On Friday, attorneys for retailers in a long-running antitrust suit challenging the card networks over how interchange rates are set officially filed a motion in federal court seeking preliminary approval of the settlement agreement struck this summer. The $7.25 billion landmark settlement was controversial from the start, drawing opposition from many of the retailers it is supposed to benefit, including many plaintiffs in the actual lawsuit.
Retailer groups have spent much of the fall trying to derail the normal process, which nearly always results in preliminary approval being granted. It remains to see if lobbying efforts and media campaigns waged by retailers will end up convincing Judge John Gleeson that enough retailers have objected to the settlement to justify denying the settlement preliminary approval. But, plaintiffs’ attorneys say this is not the stage in the process for retailers to register objections.
“Preliminary approval plays an important role in the process,” Bonny Sweeney, partner with Robbins, Geller, Rudman & Dowd and co-lead counsel for class in In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, told CardNotPresent.com in a September interview. “It triggers official notification to the class of the actual terms of the settlement. Objecting to preliminary approval will result in a large portion of the class never having been fully informed of its rights under the agreement and never having the opportunity to accept or reject the proposal—a violation of merchants’ right to due process.”
A hearing on preliminary approval is expected to take place in December or January. The judge then will consider granting the proposal that status. Final approval, if granted, could take another year.