Antitrust Law Daily Wrap Up, ANTITRUST—J.P.M.L.: Retailer remains in multidistrict litigation against credit card networks, (Dec 19, 2013)

By Jeffrey May, J.D.

The Judicial Panel on Multidistrict Litigation (JPML) has denied a request to create a new multidistrict proceeding to handle actions filed by merchants that opted out of a massive class action brought against Visa U.S.A. Inc. and MasterCard International Incorporated, as well as issuing and acquiring banks, for conspiring to fix interchange fees. The JPML denied American Eagle Outfitters, Inc.’s motion to vacate an order conditionally transferring its action to the federal district court in Brooklyn, New York, for inclusion in the existing multidistrict litigation (MDL) against the payment card networks, or in the alternative, to create a new MDL (In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, December 18, 2013, Heyburn, J.).

The JPML’s determination comes just days after the federal district court in Brooklyn approved a settlement valued at $7.25 billion resolving claims brought on behalf of approximately 12 million merchants in the matter. American Eagle had argued that its action should not have been transferred in light of the advanced stage of the MDL. American Eagle contended that this order placed it and other merchants objecting to the class settlement at a procedural disadvantage.

The JPML concluded that the multidistrict proceeding encompassed opt-out actions similar to American Eagle’s, which would benefit from the common pretrial proceedings. American Eagle’s action also shared common questions of fact with the opt-out actions pending in the multidistrict litigation.

Also rejected was American’s Eagle alternative request that the Panel create a new MDL to handle the opt-out actions, which now total 20, and to transfer those actions to the federal district court in New York City, where the first opt-out action was filed by Target Corporation. The JPML explained that it had already denied a similar request made by Target and 7-Eleven, Inc. American Eagle offered no reason for the Panel to reconsider its determination.

Therefore, American Eagle’s action was transferred to the Eastern District of New York for inclusion in the coordinated or consolidated pretrial proceedings.

Attorneys: Richard T. Victoria (Gordon & Rees LLP) for American Eagle Outfitters, Inc. Michael S. Shuster (Holwell Shuster & Goldberg) for Visa U.S.A. Inc.

Companies: American Eagle Outfitters, Inc.; Target Corp.; 7-Eleven, Inc.; MasterCard International Inc.; Visa U.S.A. Inc.

Cases: Antitrust