"Retailers were skeptical of this settlement from the beginning."
WASHINGTON – The National Retail Federation welcomed today’s refusal by the U.S. Supreme Court to reinstate a class action lawsuit settlement that would have blocked merchants from challenging Visa and MasterCard price-fixing of credit card swipe fees that increase prices paid by consumers.
“If this settlement had been approved, the structure of fees that drive up the prices of everything consumers buy would have been cemented into place forever,” NRF Senior Vice President and General Counsel Mallory Duncan said. “Now something can finally be done to bring these fees under control.”
“Retailers were skeptical of this settlement from the beginning,” Duncan said. “It would have done nothing to keep swipe fees from rising in the future. It was nobody’s idea of a good settlement.”
The Supreme Court this morning refused to take up the case, leaving in place last year’s ruling by the 2nd U.S. Circuit Court of Appeals that struck down a $7.25 billion antitrust settlement in a lawsuit brought by a small group of retailers and trade associations claiming to represent the retail industry.
The justices’ decision leaves the 2005 lawsuit pending in U.S. District Court in New York, where retailers could go to trial, pursue a revised settlement or focus on other lawsuits over the issue that have been filed more recently.
The settlement was reached in 2012 even though NRF and others argued that it failed to reform the price-fixing system under which Visa and MasterCard set fees for credit cards issued by thousands of banks. Rather than lower the fees, the card companies proposed in the settlement that they be passed along to consumers as a surcharge. Major retailers rejected the surcharge proposal, saying it was the opposite of what they sought, while small retailers would have seen as little as a few hundred dollars each. Retailers who rejected the monetary settlement would have still been bound by other restrictions the trial court would not let them opt out of, including a prohibition on future lawsuits over the fees.
NRF in 2014 asked the 2nd Circuit to overturn the settlement, saying a broad cross section of the retail industry ranging from independent Main Street stores to national chains opposed the deal. The appeals court ruled in NRF’s favor last year, saying that merchants “were inadequately represented” in the case. That ruling, however, was appealed to the Supreme Court by some of the original plaintiffs.
About NRF
NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF.com