What would you do with part of a $5.5 billion lawsuit settlement?
In 2005, a trio of national law firms helped set more than 16 million American merchants on the path to answering that question.
Minneapolis, MN-based Robins Kaplan LLP, Philadelphia, PA-headquartered Berger Montague, and Robbins Geller Rudman & Dowd of San Diego, CA, teamed to sue payment card conglomerates Visa and Mastercard, as well as card-issuing banks such as JPMorgan Chase and Bank of America, for charging grossly inflated and monopolistic transaction fees.
The settlement of that lawsuit marks a win for restaurateurs and retail merchants across the US that can now apply for their piece of the $5 billion settlement fund.
For restaurateurs nationwide, it marked the conclusion to nearly two decades of legal strife and the largest private antitrust class-action settlement in American history.
In addition to the potential reward of the settlement, the lawsuit helped spark many reforms. Restaurants and retail merchants can now incentivize customers to pay with methods other than payment card, often achieved by offering cash-paying customers a small discount or by restricting use of certain branded cards.
Additionally, the litigation led Visa and Mastercard to remove banks from their executive boards, eliminating anti-competitive influence over fee pricing.
These banks, many of whom populated the executive boards of payment card companies, instituted price fixing agreements that preyed upon merchants’ conception that they had to take credit and debit cards as payment forms to maintain business.
Most importantly, however, is the payout: to help alleviate the fee burden shouldered by merchants between 2004 and 2019, the Court of Appeals finally approved a $5.54 billion settlement fund in March of 2023.
“There’s no better time than now,” advised Robins Kaplan partner Ryan Marth, “to take advantage of the suit and get some relief from the fees [restaurants] have been paying for more than a decade.”
The claim-filing process, noted Marth, was intentionally designed to be accessible to anyone – particularly smaller businesses.
Starting in December 2023, the court overseeing the settlement authorized the sending of claim forms via mail to qualifying merchants.
Blue and white in color, the form will bear a message identifying it as an official court-sanctioned form, which can be confirmed by a blue, gray, and white insignia.
Enclosed within the communication are business-unique credentials that allow restaurateurs to access the online portal to begin filing a claim.
Businesses not contacted via mail but likely to qualify can visit Payment Card Settlement website and provide a unique taxpayer ID to be identified by the Court.
Restaurants need not worry about qualifying to receive a portion of the massive settlement fund, provided they file by May 31, 2024.
So long as the establishment accepted payments on the credit cards denoted by the suit between 2004 and 2019, they are eligible to receive funds, regardless of transaction volume or business type.
“The suit also includes everyone from restaurants to retailers and distributors,” Marth added. “My dentist even mentioned she’d received a claim form in the mail and was planning on filling it out!”
While the scope of the lawsuit may intimidate some, Marth urges all business owners that filing is important: “If I could really emphasize one point, it would be that the [claim portion] is real and worth your time, and you should spread the word to everyone.”
Thankfully, determining the size of that portion is a relatively simple fraction: the numerator is the amount of interchange fees paid by a restaurant, and the denominator is the total amount of interchange fees paid by all claimholders.
To calculate the value owed to those who file, administrators simply multiply that fraction by the $5.5 billion up for grabs. While that math may appear daunting, Marth assured that “for most restaurants, this amounts to real money.”
Nevertheless, the lawyer added, “what constitutes real money varies from one establishment to the next,” since claim size is determined by transaction volume.
Moreover, since the filing process is simple and headache free, restaurants need not spend additional money on legal help.
“Companies are going out and soliciting restaurants and other merchants to engage them to file their claims on their behalf,” cautioned Marth, “but often charge a 25-40% cut of their claim; the process is designed to be easy to avoid this!”
There’s no better time than today to file a claim and receive a portion of the settlement fund, urged Marth. The landmark suit, which helps businesses of all sizes find relief from overbearing credit card transaction fees, is shaking up the food service industry.
With a remarkably easy filing process and potential to tap into the largest antitrust class-action litigation settlement fund in American legal history, the Payment Card Settlement helps restaurateurs nationwide reclaim ownership of their business, and importantly, their bottom lines.
For information about the settlement, qualification, or claim-filing, visit Payment Card Settlement website.
