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CANADA PROVINCE OF SASKATCHEWAN) )Q.B._ _ _ o[2012CANADA RENT A(2000)PlaintiffOF AMERJCA CORPORATION, BMO FINANCIAL GROUP, BANK OF NOVA SCOTIA, CANADLAN IMPERIAL BANK COMMERCE, FINANCIAL CORPORATION, CAPITAL ClTIGROUP FEDERATION DESJARDINS DU QUEBEC, MASTERCARD INTERNATIONAL INCORPORATED, NATIONAL CANADA INC., ROYAL OF CANADA, TORONTO-DOMINION BANK, and VISA CANADA CORPORATION Defendants Brought underActionsNOTICE TO DEFENDANTI. The plaintiff may enter judgment in accordance wi
Citation preview
CANADA ) )
Q.B. ___ o[2012 PROVINCE OF SASKATCHEWAN
CANADA RENT A (2000) Plaintiff
OF AMERJCA CORPORATION, BMO FINANCIAL GROUP, BANK OF NOVA SCOTIA, CANADLAN IMPERIAL BANK COMMERCE,
CAPITAL FINANCIAL CORPORATION, ClTIGROUP FEDERATION DESJARDINS DU QUEBEC,
MASTERCARD INTERNATIONAL INCORPORATED, NATIONAL CANADA INC., ROYAL OF CANADA, TORONTO-DOMINION BANK, and VISA CANADA CORPORATION
Brought under Actions
NOTICE TO DEFENDANT
Defendants
I. The plaintiff may enter judgment in accordance with {his Statement of Claim Or such judgment as may be granted pursuant to the Rules unless
• within 20 if you were served in Saskatchewan; • within 30 if you were served elsewhere in Canada or in the United Stales of America; • within 40 days if you were served Canada and the United States of America
the day you serve a Sfatement of Defence on the plaintiff and file a copy thereof in the local registrar of the Court for the judicial centre above named.
2. In many cases a defendant may have the trial of the aclion held at a judicial centre other than the one at which the Statement of Claim is issued. defendant should consult his as to his rights.
3. This Statement of Claim is to be served within six months from the dale on which it is issued.
4. This Statement of Claim is al the above-named judicial centre the 12th day of July, 2012.
(LS) Local Registrar
The
I.
and
2.
CLAIM
plainti ff, Canada Rent A (2000) Ltd. ("Plaintiff') is a corporation incorporated
cards
credit proposed Class 17
defendant, Bank of Corporation ("MBNA") is a publicly traded corporation
pursuant to the laws of the State of Delaware, United States of America, business
In as MBNA Bank During the Class MBNA issued MasterCard-branded
throughout including in Saskatchewan.
3. defendant, BMO Financial Group ("BMO") is a chartered bank pursuant
to Bank Act, S. C. J 991, c. 46 ("Bank Act"). the Class Period, BMO issued
MasterCard-branded credit throughout Canada, including in Saskatchewan. the Class
Moneris
below).
BMO was, along with Royal Bank of one ofthejoint investors
("Moncris"), a Acquirer in Canada defined in paragraph
4. defendant, of Nova Scotia ("Scotiabank") is a chartered bank incorporated
pursuant to the Bank Act. the Class Period. issued Visa-branded credit cards
Canada, including in Saskatchewan.
5. defendant, Imperial Bank of n""rIPH'rl bank
"'"",,",r,,,1"<>rl pursuant to the Bank During the and
MasterCard-branded credit tlu:oughout Canada,
(HCIBC") is a
Period. CIBC issued both
in Saskatchewan.
6. defendant, Capital Financial Corporation (,'Capital Oneil) is a publicly traded
incorporated pursuant to the laws of the of Delaware, United of America.
the Class Period, Capital issued MasterCard-branded credit cards throughout Canada,
State
branded
United States of
traded corporation
Class Period,
throughout Canada, including Saskatchewan.
ofthe
8. The defendant, Federation des catsses Desjardins du Quebec ("Desjardins") is an
organizati on IH/f'r<:f·p the Desjardin Group including its caisses populaires credit unions.
