US Court of Appeals upholds Visa and MasterCard settlement with retailers
A group of gas station operators for oil companies, including Chevron and Shell claimed they suffered due to payment networks
US Court of Appeals upholds Visa and MasterCard settlement with retailers
A group of gas station operators for oil companies, including Chevron and Shell claimed they suffered due to payment networks
The United States Court of Appeals for the Second Circuit in Manhattan has upheld a $5.6 billion antitrust class-action settlement with over 12 million retailers accusing Visa Inc and MasterCard Inc of improperly fixing credit and debit card fees.
The federal appeals court rejected claims that a class action should not have been certified because of confusion over who deserved compensation. It added that the $523 million legal fees awarded to the retailers' lawyers was exorbitant.
The objectors were a group of gas station operators for oil companies, including Chevron and Shell. The operators and the companies claimed they suffered after accepting Visa and MasterCard for the sale of gas.
They claimed that Visa and MasterCard overcharged retailers on interchange or swipe fees when shoppers used credit or debit cards. The two entities barred retailers from directing customers toward cheaper means of payment.
Circuit Judge Dennis Jacobs said that although the dispute needed to be resolved in court, he saw “no reason" to delay the payouts to other class members. He stated the outcome was, "so remarkable as to prompt disquiet."
The judge added it was because the retailers' lawyers had billed for 630,000 hours of work (about 72 calendar years). They could collect more fees if Visa and MasterCard's anti-competitive behaviour resumed and more litigation ensued.
The retailers would be barred from bringing further claims from within the 15-year class period, and for five more years after the final settlement.
Appearing on behalf of the objectors, lawyer Steve Berman said he looked forward to protecting their and other franchisees’ interests in further litigation.
In 2019, the settlement won the approval of the US District Judge Margo Brodie in Brooklyn after over three years when the court voided a $7.25 billion accord approved by another judge, as some retailers were short-changed.