Retailers to Ask Court to Reopen, Overturn Swipe Fee Settlement

NEW YORK — A group of retailers that includes Wal-Mart Stores Inc., 7-Eleven Inc. and other major sellers plan to challenge the $7.25-billion, class-action swipe fee settlement with Visa and MasterCard after emails between a plaintiffs' attorney and a former MasterCard lawyer came to light recently, reported the Wall Street Journal.

Lawyers for the retailers were expected to formally notify the credit card companies on Tuesday that they intend to ask a New York federal court to reopen and overturn the settlement.

This move comes after an investigation into alleged wire fraud by Keila Ravelo, who represented MasterCard during the case while she was a partner at Willkie Farr & Gallagher LLP, turned up emails and documents exchanged between Ravelo and Gary Friedman, who represented merchants through his law firm Friedman Law Group LLC.

The group of retailers alleges that the lawyers' communication included confidential information and contributed to the plaintiffs receiving inadequate representation in the case.

Wilkie Farr & Gallagher stated in a February letter to U.S. District Court Judge Margo Brodie that it has seen "certain documents which we believe raise questions that appropriately should be discussed with the court concerning communications in which Ms. Ravelo was involved relating to this litigation and other matters."

The original lawsuit alleged that Visa and MasterCard illegally fixed credit card interchange fees, also known as swipe fees. The settlement was proposed in July 2012, but 10 of the 19 plaintiffs, including all of the involved trade associations, rejected it.

A filing from MasterCard's current law firm states that Ravelo and Friedman may have "violated protective orders, improperly disclosed confidential information and otherwise made improper and inappropriate communications."

Lawyers for Ravelo and Friedman, and a spokeswoman for Wilkie Farr & Gallagher, declined when asked to comment on the case, as did spokesmen for Visa, MasterCard and numerous involved retailers.