During the Period, Desjardins Visa-branded credit cards throughout ~~.,~~~, including
In During the Class owned and one the leading
9. rlAi-....... rI''''''f MasterCard International t"lf"f'rrI,r\r::lfPf1 ("MasterCard") is ""''''''''''.>/'1 under
the laws of Delaware, United of America, and is a of MasterCard
Incorporated, a publicly traded corporation incorporated pursuant to laws of the State of
Delaware, United States of America. the Class Period, MasterCard the MasterCard
credit card network throughout Canada, including in Saskatchewan.
10.
to
throughout
II.
During
including in ~a:Sl<a,tcrle""an
("National") is a
National issued
defendant, Royal Bank of ~ .. "' ... ~"" ("RBC") is a chartered
incorporated
credit
incorporated pursuant
to the BankAct, During the Class Period, issued MasterCard-branded credit cards thTOUghout
in Saskatchewan,
behind Moneris.
Class Period, RBC was, with BMO, one of
12, defendant, Toronto-Dominion ("TD") is a ::1",,''1'',01'1 bank incorporated
to Bank Act. During the issued Visa-branded cards throughout
Saskatchewan.
-3-
13. The defendant, Visa Canada Corporation ("VisaH) is a Nova Scotia incorporated company
and is a subsidiary of Visa Inc.
throughout Canada, including
14. BMO,
and TD are known as
Class Period, Visa the Visa credit card
"Defendant Banks".
PARTICULARS OF THE CLAIM
The
l5. Plaintiffbrings this
Visa Class
pursuant to The
MasterCard
and I having suffered loss in common with other
Members.
l6. Plaintiffis incorporated pursuant to the laws
operations in
to consumers.
Saskatchewan, renting Water
Act, on its own behalf, and on
as defined in
Members and
having head
and offering related
17
and
and
17. Plaintiff accepted payments by Visa credit cards and MasterCard credit cards during the
18. Plaintiff was rates for accepting credit card and MasterCard credit
and charged additional rates when such were part of a or loyally
The
19. This action is brought on behalf of merchants of the Plaintiff all Canadian
persons who, duri ng period commencing at least as early as 2001, continuing
to the present ("Class Period "), accepted payments for the supply of goods and services
credit to terms ("Visa Class Members"),
-4-
or such class definition or period as may ultimately ""tv .... ·'u'"' on the motion for
certification.
20. action is brought on behalf of consisting Plaintiff and all Canadian
who, during the "'''''''.1-', .... '-' payments for suppJy of
servIces by way MasterCard cards pursuant to the terms of agreements
("MasterCard Members") or such class definition or class period as Court may
ultimately "' ......... '.v ..... on the motion for certification.
The Defendants
21. The defendants MasterCard the two card networks Canada,
including in Saskatchewan. Visa had approximately 3 i million credits cards in circulation
and MasterCard had approximately 44 million. In 2009) approximately merchants across
,,","''''''''"''''' accepted Visa or MasterCard cards. Tn 2009, credit market had $265
bilJion in purchase Visa's these transactions was approximately 60% and
MasterCard's approximately 30%.
credit card network involves contracts with:
issuing banks that are authorized by the defendants to issue credit cards to consumers
bearing the trademarks andior MasterCard ("Issuing Banks"); and,
b) acquiring financial
C'Acquirers").
that function as payment processors to merchants
The Banks are all Issuing Banks.
Credit Card Manipulation
24. card is characterized contractual amongst and between
Visa, its Issuing and the Acquirers, and amongst and between MasterCard, its Issuing LJ'UU'l.il>
and Acquirers, each credit network market in the market for credit
card network services.
agreements
networks constitute two
contractual relationships ""1"'\"''''''''''' the Visa and 'vIa:' ...... credit card
of contracts which but interrelated operational agreements by
are
(b)
and among:
the
and
and its member
the MasterCard network and its
Acquirers).
(which are Issuing Acquirers);
banks (which are Issuing Banks and
26. In essence, the and MasterCard networks are organizations that facilitate credit and debit
They do so setting standards for exchange of data and funds
merchants, and networks also authorization,
and settlement for all Visa- and MasterCard-branded payment transactions.
Certain Issuing
in both credit
as the defendants
networks. Certain
Desjardins, and and all Acquirers
Banks, including the defendants BMO,
In order to accept by Visa or credit cards, must enter into
with Acquirers. agreements include standard terms and imposed by the
Banks and Visa and MasterCard through their respective agreements with the Acquirers.
agreements include terms of the Visa Operating (UVisa Rules"),
MasterCard MasterCard ("MasterCard Rules").
