Read Online Priceless: The Case That Brought Down the Visa/MasterCard Bank Cartel by Lloyd Constantine - Free Book Online Page A
Authors: Lloyd Constantine
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Low wages are paid to Wal-Mart executives and lawyers, as well as to Wal-Mart sales associates, but Wal-Mart stock and options are widely distributed to employees at every level. Employee equity, which has created loyalty and devotion to Wal-Mart and to its customers, is widespread and palpable. You can’t buy a Wal-Mart executive a meal or a drink or send her a Christmas present. After our holiday gifts were politely returned, C&P switched to making donations in honor of all our clients and friends to charities such as City Harvest and Meals on Wheels. Wal-Mart employees, generous and polite themselves, will afford you every courtesy and give you the shirts off their backs.
Wal-Mart’s obsession with cost-cutting works well, except in discrete situations such as the purchase of lawyers’ services. Wal-Mart thinks that hiring outside counsel is like buying tube socks. It’s not, and Wal-Mart has paid dearly while learning that lesson, having been sanctioned in numerous courts for discovery abuses, such as failing to turn over relevant documents and evidence. I don’t know whether those claims about Wal-Mart “hiding the ball” in other litigation were true or not. In our case, Visa charged that Wal-Mart had destroyed relevant evidence. C&P’s experience successfully defending against that claim—which, had it been successful, might have derailed our case—showedno venality or bad intent on Wal-Mart’s part. It did show rampant cost-cutting in litigation expenses—a realm where the platitude “penny wise, pound foolish” usually fits.
Wal-Mart came to me in 1995 because they realized that though they paid less for everything else than any other merchant, they paid exactly the same high prices for Visa and MasterCard services. And like every other store, they were forced to take Visa and MasterCard debit card transactions at credit card prices. When Wal-Mart politely asked Visa’s CEO, Carl Pascarella, to stop forcing its stores to accept these debit card transactions, Pascarella bluntly responded that Visa could force it to. And right after that impolite retort, Wal-Mart hired me and C&P.
Preparing Wal-Mart and The Limited for Battle
Wal-Mart was the best possible plaintiff and class representative for this case but also the most difficult client I have ever represented. But the extraordinary difficulty of the case was one of the things that made it the perfect antitrust case. Dealing with the big egos of all my clients, their various litigation objectives, and the diverse corporate cultures at each huge company was as or more difficult than any other part of the case. So the year of getting Wal-Mart into the gate was good practice for what was to come.
Part of that year (November 1995 to late October 1996) was spent trying to get a government antitrust agency to file its own case. Wal-Mart required that we make this effort. I really didn’t want this to happen because I wanted to control the case. I thought a government agency would interfere with our case and/or screw up its own. However, it was my job to make the effort to get an agency involved, and so I tried.
I met with Joel Klein, who was deputy assistant attorney general and who would later become the head of the Federal Antitrust Division. Joel and I were like a pair of Siamese Fighting Fish. We were two toughJewish kids from the same lower-middle-class Queens neighborhood who clashed every time we met. We would each say that we fought because we disagreed, but the real reason was our similarities.
I also met with numerous state attorney general antitrust chiefs. All of these meetings were cordial, but the implicit and sometimes explicit response was that Wal-Mart had the resources to bring its own antitrust case. The fact that Visa’s and MasterCard’s practices hurt millions of small merchants and virtually every U.S. consumer, did not seem to resonate with my former colleagues.
I also made an effort to interest the Federal
Low wages are paid to Wal-Mart executives and lawyers, as well as to Wal-Mart sales associates, but Wal-Mart stock and options are widely distributed to employees at every level. Employee equity, which has created loyalty and devotion to Wal-Mart and to its customers, is widespread and palpable. You can’t buy a Wal-Mart executive a meal or a drink or send her a Christmas present. After our holiday gifts were politely returned, C&P switched to making donations in honor of all our clients and friends to charities such as City Harvest and Meals on Wheels. Wal-Mart employees, generous and polite themselves, will afford you every courtesy and give you the shirts off their backs.
Wal-Mart’s obsession with cost-cutting works well, except in discrete situations such as the purchase of lawyers’ services. Wal-Mart thinks that hiring outside counsel is like buying tube socks. It’s not, and Wal-Mart has paid dearly while learning that lesson, having been sanctioned in numerous courts for discovery abuses, such as failing to turn over relevant documents and evidence. I don’t know whether those claims about Wal-Mart “hiding the ball” in other litigation were true or not. In our case, Visa charged that Wal-Mart had destroyed relevant evidence. C&P’s experience successfully defending against that claim—which, had it been successful, might have derailed our case—showedno venality or bad intent on Wal-Mart’s part. It did show rampant cost-cutting in litigation expenses—a realm where the platitude “penny wise, pound foolish” usually fits.
Wal-Mart came to me in 1995 because they realized that though they paid less for everything else than any other merchant, they paid exactly the same high prices for Visa and MasterCard services. And like every other store, they were forced to take Visa and MasterCard debit card transactions at credit card prices. When Wal-Mart politely asked Visa’s CEO, Carl Pascarella, to stop forcing its stores to accept these debit card transactions, Pascarella bluntly responded that Visa could force it to. And right after that impolite retort, Wal-Mart hired me and C&P.
Preparing Wal-Mart and The Limited for Battle
Wal-Mart was the best possible plaintiff and class representative for this case but also the most difficult client I have ever represented. But the extraordinary difficulty of the case was one of the things that made it the perfect antitrust case. Dealing with the big egos of all my clients, their various litigation objectives, and the diverse corporate cultures at each huge company was as or more difficult than any other part of the case. So the year of getting Wal-Mart into the gate was good practice for what was to come.
Part of that year (November 1995 to late October 1996) was spent trying to get a government antitrust agency to file its own case. Wal-Mart required that we make this effort. I really didn’t want this to happen because I wanted to control the case. I thought a government agency would interfere with our case and/or screw up its own. However, it was my job to make the effort to get an agency involved, and so I tried.
I met with Joel Klein, who was deputy assistant attorney general and who would later become the head of the Federal Antitrust Division. Joel and I were like a pair of Siamese Fighting Fish. We were two toughJewish kids from the same lower-middle-class Queens neighborhood who clashed every time we met. We would each say that we fought because we disagreed, but the real reason was our similarities.
I also met with numerous state attorney general antitrust chiefs. All of these meetings were cordial, but the implicit and sometimes explicit response was that Wal-Mart had the resources to bring its own antitrust case. The fact that Visa’s and MasterCard’s practices hurt millions of small merchants and virtually every U.S. consumer, did not seem to resonate with my former colleagues.
I also made an effort to interest the Federal
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