Twin Cities lawyer found $5.7 billion in the cards

  • Article by: JENNIFER BJORHUS , Star Tribune
  • Updated: December 7, 2013 - 10:01 PM

Attorney K. Craig Wildfang forged $5.7 billion settlement for retailers in their fight against Visa, MasterCard and card-issuing banks.

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Minneapolis antitrust attorney K. Craig Wildfang, right, talked with original plaintiff Michael Schumann in Schumann’s St. Paul furniture store.

Photo: Marlin Levinson, Star Tribune

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K. Craig Wildfang’s office on the 23rd floor of a downtown Minneapolis office tower is unremarkable, with little decoration beyond some poster-size travel photos and a smattering of bankers’ boxes and books.

Then there’s the yellow Post-it note on the wall with a number scrawled on it: $5,737,500,000.

That’s the latest value of a settlement Wildfang forged for the nation’s retailers in their battle against Visa, MasterCard and card-issuing banks over swipe fees. The largest private class-action antitrust settlement in U.S. history, the deal aims to resolve a long and bitter conflict over the billions in fees that retailers, and ultimately consumers, pay on card transactions.

Many antitrust experts consider the settlement a remarkable feat. But some retailers despise it as a cop-out that leaves the card giants free to set the fees however they want. The dollar value, first announced last year, has shrunk from $7.25 billion to $5.7 billion after industry powerhouses including Target Corp. have opted out.

Now, after years of legal wrangling, Wildfang is waiting for U.S. District Judge John Gleeson in New York to make a final decision on the deal.

“I devoted seven years of my life to this case,” Wildfang said. “People can disagree with me, but I really did do my best.”

Wildfang, 61, has earned a reputation as one of the country’s top antitrust litigators for plaintiffs. He led the giant case from its inception in 2005, when he filed the original interchange lawsuit for the class action’s first plaintiff, St. Paul businessman Mike Schumann.

The co-owner of Traditions Classic Home Furnishings, Schumann was ultimately one of 7 million to 8 million retailers in the class, just about any merchant who had swiped a credit or debit card since 2004.

It’s been a marathon.

Wildfang’s children, now in college, grew up with “the interchange case.” Along the way, Wildfang developed a chronic back problem that, he admitted, added to the challenge. He blames the bad back on years at desks and on airplanes.

Though he lives in Eden Prairie with his wife and two standard poodles, his work is national. He hasn’t tried a case in Minneapolis in about 15 years.

In his office, he demonstrates a hydraulic workstation that enables him to work part of the day standing up. Four back surgeries have left him with fused vertebrae.

Wildfang argues, as he is wont to do, that $7.25 billion is still the better number for the size of the interchange settlement since it captures the value of relief that opt-outs will get in pursuing their own claims in court. The requested attorneys’ fees have fallen from $720 million to about $570 million, plus $27 million for out-of-pocket expenses.

Robins, Kaplan, Miller & Ciresi, the firm where Wildfang works, hopes to get a quarter to one-third of that, or about $142 million to $190 million for eight years of work. The next largest chunk goes to colead counsels in Philadelphia and San Diego who also were appointed to represent the country’s retailers. But Judge Gleeson could reduce the entire amount.

Not that checks will go out soon. Appeals are a given.

Forceful litigator

Born in Iowa, Wildfang grew up in what he describes as a conservative German family. He was about 4 when the family moved to Bloomington.

After graduating from the University of Minnesota Law School, he tackled a range of cases, even prosecuting a Minneapolis cop for beating a teenage girl with a flashlight.

  • The suit

    Visa, MasterCard and a group of banks agreed last year to settle a giant class action lawsuit accusing them of colluding in setting interchange fees that retailers must pay when shoppers pay with plastic.

    A cornerstone of the accord abolished Visa’s and MasterCard’s “no surcharge” rules so retailers can surcharge consumers for paying with plastic.

    The pact also requires Visa and MasterCard to negotiate in good faith with buying groups of merchants trying to get better rates.

    Retailers get about $5.7 billion, part from a temporary reduction in interchange fees.

    The deal also would prevent retailers from suing over identical issues in the future.

    K. CRAIG WILDFANG

    Home: Eden Prairie

    Family: Wife, Chris Honaas-Wildfang; children, Grant, 20, and Alexandra, 22

    Work: co-chair of the antitrust group at Robins, Kaplan, Miller & Ciresi; special counsel to the assistant attorney general for antitrust at the U.S. Department of Justice from 1993-1996

    Education: University of Minnesota Law School (1977)

    Hobby: fly-fishing

    Favorite Churchill quote: While addressing the troops in North Africa: “It is not enough that we do our best; sometimes we must do what is required.”

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