BROOKLYN (CN) - Visa and MasterCard sued nationwide grocers, convenience stores, restaurants and pharmacies as the opt-out period for two class actions expired, insisting it did not violate antitrust laws, and if it did, it settled.
Dozens of major retailers sued Visa and MasterCard last week in Manhattan Federal Court, claiming the two dominant credit card companies colluded to impose virtually identical rules on banks, stifling competition and forcing merchants to pay millions of dollars in exorbitant "swipe" fees.
On Friday, Visa, MasterCard and six major banks sued the National Association of Convenience Stores et al., seeking "a declaration that from January 1, 2004 to
November 27, 2012 (the 'Damages Period'), the time period for which the defendants may, as opt-outs, seek damages under the Interchange Settlement, Visa's and MasterCard's conduct in, among other things, continuing to set their respective 'default interchange' rates, maintaining their respective 'honor all cards' rules, enforcing their respective rules relating to merchants ('Merchant Rules'), and restructuring themselves did not violate federal antitrust law or the antitrust laws of the several States or the District of Columbia."
The opt-out deadline was Tuesday, May 28, according to Visa and MasterCard's complaint.
The complaint states: "Plaintiffs bring this action for declaratory judgment pursuant to 28 U.S.C. § 2201 to resolve disputes that have embroiled certain of the parties, and this Court, in antitrust litigation for almost twenty years and that have outlasted two settlements. On November 27, 2012, this Court preliminarily approved the second of these settlements (the 'Interchange Settlement') in In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 05-md-1720 (E.D.N.Y. Nov. 27, 2012) (Gleeson, J.) (Orenstein, M.J.) (the 'Interchange Fee Litigation') and provisionally certified two nationwide settlement classes under Federal Rules of Civil Procedure ('FRCP') 23(b)(2) and 23(b)(3). As of the filing of this complaint, defendants, each of which was a named plaintiff in the Interchange Litigation and participated in the negotiations that led to the Interchange Settlement, have opted out or have made clear their intention to opt out of the 23(b)(3) Settlement Class before the applicable deadline of May 28, 2013. To expeditiously and finally resolve their disputes with the Defendants, who are among the most vocal opponents of the Interchange Settlement, Plaintiffs here seek" the declaration cited above.
As the merchants claimed that Visa and MasterCard stifled competition by imposing virtually identical rules on banks that use their endorsements, the merchants may or may not find amusing a footnote to the Visa/MasterCard complaint, which states: "In this Complaint, Visa does not make any allegations as to MasterCard-related conduct and MasterCard does not make any allegations as to Visa-related conduct in support of their respective claims for declaratory judgment."
Visa and MasterCard's complaint continues: "A declaration in Plaintiffs' favor against the Defendants is necessary to prevent the continuation of endless, wasteful litigation between Defendants and Plaintiffs. In fact, the Interchange Settlement is not the first settlement between Visa and MasterCard and the merchant community. In 2003, Plaintiffs Visa and MasterCard settled the In re Visa Check/MasterMoney
Antitrust Litigation (the 'Visa Check Litigation' or 'Visa Check), in exchange for payment of a substantial sum of money. Despite that settlement, the Interchange Fee Litigation was initiated, thereby subjecting Visa and MasterCard and the Bank Plaintiffs to yet a further class action challenging essentially the same conduct.