Expedited Appeal of Swipe Fee Settlement Denied
The Second Circuit Court of Appeals denied a request by Home Depot and other merchants to speed up the appeals process in a class action settlement over swipe fees. The U.S. appeals court is postponing the briefing until the settlement receives final approval from the U.S. District Court in Brooklyn. Litigation is pending in the District Court and a ruling is expected in 2013.
In November, ten merchants and trade groups filed notice to challenge the settlement of the swipe fee price-fixing case in a federal appeals court. The deal was approved by Judge John Gleeson in a U.S.District Court on November 9.
Retailers have fought hard against the $7.25 billion interchange fee settlement between merchants and Visa, MasterCard and several banks. The case began in 2005 when retailers filed complaints against Visa, MasterCard and other credit card companies, accusing the issuers of collaborating to fix the interchange or swipe fees they charge merchants for accepting credit cards.
Retailers say the settlement prevents them from opting out of the pact, which is a violation of their rights. They are challenging a part of the order that would free Visa and MasterCard from new legal claims over related interchange issues.
The proposed agreement was reached in July when MasterCard, Visa and major banks agreed to pay more than $6 billion to resolve accusations that they engaged in anti-competitive practices and price fixing in payment processing. In addition, credit card companies agreed to reduce swipe fees for eight months, an adjustment valued at $1.2 billion. Over half of the stores and trade groups that brought the proposed class action now oppose the pact, including the National Association of Convenience Stores, the National Restaurant Association and the National Grocers Association. It is also opposed by a substantial number of merchants, including the world’s two largest retailers, Walmart and Target.
If the settlement is approved, it would be the largest federal antitrust settlement in U.S. history.