NEW YORK – On Monday, the Second Circuit Court of Appeals heard oral arguments on whether a $5.7 billion settlement in the class action lawsuit against Visa and MasterCard (In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation) should be set aside.

Merchant groups, including NACS, are seeking to overturn provisions of a December 2013 court-ordered $5.7 billion settlement against Visa and MasterCard for inflating swipe fees, arguing that the settlement limits future fee-related lawsuits and does little to prevent the card companies from colluding to set higher fees. Furthermore, the $5.7 billion settlement is little more than a slap on the wrist for the card companies, which get more than $50 billion in swipe fees each year.

The settlement requires a one-time payment from the card companies to merchant class members, but does not restrain the card companies from instituting higher swipe fees and engaging in other anti-competitive practices in the future. The settlement also provides Visa and MasterCard broad prospective immunity from future litigation.

The oral arguments were the latest step in litigation that has been pending since 2005. The $5.7 billion settlement is the largest in a U.S. antitrust class action. A decision by the court of appeals may take several more months. 

Still pending before the district court is a separate merchant challenge to the Visa/MasterCard settlement, which followed discovery in early 2015 that opposing lawyers in the case shared confidential information with each other. NACS is also a party to that challenge.