NEW YORK -- A group of retailers and trade groups filed notice in federal court today stating they are appealing a key component of last month’s preliminary approval of the landmark antitrust settlement with Visa and MasterCard which would bar merchants from bringing subsequent legal claims in the case even if they object to the settlement.
The proposed appeal is extraordinary because it is being launched by some of the same plaintiffs in the antitrust suit who negotiated the $7.2 billion settlement, but eventually walked away from the deal.
"This settlement has fatal legal defects and should not get preliminary approval," Jeff Shinder, a managing partner with Constantine Cannon LLP, which is representing the objecting plaintiffs. "We look forward to presenting the problems we see in this proposal to the Second Circuit Court of Appeals."
The objectors include D'Agostino Supermarkets Inc., the National Association of Convenience Stores and National Grocers Association.
The U.S. District Court for the Eastern District of New York granted preliminary approval to the deal on Nov. 10, saying that there are issues that still “require significant scrutiny.” The settlement will be subject to final approval at a later date.
The notice of appeal was being filed the same time U.S. Judge John Gleeson was filing his preliminary approval of the settlement.
The settlement will require Visa, MasterCard and a handful of banks to pay merchants $7.2 billion to settle all legal claims stemming from a 2005 antitrust suit, for Visa and MasterCard to temporarily reduce interchange fees by an amount equal to $1.2 billion, and to alter certain rules that merchants have complained about. Those rule changes, including the elimination of a ban against surcharging customers who pay with credit cards, are set to take effect in two months.