AmEx, Merchants to Begin New Settlement Talks in Card Suit

  • Judge appoints lawyer to succeed one he threw off case
  • Attorneys tell court they will restart negotiations soon

American Express Co. and merchants fighting the company over rules governing credit-card fees are headed back to the negotiating table.

Lawyers for AmEx and U.S. retailers on Thursday told a federal judge in Brooklyn, New York, they expect to restart talks in the near future. The judge appointed a new lawyer, Michael Hausfeld, to act as a lead attorney for the merchants.

“I just want to thank you, again, Mr. Hausfeld, for picking up the baton on this case,” U.S. District Judge Nicholas Garaufis said at a brief hearing.

An earlier accord was canceled by the judge when he learned that the lead lawyer for the merchants was improperly sharing confidential information with another attorney.

Hausfeld, a Washington-based civil litigator who challenged the NCAA’s policies against student athletes’ receiving compensation, was asked by other lawyers to take on the American Express case after attorney Gary Friedman was dismissed over the ethical concerns.

Garaufis threw out the earlier settlement on finding Friedman may have tainted the negotiations by disclosing confidential details to a friend who represented MasterCard Inc. in a separate card-fee case.

Previous Terms

The settlement had resolved claims that American Express unfairly squeezed merchants with rules that forced them to absorb high fees for processing transactions. The company agreed to loosen restrictions to allow merchants to more freely pass along costs to customers through surcharging.

Hausfeld told Garaufis that he would be willing to go to trial if a new settlement can’t be reached.

The case is American Express Anti-Steering Rules Antitrust Litigation, 1:11-md-2221, U.S. District Court, Eastern District of New York (Brooklyn).

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