Emails Could Tank Already Contentious Swipe-Fee Settlement
NEW YORK — The discovery of emails between opposing lawyers who are also close friends is threatening to scuttle the 2012 $6-billion class-action antitrust settlement between Visa Inc., MasterCard Inc. and millions of merchants–including convenience-store retailers–over the setting of interchange or “swipe” fees for consumers to use credit or debit cards, reported The Wall Street Journal.
Lawyers representing merchants including Wal-Mart Stores Inc., Home Depot Inc. and 7-Eleven Inc. are expected on July 28 to formally notify the card networks that they will seek to undo the three-year-old pact, people familiar with the plans told the newspaper.
Those lawyers are expected to take the same steps in a similar case involving a pending $79-million settlement involving American Express Co. and approximately the same group of merchants, the people said.
While investigating the actions of Keila Ravelo, who represented MasterCard in the antitrust case when she was a partner at Willkie Farr & Gallagher LLP, Willkie Farr discovered emails and documents that were exchanged between Ravelo and Gary Friedman, who represented merchants through Friedman Law Group LLC. The two lawyers were colleagues at another firm early in their careers.
The merchants plan to contend that the communication between them involved confidential information and resulted in the merchants getting inadequate representation, sources said.
Willkie Farr said it found “certain documents which we believe raise questions that appropriately should be discussed with the court concerning communications in which Ms. Ravelo was involved relating to this litigation and other matters,” according to a February letter submitted to Judge Margo Brodie, who sits in the U.S. District Court for the Eastern District of New York.
Friedman represented merchants in both the Visa-MasterCard case and the American Express case. He collected a $32-million fee for his work in the Visa-MasterCard case. A group of merchants last week filed papers asking for that amount to be returned to the settlement fund.
One filing from the law firm that is now representing MasterCard said the disclosures from Willkie Farr “indicate that its former partner and Mr. Friedman may have violated protective orders, improperly disclosed confidential information and otherwise made improper and inappropriate communications.”
Spokesperson for all parties declined to comment or could not be reached by the Journal.
