Visa accuses DOJ of delaying trial in attempt to hamper Plaid acquisition
Less than a fortnight after the United States Department of Justice (DOJ) took Visa Inc to Court over its planned $5.3 billion acquisition of Plaid, the defendants have sought to expedite the proceedings.
On November 17, 2020, Visa Inc. and Plaid Inc. filed a motion with the California Northern District Court requesting that the Court convene a case management conference at the earliest possible opportunity to address scheduling and other case management issues.
The Antitrust Division of the United States Department of Justice is seeking to block Visa’s time-critical acquisition of Plaid, a deal that was signed up in January 2020, and that DOJ has been investigating for ten months.
Visa notes that merger challenges move at a substantially faster pace to a bench trial than traditional federal civil litigation, because the intervening time pending a court decision can cause significant disruption and financial uncertainty for the companies. The clerk has set an initial case management conference for March 26, 2021. The defendants, however, seek to have a case management conference as soon as possible so that the Court may set a case schedule and reasonable parameters for discovery consistent with past merger litigation timelines.
The defendants requested that DOJ join a motion for an expedited case management conference, but DOJ stated that it believed a case management conference is premature.
The parties have vastly different views regarding the time needed to prepare for trial in this matter. The defendants have proposed a February 23, 2021 trial date. DOJ, on the other hand, seeks to delay the trial. During the parties’ meet and confer on schedule, DOJ proposed a trial date at the end of July 2021, and days later proffered the later date of September 7, 2021.
DOJ argues that its challenge requires more time than the typical merger litigation because it chose to add a novel monopolization claim to its Clayton Act challenge. According to Visa, however, nothing justifies treating this case any differently from any other merger challenge.
“It is apparent that DOJ’s strategy in this action is to delay the trial as long as possible in the hopes that Defendants will simply abandon the transaction owing to the enormous pressure that time delays put on parties to substantial transactions, ” the defendants state.
The complaint alleges that Visa’s CEO viewed the acquisition as an “insurance policy” to protect against a “threat to our important US debit business.” This acquisition is the second-largest in Visa’s history, with an extraordinary price tag of $5.3 billion. Visa’s CEO justified the deal to Visa’s Board of Directors as a “strategic, not financial” move, and noted that in part because “our US debit business is critical and we must always do what it takes to protect this business.”