Case 1:05-md-01720-MKB-JO Document 7836 Filed 01/02/20 Page 1 of 74 PageID #: 113976
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`-------------------------------------------------------------
`IN RE PAYMENT CARD INTERCHANGE FEE
`AND MERCHANT DISCOUNT ANTITRUST
`LITIGATION
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`This document refers to: ALL ACTIONS
`-------------------------------------------------------------
`MARGO K. BRODIE, United States District Judge:
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`MEMORANDUM & ORDER
`05-MD-1720 (MKB) (JO)
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`A putative Rule 23(b)(3) class of over twelve million nationwide merchants brought an
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`antitrust action under the Sherman Act, 15 U.S.C. §§ 1 and 2, and state antitrust laws, against
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`Defendants Visa and Mastercard networks, as well as various issuing and acquiring banks.1 See
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`In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig., 986 F. Supp. 2d 207, 213,
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`223 (E.D.N.Y. 2013) (“Interchange Fees I”), rev’d and vacated, 827 F.3d 223 (2d Cir. 2016)
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`(“Interchange Fees II”); (First Consolidated Am. Class Action Compl., Docket Entry No. 317.)
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`Plaintiffs are merchants that accept or accepted Visa- and Mastercard-branded cards, and have
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`alleged that Defendants harmed competition and charged the merchants supracompetitive fees by
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`1 The putative Rule 23(b)(3) class sought relief in the form of monetary damages, and
`brought the action along with a separate class that sought equitable relief. (See First
`Consolidated Am. Class Action Compl. 1, Docket Entry No. 317.) At the earliest stages of this
`litigation, multiple class actions, as well as individual lawsuits by large retailers, were filed
`against Defendants. All actions were consolidated together into a multi-district litigation in 2005
`(the “MDL”). See In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig., 986 F.
`Supp. 2d 207, 220 n.12 (E.D.N.Y. 2013) (“Interchange Fees I”). Since the initial consolidation,
`a number of matters have been continuously added to the MDL, which now involves over
`seventy associated cases.
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`

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`creating unlawful contracts and rules and by engaging in various antitrust conspiracies.2
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`Interchange Fees I, F. Supp. 2d at 213; Interchange Fees II, 827 F.3d at 228−29.
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`Currently before the Court is Rule 23(b)(3) Class Plaintiffs’ motion for final approval of
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`a class settlement agreement (the “Superseding Settlement Agreement”) pursuant to Rule
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`23(e)(2) of the Federal Rules of Civil Procedure. (Rule 23(b)(3) Class Plaintiffs’ Notice of Mot.
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`for Final Approval (“Pls. Mot.”), Docket Entry No. 7469; Mem. of Law in Supp. of Pls. Mot.
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`(“Pls. Mem.”), Docket Entry No. 7469-1.) The Court preliminarily approved the class settlement
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`on January 24, 2019 (the “January 24, 2019 Order”). (Jan. 24, 2019 Order, Docket Entry No.
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`7361.) In support of the motion, Class Counsel for the Rule 23(b)(3) class (“Rule 23(b)(3) Class
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`Counsel” or “Class Counsel”) submitted past and present declarations of Class Counsel attorney
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`2 In general, in a credit card transaction, a “merchant receives the purchase price minus
`two fees: the ‘interchange fee’ that the issuing bank charge[s] the acquiring bank and the
`‘merchant discount fee’ that the acquiring bank charge[s] the merchant.” Interchange Fees II,
`827 F.3d at 228. As previously summarized by the Second Circuit, Plaintiffs challenged several
`credit card network rules as anticompetitive:
`The “default interchange” fee applies to every transaction on the
`network (unless the merchant and issuing bank have entered into a
`separate agreement). The “honor-all-cards” rule requires merchants
`to accept all Visa or MasterCard credit cards if they accept any of
`them, regardless of the differences in interchange fees. Multiple
`rules prohibit merchants from influencing customers to use one type
`of payment over another, such as cash rather than credit, or a
`credit card with a lower interchange fee. These “anti-steering” rules
`include the “no-surcharge” and “no-discount” rules, which prohibit
`merchants from charging different prices at the point of sale
`depending on the means of payment.
