American Express agreed to settle two putative antitrust class actions filed by U.S. merchants that challenged the company’s Card acceptance agreements. The settlement agreement will address certain merchant concerns, while helping to ensure that American Express Card Members are treated fairly at the point of sale. It will also limit the Company’s exposure to future legal claims. The first lawsuit, In re American Express Anti-Steering Rules Antitrust Litigation, challenges the Non-Discrimination Provisions in the company’s merchant contracts. The lawsuit dates back to 2006 and is pending in the U.S. District Court for the Eastern District of New York. The second lawsuit, In re Marcus Corporation, challenges American Express’ Honor All Cards Provisions. This lawsuit dates back to 2004 and is pending in the U.S. District Court for the Southern District of New York. American Express will reimburse the class plaintiffs’ costs of notifying merchants of the settlement up to $2 million and will provide an additional $2 million fund for plaintiffs to communicate to merchants about the terms of the settlement.
Visa posted its fiscal 3Q/12 (2Q/12) net loss of $1.8 billion, inclusive of a litigation provision of $4.1 billion, related to the settlement agreement in the Multi-District Litigation case. The Company signed a memorandum of understanding to enter into a settlement agreement to resolve the Class Plaintiffs’ claims in the Multi-District Litigation case, and announced…
The law firm of Baron and Budd is investigating excessive bank overdraft fees charged by regional banks. Through the firm’s work on national litigation concerning allegedly manipulative bank overdraft fees practices, Baron and Budd has exposed an overdraft fee charging scheme perpetrated by large national banks, such as Bank of America and JPMorgan Chase, designed to maximize the overdraft fees charged. Through a system designed to maximize the overdraft charges, usually $30 to $35 each, the banks reap huge profits. According to one media report, overdraft fee revenue reached an all-time high of $37.1 billion in 2009, and in 2011 alone, banks reported $29.5 billion in profits from overdraft charges.
A United States District Court judge has denied motions by
banks to derail federal lawsuits by consumers
seeking to recover hundreds of millions of dollars in
wrongful debit card overdraft fees.
In a 50-page opinion, Judge King found that Bank of America, Citibank,
JPMorgan Chase, U.S. Bank, Wachovia and Wells Fargo, among others, were
not entitled to dismissal of the complaints. Judge King rejected the
banksâ primary argument that its customers cannot bring private
litigation to recoup excessive overdraft fees.
The complaints were filed in the United States District Court for the
Southern District of Florida in Miami, where all federal lawsuits
brought against the banking industry for abusive overdraft fees have
been coordinated before Judge King. Plaintiffsâ lead co-counsel Bruce
Rogow and Robert C. Gilbert work with a Plaintiffs Executive Committee
comprised of the law firms of Golumb& Honik P.C., Lieff Cabraser
Heimann& Bernstein, LLP, Podhurst Orseck P.A., Trief& Olk, Webb, Klase
& Lemond, LLC, and Baron& Budd.
Dollar Financial Corp financial services for the unbanked and
under-banked announced an agreement to settle its British Columbia class
action litigation, in which the plaintiffs claimed collection of
excessive fees. The business model used by the Company’s Canadian
subsidiary, National Money Mart Company (NMMC), according to plaintiffs,
resulted in the collection of fees in excess of the statutory limit for
payday loans made since 1997. The Company announced court approval of
the previously announced settlement of its comparable Ontario class
action litigation. Subsequently, the Company will create a settlement
fund in an amount of C$24.75 million, consisting of C$12.375 million in
cash and C$12.375 million in vouchers. Fees payable to plaintiffs’
counsel will be paid from this fund. The remaining amount of the fund
will be available to class members who make claims, with the Company
receiving a credit for any unpaid debts incurred through November 1,
2009 and owed by claimants to the Company.
Loyalty marketing Alliance Data Systems has entered into a settlement for claims filed subsequent to its May 17, 2007, announcement that it had entered into an Agreement and Plan of Merger to be acquired by Blackstone Capital Partners V L.P., an affiliate of The Blackstone Group. Those cases were consolidated and are now captioned as “In re Alliance Data Corp. Class Action & Derivative Litigation, Case No. 07-4689, 68th Judicial District Court of Dallas County, Texas”. A hearing will be held on July 28 regarding the proposed settlement to settle the claims asserted on behalf of the Settlement Class against Alliance Data Systems Corporation, J. Michael Parks, Bruce K. Anderson, Roger H. Ballou, Lawrence M. Benveniste, D. Keith Cobb, E. Linn Draper, Jr., Kenneth R. Jensen, and Robert A. Minicucci in exchange for additional disclosures provided to ADSC stockholders in a Supplemental Proxy Statement filed with the Securities and Exchange Commission on July 30, 2007 and the payment of reasonable attorney’s fees and expenses to Class Plaintiffs’ Counsel in the amount of $380,000.00.
