Retailers’ Appeal of the Credit Card Fee Settlement Gets Deferred

Ronald A. Clifford, Esq.
December 27th, 2012

Immediately after the $7.25 billion Visa/Mastercard settlement received preliminary approval, retailers all over the country such as Wal-Mart Stores Inc., Target Corp., the National Association of Convenience Stores (NACS) and others voiced their objections and filed notice to appeal U.S. District Judge John Gleeson’s order. The plaintiffs state that the settlement violates their rights by preventing them from opting out; they are specifically challenging a part of Gleeson’s order that would release Visa and MasterCard from new legal claims over any related issues.

To recap what the settlement entails, the $7.2 billion deal seeks to resolve seven years of litigation regarding allegations that credit card companies and banks were fixing credit card fees (swipe fees). Stores are charged a fee every time one of their customers makes a purchase using a card, which translates to roughly $30 billion in swipe fees per year.

Recently, a U.S. Appeals court refused to hear the expedited appeal of the preliminary approval. The 2nd U.S. Circuit Court of Appeals in New York denied one of the objecting Merchants, The Home Depot, and said all other objecting parties’ briefs should not be filed until the U.S. District Court for the Eastern District of New York has issued final approval of the settlement, which is expected to be scheduled sometime in 2013.

Not all merchants oppose the deal, but dozens of retailers, including the world’s largest retailer (Wal-Mart), firmly hold that the deal offers meaningless relief for merchants; however, their quest to take down this settlement has been put on hold for now.

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