Visa 2008 Annual Report Download - page 184

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2008
(in millions, except as noted)
interchange fees for Visa's credit, offline debit, and online/PIN debit cards; (iii) eliminate claims for damages relating to the so-called "no-surcharge" rule and
"anti-steering" rules; and (iv) eliminate claims for damages based on the alleged tie of network processing services and payment guarantee services to the
payment card system services. All defendants but one bank defendant agreed not to oppose putative class plaintiffs' request. On September 18, 2008, the court
granted putative class plaintiffs' motion to file the Second Consolidated Amended Class Action Complaint.
The court entered revised case management schedules in August and September 2008, setting deadlines for class certification briefing, expert discovery
and dispositive motions and extending fact discovery to November 21, 2008. On October 6, 2008, the defendants filed an opposition to the motion for class
certification.
Retailers' Litigation
Commencing in October 1996, several class action suits were brought by a number of U.S. merchants against Visa U.S.A. and MasterCard challenging
certain aspects of the payment card industry under U.S. federal antitrust laws. Those suits were later consolidated in the U.S. District Court for the Eastern
District of New York, In re Visa Check/MasterMoney Antitrust Litigation. Among other claims, the plaintiffs alleged that Visa U.S.A.'s "Honor All Cards"
rule, which required merchants that accepted Visa cards to accept for payment every validly presented Visa card, and a similar MasterCard rule, constituted an
illegal tying arrangement in violation of Section 1 of the Sherman Act. On June 4, 2003, Visa U.S.A. signed a settlement agreement to settle the claims
brought by the plaintiffs in this matter, which the court approved on December 19, 2003. Pursuant to the settlement agreement, Visa agreed to modify its
"Honor All Cards" rule such that, effective January 1, 2004, a merchant may accept only Visa check cards, only Visa credit cards, or both. Visa also agreed to
pay approximately $2.0 billion to the merchant class over 10 years in equal annual installments of $200 million per year, among other things. After appellate
issues were resolved, the settlement became final. Settlement funds are now being distributed to the class.
Retailers' "Opt-Outs"
Several lawsuits were commenced by merchants that opted not to participate in the plaintiff class in In re Visa Check/MasterMoney Antitrust Litigation.
The majority of these cases were filed in the U.S. District Court for the Eastern District of New York. Visa U.S.A. has entered into separate settlement
agreements with all but one of these plaintiffs resolving their claims, and the District Court has entered orders dismissing with prejudice each of those
plaintiffs' complaints against Visa U.S.A. Only the action brought by GMRI, Inc. against Visa U.S.A. remains pending. On May 14, 2007, the plaintiff in the
GMRI, Inc. case sought to amend its complaint and consolidate the case with Multidistrict Litigation 1720. Visa U.S.A., Visa International and several of
their member financial institutions named as defendants in Multidistrict Litigation 1720 opposed the plaintiff's motion. On June 1, 2007, the plaintiff
withdrew its request. On June 22, 2007, GMRI, Inc. filed suit against Visa International and various member financial institutions of Visa U.S.A. and/or Visa
International in the U.S. District Court for the District of Minnesota, alleging both the merchant opt-out claims at issue in GMRI, Inc.'s suit against Visa
U.S.A. and a number of the claims set forth in the class complaint filed in Multidistrict Litigation 1720 relating to interchange and Visa rules. On February 5,
2008, the U.S. District Court for the District of Minnesota approved GMRI, Inc.'s voluntary dismissal of that action. In 2003, Visa U.S.A. established a
litigation provision for the GMRI, Inc. case based on a calculation of what GMRI, Inc. would have received under the settlement of In re Visa Check/
MasterMoney Antitrust Litigation if GMRI, Inc. had
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