Friday, November 30, 2012
In his preliminary approval order, U.S. District Court Judge John Gleeson scheduled the final approval hearing for Sept. 12, 2013. He also issued an injunction prohibiting any member of the class from challenging the settlement agreement pending its final approval.
The settlement was negotiated with the card companies by attorneys appointed by the court to represent the more than 7 million merchants in the plaintiff class. Dissenting retailers object to the settlement because it forbids them from filing related claims of anticompetitive interchange practices against MasterCard and Visa in the future.
In a request for a stay of the preliminary approval order pending appeal to the Second Circuit Court of Appeals, the objecting merchants told the district court the future claims release deprives merchants of their due process rights. The retailers specifically objected to the order allowing them to opt out of the class so far as past damages are concerned but preventing them from bringing similar antitrust claims in the future.
"Given that merchants likely will be exercising their opt-out rights for claims concerning ongoing conduct – including, most importantly, the continued fixing of interchange – providing opt-out rights only for past damages, without the ability to enjoin and obtain damages for ongoing conduct, substantially impairs the value of opt-out rights for past damages," the objecting merchants stated in their stay request. "This exacerbates the already serious due process issues raised by this settlement."
Attorneys for Visa and MasterCard, along with the attorneys who negotiated the settlement on behalf of the merchants, stated that refusing the stay would not harm the objecting retailers, but granting a stay would irreparably hurt retailers who support the settlement because, among other things, the retailers stand to lose the benefit of the settlement's proposed eight-month interchange reduction, worth an estimated $1.2 billion, which is to begin in July 2013.
Robert Vizas, an attorney representing the card companies, added, "Complex cases could not be settled if the parties and the settlement were at risk for collateral attacks and disruptive litigation during the approval process."
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