The Law Firm of Bucknam Black Davis PC

Understanding The Visa and MasterCard Class Action Settlement Notice

 In the past few weeks merchants have been receiving a “Notice of Class Action Settlement” related to a lawsuit against Visa, MasterCard and numerous banks.  The purpose of the Notice is to provide information about the law suit and the proposed settlement to members of the “class.” The Notice encompasses 27 pages and can be overwhelming to the non-lawyer reader. Because it outlines a) how members of the class may be entitled to cash payments from Visa and MasterCard and b) certain rule changes concerning surcharges for accepting these cards, the Notice should not be simply tossed in the trash.

The Lawsuit

The case, titled In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation has on going in the U.S. District Court, Eastern District of New York, for the past seven years. Plaintiffs brought the case on behalf of merchants who accept Visa and MasterCard and include Payless Shoes, Parkway Corp. and Leon’s Transmission Service, Inc.  They claimed that MasterCard, Visa and approximately 40 member banks violated federal antitrust laws by conspiring together  set interchange fees (fees typically paid by merchants for accepting Visa and MasterCards) and imposed and enforced rules that limited merchants’ ability to steer customers into other payment methods. It is the Plaintiffs’ argument that such conduct forced merchants to pay excessive fees for accepting MasterCard and Visa cards.

The Class

Class action lawsuits are used when a large number of plaintiffs have claims or when claims are being made against a large number of defendants. Usually the plaintiffs or defendants are located in multiple states. The plaintiffs bring suit on behalf of a proposed class of plaintiffs. For the case to move forward as a class action the court must agree that the members of the proposed class have suffered a common injury or injuries, typically resulting from an action on the part of a business or a particular product defect or policy that applied to all proposed class members in a typical manner. The court must also be convinced that the initial plaintiffs have t he capacity and resources necessary to represent the class as a whole. If the court agrees, the class is certified and the initial plaintiffs are authorized by the court to act on behalf of all members of the class.

The initial plaintiffs are required, however, to provide all prospective members of the class  notice of their individual rights throughout the case. One particularly important right afforded prospective class members is the right to “opt out” of the class action and bring their own lawsuits against the same defendants. Typically, if a prospective class member does not affirmatively opt out of the class they will be bound by the results of the class action lawsuit. If someone does opt out, however, they will be bound by the results of their independent lawsuit. You cannot opt out of a class action and then opt back in if your individual case is not successful.

You received the Notice because…?

The parties have, after seven years of extensive litigation (more than 50 million pages of documents were reviewed and over 400 witnesses were deposed) decided that a settlement is in the best interests of both the class and the defendants.  A settlement does not mean that Visa and MasterCard admit any wrong doing. Settling the case means the defendants avoid the risk of a judgment that they must pay more than the settled amount; plaintiffs avoid the risk of a judgment for less money.  The settlement has not yet been approved by the court. Before that court will decide whether to accept the settlement the members of the class must be notified of their rights under the proposed settlement and given the option to opt out.

The records of Visa, Mastercard and the bank defendants show that you are probably a person, business or other entity that accepted Visa-Branded cards and/or MasterCard branded cards in the United States anytime from January 1, 2004 through November 28, 2012.  This makes you a member of the class, if you decide not to opt out.

What are the benefits to the class from the settlement?

The settlement provides two categories of benefits to class members: 1) a cash settlement and 2) changes in the rules and practices Visa and MasterCard can impose and enforce on class members who continue to accept Visa and/or MasterCard.

The cash benefit portion of the proposed settlement requires Visa, MasterCard and defendant banks to establish two funds from which class members may be paid. Combined, the two funds total just over seven billion dollars.  These funds will be used to pay money awards directly to class members, pay for the cost of administering the settlement (if approved by the court) and to cover attorney’s fees and expenses.  A portion of the funds (approximately $1.5 billion dollars) will be held back to cover claims of merchants who chose to opt out of the settlement and proceed in court with individual claims.

The expectation is that merchants will receive an amount equal to actual or estimated interchange fees paid on Visa and MasterCard transactions for the period of January 1, 2004 through November 28, 2012. The interchange fund provides payment (equal to 1/10 of 1% of credit card transaction volume) to merchants who accept Visa and MasterCard during an eight month period starting June 29, 2013.

The actual amount received, however, will be affected by the total value of all valid claims filed, costs of administration and attorney’s fees and expenses approved by the court. Details of how claims will be calculated are expected to be available as of April 11, 2013.

The rule changes, if approved by the Court, will become effective no later than January 27, 2013. Under the new rules, merchants will be able to charge an extra fee to customers who use Visa or MasterCard branded credit cards, may offer discounts at the point of sale to customers who do not pay with MasterCard or Visa. Merchants who operate under different trade names at more than one location will no longer be required to accept MasterCard and Visa at all of those locations. (If operating under one trade name the rule will still be that Visa and MasterCard must be accepted at all locations or none.) Merchants will still be allowed to set a $10 minimum purchase for Visa and MasterCard.

How Do you make a claim?

