Retail Lawyers Submit $558 Million Bill

The lawyers who negotiated a $3 billion debit-card settlement for the nation’s biggest retailers have submitted their bill: $558 million, including expenses, the Wall Street Journal reported on Aug. 19. r

The settlement reached in May brought an end to a seven-year legal battle that produced nearly 400 depositions, 5 million documents and 54 expert reports, and changed the way credit-card companies charge retailers to process their cards.r

In the case, the retailers, including Wal-Mart Stores Inc. and Sears, Roebuck & Co., accused Visa USA Inc. and MasterCard International Inc. of overcharging them to process debit-card transactions.r

The settlement has thrown into question the future of interchange, or the fee that the two associations, and the banks that own them, charge retailers to accept cards issued with the Visa or MasterCard brands. Under the settlement, those fees will be open to negotiation from the beginning of next year.r

The payment, if approved by the federal judge overseeing the case, would be among the highest paydays for a plaintiffs law firm involved in a class-action suit, according to Edward F. Sherman, professor of law at Tulane University in New Orleans. Sherman isn’t involved in the case. r

However, the amount falls short of attorneys’ fees paid in some of the large mass tort cases, including the billions of dollars anti-tobacco lawyers netted in fees for winning settlements against the big tobacco companies.r

Lloyd Constantine, partner of Constantine & Partners, speaking on behalf of the other 29 plaintiffs’ firms, said, “The court will determine what is fair. All we have done is set out the criteria that had been traditionally applied by courts in making this decision.”r

Representatives for plaintiffs declined to comment. A fairness hearing is scheduled for Sept. 25.r

The suggested payment is fitting because of the difficulty of the case, length of time involved and the inherent risk of taking on the case, legal experts say.r