Majority of Plaintiffs Oppose Credit Card Deal
WASHINGTON, D.C. -- One week before the proposed settlement in a seven-year class action lawsuit against Visa, MasterCard and several financial institutions is to be filed, a majority of the named plaintiffs in the case are opposing the deal.
Ten of the 19 named class plaintiffs object to the reported $7.2-billion deal -- which was reached in July -- because rather than reforming the anticompetitive and illegal practices engaged in by the credit card industry, it will allow that industry to continue to take advantage of merchants and their customers while blocking competition and choice, according to a joint release.
The named class plaintiffs opposing the proposed settlement include: NACS, the Association for Convenience & Fuel Retailing; Affiliated Foods Midwest; Coborn's Inc.; D'Agostino Supermarkets; Jetro Holdings Inc. and Jetro Cash & Carry Enterprises; NATSO; National Community Pharmacists Association (NCPA); National Cooperative Grocers Association (NCGA); National Grocers Association (NGA); and National Restaurant Association (NRA).
"The people asking the court to approve the proposed settlement simply do not represent the interests of most merchants. We do," said Hank Armour, president and CEO of NACS. "The proposal represents a minority view and must be rejected."
The plaintiffs in the lawsuit have until Oct. 19 to formally request approval of the settlement. There have been some reports that lawyers purporting to represent the merchant community will submit the proposed settlement to the court for preliminary approval today. The federal judge hearing the case in Brooklyn, N.Y., then have 30 days to review it, as CSNews Online previously reported.
"On behalf of our members and the consumers they serve, we will continue to pursue our rights and fight for reform of the excessive anticompetitive credit card fees and oppressive rules that are being imposed on all merchants," said Peter J. Larkin, president and CEO of NGA.
The named plaintiffs have been joined by a growing chorus of members of the merchant class in the litigation including the National Retail Federation (NRF), Retail Industry Leaders Association (RILA), and National Association of College Stores, who have come out in opposition to the proposed settlement.
"Negotiators have greatly underestimated the outrage among retailers over this flawed proposed settlement. Retailers overwhelmingly view this proposal not as a settlement, but as surrender," said RILA President Sandy Kennedy. "The proposed class action settlement not only preserves the broken debit and credit markets, but it also denies retailers their future legal rights and effectively forces merchants to fund the settlement through unrestrained interchange fees in perpetuity. The proposal is unacceptable in every way and we look forward to making our case to the courts."