Visa 2007 Annual Report Download - page 56

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Ohio, Pennsylvania, South Carolina and Wisconsin. Visa International was named as a defendant in more than 30 of these complaints. On October 19, 2005,
the Judicial Panel on Multidistrict Litigation issued an order transferring these cases to the U.S. District Court for the Eastern District of New York for
coordination of pre-trial proceedings. On April 24, 2006, the group of purported class plaintiffs filed a First Amended Class Action Complaint. Taken
together, the claims in the First Amended Class Action Complaint and in the 10 complaints brought on behalf of individual merchants are generally brought
under Sections 1 and 2 of the Sherman Act. Specifically, the complaints contain some or all of the following claims: (i) that Visa's and MasterCard's setting of
interchange fees (for both credit and offline debit transactions) violates Section 1 of the Sherman Act; (ii) that Visa and MasterCard have enacted and
enforced various rules, including the no surcharge rule and purported anti-steering rules, in violation of Section 1 or 2 of the Sherman Act; (iii) that Visa's and
MasterCard's purported bundling of the acceptance of premium credit cards to standard credit cards constitutes an unlawful tying arrangement; and (iv) that
Visa and MasterCard have unlawfully tied and bundled transaction fees. In addition to the claims brought under federal antitrust law, some of these
complaints contain certain state unfair competition law claims based upon the same conduct described above. These interchange-related litigations also seek
treble damages in an unspecified amount (although several of the complaints allege that the plaintiffs expect that damages will range in the tens of billions of
dollars), as well as attorneys' fees and injunctive relief.
Visa U.S.A. and Visa International answered the First Consolidated Amended Class Action Complaint and the individual merchant complaints on
June 9, 2006. On July 10, 2007, pursuant to a joint request by the parties, the court entered a scheduling order, setting deadlines of June 30, 2008 for
completion of fact discovery, February 20, 2009 for completion of expert discovery and March 27, 2009 for filing all summary judgment and other pretrial
motions.
On September 7, 2007, the Magistrate Judge issued a Report and Recommendation to the District Court recommending that the District Court grant the
defendants' motion to dismiss the class plaintiffs' claims for damages incurred prior to January 1, 2004. On October 12, 2007, the Magistrate Judge granted
putative class plaintiffs' request to brief the issue of whether the Report and Recommendation would affect the claims of non-party members of the putative
class that opted out of the In re Visa Check/MasterMoney Antitrust Litigation class action. Following the submissions, the Magistrate Judge declined
plaintiffs' request to advise on that issue. Putative class plaintiffs filed objections to the Report and Recommendation on November 14, 2007, and defendants
filed their responses to those objections on December 13, 2007.
Other Legal and Regulatory Proceedings
In addition to the matters described above, we are a party to legal and regulatory proceedings with respect to a variety of matters in the ordinary course
of business. Some of these proceedings involve complex claims that are subject to substantial uncertainties and unspecified damages. Therefore, the
probability of loss and an estimation of damages are not possible to ascertain at present. Accordingly, we have not established reserves for any of these
proceedings, including the matters described above, other than for the Currency Conversion Litigation and the GMRI, Inc. case. See "—Retailers' Litigation"
and "—Currency Conversion Litigation." Except for those matters described above under "—Retrospective Responsibility Plan" and below, we do not believe
that any legal or regulatory proceedings to which we are a party would have a material impact on our results of operations, financial position, or cash flows.
Although we believe that we have strong defenses for the litigations and regulatory proceedings described above under "—Retrospective Responsibility Plan"
and below, we could in the future incur judgments or fines or enter into settlements of claims that could have a material adverse effect on our results of
operations, financial position or cash flows.
Notwithstanding our belief, if we are found liable in a large class action lawsuit or on the basis of a claim entitling the plaintiff to treble damages or
under which we were jointly and severally liable, charges we may be required to record could be significant and could materially and adversely affect our
results of operations, cash flow and financial condition, or, in certain circumstances, even cause us to become insolvent, and result in a
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