Every time a customer uses a V isa or credit card to a merchant for a good
or that merchant must pay a fee, commonly referred to as a "Merchant Discount Fee".
Merchant Discount Fee is calculated as a of the sale price ofthe good Or service supplied.
Merchant Discount is the difference the price a merchant charges for a good or
amount IS to 2009, merchants in
paid approximately billion in Merchant Discount
-6-
30. The Merchant is divided into three parts: the to
fssuing Bank associated with customer's particular Visa or MasterCard credit the "Service
Fee" retained by the the "Network Fee" paid to either or . The
Interchange Fee is typically 80% the Merchant Discount Fee.
31. Through lAl"fr·p.p,r'n
an unlawfully created and
that leverages
merchants.
32. During the
default minimum
Banks within their "p(!npl~T
Issuing Banks and Acquirers,
H_""~~ duopoly in the Canadian credit card network
to impose upon merchants rules In
the and MasterCard networks set
calculation of Interchange
credit card networks. These minimum rates set a
constitute
market
loss to
available
Issuing
that applied
to the vast majority
but regardless ofthe
Canadian consumers
Defendants of
benefitting by about
.,..,..n,,,,,,,,, transactions within the Visa and networks,
33. Interchange
instance,
the No Surcharge Rule increases costs and
Visa and MasterCard users have the apparition by the
from Loyalty Programs or free credit cards and reality they are
of purchases while paying about 5% more for
are structured to impose different rates on
on store and gas station transactions are
For
than interchange
to price fees on most
discriminate manner.
34. By "'A,,',,"""'" to the Visa Rules and the
MasterCard network
on the terms upon which
or arrangements that
supply credit card network
merchant agreements (the "Merchant Restraints"). Both the Visa Rules
V network and
restrictions
to merchants under the
MasterCard Rules
impose substantially the same common restraints, including the requirements that merchants must
honour all same network (the "Honour All Cards Rule") may not impose
surcharges on any credit card of the same network, of the Merchant
Discount Fee use a particular credit card (the "No Rule").
-7-
The and Rules have so rules in essence in common and so
t!'""',cI"n,rpc In as to be one set ofrules in common. Included in these common rules are
Merchant Restraint Rules the rules which result in the Merchant Discount overcharge.
36. The Merchant Restraints merchants effectively '-'''''''.''''-'1 customers to use
methods payment, and declining to certain Visa and MasterCard credit
including those with higher Merchant Fees such as premium cards. The
Merchant
MasterCard credit as compared to
surcharges to made by
modes of payment such as and debit cards.
of the Merchant Restraints is to impede or constrain competition for credit network
induding competition with respect to Merchant Discount and artificially the
cost of goods and services for Saskatchewan and Canadian consumers.
37. a consequence of the Merchant consumers pay the same for goods
services by merchants regardless of of payment, higher cost to merchants
Visa and MasterCard credit transactions.
38. effect of the Merchant Restraints is that Merchant Discount Fees in Canada are far in
excess similar fees in other jurisdictions where the Merchant are not or are
applied differently.
39. In
including
Fee).
typical Visa or MasterCard transaction, funds flow from cardholders to Banks,
Defendant which deduct the Fee, and to Acquirers who
to Visa or and finally pay the to
prIce on any less the lotal applicable
Visa and MasterCard credit card lS
Discount
to either
Visa or MasterCard along with Bank and Acquirer associated with that
of the Merchant Discount Interchange
Network and was not to merchants.
40. Visa, MasterCard, the Banks, and Acquirers to the
Discount by the Visa MasterCard Members through two
4L
MasterCard
Banks bundle credit with various features such as
Members pay some or all of the cost of these
and points. Visa and
essentially subsidizing the
as
42. structure of the Visa and ""a.">'.\...1 credit card network allows Issumg
to create powerful incentives Loyalty Programs for customers to use Visa or MasterCard
credit for as many transactions as possible, offering reward points or cash back for each dollar
spent on premium credit cards.
43.
onto
at
Cards
high the
this
44.
45
Merchant Restraints allow Banks to offload the cost ofthese Loyalty Programs
who must choose to ,."."",,, .... _ whatever fees are or not to accept credit
who in tum charge more and services to these costs. The All
forces merchants to any and all Visa and MasterCard credit cards, no matter how
for using that particular The No Surcharge Rule merchants from
expense along to customers who pay with premium cards.
and all consumers are paymg more and services than they
the No
modification is
damage and the wrongful practice
significant
imposing the No Surcharge
as a result of the
the Honour All
Rule upon merchants through the use of the Duopoly power of the Defendants.
