Settlement Reached in Long-Running Truckstop Battle Against Comdata
January 21, 2014
A $130 million legal settlement has been reached for a class of more than 4,000 independent truckstops and other retail fueling merchants following an antitrust lawsuit filed in 2007 against fleet payment card issuer Comdata and three national truckstop chains.
Comdata will pay the lion's share of the settlement, $100 million, as part of the deal, the company announced today.
The lawsuit, filed in U.S. District Court for the Eastern District of Pennsylvania, alleged Comdata imposed anticompetitive provisions in its agreements with class members that artificially inflated the fees these truckstops and other retail fueling merchants paid when accepting Comdata cards for payment.
It also challenged allegedly anticompetitive arrangements among Comdata, its parent company Ceridian, and three national truckstop chains: TravelCenters of America and its subsidiaries, Pilot Travel Centers and its predecessor Pilot Corp., and Love's Travel Stops & Country Stores.
It also claimed Comdata, with the assistance of its parent, Ceridian, engaged in anticompetitive behavior with the truckstop chains in which the chains agreed not to compete with Comdata in exchange for Comdata providing the chains with a transaction fee advantage over their smaller, independent truckstop competitors.
Lawyers for the plaintiffs argued this conduct insulated Comdata from competition, enhanced its market power and led to independent truckstops paying artificially inflated transaction fees.
Comdata and Ceridian have denied these allegations. However, Comdata said on Tuesday that it has signed a memorandum of understanding to resolve the claims.
“We are very pleased to have reached an agreement that directly addresses merchant issues while continuing to emphasize and ensure fair treatment at the point of sale for fleets that carry the Comdata Card,” said Stuart C. Harvey Jr., chairman, CEO and president of Comdata. “While Comdata believes the lawsuit lacked merit, we decided to resolve the lawsuit so that we can continue to focus our full attention on strengthening and growing our relationships with our merchant and fleet customers.”
The settlement would resolve all claims of the named plaintiffs, Marchbanks Truck Service dba Bear Mountain Travel Stop, Gerald F. Krachey dba Krachey's BP South, and Walt Whitman Truck Stop, along with the proposed class. It also calls for including a legally binding commitment from Comdata for prospective relief in the form of changes to certain allegedly anticompetitive contractual provisions in its merchant agreements, according to plaintiff lawyers.
"The settlements ... commit them to pay $130 million for the benefit of over 4,000 independent merchants across the country and will provide significant changes to Comdata's merchant agreements that we believe will help level the economic playing field for the independents," said Eric L. Cramer, at the law firm of Berger & Montague, who is one of the co-lead class counsels.
"While we were confident in our ability to survive summary judgment, win at trial, and successfully defend that verdict on appeal, given that the settlements provide immediate, certain, and significant monetary compensation for past harms and real prospective relief to ameliorate future ones, this resolution is clearly in the best interests of our clients and the proposed class," he added.
Before the settlements can become final, the parties must enter into final definitive settlement agreements, notify the class members of the details of the settlements, as well as of plaintiffs' plan for allocating the settlement funds amongst the class members.
The settlements also require approval from the court, and that process is expected to take several months.