A lawyer for retail groups seeking to derail an estimated $7.25 billion settlement with Visa Inc. (V) and MasterCard Inc. (MA) over credit-card fees charged to merchants told a judge he needs access to all records in the case, including some that Visa deemed “highly confidential.”
Jeffrey Shinder, a lawyer for at least four trade associations that oppose the deal, including the National Community Pharmacists Association and the National Association of Convenience Stores, made his argument today for release of the records in federal court in Brooklyn, New York.
“We’re simply asking for our clients to have what they had throughout the litigation,” he told U.S. Magistrate Judge James Orenstein. Orenstein declined to make a ruling today and asked Shinder to revise his request.
The settlement, made public in July, would put to rest a seven-year-long case accusing Visa and MasterCard of conspiring with major banks to fix the fees charged to merchants when customers pay with credit cards. In addition to Shinder’s clients, several other retail associations oppose the deal, including the National Retail Federation and the National Restaurant Association.
Visa, based in San Francisco, has alleged that Shinder may present a risk for “inadvertent disclosure” of the company’s business secrets because he and his firm also represent its competitors. Shinder served as a lawyer for Discover Financial Services (DFS) in the interchange fee suit, according to court records. His firm, Constantine Cannon, is also advising a mobile-payment venture, the Merchant Customer Exchange, he said in a Sept. 25 letter he submitted to the court.
The deal, which requires approval from a federal judge, would be the largest-ever recovery in an antitrust case and would include about 7 million merchants, according to Robbins Geller Rudman & Dowd LLP, a law firm representing plaintiffs that support the settlement.
Plaintiffs have until Oct. 19 to submit a formal motion seeking preliminary approval of the deal. K. Craig Wildfang, a lead lawyer for the plaintiffs, told Orenstein in court today that “we’re down to the fine-drafting issues.”
Critics of the settlement have argued that it does little to remedy merchants’ complaints about the payment networks and offers Visa and MasterCard too much freedom to raise fees in the future.
“Merchants and their customers are actually worse off than if they had gone to trial and lost,” NRF general counsel Mallory Duncan said in a Sept. 25 phone interview.
U.S. Senator Richard Durbin’s office has told retailers that they may lose out on legislative opportunities to rein in credit-card fees if they support the settlement. Durbin, a Democrat from Illinois, secured the inclusion of limits on swipe fees for debit cards in the 2010 Dodd-Frank Act, trimming revenue for the largest U.S. banks by about $8 billion.
The amendment has been “beneficial for everyone except a handful of very large banks” which were getting “truly just a windfall, and an ill-gotten one,” Douglas Kantor, counsel to the National Association of Convenience Stores, said in a Sept. 25 phone interview.
Visa Chairman and Chief Executive Officer Joseph W. Saunders told investors in a July conference call that he expects the settlement to receive preliminary approval this year.
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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