46.
47.
reduced
No Surcharge Rule
MasterCard, some
is not imposed
the United States.
merchants to charge the same whether the customer
debit card, or and effectively
with credit companies anywhere except
Plaintiff and Class lose as a result of the No Surcharge because merchants
as a result of higher by being required 10 comply with the No Surcharge
Merchant Discount but averages about 5%.
-9-
48. Saskatchewan Canadian customers are induced by the to utilize Visa
or MasterCards by
49. Loyalty Programs provide cash back to the user, air plane flight benefits identified
entry into travel as dollar value use to buy goods or services, gifts or on
lounges, tickets to events or products, and a variety of
50. The actual
MasterCard.
for sale in to
to consumer is in the range of2%
the increase the cost of the
Merchant Discount Fees and the higher
""~''''''''rI on the Visa or
that they offer
o[saJes by Visa
or MasterCard, the more must increase his costs to cover the
51.
Saskatchewan
Charge Credit
52. If all
Canadian people pay more for their
people receive back, by way
than they pay in increased costs.
by Canadians were made through
IOpr'l1H',><: as prices rise and
or the value orNo
the increased cost
to Saskatchewan and Canadian people, above what competition would mandate, for the same goods
and services, would about 5% which is more than the reaJ
Loyalty
Canadian
Saskatchewan and
53. In
would receive on
charge.
would waste J%
consumers and the real
elsewhere, outside of Canada and
and services, and at their option are permitted to
services who by Visa or MasterCard. Merchants
of
the goods and services.
through the value of
people and the
to
and
'-', ... " ... ." merchants provide goods
with purchasers of goods
of Canada and the United
are permitted to goods and services at a lower and di price jf payment is made by cash
or debit card than ifpayment is made by Visa or often with three prices - cash, a couple
of percent more debit card, and jn the range of5% more ifby Visa or MasterCard. The typical
higher rate in 1S the typical higher rate in South America is 8% to 10%.
-1
Duopoly
Various Issuing including the Desjardins, Scotiabank,
TD) with others not named as defendants, the improper ""V".,.""'', of power as a
duopoly have engaged in unlawful conduct and into anti-competitive including
with Visa, each other, and other regarding the rates Interchange
to Issuing Banks by Acquirers within the card network. ClSC, Desjardins,
are and the allocable
to, and the co-conspirator Issuing Banks.
Various Acquirers not named as defendants participated in the unlawful conduct and
into anti-competitive includingagreements with each other, the Issuing Banks.
to these Acquirers merchant with merchants across
including the Visa Class Members, imposed common anti-competitive terms
including the Merchant Restraints the Honour All and No Surcharge
In The resulted in the imposition of rates for
Discount Fees paid by the Visa Class Members. ClBC, Desjardins, Scotiabank, and
are jointly and severally liable for the actions damages allocable the Acquirers.
TD Global Peoples Trust,
Elavon, Desjardins and Chase Paymentech Solutions.
56. During the CJass Period, senior executives and employees of Visa, CIBC, Desjardins,
Scotiabank, and TD and acting in their as agents for defendants, engaged in
communications, and attended with a result
communications and Visa, CIBe, RBC, and TD and
unlawfully conspired or <>""",,,",,,11 to:
(a) lmpose Merchant Restraints set out in the Visa Rules on merchants induding
(b)
Visa Members and thereby unreasonably rates of
Discount paid by merchants, including the Members, for
made Visa credit cards in
maintain, increase, or ""'nIT,,,,
including Saskatchewan;
including Saskatchewan;
rates
(c) exchange information in order to monitor and enforce to the agreed upon
Merchant Restraints in Canada including Saskatchewan; and
58.
(d)
-11-
control the supply af credit card netwark servIces m
Saskatchewan.
including m
furtherance purpose, Period, Desjardins,
(a)
(b)
(c)
Cd)
(e)
(f)
and and their servants
increased or maintained the default rates far Merchant Discount in Canada,
ind uding ~ .... ,."'-<HY>
controlled
Merchant
supply of credit card
on merchants in
communicated, in person and by
default rates Discount
exchanged infOlmation regarding
volume of transactions using Visa
enforcing to the agreed
took and did,
from
Rules including the by imposing the
including in u ... "',,-(.,,,",,
to discuss,
Canada, including
and fix the
rates for Merchant Discount Fees and the
cards for the of monitoring and
Merchant Restraints;
the rates of the constituent elements of
disciplined which to impose the or
merchant which failed ta comply with the Merchant Restraints.