`Id. at 228–29. “Plaintiffs allege[d] that these [anticompetitive] rules were adopted pursuant to
`unlawful agreements among the banks and Visa [and MasterCard],” and “that the banks owned
`and effectively operated Visa and MasterCard, such that Visa and MasterCard were unlawful
`‘structural conspiracies’ or ‘walking conspiracies’ with respect to their network rules and
`practices.” Interchange Fees I, 986 F. Supp. 2d at 220−21. For a further explanation of credit
`card transactions and interchange fees, see id. at 214−15. As discussed infra, some of these
`challenged rules have been altered as a result of changes in the credit card industry, and some
`have been altered as a result of a prior settlement in this action.
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`2
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`K. Craig Wildfang, a declaration assessing litigation risks by the Honorable H. Lee Sarokin
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`(ret.), an expert report from economist Michael Williams, Ph.D., and declarations from the Class
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`Administrator on the implementation of the notice plan.3
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`In deciding the motion, the Court also considers, inter alia, objections from putative class
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`members, Class Plaintiffs’ reply in support of their motion for final approval, and the Class
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`Administrator report, which includes the list of class members that opted out of the Superseding
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`Settlement Agreement.4
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`For the reasons discussed below, on December 13, 2019, the Court granted final approval
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`of the Superseding Settlement Agreement (the “Final Approval Order”). (Final Approval Order,
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`Docket Entry No. 7818.)
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`I. Background
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`The Court assumes familiarity with the facts and extensive procedural history as set forth
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`in Interchange Fees I, 986 F. Supp. 2d 207; Interchange Fees II, 827 F.3d 223; In re Payment
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`Card Interchange Fee & Merch. Disc. Antitrust Litig., 330 F.R.D. 11 (E.D.N.Y. 2019)
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`3 (Decl. of K. Craig Wildfang in Supp. of Pls. Mot. (“Wildfang 2019 Decl.”), Docket
`Entry No. 7469-3; Decl. of K. Craig Wildfang in Supp. of Rule 23(b)(3) Class Pls. Mot. for
`Prelim. Approval of Settlement (“Wildfang 2018 Decl.”), annexed to Wildfang 2019 Decl. as Ex.
`1, Docket Entry No. 7469-3; Decl. of K. Craig Wildfang in Supp. of Class Pls. 2013 Mot. for
`Final Approval of Settlement (“Wildfang 2013 Decl.”), annexed to Wildfang 2019 Decl. as Ex.
`3, Docket Entry No. 7469-3; Decl. of the Honorable H. Lee Sarokin (“Judge Sarokin Decl.”),
`Docket Entry No. 7469-4; Expert Report of Michael A. Williams, Ph.D. (“Williams Report”),
`Docket Entry No. 7469-5; Decl. of Cameron R. Azari (“Azari Decl.”), Docket Entry No. 7469-6;
`Decl. of Nicole Hamann (“Hamann Decl.”), Docket Entry No. 7469-7.)
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` 4
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` (See Reply in Supp. re Pls. Mot., Docket Entry No. 7667; 2019 Report of the Class
`Administrator (“Class Administrator Report”), Docket Entry No. 7641-1; Suppl. Decl. of
`Cameron R. Azari (“Azari Suppl. Decl.”), Docket Entry No. 7641-2.)
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`3
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`(“Interchange Fees III”). The Court therefore provides only a summary of the relevant facts and
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`procedural history.
