Visa, Mastercard face new pushback in $5.5 billion retailer suit

Visa and Mastercard are facing fresh opposition from U.S. retailers in a long-running legal fight over the fees merchants pay each time consumers swipe their credit or debit card at checkout.

The Retail Industry Leaders Association and the National Retail Federation want to join a federal lawsuit filed in 2005 that led Visa, Mastercard and some big banks to agree to pay $5.54 billion to settle the case. While the suit is still in the midst of appeals, the industry’s two largest trade groups said the class of merchants the existing plaintiffs are seeking to certify is too broad and would prevent retailers who don’t like the settlement terms from opting out and taking their own legal action.

According to a filing Friday in Brooklyn, N.Y., the trade groups said they’d tried negotiating with the court-appointed counsel in the case beginning in mid-2017, but those talks have faltered in recent years. The last such meeting was in April 2019, they said. The groups, whose members have more than 100,000 store locations and generate trillions of dollars in annual sales, asked the judge for permission to become parties in the lawsuit.

“The proposed class is entirely too broad and in effect would prohibit retailers from pursing their own grievances against card networks,” Deborah White, senior executive vice president and general counsel for the Retail Industry Leaders Association, said in a statement on Monday. “We are asking the court to recognize us as parties after our repeated attempts to work with court-appointed counsel were rebuffed. We are particularly concerned that the current class would not represent our interests.”

A representatives for Visa did not have immediate comment when reached by email while a Mastercard spokesman declined to comment. The two networks set the fees that merchants are charged each time a consumer swipes their card at checkout, though most of the fee is passed on to the bank that issues the card.