A Home Depot store in Passaic, N.J. File photo by THE ASSOCIATED PRESS

WalMart, Home Depot lose bid to appeal deal in credit-card class action

TORONTO — Members of a class action have no right to appeal a court-approved settlement of the lawsuit, Ontario’s top court ruled on Thursday.

The Court of Appeal decision means Walmart Canada and The Home Depot Canada are bound by a multimillion-dollar agreement reached between the plaintiffs, the credit card companies Visa and Mastercard and the banks that issue the cards.

“They did not avail themselves of an opportunity to opt out of the class action at the time of an earlier settlement,” the five-judge panel ruled. “Accordingly, subject to their right to object at the settlement approval hearing, they were bound by any judgment or settlement in the class action.”

The case arose out of allegations that Visa, Mastercard and 10 banks had conspired since March 2001 to fix, maintain, increase, or control certain fees for merchants who accept payment by credit card. Class actions were launched in various parts of Canada and settled for more than $50 million, and in the United States.

A year ago, Superior Court Justice Paul Perell approved a settlement in Ontario under which, among other things, Visa agreed to pay $9.5 million to the plaintiff merchants. MasterCard agreed to a similar settlement. Neither company admitted any liability.

During the approval process, Walmart and Home Depot objected to what they called unfair settlements that were not in the best interests of the class members. In particular, the two retailers argued the agreements amounted to an endorsement of an illegal conspiracy in which Visa and Mastercard were central players. The agreements, they said, released the credit card companies from consequences for any future anti-competitive conduct.

While finding that the retailers had every right to raise their objections, Perell nevertheless approved the settlement as in the best interest of class members overall. Walmart and Home Depot then turned to the Court of Appeal.

In rejecting the retailers’ challenge, the higher court noted that neither company was a representative plaintiff, which makes litigation decisions on behalf of the class and bears the risks if the action fails.

For two decades, the court said, case law related to class proceedings legislation has precluded a class member from appealing a settlement approval. Allowing individual members to appeal settlements would lead to uncertainty and inefficiency, the Appeal Court said.

The court noted that settlement approval is not the same as passing judgment on the issues at play. Instead, it said, it is a finding that the deal is fair and in the best interests of the class.

“There are sound policy reasons why class members should not be entitled to appeal a settlement order where the representative plaintiff declines to do so,” the Appeal Court said.

In September 2018, Visa and Mastercard agreed to pay as much as US$6.2 billion to end a long-running price-fixing case brought by merchants in the United States.

A court hearing is set for Nov. 7 in New York to determine whether to approve the proposed settlement.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Vigil scheduled Friday for Red Deer doctor: charges expected to be laid soon

Red Deer RCMP say the investigation into a fatal attack Monday morning… Continue reading

Updated: Red Deer doctor killed at clinic

The RCMP’s major crimes unit is investigating a fatal attack on a… Continue reading

Alberta reports 257 new cases of COVID-19

The Alberta government reported 257 new cases of COVID-19 in its latest… Continue reading

‘Is this a town garden?’ Sylvan Lake resident has been gardening for 7 decades

Most summer days, Sylvan Lake’s Joel McCutcheon is in his garden pulling… Continue reading

QUIZ: Do you know the truth?

In what has been described as a post-truth era, how much do you know about truth and lies?

Cast your votes for Best of Red Deer

The Advocate’s Best of Red Deer Readers’ Choice Awards are back. Community… Continue reading

Raptors beat Bucks 114-106; key players for both teams sit

Raptors beat Bucks 114-106; key players for both teams sit

Safe at home? Blue Jays end nomadic journey in Buffalo

Safe at home? Blue Jays end nomadic journey in Buffalo

Morikawa makes eagle on 16th, wins PGA Championship

Morikawa makes eagle on 16th, wins PGA Championship

Royal Montreal Golf Club to host Presidents Cup in 2024, last hosted in 2007

Royal Montreal Golf Club to host Presidents Cup in 2024, last hosted in 2007

Familiarity breeds respect among NHL East playoff teams

Familiarity breeds respect among NHL East playoff teams

‘Heavy lifting:’ West is big, tough, deep and wide open

‘Heavy lifting:’ West is big, tough, deep and wide open

Dallas Stars keep Calgary Flames guessing ahead of first-round playoff series

Dallas Stars keep Calgary Flames guessing ahead of first-round playoff series

Most Read