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`a. Third Consolidated Amended Class Action Complaint
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`In commencing this action, Plaintiffs sought both injunctive and monetary relief, and
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`after years of litigation, former District Judge John Gleeson approved a settlement (the “2013
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`Settlement Agreement”) for an injunctive relief class and a monetary damages relief class, see
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`Interchange Fees I, 986 F. Supp. 2d at 216 n.7, 240, which was vacated by the Second Circuit on
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`June 30, 2016 and remanded to this Court, Interchange Fees II, 827 F.3d at 227, 229.5 On
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`October 30, 2017, Rule 23(b)(3) Class Counsel filed a Third Consolidated Amended Class
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`Action Complaint (the “TAC”) on behalf of named Rule 23(b)(3) representative class plaintiffs
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`(“Rule 23(b)(3) Class Plaintiffs” or “Class Plaintiffs”), and a putative Rule 23(b)(3) class.6
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`(TAC, Docket Entry No. 7123.) According to the TAC, the Rule 23(b)(3) Class Plaintiffs
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`include: Photos Etc. Corporation; Traditions, Ltd.; Capital Audio Electronics, Inc.; CHS, Inc.;
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`5 Following remand, the two putative classes — the Rule 23(b)(2) injunctive class, and
`the Rule 23(b)(3) damages class — have been proceeding separately, and are each represented
`by separate counsel. (See Mem. and Order dated Nov. 30, 2016 (“Interim Class Counsel
`Order”), Docket Entry No. 6754.)
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` In 2017, Class Plaintiffs moved to amend their Complaint. (See Class Pls. Mot. for
`Leave to Amend Compl., Docket Entry No. 6880.) On August 30, 2018, after finding that under
`Rule 15(c) the amended pleadings related back to earlier complaints, the Court affirmed
`Plaintiffs’ ability “to amend the Complaints to assert an alternative, two-sided market theory
`following the Second Circuit’s decision in United States v. Am. Express Co., 838 F.3d 179 (2d
`Cir. 2016), aff’d sub nom. Ohio v. Am. Express Co., 585 U.S. ---, 138 S. Ct. 2274, 2285 (2018).”
`In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig., No. 05-MD-1720, 2018
`WL 4158290, at *3 (E.D.N.Y. Aug. 30, 2018). In United States v. American Express Company,
`the Second Circuit held that “[t]he District Court erred in excluding the market for cardholders
`from its relevant market definition.” 838 F.3d at 197.
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` 6
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`4
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`Case 1:05-md-01720-MKB-JO Document 7836 Filed 01/02/20 Page 5 of 74 PageID #: 113980
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`Crystal Rock, LLC;7 Discount Optics, Inc.; Leon’s Transmission Service, Inc.; Parkway Corp.;
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`and Payless, Inc. (See id. ¶ 2.)
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`After additional extensive discovery and renegotiations, the Rule 23(b)(3) Class Plaintiffs
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`and Defendants reached a new and separate settlement agreement, the Superseding Settlement
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`Agreement, which the Court granted preliminary approval of on January 24, 2019. (Jan. 24,
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`2019 Order; Superseding Settlement Agreement, Docket Entry No. 7257-2); see also
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`Interchange Fees III, 330 F.R.D. 11.
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`b. Superseding Settlement Agreement
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`The Superseding Settlement Agreement defines the proposed Rule 23(b)(3) putative class
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`to include:
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`[a]ll persons, businesses, and other entities that have accepted any
`Visa-Branded Cards and/or Mastercard-Branded Cards in the
`United States at any time from January 1, 2004 to the Settlement
`Preliminary Approval Date, except that the Rule 23(b)(3) Settlement
`Class shall not include (a) the Dismissed Plaintiffs, (b) the United
`States government, (c) the named Defendants in this Action or their
`directors, officers, or members of their families, or (d) financial
`institutions that have issued Visa-Branded Cards or Mastercard-
`Branded Cards or acquired Visa-Branded Card transactions or
`Mastercard-Branded Card transactions at any time from January 1,
`2004 to the Settlement Preliminary Approval Date.
