Lawyers, Cards & Money
BROOKLYN, N.Y. -- A federal judge on Friday approved $544.8 million in attorneys fees for law firms that represented merchants who sued Visa Inc. and several banks over credit-card transaction fees, reported The Wall Street Journal.
The amount represents about 9.6% of a $5.7 billion settlement fund established for merchants participating in the deal, according to an order filed by Judge John Gleeson in U.S. District Court in Brooklyn, N.Y.
"This case stands out in size, duration, complexity, and in the nature of the relief," Gleeson wrote in the order cited by the newspaper. He added that class attorneys "took on serious risks in prosecuting the case."
The settlement, which leeson approved last month, was billed by the attorneys as the largest settlement of an antitrust class-action case. Once valued at $7.25 billion, the settlement amount shrunk to $5.7 billion based on merchants who opted out of the settlement.
The merchant class was represented by law firms Robbins Geller Rudman & Dowd LLP; Robins, Kaplan, Miller & Ciresi LLP, and Berger & Montague PC.
Craig Wildfang, a partner with Robins, Kaplan, Miller & Ciresi, said Friday the award would be distributed among a larger number of firms who helped on the case.
In addition to attorneys' fees, Gleeson also approved $27.04 million in expenses for the firms but declined their request for $1.8 million in incentive payments for class plaintiffs, said the report.
The incentive payment request would "no doubt dwarf the average monetary recovery" for other class members, he said.
Merchants sued Visa, MasterCard and several banks that issue their credit cards in 2005, alleging they set interchange or "swipe" fees at arbitrarily high levels.
Retailers also have fought Visa and MasterCard for years over policies that they argue have prevented them from lowering their costs of accepting cards, including the ability to encourage customers to use lower-cost forms of payment.
Since it was announced in July 2012, the settlement has garnered heated opposition from numerous retail trade groups and merchants, including some class plaintiffs, who say the agreement is too generous to Visa and MasterCard and will not stop the transaction fees retailers pay from rising.
In addition to making payments to merchants, Visa and MasterCard also agreed to alter some of their rules that retailers had complained about.
The biggest change was the elimination of rules that prohibited merchants from surcharging, or charging customers a fee for paying with a credit card. The rule change took effect in Jan. 2013.
Several groups and merchants, including the National Association of Convenience Stores, National Retail Federation and Wal-Mart Stores Inc., have already filed appeals of settlement approval.
Many merchants and trade groups who opposed the deal have filed new suits against Visa and MasterCard.