NEW YORK – A federal judge has set an expedited schedule for objectors to weigh in against a proposed $7.2 billion settlement between merchants and credit-card giants Visa Inc and Mastercard Inc , giving opponents less time than expected to fight against initial approval of the potentially historic pact.
The proposed settlement was submitted Friday for preliminary approval by the court. If it receives first preliminary and then final approval, it would be the largest federal antitrust settlement in U.S. history, offering nearly 8 million merchants $7.2 billion in cash and temporary reductions in interchange, or swipe fees, which stores must pay to process credit and debit transactions.
Since it was announced in July, the proposal has been opposed by some of the largest U.S. retailers, including Wal-Mart Stores Inc , and trade groups like the National Retail Federation. Ten of the 19 original stores and trade groups leading the litigation have also come out in opposition.
Retailers and trade groups that oppose the settlement will have until October 31 to file their written objections with the court, according to an order handed down Wednesday. A hearing has been scheduled for November 9 before U.S. District Judge John Gleeson in Brooklyn federal court.
The deadlines set by Gleeson are considerably shorter than parties in the case had anticipated. At recent hearings, a magistrate judge indicated that parties opposing the deal would have until mid-November to file written objections, and a hearing was expected to be scheduled in either December or January.
The expedited schedule "could be a very, very good sign for the settlement," said Bob Stolebarger, a partner at Bryan Cave who is antitrust counsel to the Electronic Payments Coalition, a trade group for credit-card companies and payment networks.
Gleeson also offered his own initial assessment of the deal on Wednesday, saying that "at first blush, it appears to satisfy the threshold requirements for preliminary approval." However, he noted that the legal standard for preliminary approval is lower than that for final approval, and said objections "deserve, and will get, careful consideration by the court."
Visa, Mastercard and lawyers appointed by the court to represent lead merchants have said they are confident that Gleeson will ultimately approve the deal.
But opponents say it does not meet the legal standard of being "fair, reasonable and adequate."
If approved, the settlement would resolve seven years of litigation brought on behalf of stores, restaurants and retailers who accused the credit card companies of conspiring with banks to inflate swipe fees. If it is rejected by the court, the parties could wind up back at square one.
(Reporting by Jessica Dye; Editing by Phil Berlowitz)