Last Update :2/12/2019

Golf Course Owners You May Be Eligible to Share in $6B Class Action Settlement

Golf Course Owners You May Be Eligible to Share in $6B Class Action Settlement

If your golf course accepted credit cards anytime between Jan. 1, 2004 and Nov. 28, 2012 you may be eligible to share in the $6 billion class action settlement against Visa U.S.A. Inc. ("Visa") and MasterCard International Incorporated ("MasterCard").

On Jan. 24, 2019, the U.S. District Court of New York granted preliminary approval to the settlement filed on Sept. 18, 2018 in the case "PAYMENT CARD INTERCHANGE FEE AND MERCHANT DISCOUNT ANTITRUST LITIGATION." The order is availableHERE. While this case has lingered in the courts since 2012, it finally appears to be coming to a close.

After an initial filing in 2009, on Nov. 27, 2012, the U.S. District Court, Eastern District of New York approved the class action lawsuitsettlement finding that Visa and MasterCard, separately and together with banks, violated antitrust laws and caused merchants to pay excessive fees for accepting their credit and debit cards.

On Dec. 13, 2013, the U.S. District Court, Eastern District of New York, issued final approval of the settlement. However, this decision was appealed by many of the merchants, which felt that the lower court limited that settlement to only two classes of merchants.

Then on Sept. 28, 2015 the U.S. Court of Appeals for the Second Circuit heard the arguments, and on June 30, 2016 it reversed the approval of the settlement. It concluded, "numerous objectors and opt‐out plaintiffs argue that this class action was improperly certified and that the settlement was unreasonable and inadequate. We conclude that the class plaintiffs were inadequately represented in violation of Rule 23(a)(4) and the Due Process Clause. Accordingly, we vacate the district court's certification of this class action and reverse the approval of the settlement."

The court found the companies violated antitrust laws by:

  • Agreeing to set, apply and enforce rules about merchant fees (called default fees or interchange fees)
  • Limiting what merchants could do to encourage customers to use other forms of payments, for example, charging customers an extra fee or offering discounts when using cash or checks, and
  • Continuing this behavior even after Visa and MasterCard changed corporate structures.

Under the settlement, Visa, MasterCard and the banks agreed to make payments in two settlement funds:

  • First is a "cash fund," a $6.5 billion fund that will pay valid claims of merchants that accepted Visa or MasterCard credit or debit cards at any time between Jan. 1, 2004 and Nov. 28, 2012.
  • The second is an "interchange fund," estimated to be approximately $1.2 billion that will be paid based on a portion of the interchange fees attributable to certain merchants that accept Visa or MasterCard for an eight-month "interchange period."

So, where does this leave our members who did not file their claim? After reaching out to a number of you, it was apparent either they did not receive the public notice in 2014 or they just ignored it. We have reached out to the court-appointed managing agency for the settlement (Payment Card Settlement group) as well as the lead attorney representing the merchants (Berger & Montague PC) and learned our members may still be able to participate in the settlement.

The courts have again selected Payment Card Settlement group to manage the claim process. Their website will include the final approved application forms along with filing information.

If you are interested in participating, here is some of the information you will need to submit with your claim (this is based on previous settlement, subject to change pending final appeal):

  • Amount of interchange fees paid from Jan. 1, 2004 - Nov. 28, 2012
  • Merchant default interchange rate you were charged
  • Sales volume interchange rate used (to extent known, broken down by network brand, credit card and debit card type)
  • Merchant category codes used to process sales transactions

Your merchant processor may be able to assist you with pulling this information together. The NGCOA will continue to follow this lawsuit and ensure its members are afforded the opportunity to participate in this settlement process.

NGCOA members may recall in 2013, NGCOA released an article regarding this class action lawsuit and warned members of the many predators who were offering their assistance (for a fee) with collecting your share. While the offers vary, in essence they promise to intercede in any claims process in order to maximize the recovery golf courses will receive, in return for a significant portion of that recovery. NGCOA recommends owners review the free assistance offered by the court appointed Payment Card Interchange Settlement organization before paying a third-party collection agent.

NCOA will update members when additional guidance has been released.

Ronnie Miles
Director of Advocacy
Daniel Island SC

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