A federal appeals court has overturned a historic antitrust settlement between retailers and Visa and MasterCard, reviving more than a decade of legal battles over processing fees.
The 2nd U.S. Circuit Court of Appeals in Manhattan said last week that the lawyers represented retailers with competing interests in the settlement, which was once valued at $7.25 billion, one of the largest in antitrust history. The judges pushed the suit back to a lower court.
The settlement stemmed from a 2005 lawsuit in which retailers accused credit card providers of scheming to fix the price of processing fees. The sides reached the settlement in 2012.
Under the deal, merchants would give up their rights to sue in the future, regardless of whether they received a piece of the money. Merchants also would be allowed to charge higher prices when consumers paid with credit cards, which are typically more expensive for them to process than debit cards.
But Thursday the Court of Appeals said that the merchants had been “inadequately” represented when the settlement was reached.
The court said that two groups should not have been represented by the same lawyers, who stood to earn more than a half-billion dollars in fees, because the groups of merchants’ interests conflicted with one another. Some merchants would want to maximize their cash payments, while others would want to “maximize restraints on network rules to prevent harm in the future,” the court wrote.
“Class counsel stood to gain enormously if they got the deal done,” the court said in one of the opinions from the three-judge panel.
A lower court will now have to decide the terms of a new settlement or whether to push the case to trial.
Crystal Pepsi returns to shelves for summer
PURCHASE, N.Y. >> PepsiCo is bringing back the 1990s this summer with an eight-week release of Crystal Pepsi, one of the iconic beverages of that decade.
The clear cola was originally rolled out nationally in 1993 with a high-profile campaign that included Super Bowl ads featuring Van Halen’s “Right Now.” The product was widely regarded as a flop along the lines of New Coke after missing sales targets. It was soon reformulated with a lemon flavor and renamed Crystal.
Crystal Pepsi was brought back briefly in December as a prize in a two-day online sweepstakes. Purchase, N.Y.-based PepsiCo says it will return to U.S. store shelves Aug. 8.
Malaysia Air gets third CEO in 2 years
Malaysia Airlines Bhd. named its third chief executive officer in two years amid a business overhaul after two fatal air crashes in 2014 prompted the carrier’s owner to take the company private.
The airline, now fully owned by the nation’s sovereign wealth fund Khazanah Nasional Bhd., promoted Chief Operating Officer Peter Bellew to the top job after Christoph Mueller resigned in April about less than halfway into his three-year tenure. The appointment took effect last month, three months before Mueller was scheduled to leave.
On the Move
Castle Resorts & Hotels has named William “Kahele” Naeole Jr. its new senior e-commerce manager. He has 12 years of experience in online and traditional offline marketing, recently serving as a digital content and SEO manager at Aqua-Aston Hospitality.
Bennet Group Strategic Communications has promoted Christine Matsuda Smith to vice president. Her responsibilities include continuing to manage a high-profile client’s portfolio as well as direct strategy for the firm, personnel management and business development. Smith joined the company in 2013 and has experience with local and national nonprofit institutions.
