October 15, 2010

Wells Fargo A Day Late And A Dollar Short In Bid For Visa Check/MasterMoney Settlement Funds

The Second Circuit Court of Appeals has upheld a district court ruling that dismissed belated claims by Wells Fargo to participate in the groundbreaking settlements of the Visa Check/MasterMoney Antitrust Litigation

The settlements, finalized in 2005, involved payment of $3.05 billion by defendants Visa and MasterCard to a plaintiff class of millions of U.S. merchants afflicted by the defendants’ “Honor All Cards” policies – polices that illegally tied debit cards to credit cards and forced merchants to accept debit cards at supracompetitive prices.

The deadline for filing claims to the settlement funds expired on September 15, 2008, after a three-year window for filing claims.  After the deadline passed, Wells Fargo attempted to file claims on behalf of bankrupt merchants to whom Wells Fargo had provided loans.

On November 19, 2009, Judge John Gleeson of the U. S. District Court for the Eastern District of New York rejected Wells Fargo’s attempt to file late claims, finding that Wells Fargo did not provide an adequate explanation rising to the level of “excusable neglect” for why it failed to file its purported claims before the deadline.  Judge Gleeson noted that Wells Fargo knew about the settlements as early as 2006 when it participated in the claim of another merchant.  The Second Circuit affirmed Judge Gleeson’s decision less than two weeks after hearing oral argument.

According to Jeffrey Shinder of Constantine Cannon, counsel for the plaintiff class who opposed Wells Fargo’s appeal during oral argument, Judge Gleeson’s ruling and the Second Circuit’s timely affirmance will help wind up the administration of the settlement, a process that has involved multiple distributions to merchants totaling over $2.5 billion over the past five years.  One more distribution will be made to merchants this year, possibly the last distribution in the case (more information on this process is available at the case website).

The Visa Check/MasterMoney Antitrust Litigation, which also involved injunctive relief valued as much as $80 billion, is often credited with blazing the trail for similar litigation against the credit and debit card companies.  The most recent action was filed on October 4, 2010, by the Department of Justice and seven states against Visa, MasterCard, and American Express.  While Visa and MasterCard agreed to settlements, American Express has elected to litigate the lawsuit.

Categories: Antitrust Enforcement, Antitrust Litigation

    No comments.

    Leave a Reply

     






    © 2009-2024 Constantine Cannon LLP. Attorney Advertising. Disclaimer. Privacy Policy.