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In one of the stranger twists arising from the controversial settlement to credit card interchange litigation, the federal judge overseeing the massive case on Thursday gave lawyers for two feuding merchant groups a week to propose changes to a Web site that urges merchants to opt out of the pending settlement.
U.S. District Judge John Gleeson convened a brief hearing in Brooklyn, N.Y., at the request of attorneys for class merchants in favor of the settlement with Visa Inc., MasterCard Inc. and some banks that was announced last July. The pro-settlement faction objected to the merchantsobject.com Web site that eight anti-settlement merchant trade groups created in March. The pro-settlement side said the site did not provide full information about merchants’ options and that its placement of links to the court-approved settlement site, paymentcardsettlement.com, were not prominent enough.
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Gleeson too found fault with the merchantsobject site, calling it “completely misleading” and saying the wording might lead merchants to think accepting the settlement was not an option, according Reuters. But he didn't order any specific changes, instead telling the sides to submit proposals for possible relief that could include a notice that the court had previously found its information misleading, Reuters reported.
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The anti-settlement side took a First Amendment stance in defending the new Web site, which urges merchants to opt out of of the plan and provides a way for merchants to object electronically. “This is odd because the Web site’s completely accurate,” says Washington, D.C. attorney Douglas Kantor, who represents NACS, the convenience-store trade group that is one of merchantsobject.com’s sponsors. “It really boils down to the class lawyers not liking that some people have a different perspective.”
Kantor adds, however, “that we will comply with what the court has told us to do.”
An attorney for the pro-settlement group could not be reached for comment late Thursday. But Mitch Goldstone, a pro-settlement plaintiff, says merchantsobject.com is simply a distraction.
“Eight million merchants are in support of this,” says Goldstone, chief executive of Irvine, Calif.-based ScanMyPhotos. “The easiest way is to turn it [the site] off and use the court-sanctioned Web site, which contains all the information.”
Gleeson has already approved the settlement on a preliminary basis, but says final approval has a higher threshold. He’s set a May 28 deadline for filing objections. The court will assume merchants who don’t object support the plan. A so-called fairness hearing is set for Sept. 12.
In addition to NACS, another merchantsobject.com supporter is the Retail Industry Leaders Association, which announced Thursday that it was opting out of and objecting to the settlement. The others are the National Restaurant Association, the National Grocers Association, the National Cooperative Grocers Association, the National Community Pharmacists Association, NATSO, an association of truck-stop operators, and SIGMA, a fuel marketers’ association.
In related news, Gleeson has appointed an expert to evaluate the economic implications of the case’s issues.
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