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`(Superseding Settlement Agreement ¶ 4.) All class members had the right to “opt out” — or
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`exclude themselves — from participation in the class and from being bound by the terms of the
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`Superseding Settlement Agreement. (See id. ¶ 39(f); Mem. in Supp. of Rule 23(b)(3) Class Pls.
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`7 On April 27, 2018, the Court dismissed the claims and actions of Crystal Rock, LLC
`without prejudice. (But see Stipulation and Order of Dismissal dated Apr. 27, 2018, Docket
`Entry No. 7197 (stating that “[a]ll discovery taken of Crystal Rock, LLC . . . will remain in the
`factual record”).) As a result, Crystal Rock, LLC is not listed as a Class Plaintiff in the
`Superseding Settlement Agreement, and the Court does not consider the facts as to Crystal Rock,
`LLC in this Memorandum and Order. (See Superseding Settlement Agreement ¶ 3(ii); TAC
`¶ 14.)
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`5
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`Mot. for Class Settlement Prelim. Approval (“Mem. in Supp. of Prelim. Approval”) 2, Docket
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`Entry No. 7257-1.)
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`The Superseding Settlement Agreement provides for an award of over $6.3 billion in
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`relief before opt-out reductions and expense takedowns8 — a figure that Class Counsel believes
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`is the largest cash settlement in antitrust class action history. (Pls. Mem. 3; Wildfang 2018 Decl.
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`¶ 3.) Putative class members that did not opt out of the settlement are entitled to “receive the
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`same benefit — a pro rata share of the monetary fund based on the interchange fees attributable
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`to their transactions during the class period.” (Mem. in Supp. of Prelim. Approval 2; Plan of
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`Administration and Distribution I-2, 3, annexed to Superseding Settlement Agreement as App. I.)
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`In return for a pro rata share of the fund, the class members will release the claims raised
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`in the TAC — “claims arising out of or relating to conduct or acts that were alleged or raised or
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`that could have been alleged or raised relating to the subject matter of this litigation,” (Mem. in
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`Supp. of Prelim. Approval 2), that have accrued through the date of the Court’s preliminary
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`approval of the settlement, i.e., January 24, 2019, and that “accrue no later than five years after
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`the Settlement Final Date,” (Superseding Settlement Agreement ¶ 31(a)).9 The released claims
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`8 Under the Superseding Settlement Agreement, Defendants made additional cash
`payments of $900 million to the existing settlement funds, which had been reduced to account
`for opt-out class members. (Pls. Mem. 3.) As of June 6, 2019, the settlement fund held a value
`of $6,322,607,198.34. (Id. at 3 n.3.) The Superseding Settlement Agreement allows for a
`maximum of $700 million in reductions for opt-out class members, (see Superseding Settlement
`Agreement ¶ 22); as of October 25, 2019, the value of the settlement fund had been reduced by
`$700 million, and had a value of $5,620,511,120, (Notice re Pls. Mot. 2, Docket Entry No. 7752
`(“Based on the transaction volume that opted-out of the settlement, the takedown is $700
`million.”)).
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` 9
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` “Settlement Final Date” is defined as the business day after the affirmation by any
`appeals court of this Court’s final approval of the proposed settlement. (See Superseding
`Settlement Agreement ¶ (3)(ss).) According to Class Counsel, this effectively means that “[t]he
`release will bar claims that have accrued within five years following . . . the exhaustion of all
`appeals.” (Mem. in Supp. of Prelim. Approval 23.)
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`also encompass claims that were or could have been alleged in this action relating to, among
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`other things, interchange fees, anti-steering rules, and honor-all-card rules. (See id.
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`¶ 31(b)(i)−(vi).)
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`The Superseding Settlement Agreement does not release the right of any Rule 23(b)(3)
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`class member to participate in the Rule 23(b)(2) action “solely as to injunctive relief claims.”10
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`(See id. ¶ 34(a); see also Mem. in Supp. of Prelim. Approval 23 (“[T]he release does not bar the
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`injunctive relief claims asserted in the pending proposed Rule 23(b)(2) class action . . . . Nothing
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`in the release affects in any way the scope of injunctive relief which the [Rule 23(b)(2)] Plaintiffs
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`and proposed class can seek.”).)