The Court first has to approve the proposed settlement. If approved, you will eventually have to file a valid claim in order to get payment from the settlement. If you have not opted out of the settlement the claim form will be mailed to you. It will also be available at   Class members with more than one location or franchise may fill out (but are not required to) a pre-registration form which is available at the website.

A “Fairness Hearing” at which the Court will hear arguments as to why the proposed settlement is or is not fair is scheduled for September 12, 2013. How long it will take the Court to decide whether or not to accept the proposed settlement is unknown. The result is that it will be several months before a claim form will be available. In the meantime it is advisable for merchants to pull together information that supports the amount of their claim.

What if I don’t like the proposed settlement?

You have two options: 1) you can object to the settlement and 2) you can opt out.

To object to the settlement you must file a Statement of Objections with the U.S. District Court for the Eastern District of New York. A copy of your statement must also be sent to counsel for both the plaintiffs and the defendants. Your statement must ne postmarked no later than May 28, 2013.  Refer to pages 12 and 13 of the Notice for additional information.

How do you opt out?

You can only opt out of the cash settlement class. The proposed rule changes, if accepted by the court, cannot be opted out of and will apply to all merchants accepting MasterCard and Visa branded cards.

To opt out you must send a letter to the address specified in the Notice. First class mail is acceptable; you cannot opt out by phone, fax, email or online. You should keep a copy of your letter for your records. The letter must provide identifying information about the merchant (including the merchant’s taxpayer i.d. number), specifically state that you wish to opt out of the “cash settlement class in the case called In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation.”  Refer to the Notice (pages 11 and 12 for the information that must be included in your opt out letter.)

Your letter must be postmarked no later than May 28, 2013.  If your letter is postmarked after that date it will be considered invalid. You will be bound by the terms of the settlement but you will also remain a member of the Cash Settlement Class entitled to payment. If you file your opt out letter on time you will not be eligible for payment under the terms of the class. You then have the right to bring claims against the Defendants on an individual basis.

What if you do nothing?

If you don’t file a claim form, object to the settlement or opt out you will not receive payment. You will be bound, however, by the terms of the cash settlement. All merchants, whether they file a claim, object or opt out will be bound by the proposed rule changes, assuming the court approves the settlement.

Where can I get more information?

Contact information, copies of the proposed settlement and a list of important dates can be found at

Frequently asked questions about Fees and Costs in Family Law Cases

>Frequently Asked Questions about Fees and Costs in Family Law cases

How much will my case cost? It depends. In family cases, attorneys charge by the hour, or a portion thereof, for their time, and for paralegal time. The total amount of fees charged depends on the number of issues involved, the amount of discovery, the number of hearings, and the obstructionism of the opposing party. Many of these factors are out of the control of you and your attorney, so it can be difficult to control costs. A divorce where the parties can reach an early agreement may cost as little as a few thousand dollars; a case where there are multiple issues, hearings, discovery, and obstructionism of the other party may cost well in excess of $100,000.00.

My attorney bills me a minimum amount no matter how short the time spent. Why? Most attorneys provide for a minimum amount of time in their billing structure, usually either 1/10 of an hour, ten minutes, or ¼ of an hour. Therefore, if you have a three minute phone call with your attorney, he or she may charge you up to fifteen minutes for that call. In fairness to the attorney, one of the most difficult parts of our practice is “capturing” all of the time we spend on a case. For example, it is rare, even with minimum time protocols, for attorneys to be able to capture all their billable hours they spend in a day for clients, particularly if they are dealing with multiple cases during the day. Minimum fees help to bridge that gap.

Why are the attorney’s hourly rates so high? It’s a matter of simple economics. An attorney, as with any businessperson, has overhead, including rent, utilities, staff salaries, law books and computers. The hourly rate reflects all of those costs in addition to the attorney’s salary.

How do I minimize costs? There are several ways to keep fees down.

o Gathering and organizing financial documents is a big cost saver. Talk to your attorney about what documents you should be gathering and how he or she wants them organized.
o Keeping the temperature cool: This means trying not to do anything that will provoke the other side, if possible. When your soon to be ex-spouse becomes angry, costs invariably go up. For example, throwing your spouse’s clothes on the lawn may turn out to be an expensive act of revenge when your spouse calls his or her attorney, and the hope of a negotiated settlement goes out the window. Another red flag: dating or living with a new girlfriend or boyfriend does not matter to the court, but will anger your spouse—usually resulting in a more contentious divorce.
o Negotiating a settlement: litigation is very expensive; negotiated settlements are almost always less so. Even if you cannot agree on everything, try to agree upon as much as possible, and you have a right to litigate the rest. This does not mean, however, that you need to agree for agreement’s sake. If your spouse is being unrealistic, then a hearing may be necessary.

Can I pay my attorney on a contingency fee basis? The law does not allow lawyers to represent clients in family cases on a contingency fee without prior court approval. In addition, many family law cases involve other issues besides property awards; thus a contingency fee would not apply to those cases.

What other expenses can I expect in a family law case? The most costly expenses you can expect are for expert fees and deposition costs, if you need an expert or you need to take someone’s deposition. Some experts attorneys use are: private investigators, forensic psychologists, property appraisers, actuaries to determine values of pensions or annuities, financial experts. Those costs may run from hundreds to thousands of dollars, but in a particular case may be worth the investment.

