Trade Groups Could be Held in Contempt Over Swipe Fee Websites

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Trade Groups Could be Held in Contempt Over Swipe Fee Websites


NEW YORK – A federal judge threatened to hold trade associations in contempt of court over recently launched websites criticizing the proposed $7.2-billion swipe fee deal winding its way through the courts.

"The site continues to this day to obfuscate the important differences between opting out and objecting" to the settlement, "and it fails to adequately inform a visitor to the site of the consequences of opting out," U.S. District Court Judge John Gleeson wrote in an order filed Wednesday in District Court, Eastern District of New York in Brooklyn, N.Y., as reported by Dow Jones Newswires.

On April 11, Gleeson singled out the website launched by NACS, the Association for Convenience & Fuel Retailing, which tells merchants to "take action" and says their options are to "opt out" or "object." He said the wording of the websites could prompt merchants to think that accepting the settlement is not an option, as CSNews Online previously reported.

At the time, Gleeson gave the lawyers -- for both pro- and anti-settlement retailers -- one week to submit proposals on appropriate relief. He said he would not order the sites be taken down, but would be willing to consider such relief as a website banner telling visitors that information previously posted could be misleading.

That deadline has now passed and a new one has been set.

According to the Dow Jones report, Gleeson is giving the trade groups until April 30 to show in writing why they shouldn't be held in contempt of court. In Wednesday's order, he also approved the plaintiffs' request that the banners be placed on the home pages of the websites in question. In addition, he ordered that the trade associations provide notice to class plaintiffs' counsel of any communication they intend to send out regarding the settlement.

Gleeson gave the trade groups, including NACS, the National Grocers Association and National Restaurant Association, a chance to argue why should not be taken down. Oral arguments on the issue will take place May 3.

An attorney representing some of the trade groups that oppose the settlement did not immediately respond to a request for comment Wednesday, the news outlet noted.

Approximately 8 million merchants have until May 28 to opt out or object to the deal. A fairness hearing to determine whether the settlement should be granted final approval is scheduled for Sept. 12.