Payment Card Interchange Fee Settlement: Merchants Challenge Visa and Mastercard Immunity

Three New York merchants are asking a federal court to strip Visa and Mastercard of the liability shield embedded in a 2019 damages deal over card interchange charges that applies to millions of sellers.

On Tuesday, the merchants sought summary judgment from Judge Brian Cogan of the U.S. District Court in Brooklyn, in the Eastern District of New York. That request accompanies a new complaint they filed the same day in the federal court in Manhattan naming Visa and Mastercard as defendants, and they want Cogan’s ruling to clear the way for that litigation to proceed there.

Scope of the Prior Class Action and New Claims

The Brooklyn court retains oversight of the 2019 class action settlement, which delivered roughly $6 billion to an estimated 15 million U.S. merchants, the new filing says. Eligibility for the settlement generally covered U.S. merchants that accepted Visa and/or Mastercard cards during the class period, which the filing describes as spanning roughly 15 years through early 2019; merchants that opted out were excluded from the class recovery and preserved their ability to pursue their own damages claims. The earlier class period spanned 15 years through early 2019, while the proposed class now would seek damages on fees paid since January 2019 by merchants who say they are not barred by the settlement’s forward-looking release and who want to litigate claims tied to fees paid after that point.

Visa and Mastercard were key defendants in the case, and the settlement also involved claims against banks that issue payment cards and participate in setting or applying interchange-related rules. The settlement itself is legitimate in the sense that it received court approval and was later upheld by the Second Circuit Court of Appeals, but the filing emphasizes that disputes over what the settlement can lawfully release in the future continue to be litigated.

A court-approved class settlement can be binding and enforceable while still generating later disputes over how far its release reaches and whether it can lawfully bar claims based on future conduct.

How much a merchant receives from a class settlement like this can vary significantly. Payments are typically calculated on a pro rata basis using information tied to a merchant’s card-acceptance activity during the class period, such as transaction volume and the interchange fees associated with those sales, and then adjusted based on the total number of valid claims submitted and the overall fund available. In practice, a merchant with relatively low card volume during the class period may receive a comparatively small payment, while higher-volume merchants may receive substantially more.

Settlement funds are also typically reduced by court-approved attorneys’ fees and litigation expenses, along with administrative costs to process claims and distribute payments. Individual claimants generally do not pay additional legal fees out of pocket to file a claim; instead, any fee awards and costs come from the common fund as approved by the court.

The complaint asserts the networks effectively bought a license through settlement to keep violating antitrust law, shielding themselves from damages while maintaining the same conduct.

Plaintiffs argue that striking the release from future liability would leave the rest of the agreement intact and simply force the networks to defend their conduct in court. They ask Judge Cogan to confirm that the settlement’s release language does not bar their new claims, noting the networks have collected over $700 billion in card fees since Jan. 2019.

If defendants wished to stop being sued for antitrust violations, they should have stopped violating the antitrust laws, wrote New York attorney Jason Bressler, who also submitted the summary judgment request to Judge Cogan.

A Visa representative declined to comment on either the complaint or the summary judgment motion. Mastercard did not respond to a request for comment.

According to the motion, the 2019 accord grants the networks protection from damages claims tied to the same alleged continuing conduct at issue in the class case, including interchange-fee and network-rules-related practices that plaintiffs say persisted beyond the class period, until Aug. 8, 2028. The motion also frames the dispute as turning on whether merchants may still bring claims based on fees paid after January 2019, whether claims involving different conduct fall outside the release, and whether merchants that opted out remain free to sue individually.

Plaintiffs, Representation Issues, and Parallel Cases

Bressler represents the Manhattan plaintiffs listed below.

They contend the forward-looking release left some class members inadequately represented and unfairly treated because compensation was not aligned with when harm occurred, citing as an example a merchant that accepted Visa or Mastercard for only a single day during the class period.

That business was paid for one day of harm yet relinquished many years of future claims; the benefit was minimal while the concession was substantial.

The Second Circuit Court of Appeals upheld the 2019 settlement but declined to decide whether the forward release was lawful, the motion says.

Merchants that wanted to avoid being bound by the settlement’s release could opt out through the court-approved process and by the deadline stated in the official notice; those that did not opt out generally remained in the class and became subject to the settlement’s terms, including any release the court found enforceable.

• Target
• Nike
• Panera Bread
• Grubhub Holdings (merchants’ group; slated for a September trial in Chicago)

Separately, Judge Cogan has set a Monday hearing to consider arguments on a proposed settlement offering injunctive relief for millions of merchants. An earlier proposal for that injunctive relief was rejected by another federal judge in 2024.

Merchants who receive a notice about the settlement are typically advised to read it closely, confirm it references the court-approved administrator and case information, and follow the instructions provided to file a claim, update business or payment details, or take any other required steps by the stated deadline. For updates and case documents, merchants can rely on the official settlement administrator contact information included in the notice and on filings and orders in the court docket.