Visa 2009 Annual Report Download - page 122

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2009
(in millions, except as noted)
Morgan Stanley Dean Witter/Discover Litigation
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). Visa International and Visa Europe filed an appeal of the ruling with the Court of First Instance on December 19, 2007. Pursuant to existing
agreements, Visa Europe has acknowledged full responsibility for the defense of this action, including any fines that may be payable.
Parke Litigation
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 alleged that Visa U.S.A. and Visa International's failure to inform cardholders in a
timely manner of a data-security breach at CardSystems, a payment card processor that handled Visa and other payment brands, constitutes an unlawful and/
or unfair business practice under California's Unfair Competition Law and violates California's statutory privacy-notice law. CardSystems filed for bankruptcy
in U.S. District Court for the District of Arizona in May 2006, staying the litigation as to it. Proceedings involving CardSystems continue in the bankruptcy
court in Arizona.
On February 13, 2009, the parties executed a settlement agreement in which plaintiffs agreed to withdraw their proof of claim against CardSystems in
the bankruptcy action and dismiss their claims with prejudice against all defendants in the California state court action. On April 23, 2009, the federal
bankruptcy court judge approved the withdrawal of plaintiffs' bankruptcy claim against CardSystems, and on June 16, 2009, the state court judge approved the
settlement and dismissed the state court action with prejudice. With the expiration of the appeals period, the settlement became final on August 17, 2009. The
settlement amount is not considered material to the consolidated financial statements.
The ATM Exchange Litigation
On November 14, 2005, The ATM Exchange filed a complaint for money damages against Visa U.S.A. and Visa International in the U.S. District Court
for the Southern District of Ohio. The plaintiff asserted claims of promissory estoppel, negligent misrepresentation and fraudulent misrepresentation, alleging
that Visa's deferment of a July 1, 2004 member deadline that required newly deployed ATMs to be certified by a Visa-recognized laboratory as meeting
certain PIN-entry device testing requirements harmed the plaintiff by reducing demand for its ATM upgrade solution. On August 4-6, 2009, a non-binding
"summary jury trial" was held pursuant to the court's local rules. A jury found no liability and awarded no damages. On August 31, 2009, the parties entered
into a settlement agreement. The settlement was funded exclusively by Visa's insurer, and the case has been dismissed with prejudice.
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