UNITED STATES DISTRICT COURT|
EASTERN DISTRICT OF NEW YORK
IN RE VISA CHECK/MASTERMONEY
This Document Relates To:
MASTER FILE NO. CV-96-5238
(Gleeson, J.) (Orenstein, M.J.)
DECLARATION OF JOHN R. READ
I, John R. Read, hereby declare that:
- Since approximately August 2004, I have served as Chief of the Litigation III Section of
the Antitrust Division of the United States Department of Justice. This Section
successfully challenged Visa's and MasterCard's exclusionary rules for member banks.
See United States v. Visa, U.S.A., Inc., et al., 344 F.3d 229 (2d Cir. 2003), cert. denied,
543 U.S. 811 (2004). The Section is also responsible for the antitrust issues arising out of
the instant class action against Visa and MasterCard.
- I submit this declaration in connection with the United States' Reply Memorandum in
Support of Government Merchants' Participation in the Distribution of the Net Settlement
- In October 2005, several Government Merchants called the Antitrust Division stating that
they had received claims forms that indicated that they would receive compensation as a
result of the settlements of the instant action. They wanted to know how to proceed.
- I assigned Erika Meyers, an attorney, to learn the facts and make recommendations on
how to deal with the issues presented. Ms. Meyers no longer works with the Antitrust
Division. We first assumed that Lead Counsel had made one minor mailing mistake. She
called Lead Counsel to inform them of the mistake and remind them of the November 14,
2002 Civil Division Letter. Apparently because Lead Counsel could not locate it, Ms.
Meyers had to resend the Civil Division Letter to Lead Counsel.
- Ms. Meyers, others, and I went forward gathering information and working with Lead
Counsel, Defendants, and the Government Merchants. In doing so, we learned the facts
that have led to the filing of the instant Memorandum by the United States. In particular,
we learned far more about Lead Counsel's treatment of the claims of the Government
Merchants throughout the litigation and the details surrounding the settlements between
Lead Counsel and Defendants. In the process of learning those facts, we determined that
the appropriate course of action would be to seek a ruling from the Court regarding the
United States' participation in the settlement funds' distribution.
- Ms. Meyers, Allen Grunes, others, and I personally met Lloyd Constantine on December
1, 2005. At that meeting, Mr. Constantine gave an overview of his strategy in litigating
the case and his plans for securitizing and distributing the settlement funds. But Mr.
Constantine did not recount at the meeting any steps Lead Counsel took to inform the
Court or Defendants of the Civil Division Letter, nor any significant steps Lead Counsel
took to exclude the Government Merchants from the Class either by extricating them
from the damages claim or from the mailing lists.
- At the December 1, 2005 meeting, even though we brought up and discussed with Mr.
Constantine the Cooper decision, he did not take the position that Cooper barred the
Government Merchants from participating in the settlement funds' distribution. To the
contrary, he expressed the view that he was "agnostic" whether the Government
Merchants were class members or could participate in the settlement. He closed the
meeting by saying that he would be willing to help us with the Court: "Just let me know
what you want." However, Mr. Constantine also spent a good portion of the meeting
recounting his interactions with the United States Postal Service ("USPS") and indicating
it might need to be treated differently from the rest of the Government Merchants.
- After discussions with Defendants regarding how to deal with the Settlement
Agreements' Release provisions to ensure that those provisions could not be construed to
restrict any United States' law enforcement efforts, I (and others) spoke to Mr.
Constantine and Amy Roth by phone on Friday, December 23, 2005. In that
conversation, I told Mr. Constantine that the Department would like to proceed with a
stipulated filing to the Court by all parties (Lead Counsel, Defendants, and the United
States) that would explain the circumstances surrounding the issue and jointly ask that the
United States be allowed to participate in the settlement proceeds.
- I told Mr. Constantine that I had talked to counsel for Defendants and they seemed open
to exploring a stipulated filing. I stated that the issue of whether the USPS would
ultimately be included or excluded in the stipulated filing would need to be left for
another day after we had had time to gather and review all the relevant facts.
- During this December 23 telephone call, Mr. Constantine seemed to appreciate putting
aside the USPS issue for the moment and indicated that he was amenable to the idea of a
stipulated filing that would allow, with the Court's permission, the Government
Merchants to participate in the Net Settlement Funds' distribution on the same terms as
the other Class Members. Mr. Constantine did say, however, that he wanted to see the
exact language of the stipulation and proposed order before finally signing off.
- In mid-January, the Section sent Mr. Constantine a proposed stipulation and order (see
Exhibit A of the Supplemental Declaration of Allen P. Grunes). We continued to work
on the issue until the week of January 23, 2006. Not until that week did Lead Counsel
indicate their current position that the Government Merchants are legally barred under
Cooper from participating in the settlements.
I declare under penalty of perjury that the foregoing is true and correct.
Executed this 4th day of May 2006 in Washington, D.C.
John R. Read