Visa 2015 Annual Report Download - page 137

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2015
On July 28, 2015, certain objectors to the class settlement asked the court to vacate or set aside
its final judgment approving the settlement, or in the alternative, to grant further discovery, in light of
communications between one of MasterCard’s former lawyers and one of the lawyers for the class
plaintiffs.
Consumer Interchange Litigation
On December 16, 2013, a putative class action was filed on behalf of all Visa and MasterCard
payment cardholders in the United States since January 1, 2000 against certain financial institutions,
identifying non-defendants Visa, MasterCard, and certain other financial institutions as co-conspirators.
Plaintiffs allege primarily a conspiracy to fix interchange fees and seek injunctive relief, attorneys’ fees,
and treble damages in excess of $54.0 billion dollars annually arising from purported overcharges.
Originally filed in federal court in California, the case was transferred to MDL 1720. On November 26,
2014, the MDL court dismissed plaintiffs’ federal law claim and declined to exercise jurisdiction over
plaintiffs’ state law claim. Both sides have asked the court to reconsider aspects of its decision and
have filed notices of appeal.
Interchange Opt-out Litigation
Beginning in May 2013, more than 50 opt-out cases have been filed by hundreds of merchants in
various federal district courts, generally pursuing damages claims on allegations similar to those raised
in MDL 1720. A number of the cases also include allegations that Visa has monopolized, attempted to
monopolize, and/or conspired to monopolize debit card-related market segments, and one of the cases
seeks an injunction against the fixed acquirer network fee. The cases name as defendants Visa Inc.,
Visa U.S.A., Visa International, MasterCard Incorporated, and MasterCard International Incorporated,
although some also include certain U.S. financial institutions as defendants. Wal-Mart Stores Inc. and
its subsidiaries filed an opt-out complaint that also adds Visa Europe Limited and Visa Europe Services
Inc. as defendants. Visa has acknowledged and confirmed its obligations to indemnify Visa Europe
Limited and Visa Europe Services Inc. with respect to the claim against them in Wal- Mart’s complaint.
Visa, MasterCard, and certain U.S. financial institution defendants in MDL 1720 filed a complaint
in the Eastern District of New York against certain named class representative plaintiffs who had opted
out or stated their intention to opt out of the damages portion of the Settlement Agreement. In addition,
Visa filed three more similar complaints in the Eastern District of New York against Wal-Mart Stores
Inc.; against The Home Depot, Inc. and Home Depot U.S.A.; and against Sears Holdings Corporation.
All four complaints seek a declaration that, from January 1, 2004 to November 27, 2012, the time
period for which opt-outs may seek damages under the Settlement Agreement, Visa’s conduct in,
among other things, continuing to set default interchange rates, maintaining its “honor all cards” rule,
enforcing certain rules relating to merchants, and restructuring itself, did not violate federal or state
antitrust laws.
All the cases filed in federal court have been either assigned to the judge presiding over MDL 1720,
or have been or expect to be transferred by the Judicial Panel on Multidistrict Litigation for inclusion in
MDL 1720. The court has entered an order confirming that In re Payment Card Interchange Fee and
Merchant Discount Antitrust Litigation, 1:05-md-01720-JG-JO (E.D.N.Y.), includes (1) all current and
future actions transferred to MDL 1720 by the Judicial Panel on Multidistrict Litigation or other order of
any court for inclusion in coordinated or pretrial proceedings, and (2) all actions filed in the Eastern
District of New York that arise out of operative facts as alleged in the cases subject to the transfer orders
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