A U.S. law firm said it unknowingly filed fraudulent claims in a $5.6 billion antitrust settlement with Visa and Mastercard, telling a judge it was “embarrassed” and would strengthen its review process.
The firm, New York-founded Milberg Coleman Bryson Phillips Grossman, said in a Brooklyn federal court filing, opens new tab on Friday that it received paperwork from a “referral” source and then submitted the material to a claims administration company as part of the process for clients to receive money from the settlement.
A class of 12 million retailers in the case accused Visa and Mastercard of improperly fixing credit and debit card fees. The companies denied any wrongdoing in reaching the settlement, which a court upheld last year.
Milberg told attorneys for the class that the firm had withdrawn 30 “proofs of authorization” following an investigation that began in early May. Milberg was not involved in negotiating the settlement but represented clients seeking a piece of the fund.
Milberg and attorneys for the retailer plaintiffs did not immediately respond to requests for comment on Tuesday. Visa and Mastercard also did not immediately respond to similar requests.
A judge on Sunday set a June 6 deadline for class counsel and Milberg to submit more information about the false claims.
U.S. courts have faced mounting questions about false claims being submitted in multimillion-dollar class action settlements.
Milberg in Friday’s court filing said the disputed “claims somehow slipped through without detection.” The firm said in the filing, jointly submitted with plaintiffs’ counsel, that “we are strengthening our internal audit and review procedures so that this will not happen again.”
Milberg said it was undertaking an audit of every claim it has submitted to the court. It asked for time to provide the court “a more complete and detailed analysis of all claims submitted by the firm.”
The firm said it was “fully cooperating” with attorneys for the class.
Class lawyers said some of the submissions were purportedly from household name multinational companies and that even a “cursory” review showed the filings to be fraudulent.
The case is In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, U.S. District Court, Eastern District of New York, 1:05-md-01720-MKB-VMS.