Visa 2007 Annual Report Download - page 65

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only, the "Settlement Injunctive Class," which contains all persons who held a U.S. issued Visa- or MasterCard-branded credit or debit card or Diners Club-
branded credit card at November 8, 2006. Charge cards are included in the definition of "credit cards." On November 14, 2006, Bernd Bildstein, plaintiff in
Bildstein v. MasterCard International Incorporated, No. 03 Civ. 9826 (S.D.N.Y.), a case coordinated with the MDL Action, filed a Notice of Appeal from the
grant of preliminary approval.
Notice of the settlement began in 2007. In view of concerns raised by putative class members, the court appointed a special master to work with the
parties to review and amend, as appropriate, the plan for class notice and distribution of the settlement fund and to determine whether the proposed settlement
agreement is fair, adequate and reasonable with respect to all class members. The special master submitted his report on or about July 10, 2007, and
recommended that the plan for notice and distribution of the fund be modified. On August 13, 2007, the court issued an order approving the claims procedure
recommended by the special master. On September 24, 2007, the court issued an order approving the revised notices, claim forms and settlement schedule
submitted by the parties. Revised notices and claim forms will be mailed to identified class members in late November, and a revised publication notice will
run in late November and early December. Class members will have until February 14, 2008 to object to or opt-out of the settlement. The Court moved the
hearing on entry of Final Judgment and Order of Dismissal to March 31, 2008.
Based upon the court's preliminary approval of the settlement of the MDL Action and other developments, approximately $100.1 million has been paid
into a settlement fund to resolve these claims against Visa U.S.A. and Visa International, and legal provision of approximately $20.0 million has been made
for the remainder of the settlement in connection with these currency conversion cases.
Should the MDL Settlement Agreement not receive final court approval, or otherwise terminate, we anticipate that the parties in all of the Currency
Conversion Litigation actions would return to the status quo ante in their respective actions.
Morgan Stanley Dean Witter/Discover
In August 2004, the European Commission in Brussels issued a Statement of Objections against Visa International and Visa Europe alleging a breach of
European competition law. The allegation arises from the Visa International and Visa Europe Rule (bylaw 2.12(b)) that makes certain designated competitors,
including Morgan Stanley Dean Witter/Discover, ineligible for membership. On October 3, 2007, the European Commission fined Visa International and Visa
Europe €10.2 million ($14.5 million) for infringing European Union rules on restrictive business practices (Article 81 of the EC Treaty and Article 53 of the
EEA Agreement). Pursuant to existing agreements, Visa Europe has acknowledged full responsibility for the defense of this action, including any fines that
may be payable.
Parke
On June 27, 2005, a purported consumer and merchant class action was filed in California state court against Visa U.S.A., Visa International,
MasterCard, Merrick Bank and CardSystems Solutions, Inc. The complaint stems from a data-security breach at CardSystems, a payment card processor that
handled Visa and other payment brand transactions. The complaint alleges that Visa U.S.A. and Visa International's failure to inform cardholders of the
CardSystems breach in a timely manner constitutes an unlawful and/or unfair business practice under California's Unfair Competition Law and violates
California's statutory privacy-notice law. In August 2005, the court denied the plaintiffs' application for a temporary restraining order, except with respect to
the defendants' retention of affected account-identifying information, and in September 2005 denied plaintiffs' motion for a preliminary injunction. Also in
September 2005, the court dismissed the claims brought by the merchant class. On November 18, 2005, the defendants answered the remaining claims.
Limited discovery occurred.
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