Visa, CIBC, RBC, Scotiabank,
wrongfully in concert and predominant
TD and others were motivated to work
and predominant concerns were to:
Ie
(a) harm the plaintiff and other
supracompetitive rates for Merchant
(b) illegally their profits.
The acts done by Visa, ClBC, Desjardins,
and done by officers,
In
Members by them to pay
Fees; and
Scotiabank, and TO were authorized,
agents, employees, or representatives
ar transaction business affairs.
-I
The MasterCard Duopoly
60. Issuing including defendants Capital One, Chi, MBNA.
National, and along with others not named as defendants, employing the improper exercise
power as a duopoly have in unlawful into anti-competitive
agreements, including with MasterCard, each and other Banks
the rates ofInterchange paid to Issuing by Acquirers within the MasterCard credit card
MasterCard, BMO, One, CIBC, , MBNA, National, and RBC are jointly and
liable for actions of, and allocable to, the co-conspirator Issuing Banks.
61. Acquirers not as defendants particjpated in alleged unlawful conduct and
into anti-competitive agreements, including agreements with MasterCard, each and
the Banks. Pursuant to these the entered into merchant agreements
with merchants across including the MasterCard Members, which imposed common
anti-competitive terms and conditions, including and the Honour All Cards
and No Rule in resulted in the imposition of
supracompelitive rates Merchant Fees paid by the MasterCard Class Members.
MasterCard, CIBC, Citi, National, RBC are and severally
liable for the of, and allocable to, the Acquirers. Acquirers include Moneris
Solutions, TD Merchant Services, Payments, Trust, Elavon,
and Paymentech Solutions,
During the Period, and employees of MasterCard, BMO, Capl tal One,
CIBC, MBNA, National, RBC, and others, acting in capacities as for
engaged in communications, conversations, and attended with each a result of
to: communications and MasterCard others unlawfully conspired or
(a) impose the Merchant Restraints set out the MasterCard Rules on merchants,
(b)
including the MasterCard Members, thereby unreasonably increase the
rates of Merchant Discount paid by merchants, including the MasterCard Class
Members, for payments made using MasterCard credit cards in Canada including
Saskatchewan;
fix, maintain, increase, or control the rates Merchant Fees in
including Saskatchewan;
63.
-13-
(c) exchange information in to monitor and adherence to the agreed upon
Merchan1 Restraints in including Saskatchewan; and
(d) control the supply of credit card network in Canada including
Saskatchewan.
furtherance of this unlawful during the MasterCar:d,
One, Citi, MBNA, National, and others, and their servants and agents:
64.
increased or the default rates Merchant Discount In
including Saskatchewan;
(b) controlled the supply t card services by imposing the MasterCard
(c)
(d)
(f)
including the
Saskatchewan;
Restraints on
communicated, and by telephone, to
default rates Discount Fees
in Canada, '
standardize, fix the
including
exchanged information regarding the rates Merchant Discount the
volume of transactions MasterCard credit for the purposes of monitoring
and enforcing adherence to the agreed upon Restraints;
took active did, conceal the rates of the constituent of
disciplined any Acquirer which failed to impose Merchant or
merchant which to comply with the Merchant Restraints,
MasterCard, BMO, Capital C18C, Citi, MBNA, National, and RBC, and others were
to work wrongfully in ,'nl'lI',..,'rI and their predominant purposes and predominant concerns
were to:
harm the plaintiff other
supracompetitive rates for Merchant
(b) illegally their profits.
The acts done by MasterCard, BMO, Capital
were authorized, ordered, and by their respective
of each Ie in the
Members by
and
them to pay
ClBC, Citi, MBNA, National, and RBC
directors,
direction, control, or
employees, or
of its
-I
of Action
Plaintiff 'nrr\rn,(\rl'lfp'~ the assertions set f0l1h
Unlav,jul fnlerfeJ'ence with Economic Interests
67. or alternatively, acts particularized
to
Members, and the are jointly and
with economic interests.