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`c. Preliminary approval of the Superseding Settlement Agreement
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`On January 24, 2019, the Court preliminarily approved the Superseding Settlement
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`Agreement and preliminarily granted class certification for the purposes of settlement, appointed
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`Class Counsel and the Class Administrator, and approved the proposed Notice Plan, Class
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`Notices, and Plan of Administration and Distribution. See Interchange Fees III, 330 F.R.D. at
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`27. On January 28, 2019, the Court issued a Memorandum and Order (the “Preliminary
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`Approval Order”) setting forth its reasons for granting preliminary approval. Interchange Fees
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`III, 330 F.R.D. 11.
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`10 The Court notes that documents and filings refer to the Rule 23(b)(2) action in a
`variety of ways. The Rule 23(b)(2) action is proceeding in this MDL as Barry’s Cut Rate Stores
`Inc. et al. v. Visa, Inc., et al., No. 05-MD-01720. The action is sometimes referred to as
`“Barry’s” and the class is sometimes referred to as the “equitable relief class.” For the purposes
`of consistency across opinions, the Court uses the terms “Rule 23(b)(2)” and “injunctive relief”
`to refer to the action, as opposed to “Barry’s” and “equitable relief.”
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`7
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`d. Notice
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`i. Mailing and publication
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`The Court approved a direct-mail and media Notice Plan, and a Publication Notice and
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`Long Form Notice in the Preliminary Approval Order as sufficient to adequately notify class
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`members of the proposed settlement. Id. at 59. To facilitate notice, the Class Administrator
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`gathered over 221 million merchant records from Mastercard, Visa, and large U.S. payment
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`processors, which resulted in a database of over 16 million merchants. (Azari Decl. ¶ 11; see
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`also Hamann Decl. ¶¶ 10−16.) Between March 25, 2019 and April 24, 2019, 16,330,223 notices
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`were sent to “likely” class members by first class mail. (Azari Decl. ¶ 14; Hamann Decl. ¶ 22.)
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`In addition, the Class Administrator also undertook a publication campaign, including “354
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`separate print publication units with a combined circulation of more than 39.9 million and more
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`than 689 million . . . internet banner impressions.” (Azari Decl. ¶ 16.) The Publication Notice
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`appeared in major publications, including the Financial Times, the Wall Street Journal, the New
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`York Times, Forbes, People, Sports Illustrated, and National Geographic, as well as newspapers
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`in U.S. territories, language-targeted publications, and trade, business, and specialty publications.
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`(Id. ¶¶ 30, 32, 34, 36−37.) Banner advertisements appeared on, inter alia, Google and Facebook.
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`(Id. ¶ 39.) This “combined measurable paid print and internet effort . . . reached 80.4% of all
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`U.S. Adults aged 18+ with an average frequency of 2.8 times, 84.2% of all U.S. Business
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`Owners with an average frequency of 3.2 times, and 84.4% of all U.S. Adults in Business and
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`Finance Occupations with an average frequency of 3.4 times.” (Id. ¶ 14.) The Long Form
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`Notice was also sent to 68,822 available e-mail addresses, and was available for download on the
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`case website, www.paymentcardsettlement.com, maintained in eight different languages. (Id.
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`¶¶ 26−27.)
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`ii. Notice of exclusion to Dismissed Plaintiffs
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`During the preliminary approval phase, the Court received objections to preliminary
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`approval by a group of entities that own and/or operate gas stations and convenience stores that
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`sell petroleum products that are produced and branded by major oil refiners such as Shell and
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`ConocoPhillips (collectively, the “Branded Operators”). See Interchange Fees III, 330 F.R.D. at
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`25−26. The Branded Operators’ expressed concern that some portion of them had been labeled
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`as “Dismissed Plaintiffs” and excluded from the Superseding Settlement Agreement due to
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`separately negotiated settlement agreements entered into by major oil suppliers and brands, and
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`that there would “be a ‘failure to notify’ hundreds of class members as a result of these exclusion
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`lists.” (Mem. in Opp’n to Prelim. Approval of Class Settlement (“Mem. in Opp’n to Prelim.
