In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation

24-1653(L)

In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY

ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF

APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER

IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN

ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY

ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held

at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,

on the 4th day of May, two thousand twenty-six.

PRESENT:

DENNIS JACOBS,

PIERRE N. LEVAL,

MICHAEL H. PARK,

Circuit Judges.

__________________________________________

In re Payment Card Interchange Fee and Merchant

Discount Antitrust Litigation 24-1653(L);

24-1808(CON).

803 KAVA LLC, CRYOSERVICES, INC. D/B/A

ANDERSON CRYOTHERAPY D/B/A ATHLETIC

RECOVERY CENTER; DELL FOX JEWELRY LLC;

MAUREEN ROXBERRY; HAYLEY LANNING;

SBG DESIGNS, LLC D/B/A GOLDFINE JEWELRY;

SHEN SHU ACUPUNCTURE, PLLC;

CAMP GROUNDS COFFEE, LLC,

Plaintiffs-Appellants,

v.

JACK RABBIT, LLC,

Objector-Appellant,

v.

VISA, INC., MASTERCARD INCORPORATED,

Defendants-Appellees. *

__________________________________________

FOR PLAINTIFFS-APPELLANTS MARK C. RIFKIN (Thomas H. Burt on the

brief), Wolf Haldenstein Adler Freeman

& Herz LLP, New York, NY.

FOR OBJECTOR-APPELLANT N. ALBERT BACHARACH, JR., N. Albert

Bacharach, Jr., P.A., Gainesville, FL;

Paul S. Rothstein, Attorney Paul S.

Rothstein, P.A., Gainesville, FL.

FOR DEFENDANT-APPELLEE VISA, INC. ROSEMARY SZANYI (Matthew A.

Eisenstein, R. Stanton Jones on the brief),

Arnold & Porter Kaye Scholer LLP,

Washington, DC; Michael S. Shuster,

Demian A. Ordway, Jayme Jonat,

Holwell Shuster & Goldberg LLP, New

York, NY.

FOR DEFENDANT-APPELLEE MASTERCARD Kenneth A. Gallo, Paul, Weiss, Rifkind,

INCORPORATED Wharton & Garrison, LLP, Washington,

DC; Brette Tannenbaum, Nina

Kovalenko, Gary Carney, Paul, Weiss,

Rifkind, Wharton & Garrison LLP, New

York, NY.

FOR AMICI CURIAE INTUIT INC.; INTUIT PAYMENT Marc L. Greenwald, Steig D. Olson,

SOLUTIONS, LLC; BLOCK, INC. F/K/A SQUARE, Manisha M. Sheth, David M. Cooper,

INC.; AND ACI PAYMENTS, INC., IN SUPPORT OF Quinn Emanuel Urquhart & Sullivan,

PLAINTIFFS-APPELLANTS LLP, New York, NY; Adam B. Wolfson,

Quinn Emanuel Urquhart & Sullivan,

LLP, Los Angeles, CA; Justin T.

Reinheimer, Quinn Emanuel Urquhart &

Sullivan, LLP, San Francisco, CA.

Appeal from a memorandum and order of the United States District Court for the Eastern

District of New York (Brodie, C.J.).

*

The Clerk of Court is respectfully directed to amend the caption accordingly.

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UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED.

In 2019, Defendants settled a federal antitrust class action with a class of merchants that

accepted their credit cards during the class period. The Settlement Agreement defines the class,

in relevant part, as “all persons, businesses, and other entities that have accepted any Visa-Branded

Cards and/or Mastercard-Branded Cards in the United States at any time from January 1, 2004 to

the Settlement Preliminary Approval Date.” App’x at 7577. Amici Intuit Inc., Intuit Payment

Solutions, LLC (together, “Intuit”); Block, Inc. f/k/a Square (“Square”); and ACI Payments, Inc.

provide payment facilitation services to customers. Intuit and Square opted out of the class action

settlement and filed their own complaints asserting antitrust claims against Defendants.

Plaintiffs-Appellants (together, the “Square Sellers”) are merchants and customers of

Square that use Square’s payment card facilitation services to process credit card purchases.

They did not opt out of the Settlement Agreement, but in 2021, they filed a putative antitrust class

action complaint against Defendants. The Square Sellers appeal from a memorandum and order

granting Defendants’ motion to enforce the Settlement Agreement and finding that the Square

Sellers are members of the settlement class. We assume the parties’ familiarity with the facts and

the issues on appeal, which are discussed at greater length in our opinion in the tandem case of

Old Jericho v. Visa, No. 24-2678, filed simultaneously with this summary order.

First, the Square Sellers argue that the district court erred in concluding that they are

members of the settlement class because they are neither direct purchasers nor direct payors of the

challenged fees. For substantially the reasons stated in Old Jericho v. Visa, No. 24-2678, we

reject the Square Sellers’ argument that the district court must resolve disputes over class

membership by identifying the party that directly paid Defendants for payment card processing

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services. Instead, the district court’s task is to construe the Settlement Agreement “in accord with

the parties’ intent.” Revitalizing Auto Cmtys. Env’t Response Tr. v. Nat’l Grid USA, 92 F.4th

415, 441 (2d Cir. 2024) (quotation marks omitted). If the class definition is ambiguous as to

potential class members, the district court can consider “extrinsic evidence of the parties’ intent”

on a developed factual record to resolve that ambiguity. Id. at 442.

