NEW YORK (LN) — A Second Circuit panel on Monday affirmed a district court’s ruling that merchants using Square’s payment facilitation services qualify as class members in the antitrust settlement with Visa and Mastercard.
The panel’s summary order resolved a dispute over whether Square sellers, who use the company’s platform to process credit card transactions, fall within the settlement’s definition of entities that “accepted” Visa or Mastercard-branded cards.
The 2019 settlement agreement defines the class 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.”
Block, formerly known as Square, and Intuit opted out of the settlement to pursue their own antitrust claims against the card networks. The Square sellers, however, did not opt out but later filed a putative class action, arguing they were not direct purchasers of the challenged fees.
The Second Circuit rejected that argument, deferring to the district court’s interpretation of the settlement agreement. The panel noted that the district court carefully reviewed evidence regarding how payment facilitators function and how the parties characterized who “accepts” credit cards in a transaction.
“Few persons are in a better position to understand the meaning of a settlement than the district judge who oversaw and approved it,” the panel wrote, citing precedent that trial court findings on party intent are respected unless clearly erroneous.
The court found no clear error court’s conclusion that the settling parties intended for the Square sellers, rather than Square itself, to be included in the settlement class. The district court relied on Square’s merchant agreements, Visa and Mastercard rules distinguishing between payment facilitators and merchants, and the reality that cardholders hand cards to sellers of sale.
The panel also dismissed the Square sellers’ due process challenge regarding notice. The court found no clear error court’s determination that the notice plan was reasonable under the circumstances, satisfying the requirement for individual notice to all members who can be identified through reasonable effort.
The ruling aligns with the Second Circuit’s simultaneous decision in Old Jericho v. Visa, No. 24-2678, which addressed similar issues in a tandem case.
The panel included U.S. Circuit Judges Dennis Jacobs, Pierre N. Leval, and Michael H. Park.