Perspective: We're a Long Summer Away from Swipe-Fee Resolution

Published in CSP Daily News

Circle K among hundreds of retailers that object, opt out of proposed settlement

By  Steve Holtz, Online News Director & Beverage Editor

BROOKLYN, N.Y. -- A perusal of the hundreds of documents filed in the past few days in the court case of Payment Card Interchange Fee and Merchant Discount Antitrust Litigation reads like a Yellow Pages of retail: Target, Abercrombie & Fitch, Gap, hotels, restaurant groups and retail associations.

Some of the filings are simple, one-sentence statements: "Please take notice that Jeffrey I. Shinder of Constantine Cannon LLP shall appear as counsel of record for objector Martin's Super Markets Inc. in the above-referenced actions."

Others are lengthy diatribes--20 pages and more--detailing the reasons the retailers disagree with a proposed settlement on interchange fees.

What just about all of them have in common in the use of the terms "object" and/or "opt out."

"This settlement should be denied by the court, as the class plaintiffs do not satisfy the adequacy requirement, as a conflict of interest exists between the named class representatives and the putative class because each class plaintiff is paid $200,000 for not challenging or contesting the settlement, while the parties' settlement agreement forbids the class plaintiffs from challenging any aspects of the settlement with this court," wrote a group representing several full-service restaurants and beauty salons.

"Please take notice that Ascena Retail Group Inc. … desires to appear and wants to speak at the Fairness Hearing for the case called in re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation," wrote the Suffern, N.Y.-based parent company of The Dress Barn, Charming Shoppes Outlet Stores LLC and Lane Bryant Inc., among others.

In the convenience store industry, Alimentation Couche-Tard Inc. is among the most recent chains to opt out of the settlement on behalf of the entire U.S. network of Circle K convenience stores. Circle K joins 7-Eleven, Alon Brands and many other c-store chains in choosing to opt out.

Retailers who do not opt out--and thereby become fully bound by the restrictions of the agreement--will be eligible for a share of the $7.25 billion. But the figure amounts to less than three months' worth of swipe fee charges, according to objectors, and the small retailers hit hardest by the fees would give up their rights for as little as a few hundred dollars.

The lawsuit was brought in 2005 by 19 trade associations and individual retail companies, but a majority--including all six trade associations--rejected the settlement when it was proposed last summer.

Click here to view CSP Daily News' coverage of the swipe-fee issue.

What's clear in all of this is: This is not a convenience store-industry battle. While the c-store industry--and NACS, specifically--has been front and center in this battle, the scale of the struggle makes it an issue for all retailers in every channel. Recent objectors range from value retailer 99 Cents Only Stores to high-end couture designer and retailer Hermes Paris. Indeed, the class could include most any company that ever has or ever will accept credit cards for payment of goods or services.

The Sept. 12 Fairness Hearing date is a summer away. And based on these court documents obtained by CSP Daily News, don't expect a decision right away. Dozens and likely hundreds of retailers and retail groups have requested an opportunity to address the court in reference to the proposed $7.25-billion settlement. At the same time, lead defendants Visa and MasterCard have asked federal Judge John Gleeson to declare that swipe fees do not violate antitrust law. The complaint asks Gleeson to declare that the fees are lawful and pro-competitive. If Gleeson rules that the swipe fees do not violate antitrust law, it could prevent retailers from pursuing separate damage actions.

It's going to be a long summer, followed by a long, contentious battle in a Brooklyn courtroom.

Steve Holtz is news director for CSP. He can be reached at

By Steve Holtz, Online News Director & Beverage Editor
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