The district court did so here. It first concluded that the word “accepted” in the Settlement

Agreement is ambiguous as applied to the Square Sellers and Square, which can both “credibly

claim to have ‘accepted’ payment cards.” In re Payment Card Interchange Fee & Merch. Disc.

Antitrust Litig., 735 F. Supp. 3d 249, 262 (E.D.N.Y. 2024). Next, the district court concluded

that the parties intended that “as between competing claimants, only one entity is entitled to make

a claim of the settlement fund.” Id. at 264. None of the parties in this appeal contests this

characterization of the settling parties’ intent. 1 The district court then found that the Square

Sellers “accepted” payment cards for each transaction and were thus members of the settlement

class. It based this finding on (1) Square’s merchant agreement, which states that Square allows

merchants “to accept Cards from customers,” id.; (2) Square’s Complaint, which alleges that

Square “helps Sellers (merchants who utilize Square to accept payment cards . . . ) start, run, and

grow their businesses, including by enabling Sellers to accept card payments,” id.; (3) Visa’s rules,

which distinguish between a “Payment Facilitator” and a “Merchant” and provide that an entity

cannot simultaneously act as both a payment facilitator and a merchant, id. at 265; (4) Mastercard’s

rules, under which Sellers “accept” payment cards while payment facilitators facilitate the

1

Although the parties do not dispute this contention, in Fikes we explained that we “accept that

interpretation of federal antitrust law for the purposes of this appeal, without opining on its soundness.”

Fikes Wholesale, Inc. v. HSBC Bank USA, N.A., 62 F.4th 704, 716 n.5 (2d Cir. 2023); see generally id. at

730-32 (Leval, J., concurring). We accept this interpretation of the Settlement Agreement, but we again

do not opine on the soundness of this interpretation as a matter of federal antitrust law.

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acquiring of transactions, id. at 266; (5) the Square Sellers’ own declarations, which describe

themselves as businesses that accept credit and debit cards, id.; (6) the “way real-world

transactions are conducted” in which the “cardholder hands her card to a Seller, who ‘accepts’ it

for payment at the point of sale,” id. at 264; and (7) the incongruence of interpreting the word

“accepted” to mean that Square “‘accepts’ a payment card, but the [Square] Seller ‘accepts’ cash,

for two otherwise identical transactions,” id. at 265.

We decline the invitation of the Square Sellers and amici to second-guess the district

court’s finding that the settling parties intended to include the Square Sellers, rather than Square,

in the settlement class. “Few persons are in a better position to understand the meaning of a

settlement than the district judge who oversaw and approved it,” and a “trial court’s findings

regarding the parties’ intentions will be respected on appeal unless they are clearly erroneous.”

W. Alton Jones Found. v. Chevron U.S.A., Inc., 97 F.3d 29, 33 (2d Cir. 1996) (cleaned up). The

district court carefully reviewed the record and considered evidence about how payment

facilitators function, as well as how the parties themselves characterized who “accepts” credit

cards in a given transaction. Based on this record, the district court’s findings as to the settling

parties’ intent regarding which entities should be deemed part of the settlement class were not

clearly erroneous.

For substantially the reasons stated in Old Jericho v. Visa, 24-2678, we also reject the

Square Sellers’ argument that the district court’s order impermissibly created an intra-class conflict

by placing direct and indirect purchasers in the same settlement class. As explained in that

opinion, the parties settled partly to avoid resolving Defendants’ indirect purchaser defense. The

Square Sellers’ argument that the district court was required to avoid “including both direct and

indirect purchasers in the settlement class,” Square Sellers’ Br. at 43, thus rests on an assumption

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about which entities are indirect purchasers. This interpretation relying on such an assumption

would undermine the purpose of the Settlement Agreement by requiring a final resolution of the

very issue the parties sought to avoid.

Finally, the Square Sellers argue that the Settlement Agreement violates due process

because they did not receive individual notice of it. When approving a 23(b)(3) class action

settlement, the district court “must direct to class members the best notice that is practicable under

the circumstances, including individual notice to all members who can be identified through

reasonable effort.” Fed. R. Civ. P. 23(c)(2)(B). Under this rule, “[i]ndividual notice must be

sent to all class members whose names and addresses may be ascertained through reasonable

effort.” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173 (1974).

Whether class members can be identified through reasonable effort “is a finding of fact,

and must be accepted unless clearly erroneous.” In re Agent Orange Prod. Liab. Litig. MDL No.

381, 818 F.2d 145, 169 (2d Cir. 1987). The district court expressly recognized its obligation to

direct “individual notice to all members who can be identified through reasonable effort” when

approving the notice plan. In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig.,

330 F.R.D. 11, 58 (E.D.N.Y. 2019). We identify no clear error in the district court’s finding that

the notice plan was reasonable under the circumstances. See id. at 59 (finding “reasonable the

manner in which the notices will be provided” in the settlement); In re Payment Card Interchange

Fee & Merch. Disc. Antitrust Litig., No. 05MD1720MKBJO, 2019 WL 6875472, at *36 (E.D.N.Y.

Dec. 16, 2019) (“[T]he Court finally approved the Superseding Settlement Agreement as fair,

reasonable and adequate, including the Notice Plan, Class Notices, and Plan of Administration and

Distribution.”).

* * *

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We have considered the Square Sellers’ remaining arguments and find them to be without

merit. For the foregoing reasons, the order of the district court is AFFIRMED.

FOR THE COURT:

Catherine O’Hagan Wolfe, Clerk of Court

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