NCGA and Other Merchants Will Appeal Preliminary Ruling in Proposed Interchange Settlement

Nov 27, 2012

Today a majority of named class plaintiffs filed a notice of appeal to challenge a ruling from the U.S. District Court for the Eastern District of New York granting preliminary approval to a proposed settlement of a long-standing antitrust class action filed by merchants against Visa, MasterCard and the largest banks. The merchant group will ask the U.S. Court of Appeals for the Second Circuit to deny preliminary approval due to the legal defects in the proposed settlement.

More than 1,200 merchants have weighed in with the courts in opposition to the settlement on the grounds that it locks in the broken interchange system, deprives merchants of their right to fight the anticompetitive practices of the Visa, MasterCard duopoly in court, and constrains innovations that could bring competition to the marketplace, such as mobile technology.

“This settlement has fatal legal defects and should not get preliminary approval. We look forward to presenting the problems we see in this proposal to the Second Circuit Court of Appeals.,” said Jeffrey Shinder, managing partner, Constantine Cannon, LLC, counsel to the merchants objecting to the proposed settlement.

The named class plaintiffs opposing the proposed settlement of the case, which is known as “In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation,” are Affiliated Foods Midwest, Coborn’s, Inc., D’Agostino Supermarkets, Jetro Holdings LLC, National Association of Convenience Stores (NACS), NATSO, National Community Pharmacists Association (NCPA), National Cooperative Grocers Association (NCGA), National Grocers Association (NGA), and National Restaurant Association (NRA).

“The merchant community is deeply committed to reforms that bring transparency and competition to the broken electronic payments market. The volume and diversity of those objecting to this flawed proposal is remarkable and continues to grow,” said Shinder.

The named class plaintiffs were joined in multiple briefs filed with the court from a growing chorus of members of the merchant class, including nearly 1200 small businesses and recognized brands, such as 7-Eleven, Abercrombie & Fitch Co., Alon, American Signature, Inc., Ascena Retail Group, Inc., AutoZone, Best Buy, Big Lots Stores, Inc., Boscov’s Department Store, LLC, Chico’s FAS, Inc., CKE Restaurants, Inc., Costco Wholesale Corp., Crate & Barrel, Cumberland Farms, Dick’s Sporting Goods, Dillard’s, Inc., Dollar General, Expedia, The Gap, Inc., Giant Eagle, The Home Depot, IKEA, J.C. Penney Corporation, Inc., Jo-Ann Stores, Kum and Go, Kwik Trip, Limited Brands, Inc., Lowe’s, Macy’s, Inc., Michaels, The Neiman Marcus Group, Inc., Papa John’s International, Inc., Petco, REI (Recreational Equipment, Inc.), RaceTrac Petroleum, Inc., Saks Incorporated, ShopKo, Sports Authority, Starbucks, Target Corporation, Wal-Mart Stores, Inc., Wawa, Wendy’s, and a variety of associations including the American Booksellers Association, and National Association of College Stores, National Retail Federation, and Retail Industry Leaders Association.