By PAUL NOWELL - AP Business Writer.
The federal courts should consolidate 14 lawsuits from merchants seeking to force some of the nation's leading credit card issuers to lower their fees, defense attorneys argued Thursday in a hearing before a seven-judge panel.
Attorneys for the plaintiffs, which include the country's largest merchants associations, wanted some of the cases to be argued separately. They also argued that the case should be moved to New York, while defense lawyers want the case heard in Atlanta.
The seven-judge panel chaired by U.S. District Judge William Terrell Hodges of Florida did not issue a decision at the end of the hearing and did not indicate when a ruling might come." We will take the matter under submission," Hodges told the attorneys, repeating the same phrase he uttered at the end of 11 unrelated cases that went before the Judicial Panel on Multidistrict Litigation.
The credit card lawsuits pit some of the nation's largest merchant associations and retailers, including Walgreen Co. and Safeway Inc., against credit card issuers such as Visa USA, MasterCard Inc., and a number of major banks, including Citigroup Inc., Bank of America Corp. and JPMorgan Chase.
Last week, four merchant associations filed a new class action suit in New York, accusing the defendants of engaging in collusive practices in setting interchange fees. The suit asked for an injunction to stop the alleged collusion as well as unspecified damages.
The plaintiffs in that suit - the National Association of Convenience Stores, the National Association of Chain Drug Stores, the National Community Pharmacists Association and the National Cooperative Grocers Association - represent thousands of merchants nationwide. The plaintiffs claim interchange fees, which are paid by the merchants each time a customer uses a debit or credit card, are passed down to consumers in higher prices.
In 2004, they estimated interchange fees cost the average American household about $232 a year.
In June, the first major interchange lawsuit was filed by the firm of Robins, Kaplan, Miller & Ciresi LLP on behalf of 30 Minute Photos Etc. of Irvine, Calif., and several other small retailers, in federal court in Connecticut.
The same law firm also filed the latest merchant suit in U.S. District Court for the Eastern District in New York. In July, seven big retail chains led by Kroger Co., Albertson's Inc. and Safeway, filed a price-fixing suit against Visa in federal court in Manhattan. Plaintiffs in similar cases have had some success in the courts in recent years. In 2003, Visa and MasterCard agreed to pay $3 billion to retailers and to reduce the fees it charged for debit card transactions. Two years earlier, a federal court in Manhattan required Visa and MasterCard to drop rules that prohibit their member banks from also issuing American Express or Discover Cards.
The case, brought by the Department of Justice, eventually was appealed by the card associations to the U.S. Supreme Court. The Supreme Court declined to review the case in 2004
(Source: The Dispatch)