The California First District Court of Appeal has rejected American Express attempt to make millions of cardholders individually arbitrate claims concerning its fee-paid flight insurance programs. The Court concluded that AmEx waived its right to arbitration when it sought court approval of a class action settlement based upon misleading and false statements in court filings, to plaintiffs’ counsel and the cardholder class. The decision will force AmEx to go forward with a nationwide class action. AmEx’s motion for summary judgment was also recently rejected. The case was filed in September 2001 when William Hoffman filed suit alleging that AmEx was cheating their customers by systematically charging card members for travel insurance whether or not a trip was taken.
Two antitrust lawsuits seeking class action status have been filed against Comdata alleging the company has harmed competition by using its market dominance to impair the ability of rival card issuers to challenge Comdata’s monopoly. The lawsuits were filed by two independent truck stops who want to represent all independent truck stops. The suit alleges that in the mid-1990s Comdata acquired its chief truck stop card rival (NTS) and the monopoly point of sale system (Trendar). After becoming a monopolist in the truck stop card and point of sale system markets, Comdata changed its pricing system and significantly increased card fees paid by independent truck stops relative to fees charged to the chain truck stops. The suit says chain truck stops typically pay about 50 cents a transaction, whereas independent truck stops pay a percentage of the value of the transactions, typically over 2%. The Plaintiffs are represented by Washington, DC-based David Balto; Philadelphia-based Berger & Montague; and San Francisco-based Lieff, Cabraser, Heimann & Bernstein.
PayPal has signed an agreement with 28 U.S. Attorneys General to simplify its user agreement and communicate more details on its fraud protection program. PayPal also announced it has reached a preliminary settlement agreement with a proposed class action for $3.5 million. To cover the cost of the investigation, PayPal will pay $1.7 million to the Attorneys General. Under the terms of the settlement agreements, PayPal is not admitting any liability for any of the allegations in the two cases. PayPal had 113.7 million total accounts at the end of the second quarter, a 44% increase from one-year ago. Total payment volume rose 37% to a record $8.9 billion which includes payments initiated through the PayPal system but excludes its payment gateway business. (CF Library 7/24/06)
Providian said this week that it reached a settlement with the Civil Division of the Department of Justice last month in regard to discounted bulk mail postage rates. In 2003, Providian said an individual made a claim against it and TSYS as a vendor, alleging they received discounted bulk mail postage rates between 1997 and 2001 that they were not eligible for. The allegations involve claims that such mailings were not eligible for bulk mail postage rates because requirements relating to the updating of mailing lists were not satisfied. Providian did not disclose the amount of settlement with the DOJ and the individual but said it requires court approval.
The first major lawsuit by merchants to take on U.S. interchange fees charged by the VISA and MasterCard networks was thrown out of court yesterday for lack of standing under current antitrust laws. The decision by a judge of the federal court in the Northern District of California represents a key win for VISA and MasterCard but may have little impact on two other pending and significant lawsuits. In yesterday’s decision, the court found that the merchants had no factual basis to support their allegation that VISA and MasterCard set the merchant discount fee. Judge Jeffrey White found that the merchants, as indirect purchasers, lacked antitrust standing to assert any claims against VISA and MasterCard. The dismissed suit was filed by two small California merchants in October. In June, a small group of merchants filed an antitrust lawsuit in the U.S. District Court of Connecticut, alleging collusive practices by VISA, MasterCard and major banks in setting credit card interchange fees at supra-competitive levels. Robins, Kaplan, Miller & Ciresi, is representing the merchant plaintiffs with CT-based Koskoff, Koskoff & Bieder acting as co-counsel. Two weeks ago, Kroger and six other major merchants filed a federal lawsuit against VISA over its interchange fee practices. (CF Library 6/23/05; 7/15/05)
Gemplus says it has landed a successful result on appeal in a lawsuit concerning an alleged breach of contract by Gemplus regarding the promotion of smart card solutions for casino slot machines. On May 26th, the Aix-en-Provence Court of Appeal rendered a decision
in favor of Gemplus, reversing the judgment of the Marseille
Commercial Court of March 18th, 2004 which had found that Gemplus had breached the contract and had ordered Gemplus to pay the plaintiffs EUR 22 million in damages. The Court of Appeals dismissed all the plaintiffs’ claims for damages and ordered the plaintiffs to pay court costs and expert’s fees.