings LLC, NATSO, National Community Pharmacists Association (NCPA), National Cooperative Grocers Association (NCGA), National Grocers Association (NGA) and National Restaurant Association (NRA).
“The merchant community is deeply committed to reforms that bring transparency and competition to the broken electronic payments market. The volume and diversity of those objecting to this flawed proposal are remarkable and continues to grow,” said Shinder.
The only issues considered at the preliminary approval hearing were whether there are legal defects in the proposal—the overall fairness of the proposal will not be fully considered until later.
“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,” said Armour.