Visa, MasterCard $5.6 billion settlement with retailers is upheld By Reuters

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Visa, MasterCard $5.6 billion settlement with retailers is upheld

Stock Markets Mar 15, 2023 04:43PM ET

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Visa, MasterCard $5.6 billion settlement with retailers is upheld

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By Jonathan Stempel

(Reuters) - A federal appeals court on Wednesday upheld a $5.6 billion antitrust class-action settlement with more than 12 million retailers that accused Visa Inc (NYSE:V) and MasterCard Inc of improperly fixing credit and debit card fees.

The 2nd U.S. Circuit Court of Appeals in Manhattan rejected claims that a class action should not have been certified because of confusion over who deserved compensation, and that the $523 million of legal fees awarded to the retailers' lawyers was too high.

Among the objectors were a group of gas station operators for oil companies such as Chevron (NYSE:CVX) and Shell (LON:RDSa).

The operators and the companies both claimed to have been injured after accepting Visa and MasterCard for gas sales.

Circuit Judge Dennis Jacobs said that although their dispute may need to be resolved in court, it was "no reason" to delay payouts to other class members.

The settlement resolved claims that Visa and MasterCard overcharged retailers on interchange fees, or swipe fees, when shoppers used credit or debit cards, and barred retailers from directing customers toward cheaper means of payment.

Settling retailers would be barred from bringing further claims from within the 15-year class period, and for five more years after the settlement became final, court papers show.

Steve Berman, a lawyer for the objectors, said he looked forward to protecting their interests and those of other franchisees in further litigation.

The settlement had won approval from U.S. District Judge Margo Brodie in Brooklyn in Dec. 2019, three-and-a-half years after the appeals court voided a $7.25 billion accord approved by a different judge because it shortchanged some retailers.

While upholding the latest settlement, Jacobs said the outcome was "so remarkable as to prompt disquiet."

He said this was in part because the retailers' lawyers had billed for 630,000 hours of work, or about 72 calendar years, and could collect more if Visa and MasterCard's anticompetitive behavior resumed and more litigation ensued.

The case is In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 2nd U.S. Circuit Court of Appeals, No. 20-339.

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Visa, MasterCard $5.6 billion settlement with retailers is upheld

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