Do attorneys double bill when they are doing work for two clients? Attorneys are prohibited from double billing by the Code of Ethics. If Attorneys are traveling to court for two hearings, for example, they cannot bill both clients for the time on the road. We pro-rate travel time when we are traveling to court for more than one client.

Why am I not credited with interest on the money in attorneys client’s trust accounts? Most attorneys require that an advance fee be paid in cases involving hourly charges. That advance fee is placed in a clients trust account, and the funds are transferred to the operating account when an attorney spends time or has an expense in your case. The Code of Ethics requires lawyers to place their clients trust monies into special interest bearing accounts called IOLTA accounts. With those accounts, the banks have a legal obligation to pay the interest directly to the Association. The interest earned goes to people or organizations with legal needs. In Vermont, most of the interest earned on IOLTA accounts is paid by the Vermont Bar Association to Vermont Legal Aid to help represent needy clients, and to other legal causes.

Can the other party be ordered to pay my attorneys fees in family cases? Yes. The court can order a spouse or ex-spouse to pay your attorneys fees. It is up to the court to decide. The court may or may not grant your request. The court will only order a spouse to pay attorneys fees when there is large gap between the parties’ income, and when you can show you are unable to pay your fees. My advice, however, is not to count on this. It is rare for Vermont courts to award attorneys fees.

Attorneys are expensive; why isn’t it better to negotiate a settlement with my spouse myself? It is true that divorce is expensive. However, there is a great deal at stake: your children’s future and your financial security for years to come. Lawyers are paid to look into the future and determine the impact of the terms of a settlement on you and your family. In addition, if you are in an emotional breakup—and what breakups aren’t?—it is difficult to negotiate a settlement that takes into account all of the issues–and is fair and equitable. If you want to negotiate a settlement with your spouse yourself, then my advice is to at least have an attorney review the settlement before you sign. Most attorneys will be willing to give you advice about a settlement you have negotiated with your spouse. It will be money well spent.

Preparing for the financial side of divorce

>The emotional issues associated with divorce often overshadow realistic consideration of the financial implications of the breakup of a marriage. Unfortunately, this reality may put one or both parties at financial risk because markets are always changing and financial records can become stale or lost. It is therefore important to address the financial issues early in the divorce proceeding.

First step: Preparing Financial affidavit–Form 813

In Vermont, one of the first forms a divorce client will be asked to complete is the Form 813 which provides a summary of his or her current financial condition including a listing of assets, liabilities, and a schedule of monthly income and expenses. This is a useful form that will help you determine what information the court believes is important in deciding the financial issues in your divorce. The 813 form is available online at The information provided on the 813 will form the basis for discussion about the financial issues to be addressed in the divorce proceeding, but it is also a document that will become part of the record with the court. While the court does not require that the information on the 813 form be supported by documents, it is best practice to gather the documents that support the information, and keep it with your copy of the 813 form. In that way you can show your lawyer and the court how you arrived at the information on the form.

Step 2: Gathering records

The following are some of the financial records that you should gather and organize as soon as practicable in a divorce proceeding. They include documents that will support the 813 form as well as additional documents that will help you make your case in court:

  • Individual Federal Tax Returns for at least 2 years including individual W-2’s.
  • Copies of employment contracts.
  • Tax returns for corporations or LLC’s (owned or partially owned by you) for at least 2 years
  • Financial Statements for corporations, LLC’s, and/or sole proprietorships owned or partially owned by you for at least 2 years. These include income statements and balance sheets.

Bank accounts (including checking, savings, and money market accounts)

  • Copies of signature cards
  • Copies of check registers for past 2 years
  • Copies of monthly statements for at least 2 years
  • Copies of canceled checks for at least 2 years
  • Copies of all deposits including deposited items for 2 years

Investment Accounts

  • Copies of investment account contracts
  • Copies of monthly statements for at least 2 years together with related check registers
  • Copies of canceled checks for at least 2 years
  • Copies of all deposits and deposited items for last 2 years.

Loan documents

  • Copies on notes, mortgages, security agreements, and loan balances (can be obtained from your financial institution) for all outstanding loans.

Real Estate documents and information

  • 911 address
  • Current Deed
  • Valuation: listers’ cards or appraisals
  • Mortgage loan documents including notes, mortgage deeds, and bank statements showing current balances.

Retirement Accounts and social Security Entitlement

  • IRA, 401K, 403b, statements covering last 2 years and related contracts showing ownership and beneficiary information
  • Defined benefit retirement plans
  • Plan documents showing ownership and beneficiaries
  • Most recent statement showing amount of entitlement and payment options
  • Copies of Social Security Statements showing entitlement amounts, date of retirement, etc.

Credit Cards

  • Copies of monthly statements for past two years on all credit card account Insurance/Annuities Policies
  • Copies of contracts showing ownership and beneficiaries
  • Statement of cash surrender value.

While the task of gathering all of this information seems daunting, taking the time to do so early will facilitate the divorce proceeding and help control costs.

At our law firm, our motto is “Information is power”. That should be your motto when you are going through a divorce.

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