Rome LLP Founder and Principal Eugene Rome provided expert analysis to Payments Dive on the latest objections to the proposed $38 billion Visa, Mastercard class action settlement with merchants over credit card swipe fees.
The article, titled “Merchants Call Card-Fee Pact Unconstitutional,” covers new filings from Walmart, Circle K Stores, and the National Association of Convenience Stores (NACS). The merchants argue that keeping them in the settlement class without the right to opt out violates their due process rights under the Fifth and Fourteenth Amendments. Walmart also argues that binding it to a mandatory class raises Takings Clause concerns. The litigation, which dates back to 2005, is before U.S. District Judge Brian Cogan in the Eastern District of New York, and class counsel have until Oct. 14 to respond.
Drawing on his experience litigating major payments disputes for merchants, Eugene identifies Walmart’s due process and Takings Clause theories as “fairly novel arguments.” He points to the makeup of the class as a key issue, “You’ve got vastly different merchants here, which I think is a critical component [of certifying an injunction class which forecloses any opt outs].”
In his view, Walmart’s due process argument is “slightly stronger” because courts don’t allow parties to exit a class seeking injunctive relief from a defendant.
“The unique thing about an injunctive class is that you cannot opt out,” Eugene explains. As a result, he determines, the court is “in effect extinguishing valuable future claims” that Walmart and other large merchants would likely pursue.