Breach of/he Compelilion Act
were unlawful acts
Class
liable for 10rt
by the
MasterCard
68. Further, or alternatively,
Competifion Act, R.S.
acts particularized are in breach of Part VI
c. 19 (2lld SuppJ.) ("Competition Act'), and were and are
unlawful, and render the jointly and liable to pay costs of
u,., .... ~, .. pursuant to s. of Competition
69. Further, or alternatively) the acts particularized
Act at the time acts were commit1ed, and
were in breach of
were unlawful.
45 of the
70. acts particularized were unlawful acts
and MasterCard Class Members, which unlawful acts
would likely cause injury to the Plaintiff and other
towards plaintiff and other Visa
defendants knew in circumstances
and MasterCard Class Members and, as
such,
71.
defendants are
purpose
Class
The Plaintiffand the
defendants' unlawful
During the Class
for the tort of civil conspiracy. Further, or alternatively, the
acts particularized herein was to injure the Plaintiff and other Visa
the defendants severally liable tort of civil
V isa and MasterCard Members suffered as a result
with their economic interests.
Plaintiff and Class
Members entered into standard form merchant with Acquirers containing the
violations
MasterCard
they would have
-1
pursuant to
paid more for Visa
the absence of the illegal
and MasterCard Rules. By reason
MasterCard credit card network
and, as a result, they have been
in their property and have suffered in an amount presently undetermined
("Merchant Discount Fee Overcharge"), and suffered a loss of business because of hIgher
which it was compelled by economic forces to
Restraints.
Punitive
73.
outrageous,
of the
thal the defendants'
"'VI\~I'-"", wanton, without care,
the rights of each
flowing from the operation of the Merchant
as herein was
wilful, and in contumelious
Class Member, indifferent to
consequences, aware the effect of increased costs and the damage to the
Canadian economy, in circumstances where tile and pal1icularly Visa and
are aware worldwide non Canadian and practices, and, as such, {he
defendants jointly and severally liable to pay punitive damages.
74. amount punitive damages mus! of magnitude to deter the
MasterCard, from practices and in particular Merchant
75. judicial arm of governance to economic on behalf of
Canadian not even understand the nr,...npr additional financial by
that the use the duopoly power of the to take advantage Canadians will not be
tolerated to end.
Unjust Enrichment, Constructive Trust, and Waiver of Tort
76. the Plaintiff waives tort pleads (hat all Class
Members are to recover under
77. have each been
and the wrongful benefits
princjples.
by the receipt of the IVlercnamDiscount Fee
to Defendants from the of Merchant
-16-
Restraints. Visa and MasterCard Members suffered a deprivation in the amount of such
of the Merchant Restraints. Merchant Discount Overcharge and from the
78. the Merchant Discount Fee that was
Visa and Class Members resulted from the defendants'
by the defendants
orunlawfuJ
Ihe
there
is and can be no j the defendants' retaining any part such overcharge
79.
from the Merchant Restraints.
defendants are as constructive trustees in favour and
Members for of the Merchant Discount Fee and from the Merchant
because, other reasons:
(a) the defendants were unjustly by receipt Merchant Discount Fee
Overcharge and from lhe Merchant Restraints;
(b) the a deprivation paying the Discount
Overcharge and benefits Merchant Restraints;
(c) conduct committed wrongful acts by
in the claim;
(d) the Merchant Discount Overcharge and from the Merchant Restraints
(e)
(0
(g)
were acquired such lhat the defendants not in good
retain them;
require the imposition a constructive trust;
the integrity of marketplace would be
constructive trust: and
are no factors would, in
benefits from the Merchant
constructlve trust unjust.
If the court not impose a
the artificially induced overcharge
render the imposition of a
80. The Plaintiff pleads that equity good conscience requires defendants to hold
Discount Overcharge benefits from Merchant in trust for the
Plaintiff and the other MasterCard Members to disgorge that amount to the
Plaintiff and other Class
- J 7-
RELIEF SOUGHT
81 . The Plaintiff, on its own behalf, and on behalf of the Visa and MasterCard Class Members,
claims against the defendants:
(a) a declaration that the defendants, and each of them, participated in conspiracies to
impose and maintain the Merchant Restraints and Merchant Discount Fees in the
period beginning in at least 2000 to the present in violation of statutory, common
law, and equitable laws as alleged in this claim;
(b) general damages for conspiracy and unlawful interference with economic interests;
(c) general damages for conduct that is contrary to Part VI of the Competition Act;
(d) punitive damages;
(e) damages for the investigation and prosecution of this proceeding pursuant to s. 36 of
the Competition Act;
(f) interest pursuant to The Pre-judgment inferest ACI, SS J 984-85-86, c. P-22.2; and,
(g) such further and other relief as counsel may advise and this Honourable Court may
allow.
