Walmart (NYSE:WMT), Amazon (NASDAQ:AMZN) and dozens of other large retailers made their final objections to the $7.25 payment-card interchange settlement on Tuesday (May 28), in a joint legal brief that attacked nearly every element of the settlement.
The 74-page filing marks the theoretical end of objections to the settlement, which got preliminary approval from U.S. District Judge John Gleeson last summer. Under the settlement, Visa (NTSE:V), MasterCard (NYSE:MA) and several large banks would be protected from future lawsuits over their payment card rules, while retailers would get several months' worth of interchange rate reductions plus the ability to add a surcharge, or "swipe fee," for customers who use a credit card.
But most retailers can't benefit from swipe fees, which are illegal in 11 states and also barred for merchants that take American Express cards along with Visa and MasterCard, according to the objection by the retailers. The filing also argues that the settlement defines "merchant" too broadly (it includes Amtrak, government agencies and even card processor First Data because they all incidentally accept payment cards) and grants the card brands too much protection from being sued, given that the original lawsuit was only about a much more limited set of Visa and MasterCard rules.
The settlement "is worse for the class than losing" the original class-action lawsuit would have been, the retailers' brief claims.
With the May 28 deadline for objections now past, the court has until a Sept. 12 "fairness hearing" to sift through all the filings to determine which retailers have opted out of part of the settlement and to weigh the merits of the objections.
A hint of just how much work remains showed up in a docket entry for Judge Gleeson's court on Wednesday: Apparently the retailers' objection was so last-minute that retailers' lawyers ran out of time and had to deliver more than 100 supporting documents to the court in paper form. They made the deadline, but now the lawyers have agreed to take the documents back, scan and file them individually in the court's electronic filing system, and then return the originals to the court.
- See this Bloomberg story
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