A federal judge will give opponents of a proposed settlement on credit-card swipe fees until the end of the month to voice their opinions. At the same time, the judge said he is likely to give preliminary approval to the proposal, pending the feedback.
U.S. District Court Judge John Gleeson on Wednesday said the pending $7.25-billion settlement between merchants and Visa Inc., MasterCard Inc., and several large banks appears to meet requirements for preliminary approval, according to a Dow Jones Newswire report.
However, Gleeson noted that the threshold for preliminary approval of proposed class-action settlements is “meaningfully lower” than that for final approval. “I have reviewed the settlement agreement, and at first blush it appears to satisfy the threshold requirements for preliminary approval,” Gleeson wrote, though he didn’t actually grant preliminary approval to the deal, according to the report. The deal, announced in July, would allow the payment networks and several banks that issue their cards to resolve litigation that has lingered since 2005.
The settlement has re-ignited a long-standing battle between merchants and the credit-card industry, the report said. A number of merchant groups have said the deal is flawed because it won’t stop swipe fees from increasing in the future. More than half of the 19 named plaintiffs involved in the suit have said they oppose it. Supporters say critics are trying to drum up support for legislation that would address the fees.
Attorneys who negotiated the deal on behalf of a proposed class of up to 8 million merchants asked for Gleeson’s preliminary approval of the settlement in a motion filed Friday in the Brooklyn court.
Gleeson’s order Wednesday denied requests by attorneys representing some of the merchants who oppose the deal to allow for the formation of a committee to represent objectors and to specify whether he will set procedures for absent class members who oppose the deal to make their concerns known.
Gleeson said parties who oppose preliminary approval have until Wednesday, Oct. 31, to make their positions known in writing. Objections “deserve, and will get, careful consideration by the court,” he wrote, according to the report.
Gleeson also said he will allow for oral argument on the motion for preliminary approval on Friday, Nov. 9, noting, “It seems clear that there is an expectation among some interested parties that the preliminary approval process should be more involved in this case than in the usual class action.”
If the deal is approved, up to 8 million retailers could receive payments totaling $6.05 billion. In addition, the settlement also calls for Visa and MasterCard to temporarily reduce swipe fees by an amount equal to $1.2 billion and would allow merchants to surcharge customers who pay with cards, a practice Visa and MasterCard have long banned. (CSP Daily News: www.cspnet.com)