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`Approval”) 5, Docket Entry No. 7300; id. at 19 (“Defendants have been allowing the Oil Brands
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`to negotiate opt-out settlement agreements on behalf of all of their [B]randed [O]perators without
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`the consent of the operators.”).)
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`In order to address these concerns, the Court directed Class Counsel to send a Notice of
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`Exclusion to Dismissed Plaintiffs — i.e., entities and their affiliates that have previously
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`dismissed their lawsuits against Defendants — in order to notify the Dismissed Plaintiffs that
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`they will be ineligible to receive settlement funds. (See Notice of Exclusion from Class Action
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`Settlement (“Notice of Exclusion”), annexed to Proposed Prelim. Approval Order as Ex. 2,
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`Docket Entry No. 7354-1.) Between March 25, 2019 and April 24, 2019, the Class
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`Administrator mailed 6100 Dismissed Plaintiff notices of exclusion. (Hamann Decl. ¶ 28.) On
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`June 5, 2019, the Class Administrator mailed another 518 notices of exclusion. (Id.) In response
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`to several Branded Operators indicating to the Court that they had not received notice,
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`Magistrate Judge James Orenstein discussed the issues with the parties at a July 9, 2019 status
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`conference, and ordered Notice to be sent to those Branded Operators. (See Min. Entry dated
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`July 9, 2019 (“The parties will take appropriate step[s] to provide notices to all non-party
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`Branded [Operator] objectors to the pending proposed settlement who report that they have not
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`received a copy of the notice.”).) By August 6, 2019, the Class Administrator had mailed sixty-
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`seven such notices. (See Class Administrator Report ¶ 6 (“[I]n response to certain objectors’
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`claims that they had not received a copy of the notice, . . . copies of the long form notice [were
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`mailed to] the objector to the address provided in their objection.”).)
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`iii. Additional notice
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`On July 22, 2013, one day before the opt-out and objection deadline, Class Counsel
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`notified the Court “that communications had been made by certain hotel brands to their
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`respective hotel-franchisees stating that the hotel brands planned to opt out from the Class the
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`franchisees, unless the franchise owner affirmatively indicated to the brand that it did not want to
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`be included in the brand’s planned opt-out litigation.” (Letter dated July 22, 2019 1, Docket
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`Entry No. 7552.) Class Counsel stated that they were “aware that issues related to the
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`franchisee/franchisor relationship may arise during any claims process and such issues — a
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`matter of contract — will likely be resolved through a process such as that employed in the Wal-
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`Mart litigation where a special master made determinations regarding similar matters.” (Id.)
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`However, they were concerned “that certain information was not provided to franchise owners,”
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`and thus proposed sending a written communication and allowing any franchisee that had been
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`opted out “to effectively nullify that opt out within a period of 45 days after receiving this
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`supplemental communication approved by Class Counsel.” (Id. at 2.)
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`On August 28, 2019, Class Counsel notified the Court that “[t]he Class Administrator has
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`received requests for exclusion from the Settlement Class that purport to request exclusion on
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`behalf of a variety of entities in addition to the entity that actually submitted the request,” i.e.,
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`that “[c]ertain entities have submitted requests for exclusion . . . on behalf of subsidiaries,
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`franchisees, licensees, affiliated entities,” and more. (Status Report dated Aug. 28, 2019 2−3,
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`Docket Entry No. 7660.) Class Counsel informed the Court that they were reviewing the
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`exclusion requests and that “[t]o the extent any issues [could not] be resolved, Rule 23(b)(3)
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`Class Counsel will . . . suggest a procedure to resolve them.” (Id. at 3.)
