Merchant Trade Group Intervenes in Credit Card Interchange Fee Consolidated Lawsuit

A federal court in Brooklyn, New York allowed the National Retail Federation, the Retail Industry Leaders Association, and Walmart Inc. to permissively intervene for the limited purpose of opposing class certification in a long-running antitrust case brought by merchants against banks and credit card companies. 

In the multidistrict litigation matter, the merchant-plaintiffs contended that the defendants’ network rules impose supracompetitive and collectively fixed fees, the fees that are charged whenever a customer completes a transaction using a Visa or Mastercard payment.

The case, contesting challenged network-instituted rules like “default interchange rules, honor-all-cards rules, no-surcharge rules, and no-discount rules,” has been in the courts since the mid-2000s. The Second Circuit Court of Appeals invalidated a settlement in 2016. The merchant trade groups reportedly opted out of an improved December 2019 settlement, and have not since pursued direct litigation.

In the filing approving the intervention, the court explained that the trade merchant groups and Walmart seek to oppose class certification because, under the proposed class certification definition, putative class members may not be allowed to opt out of the injunctive relief class. The plaintiffs opposed the motion to intervene on several grounds, including that it was untimely because their motion for class certification is fully briefed.  

The court held that there were relevant factors mitigating a finding of timeliness. Moreover, Judge Margo K. Brodie said, the intervenors would be prejudiced were they denied permission to intervene.

In light of the risk of harm to their interests, the court wrote, the intervenors will help develop underlying fact issues surrounding opt-out issues. 

“Unlike the Direct Action Plaintiffs and the Grubhub Plaintiffs, Proposed Intervenors are not currently pursuing damages claims against Defendants and therefore they will add the perspective of absent class members not otherwise litigating their cases who nevertheless seek opt-out rights from the litigation,” the opinion said.

Walmart is represented by Kramer Levin Naftalis & Frankel LLP and Dowd Bennett LLP. The merchant trade groups are represented by Emery Celli Brinckerhoff  Abady Ward & Maazel LLP.