A federal appeals court in New York has upheld the largest antitrust class action settlement in history, along with an award of $220 million to the lawyers who brought the $3 billion case against Visa and MasterCard.

In its ruling, the 2nd Circuit Court of Appeals tossed out challenges to the settlement and to the legal fees in the dispute, which targeted a MasterCard and Visa policy requiring merchants to accept debit cards if they took the traditional credit cards. Lawyers for the merchants contended that tying the two products together violated federal antitrust laws.

The class-action attorneys argued that the $220 million in legal fees allowed by the trial court was inadequate and the legal team should have been awarded more than $600 million, but the appeals court disagreed.

“The district court’s fee award is reasonable,” Judge Richard Wesley concluded. He rejected the claim by plaintiffs’ lawyers that a fee of 18% of the settlement was needed to make it worthwhile for attorneys to take complex cases on a contingency basis.

“The court sought to compensate plaintiffs’ counsel handsomely, and at the same time limit the percentage of the award so that plaintiffs’ counsel would not receive a windfall detrimental to the class,” wrote Judge Wesley, who was appointed by President Bush.

Judge Jose Cabranes, an appointee of President Clinton, joined the opinion. A third judge assigned to the case, Chester Straub, recused himself without explanation.

In an interview yesterday, the lead attorney for the plaintiffs, Lloyd Constantine of the Manhattan-based Constantine & Partners, said he was delighted with the ruling.

“We’re extraordinarily pleased with the decision,” Mr. Constantine said. He pointed out that the appeals court’s decision was effusive in its praise for the plaintiffs’ lawyers who handled the case.

“The U.S. Court of Appeals has written me a love letter. I’m happy,” said Mr. Constantine, who was the antitrust chief in the New York attorney general’s office until 1991.

Mr. Constantine said aspects of the ruling that cut his fee request by nearly two-thirds were “odd,” but added that he has no plans to appeal. “We’re just very eager to have it over,” he said.

One objector has asked the 2nd Circuit to rehear the case en banc. Mr. Constantine said he expects one or more of the parties unhappy with the decision to ask the Supreme Court to review the case.

A Florida lawyer who objected to the $220 million fee award, N. Albert Bacharach, said he was considering whether to appeal. “There needs to be an incentivization for people to do unusual, complex, and difficult cases like this, but I’m not inclined to believe that it requires quite such a lavish hand,” said Mr. Bacharach, who represents a Gainesville pizza parlor that took Visa and MasterCard.

To make their case for $609 million in fees, the plaintiffs’ lawyers retained several renowned law professors as experts: Arthur Miller of Harvard, John Coffee Jr. of Columbia, and Harry First of New York University. All filed declarations saying the plaintiffs’ lawyers should be awarded a substantial percentage of the settlement, even in so-called mega fund cases, to preserve their incentive to press for the largest possible fund for the class.

“There has never been an antitrust action as complex, risky, and as hard-fought that has led to similar beneficial results for the class and the public at large,” Mr. Miller wrote. He called the fee request “fair and reasonable.”

Both Mr. Miller and Mr. Coffee said they had never seen a firm take on as much financial risk as Constantine & Partners in the Visa and MasterCard case. “This case presents the clearest example that I have ever seen of a ‘You-bet-your-firm’ case,” Mr. Coffee wrote.

Curiously, none of the professors’ filings refer to the exact dollar amount of fees sought by plaintiffs’ counsel. Messrs. Miller and Coffee did not return phone calls and e-mails seeking comment for this story, and Mr. First could not be reached.

A professor at Cardozo Law School, Lester Brickman, scoffed at the opinions of his fellow academics.

“Those are expensive declarations,” Mr. Brickman said. “This is round-up of the usual suspects. These are some of the most prominent lawyers who are law professors who are frequently hired to bless the fee. Their blessing comes at a commensurate price, but their blessings are certainly worth the price they charge.”

Another lawyer who challenged the settlement, Lawrence Schonbrun of Berkeley, Calif., said the number of firms that joined in the suit belies the argument that the case was such a risk. “There were 36 law firms jumping all over themselves to get involved in this case,” he said.

The appeals court’s decision was dated January 4, but the attorneys notified merchants in the class about the ruling last week. The notification made no mention of the appeals court’s action upholding the $220 million fee.

About 5 million merchants are entitled to share in the $3 billion fund from the litigation, but no money will be disbursed until all appeals are exhausted.

Before the suit was brought, Visa and MasterCard charged merchants the same rate for both credit and debit cards. The lawyers who filed the suit argued that merchants could have negotiated lower fees for the debit transactions, which are virtually risk-free to Visa and MasterCard. As part of the settlement, the two firms also agreed to charge lower fees and to drop the requirement to honor debit cards.

The appeals court ruling was far more deferential to Mr. Constantine and his colleagues than the ruling from the trial court judge who considered attorney’s fees, John Gleeson of Brooklyn.

In December 2003, Judge Gleeson gave the plaintiffs’ lawyers in the case a tongue-lashing for asking for more than half a billion dollars in fees.

“Lead counsel’s request to be paid almost 10 times their hourly rate is absurd,” Judge Gleeson wrote. “It is fundamentally unreasonable and wholly out of character for a group of counsel whose commitment to the corner store merchants they represent has, until now, been admirable and unflagging.”

Judge Gleeson ridiculed the suggestion that the $220 million fee he awarded would be insufficient to motivate other lawyers to bring meritorious but risky cases. “If it amounts to punishment, I am confident there will be many attempts to self-inflict similar punishment in future cases,” the judge wrote.

Mr. Constantine acknowledged that the $609 million figure is staggering. “If you’re just asking the question in a vacuum ‘Is $609 million too much for a bunch of lawyers to be compensated for doing a case?’ I’d say absolutely, that’s a ridiculous amount of money,” he said.

However, Mr. Constantine said the courts have established various factors that guide fee awards. For instance, suits that are investigated by the firm from the outset generally warrant larger fees than those that piggyback on a government probe, he said. Another is the amount of time and effort a firm has invested in the litigation.