On October 30, a California appellate court approved a settlement in two class actions challenging Visa and MasterCard’s allegedly anti-competitive debit and credit policies. According to the court, the revised version of the $31 million settlement fixed an improper release of claims. The court said the revised deal properly takes into account the value of the claims brought in the second action, filed by plaintiff James Attridge, who was also a class member in the earlier action brought by plaintiff Richard Johns.
The Attridge action took issue with different Visa and MasterCard policies than the Johns action – specifically, exclusion policies that prohibit banks that issue credit cards affiliated with the Visa or MasterCard systems from issuing credit cards affiliated with other systems from competing credit card companies. The decision states that the revised deal makes the release of the Attridge claims explicit and that class counsel explicitly addressed the issue when moving for approval of the new settlement.
“Class counsel represented to the trial court that in their view, the compensation to the class was adequate to reflect the value of the plaintiffs’ claims, including the Attridge claims,” the court wrote. “Moreover, the trial court expressly discussed the value of the Attridge claims, and took that value into account, when determining whether the revised settlement was fair and adequate.”
The Johns action was first brought in 2000, challenging the companies’ acceptance policies. It argued that Visa and MasterCard illegally tied the acceptance of their debit cards by retailers to the merchants’ acceptance of their credit cards, “forcing merchants to accept [the debit cards] as a condition to being able to continue accepting the foremost and indispensable Visa and/or MasterCard credit cards.” Attridge filed his separate action in 2004, arguing that the companies’ exclusion policies had reduced competition in the “general purpose card network services market,” which permitted them to allegedly charge anti-competitive prices for network services.
The class settlement was approved in August 2010 and required Visa and MasterCard to pay $31 million into an escrow fund.