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`On September 17, 2019, Class Counsel informed the Court that after reviewing the
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`exclusion requests, it “determined that a set of exclusions required further investigation” and that
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`“exclusions may have been filed by members of the National Alliance of Trade Associations
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`(‘NATA’) and were submitted en masse.” (Letter dated Sept. 17, 2019, Docket Entry No. 7697.)
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`Class Counsel proposed sending curative notice to “several hundred class members who
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`previously sought exclusion,” and granting them thirty days to opt back into the settlement. (Id.)
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`The Court approved the curative notice on September 30, 2019. (Order dated Sept. 30, 2019.)
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`e. Exclusions and objections
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`i. Exclusions
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`As of August 6, 2019, the Class Administrator had received 676 exclusion requests.
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`(Class Administrator Report ¶ 11; Azari Suppl. Decl. ¶ 22.) On November 6, 2019, the Class
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`Administrator submitted an updated report on exclusion requests to the Court, due to the
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`additional opt-out period, described supra. (2019 Suppl. Report of the Class Administrator
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`(“Class Administrator Suppl. Report”), Docket Entry No. 7772-1.) Pursuant to the updated
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`reports, the Court finds the final number of exclusion requests to be 675. (See id. ¶ 6; see also
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`Letter re Exclusion Reqs. in Resp. to Ct.’s Nov. 25, 2019 Order, Docket Entry No. 7795.)
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`ii. Objections
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`The deadline to file objections to the Superseding Settlement Agreement was July 23,
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`2019. (See Jan. 24, 2019 Order ¶ 18.) Several objections were filed shortly after the deadline,
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`which the Court considers. The Class Administrator stated that as of August 6, 2019, it had
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`received 200 objections. (Azari Suppl. Decl. ¶ 22.) The Court notes that several of these may
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`have been attempts at other forms of communication, such as claims filing requests, and both
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`Class Counsel and the Court have tallied the objection count at approximately 176 objections.
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`(Pls. Reply 1.) Objections were received in a variety of mediums, including short form
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`objections and lengthy briefs. Substantive objections include objections to the settlement
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`amount, claims release provision, Plan of Administration and Distribution, and a number of
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`objections from the Branded Operators, including as to adequate representation and the class
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`definition. These objections are considered infra. Objections received as to proposed attorneys’
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`fees, expenses, and class representative service awards are considered in separate opinions.
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`1. Short and form objections
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`The majority of the short form objections objected to attorneys’ fees, expenses, and class
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`representative service awards. The Court also received one objection filed in a format suggested
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`in the Long Form Notice, (see Class Notices G2-16, G2-17, annexed to Proposed Prelim.
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`Approval Order as Ex. 1, Docket Entry No. 7354-1), objecting to the cash settlement and Plan of
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`Administration and Distribution due to “the fairness of each plan and the length of time
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`involved.” (Statement of Obj., Docket Entry No. 7513.)
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`2. Nejat Kohan’s objections
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`Objector Nejat Kohan (1) objects to non-payment of settlement funds to putative class
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`members that do not file claims as unfair, (2) states that the Notice “does not contain the full text
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`of the release,” and (3) complains that the Superseding Settlement Agreement contains “an
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`arbitrary or ambiguous clause” as to what will be done with potentially “over a billion dollar[s]
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`of remaining and unclaimed settlement proceeds.” (Statement of Obj. of Class Member Nejat
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`Kohan, Esq. (“Kohan Obj.”) 6−9, Docket Entry No. 7550.)
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`Regarding his objection that non-payment to class members that fail to file claims is
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`unfair, Kohan specifically objects to the portions of the Long Form Notice that read: “[i]f you do
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`not file a claim, you cannot get money from this settlement,” and “[i]f you do not exclude
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`yourself from the Rule 23(b)(3) Settlement Class, you cannot be part of any other lawsuit against
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`Defendants and other released parties listed in the Rule 23(b)(3) Class Settlement Agreement for
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`released conduct.” (Class Notices G2-18.) He states that “the Washington Post reported that
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`approximately 50% of adults can’t read at an 8th grade level. That 50% isn’t likely to get to page
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`17 of the notice, if they do . . . , that same 50% likely doesn’t function at a high enough level to
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`file a claim.” (Kohan Obj. 6.)