DATED at Regina, Saskatchewan, this 12th day of July. 2012.
Delivered By/Address for Service: MERCHANT LA W'cROUP LLP 240 I Saskatchewan Drive
Regina, Saskatchewan S4P 4H8
E.F. Anthony Merchant\ Q.c. Tel: (306) 359-777
Fax : (306) 522-3299
H.IWpdalalClass AClionslCrcdil Card Fcesl$lalcmenl of Claim IS laiC me III orCla,m· Cre<lil Cm! Fees· SK . VS .wpd
Price of Using Credit Cards Going Up? Merchants May Get Surcharge Rig. .. http://online.wsj.com/articte/SB 1000 14240527023040220045775166 J 3."
) of4
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Business A~ RiI'C1I~ O\ltSOIlI' CC:, Ll'l)ol'o Keeps Produclion In-Housc
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Ballk r\teOIlIlI~ Fi!!,lIl'c ill f)1'1I~ Probe
Price of Plastic Going Up? Merchants May Get Surcharge Rights
Article Video Sloe k QUale s Comm. nls (247)
By ANOREW R. JOHNSON
M:JRE IN BUS INc SS »
Available to WSJ.com Subscribers
Merchants may saon begin 10 impose a surcharge eaen lmo a c",lomer pay. \YlIh. c(edll card, • p'ac~co VI.,. and M .. lerCa/d currenlly pronlbll, Andlfffl Jonr-..on Ma. dol. Its "" The Now.> Hub IPhoIO' Bloomberg News)
Merchants may soon begin to impose a surcharge each tirl"e a custOfT'6r pays wilh a
credit card, a practice Visa Inc, ( V .l .:iO% and MasterCard Inc. I M/o. -2.35% 0 1 currently
prohibil.
Retailers have long pushed for lhe right 10 charge exira 10 cuslorrers who pay wrlh ptaslic
versus cash, saying Itle practice would help defray their costs for accepting credit and
debit cards. Merchants pay Iransaclion fees on each card sWipeo
Bul VIsa arid MasterCard, which operate the world's largest card-payments networks, ban
the practice in the U S. as pari 01 rules they require relllilers to follow to accept Iheir
cards, That ban is expected 10 be eliminated or altered. though, under a potential
seHlemenl of long-standing lawsuits relailers have brought agamsl the card networks and
nUJrerous bankS that rssue their cards,
"Merchants prefer complele flexrbillty, and in their eyes relaxing some of Ihese rules like
surcharging (lsi sorrethlng Ihat will be permanent," said Glenn Fodor, an analyst With
Morgan Stanley.
Journal Community Sel1lerrenl dlscussioros have taken place
over the past year. and Mr, Fodor and
other analysts have predicted a deal
would be reached before a Seplember iiii'll date lor the litigation, which includes roore
than 50 laWSUits filed since 2005. The suits have been consolidated in U.S. District Court
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7/9/2012 9:3 I PM
Price of Using Credit Cards Going Up? Merchants May Gel Surcharge Rig .. . http://online .wsj .colll/articleJSBIOOO J 424052702304022004577516613 ...
2of4
in Brooklyn.
A seltlerrent is likely 10 include changes 10
Visa and MasterCard rules , including Ihe
card compan ies' ban against surcharges,
analysts have said
A spokeswoman for Visa and a
spokestrel'l for MasterCard declined 10 comment on Ihe status of discussions Friday
Several attorneys involved in Ihe case also declined to comment A settlerrenl could be
fiMlized as soon as this week, Bloomberg News reported lasl week.
The laWSUits, filed by merchanls including Kroger Co. , [ K.R · 1.54% I Pay less Shoe Source
and Safeway Inc. l-sv'I'Y . \ .75% I and several trade groups, contend the card grants engage
in antlcornpelilive behavior by corospiring over Ihe fees , known as inlercha~e , Ihal
retai lers pay every tirre a consurrer swipes a card.
