Judge Grants Interchange Settlement Preliminary Approval, Merchants ‘Likely’ to Appeal
Nov. 13, 2012
After Federal Judge John Gleeson last week granted preliminary approval to a proposed $7.25 billion settlement in a long-running antitrust suit between retailers and the credit-card industry, several plaintiffs yesterday indicated they will appeal the decision. The settlement proposal, announced in July , came under fire almost immediately from many top retailers and trade groups (many plaintiffs in the suit itself). Opponents lobbied hard through the media and the courts to persuade Judge Gleeson to deny preliminary approval— an unusual tactic after a settlement has been negotiated. On Friday, however, the Judge said retailers’ objections to the settlement were “overstated” and did not warrant abandoning the settlement process at this point. The payments industry cheered the decision.
“We view Judge Gleeson’s ruling today as further indication that this historic settlement is a fair and balanced resolution to the epic swipe fee battle,” Trish Wexler, spokeswoman for the Electronic Payments Coalition—a trade group representing the major card brands and credit-card issuers—said Friday. “After seven years of negotiation, two years of mediation, and compromise by both sides, the judicial process continues to work effectively and we have taken another important step toward settling this dispute between retailers and the payment card industry.”
Yesterday, however, many plaintiffs in the case reiterated their opposition to the settlement and said an appeal of the Judge’s decision was “likely.”
“We remain convinced that this is a bad deal and we will look at our options to appeal this decision,” said Hank Armour, president and CEO of NACS, a national trade association representing gas stations and convenience stores and an original plaintiff in the case. “This bad deal should not be forced upon the vast majority of merchants and their customers.”
Pending the outcome of any appeal (or even as the appeal goes forward, according to a NACS spokesperson), the next step in the process is for members of the class—the millions of merchants that have accepted credit-card payments in the past nine years—to receive official notice of the terms of the settlement. The path to final approval still could take years.