Dive Brief:
- Several large merchants, including Walmart, are asking a federal judge to schedule oral arguments before he rules on a proposed settlement to resolve decades of litigation with Visa and Mastercard over card interchange costs.
- The National Retail Federation and the Retail Industry Leaders Association wrote to U.S. District Judge Brian Cogan on Tuesday, requesting oral arguments on the merits of the pact, which was announced in November. Walmart made a similar request on Friday, followed by Circle K and the National Association of Convenience Stores on Monday.
- Separately, the class counsel in the litigation filed a motion Monday seeking sanctions against a Tennessee law firm, Betz & Baril, and ClickFunds LLC, a referral firm with which it worked. Both firms “repeatedly made misleading statements to class members,” the motion said. A principal of the firm named in the motion, Jason Baril, did not respond to a message Tuesday at his office seeking comment.
Dive Insight:
Merchants sued Visa and Mastercard in 2005, arguing that they had overpaid interchange fees for years because of the networks’ antitrust violations.
The proposed settlement would cut posted credit interchange rates by 0.1% for five years and impose a 1.25% rate for standard consumer cards for eight years. It would also give merchants the right to decline some higher-cost Visa and Mastercard-branded credit cards – a departure from the networks’ “honor all cards” rule – and the ability to add surcharges on some cards.
The court record on the proposed settlement contains more than 200 pages of briefings and dozens of exhibits from the plaintiffs and card networks, Walmart noted in its letter. Objectors to the settlement have filed 37 distinct objections, “raising a host of discrete arguments,” wrote Jesse Panuccio, an attorney for Walmart.
“Oral argument would help the Court cut through that extensive paper record to the core of the issues presented,” Panuccio wrote.
Additionally, “the parties’ disregard for Walmart’s concerns during this round of negotiations highlights the need for Walmart to have a fair chance to present its case,” he added.
A court hearing would allow the retail trade associations “to more fully participate in a process to which they have been inappropriately shut out,” Debra Greenberger, an attorney for the NRF and RILA, wrote Tuesday in a letter to Cogan.
“If the Court is considering preliminarily approving a settlement that binds the largest class of merchants in history, we respectfully submit that the Court should hear the perspective of the broad range of merchants represented by the Merchant Trade Groups, rather than rely on the five small businesses that are the Named Plaintiffs,” Greenberger said.
The merchants also noted that U.S. District Judge Margo Brodie, who was previously assigned the case, heard oral arguments before her June 2024 ruling that rejected a prior settlement.
In the sanctions issue, class attorneys are asking Cogan to prevent Knoxville injury law firm Betz & Baril and ClickFunds from receiving any funds related to clients they signed up to collect claims from a settlement. They also want the court to order the firms to alert class member clients that they’ve been sanctioned, and to pay legal fees and costs.
According to the motion, Betz & Baril failed “to properly train and monitor agents” that dealt with merchants – including telling some how much they were subject to receive from the interchange settlement.
“The proposed sanctions are tailored to least affect innocent class members, but harsh enough to, it is hoped, finally have all false and misleading conduct cease,” wrote Alexandra Bernay of San Diego law firm Robbins Geller Rudman & Dowd, the class counsel that’s overseeing claims and filed the sanctions motion.
Betz & Baril has until Feb. 23 to respond to the motion.
