Key takeaway: Two separate threads are now worth tracking in this litigation. One challenges the settlement’s substance, fee cuts and liability protections. The other, newer thread challenges the class structure itself. Either one succeeding could meaningfully delay or reshape a settlement that had appeared to be heading toward final approval.
Large retailers, including Walmart and Circle K Stores, are challenging the proposed Visa/Mastercard swipe-fee settlement on constitutional grounds. They argue that forcing their inclusion in the settlement class violates due process rights.
Walmart filed its objection September 14. NACS filed a separate objection the same day. Both ask U.S. District Judge Brian Cogan to let members opt out of the plaintiffs’ class, or to decertify the class entirely given its size and diversity. Their central claim is that the settlement seeks injunctive relief through a mandatory class, a structure courts typically don’t let members exit. “Before an absent class member is compelled to participate in a vast reordering of significant economic relationships to which it is a party, due process requires that it be afforded the right to opt-out,” Walmart wrote in its 299-page filing, citing the Fifth and Fourteenth Amendments.
Walmart’s attorney, Jesse Panuccio of Boies Schiller Flexner, raised a second argument under the Takings Clause. He wrote that “ensnaring” Walmart in a mandatory class raises serious concerns. In his framing, the settlement effectively transfers ownership of the company’s legal claims to the government without compensation. NACS made a parallel due-process argument in its own filing, saying a settlement whose members cannot opt out violates the Fifth Amendment.
Eugene Rome, founder of law firm Rome LLP, called Walmart’s due-process argument “fairly novel.” He noted that the case’s unusually large and varied class of merchants strengthens it. The settlement resolves litigation dating back to 2005. Cogan granted preliminary approval in June 2026. Class counsel has until October 14 to respond.
This is a separate legal track from the objection MFJ covered last week. There, the Merchant Payments Coalition and 978 retailers and trade groups challenged the settlement’s substance, namely the size of the fee cut and the scope of liability protections for the networks. This filing, led by Walmart and joined by NACS, instead challenges the class structure itself as unconstitutional.
Why it matters: A constitutional challenge is a different, and potentially higher-stakes, line of attack than objections about whether the settlement’s financial terms are adequate. If Cogan finds merit in the due-process or Takings Clause arguments, the class itself could be restructured. That’s a bigger hurdle than renegotiating dollar figures, for a deal that has already survived two prior rejected settlement attempts.
Source: Payments Dive