Last year a proviSion 01 Ihe DOdd-Frank financial-<>verhaullaw known as Ihe Durbin
amendment look ellect. cutling in half the sWipe fees on debit-card trar.sactions.
However, 1( lett credit-card sWipe fees untouched.
So-called SWipe fees are sel by Visa and MasterCard but co llected as revenue by the
banks Ihal issue lI'Ieir cards. In addllion 10 the card networks, the suits name large banks
including Bank of Arrerlca Corp., l l3Ac · 1.31% J.P. Morgan Chase JPM . iJ:)8·%, & Co.,
~ Inc. ~I and Wells Fargo j Y'!!'~ ... !.u.:65.'l:..1 & CO.
"We conllnue 10 Oelieve that a selilemen! IS Ihe likeliesl outcome as neilher side wanls a
drawn, out legal baltle and Ihe defendants don'l want to ri sk having to pay treble damages
Illhey lose," Sanjay Sakhrani, an analyst With Keefe , Bruyette & Woods, wrote in a research nole lasl month.
Audio Andrew R. Johnson slopped by The Dally
Wrap Irom The Wall Streel Journal to
diSCUSS what consumers need to know.
00:001 .. ~ 00;00
A selUemenl is likely to have Ihree
components : payments by the defendanls
ranging from $8 billion to $12 billi on, a
te~orary reduclion in Interchange fees
and the elimnahon of Ihe no·surcharge
rule, according to KBW
Relail experls say the ability 10 assess a
surcharge would have a longer-Ierm benefit to merchanls than a lemporary reduclion in
fees or monetary payments. The rationale is lI'Ie praclice could exert pressure on II1sa
and MaslerCard to treke more permanent cuts 10 card fees. The networks rely on
transaction volume tor revenue, and the threat of lOSing transacllon volume if consumers
stopped using their cards because of surcharges may prompt the card networks 10 lowel
cosls.
"If there were surcharges in the rmrket place ... lhe networks, who are prirmnly
responsible for establishing pnces for acceplance, would bring their product cosls down,"
sa id Mark HalWedel, a former executive at Wal·Marl Siores Inc. I WI·~'~.5G% I who
handted payments·relaled matters and is now chief execuhve officer of the Merchanl
Advisory Group. which represents merchants in paymenls·industry issues.
Visa and MasterCard In lI'Ie past have loosened olher Nles Ihat have been a Ihorn in the
side of merchants. Under a selllerrent wllh the U.S. Justice Departmenl last year. Ihe two
corrwnies agreed 10 drop Nles that prohibit merchants from offermg discounts and other
perks 10 steer customers 10 lower-cost cards or cash. The card companies have been
more agreeable to discounltng as opposed 10 surcharges because the former practice IS
seen as being less punitive 10 consumers.
Cred it·Card Rales Rise Again
Real ,Tlme Advice: 8orrowers co~~nue 10 pay record low reles, wilh One major el<Cepllo~
credtl card • . One solution don'l use Ihem.
II1sa and MasterCard allow 1\
In Ihe U.S., 10 states, including New York
and California , have laws prOhibiting
sUfCharges, according to Visa. It is
unclear whether merchants in those slates
would be able to ef"\98ge in the practice If
A change in Visa's and MasterCard's rules also wouldn't affeci purchases made wilh
The: lIidtll"'H Cos l,. "fPull)}C: \'"i·Pi ()2:48
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Price of Using Credit Cards Going Up? Merchants May Get Surcharge Rig. .. http://online.wsj.comlarticle/SB 10001424052702304022004577516613 ...
30f4
cards Irom Arnencan Express Co. jl\XPT3ii%1 and Discover Financia' Services.
r DFS ·0.85% J which aren', pari of the litigation.
Arrerican Express's contracts discourage surcharges but allow it so long as rrerchants
also surcharge custorrers who pay with other payrrent networks' cards, a spokesworran
said. Discover has a SImilar policy, This has rreanl that merchants who accept all four
card brands have been unable to surcharge because 01 Visa and MasterCard rules
prohibiting surcharges on their cards.
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Merchants May GAin RighI 10 Surcharge Card Custom,ers Under Polenrial So.. http://www.1l8sdag.com/articleJmerchanls-may-gain-right-lo-surcharge-ca ...
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