U.S. Supreme Court Won’t Reinstate $5.7 Billion Credit-Card AccordBy
The U.S. Supreme Court refused to revive a $5.7 billion settlement of retailer claims that Visa Inc. and MasterCard Inc. improperly fixed credit-card swipe fees, in a rebuff that could mean years of additional litigation.
Rejecting calls from the card companies and the settling retailers, the justices left intact a ruling that scrapped the accord and said it didn’t adequately protect the interests of objecting merchants. The justices made no comment, turning away an appeal as part of
a list of orders released Monday.
The world’s biggest payment networks had sought to end a decade-old court battle over fees that exceed $40 billion annually.
Dozens of big retailers -- including Amazon.com Inc., Target Corp. and Starbucks Corp. -- opposed the settlement and urged the Supreme Court to reject the appeal without a hearing.
They said the accord was unfair because it stripped them of their right to sue Visa and MasterCard over fee practices that weren’t addressed in the settlement. The retailers faulted the agreement for giving the lawyers pressing the suit $545 million in fees.
The settlement "is a confiscation -- one that pays a group of lawyers over a half billion dollars to forever insulate Visa and MasterCard" from lawsuits, the retailers argued in court papers.
A group of smaller retailers tried to revive the settlement, arguing that the litigation had produced major improvements in credit-card fees practices. The settlement lets merchants impose surcharges on credit-card transactions in the states where that practice is legal.
"As a result of this historic reform, merchants will be empowered to educate consumers about the true cost of credit-card usage," the appeal argued.
Visa, MasterCard and their member banks supported the appeal. They argued that "the overwhelming majority of plaintiffs were satisfied with the deal and did not object."
The 2012 settlement, estimated to be the largest-ever U.S. antitrust deal, was once worth as much as $7.25 billion. The value dropped to $5.7 billion after reductions for about 8,000 merchants that dropped out of the damages portion of the case.
Visa and MasterCard have defended themselves for decades against claims that they operated price-fixing schemes. Swipe, or interchange, fees are set by card companies and paid by merchants when consumers use credit or debit cards.
Chief Justice John Roberts and Justice Samuel Alito didn’t take part in the high court’s action.
The Supreme Court case is Photos Inc. v. Home Depot, 16-710.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.