July 5 (Reuters) - The fate of $170 million in fees

sought by lawyers at Grant & Eisenhofer and three other law

firms that negotiated an antitrust settlement with Visa and

Mastercard ( MA ) is up in the air, after a Brooklyn federal judge

rejected the proposed deal last week.

Following nearly 20 years of litigation, the settlement

would have required Visa and Mastercard ( MA ) to limit the swipe fees,

or interchange fees, paid by millions of merchants when shoppers

use credit or debit cards. Merchants have long accused Visa and

Mastercard ( MA ) of overcharging them on the fees.

Under the agreement, Visa would have paid up to $113.3

million and Mastercard ( MA ) would have paid up to $56.6 million to

compensate the class action lawyers if their fee request was

approved.

But the settlement, which the lawyers said would save

merchants $30 billion over five years, did not go far enough,

U.S. District Judge Margo Brodie said in her 88-page ruling.

Brodie's decision did contain some good news for the class

attorneys, who also included lawyers at Hilliard Shadowen, Freed

Kanner London & Millen and the Nussbaum Law Group. Brodie did

not object to the terms of their $170 million fee request, which

the defendants had agreed to pay out within 20 business days of

the judge's approval.

The wait will now be much, much longer, however, as the

attorneys must now try to extract more concessions from Visa and

Mastercard ( MA ).

The defendants could likely withstand a "substantially

greater" settlement, Brodie said in her decision, citing an

estimate that merchants paid $100 billion in interchange fees on

Visa and Mastercard ( MA ) transactions in 2023 alone.

The accord would have lowered the typical 1.5% to 3.5% swipe

fee by 0.04 percentage points for three years, capped fees for

five years, and given merchants more room to impose surcharges.

The deal kept fees too high and still required merchants to

accept an "Honor All Cards" rule requiring that they take all

Visa and Mastercard ( MA ) cards, or none, Brodie said.

Attorneys at the four class counsel firms did not respond to

requests for comment on the decision. A Mastercard ( MA ) spokesperson

declined to comment, and a Visa spokesperson did not immediately

respond to a request for comment. The companies have denied

violating antitrust law.

The rejection of a proposed class action settlement in the

preliminary stages is relatively rare, class action experts told

Reuters.

Brodie's decision cannot be appealed, and even if it could,

it would be difficult to overturn given her findings, said Ted

Frank of the Hamilton Lincoln Law Institute, who is known for

bringing objections to class action settlements.

"You wouldn't be able to show that it's clearly erroneous,"

Frank said. Frank said he consulted with an objector to a 2013

settlement in the swipe-fee case. He has not done any legal work

relating to the 2024 settlement.

The proposed settlement attracted opposition from large

retailers like Walmart, Target and GrubHub, as well as the

National Retail Federation and the Retail Industry Leaders

Association, who said it was inadequate.

The NRF has not yet weighed in on the plaintiffs' fee

request, but that's largely due to other concerns over the deal,

said Stephanie Martz, the group's chief administrative officer

and general counsel.

"It's not 'not a problem,' but it's not our particular

problem," Martz said.

Any new settlement would likely include a higher fee

request, Vanderbilt Law School professor Brian Fitzpatrick said

in an email, based on both the value of a renegotiated deal and

the additional time required to reach it.

- In other fee news, Tesla and the legal team that voided Elon

Musk's $56 billion in stock options will make their arguments to

a Delaware judge on Monday over the lawyers' bid for

compensation. The plaintiff's team is seeking 29 million Tesla

shares, worth around $7 billion as of Wednesday, which they

argued is around 11% of the benefit they achieved for the

company.

Tesla has argued that the case obtained virtually nothing

for the company and the fee should be around $13.6 million.

- Plaintiffs' firms including Carney Bates & Pulliam, Shamis &

Gentile and Edelsberg Law that reached a $48 million deal

resolving claims that Progressive undervalued wrecked cars and

said they will seek up to $16 million in legal fees.

- Law firms Hagens Berman and Cohen Milstein were awarded $51.6

million for their work representing chicken consumers in a

long-running price-fixing case, after an appeals court ordered

the Chicago federal judge overseeing the litigation to re-visit

his initial $57 million award.

(Legal Fee Tracker is a weekly feature exploring attorney

compensation awards and disputes in class actions, bankruptcies

and other matters. Please send tips or suggestions to

[email protected])