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`3. Mattress Firm, Inc., Watsco, Inc., and Easy Breathe, LLC’s
`objections
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`Objectors Mattress Firm, Inc., Watsco, Inc., and Easy Breathe, LLC (the “Mattress Firm
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`Objectors”) argue that the Superseding Settlement Agreement is unfair, unreasonable, and
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`inadequate because (1) “[t]he release unlawfully waives future claims that challenge interchange
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`rules,” and (2) “[t]he relief is unfair, inadequate, and unreasonable . . . because it significantly
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`lowers the pro rata share of class members” as compared to the relief from the 2013 Settlement
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`Agreement. (Statement of Obj. of Class Members the Mattress Firm, Inc., Watsco, Inc., and
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`Easy Breathe, LLC (“Mattress Firm Obj.”) 1, Docket Entry No. 7558.)
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`Mattress Firm Objectors argue that the release is impermissible because it “waives
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`damages based on future violations of the antitrust laws.” (Id. at 3.) Quoting the release
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`language, they argue that releasing claims “that will accrue between January 14, 2019 and ‘five
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`years following the court’s approval of the settlement and the resolution of all appeals’
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`necessarily releases future claims for damages, which is in itself impermissible.” (Id.) They
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`further argue that the Superseding Settlement Agreement “effectively halves the pro rata
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`recovery of the class from the benchmark established under the original settlement agreement
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`and is therefore inadequate.” (Id.) They write:
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`The original settlement agreement provided that [D]efendants
`would pay a cash award of $7.25 billion (before opt-outs and
`expenses) to a class of merchants that accepted Visa and/or
`Mastercard from January 1, 2004 to November 28, 2012, or
`$2,227,342.55 per day of the class period.
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`that
`[A]greement provides
`[S]ettlement
`[S]uperseding
`The
`defendants would pay a cash award of as much as $6.26 billion
`(before opt-outs and expenses) to a class of merchants that accepted
`Visa and/or Mastercard from January 1, 2004 to January 24, 2019,
`or $1,137,561.33 per day of the class period.
`
`
`(Id.)
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`4. Kevan McLaughlin’s objections
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`Kevan McLaughlin objected to the 2013 Settlement Agreement, but states that
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`“[a]lthough many of the issues raised in McLaughlin’s original objection have been addressed in
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`the Superseding Settlement [Agreement], the prospective five-year waiver of financial liability
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`for future conduct in the release remains troubling. It may well be unenforceable but, even if it is
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`not, there is no reason to extend the five-year bar by adding to it the duration of any appeals, as
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`the release purports to do.” (Obj. to Class Action Settlement and Notice of Intent to Appear by
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`Kevan McLaughlin (“McLaughlin Obj.”) 2, Docket Entry No. 7571.) He argues that (1) “there
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`is a strong argument that the proposed waiver of future violations is void as against public policy
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`in antitrust cases”; (2) it is unclear whether releasing claims arising from “related” conduct
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`comports with Second Circuit law; (3) even if the prospective release is allowable, the “five-year
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`immunity period” should not be extended to the end of the duration of any appeals, and “[t]here
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`is no apparent rationale for extending a term certain during appeals except to penalize class
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`members for taking appeals”; and (4) the length of the release and its “uncertain temporal scope”
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`makes it difficult to assess what class members are giving up in exchange because if appeals are
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`made, it is unclear “how many additional years’ worth of 7 class members’ damage claims are to
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`be exchanged for that same class fund recovery.” (Id. at 3−7.)
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`5. Gnarlywood LLC and Quincy Woodrights, LLC’s objections
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`Objectors Gnarlywood LLC and Qu