STRATEGIC PARTNERS
April 27, 2003
NEW YORK -- In a surprise move, MasterCard International settled its portion of the class-action lawsuit filed by Wal-Mart Stores Inc. and other retailers over its debit-card policies.
According to the Associated Press, U.S. District Judge John Gleeson made the announcement on April 28, just as the trial was set to begin. Visa USA is now the only defendant in the high-profile lawsuit.
Gleeson gave no details of what he called an "11th-hour settlement." He ordered MasterCard, Wal-Mart and other plaintiffs in the suit not to speak publicly about the settlement.
A MasterCard spokeswoman in the Brooklyn courtroom declined comment, citing Gleeson's just-imposed order.
Shortly after the announcement, Visa asked Gleeson for permission to delay its opening arguments, which were slated to be heard on April 28. Visa attorney Steve Bomse sought to have Visa's opening statements moved to April 30, saying the delay was necessary because the trial has changed.
Wal-Mart and retailers sued the two card companies for billions of dollars, claiming that Visa's and MasterCard's "honor all cards policies" forced them to clear some debit transactions through the companies' settlement systems rather than through EFT networks such as Starand NYCE.
Before the settlement, experts estimated the trial could last at least three months, and that any verdict could be delayed for years on appeal.
According to Credit Card Management magazine, in 2000 Visa had a 47 percent share of the U.S. credit card market, and MasterCard held a 28.4 percent share.
Because of Visa's larger market share, attorneys representing the retailers had made Visa the primary target of the suit. MasterCard in March asked Gleeson for a separate trial, a request the judge denied.
