The National Retail Federation asked a federal judge to “right or reject” a proposed settlement of an antitrust lawsuit over credit card swipe fees, saying the measure needs to be rewritten to do more to bring the soaring fees under control and that retailers who don’t support it should be allowed to completely opt out.

“The proposed settlement is next to worthless,” NRF Senior Vice President and General Counsel Mallory Duncan said. “It does nothing to reduce swipe fees or keep them from rising in the future, it offers retailers pennies on the dollar for the damage that has already been done, and it tries to tie merchants’ hands from ever suing again. This is actually worse than no settlement at all because it further entrenches the monopoly held by the card companies.”

“This proposal has not been agreed to by the retail industry by any stretch of the imagination,” Duncan said. “Thousands of retailers have flatly rejected the settlement, including many of the nation’s best-known brands. This is a backroom deal being pushed by the card industry and trial lawyers more concerned about their fees than protecting retailers or consumers.”

Attorneys representing NRF are scheduled to appear before U.S. District Court Judge John Gleeson in Brooklyn, N.Y., today for a hearing on final approval of the settlement. NRF argued in a brief filed this spring that the proposal “gives the credit card networks carte blanche to set and manipulate interchange rates” while giving retailers nothing in return.

Close to 8,000 merchants, representing at least 25 percent of Visa and MasterCard volume, have opted out of the $7.25 billion originally offered by the settlement. But the unusual structure of the proposal blocks them from opting out of other terms and conditions, including a ban on future lawsuits over the issue. NRF attorney Andrew Celli argued that retailers should instead be given the ability to fully opt out of the settlement.

Celli also called on Gleeson to “right or reject” the proposal. He said the judge should give lead plaintiffs’ counsel K. Craig Wildfang “invigorated and empowered” leverage to redraft the settlement and “make the deal fair” or reject it entirely if that cannot be accomplished.

“As it stands, the settlement rewards the perpetrators and traps the victims,” Celli said. “But it is not hopeless. It can be made fair. You have the power to make it so.”

As written, NRF opposes the settlement because it fails to reform the price-fixing system under which Visa and MasterCard set swipe fees followed by banks that issue their credit cards, or to introduce transparency that would lead to competition to lower the fees. Rather than lowering the fees, the card companies have proposed passing them along to consumers as a surcharge, even though most major retailers have rejected surcharges and at least 10 states bar surcharges by law. The $7.25 billion was intended to compensate retailers for price-fixing over nearly nine years but amounts to less than three months’ worth of swipe fee charges, and small retailers would receive as little as a few hundred dollars.

Rather than being brought by the retail industry as a whole, the suit was filed in 2005 by six trade associations and 13 retail companies, most of them individual stores or small chains. The settlement was drafted without input from other retailers, and was ultimately rejected by a majority of the plaintiffs, including all of the associations. NRF is not a party to the lawsuit, but has led the retail industry’s opposition to the settlement because NRF member companies would be dragged into its terms as part of the class action.

Averaging about 2 percent, swipe fees are a percentage of the transaction taken by banks each time consumers swipe a credit card to pay for a purchase, and total about $30 billion a year nationwide. The fees have tripled over the past decade and drive prices up for the average household by more than $250 per year.