Comdata, Truck Stop Chains to Settle Payment Card Class Action Lawsuit

Comdata Corp. and a group of truck stop chains have agreed to pay $130 million to settle a class action lawsuit that was brought by truck stop owners who alleged the big chain stores conspired with Comdata to push out smaller competitors.

The class action settlements would resolve all of the plaintiffs’ claims in exchange for a total of $130 million in payments from all of the defendants.

Under the terms of the class action settlement, Comdata will pay $100 million and agrees to change some of its allegedly anticompetitive practices. Although the settlement has not been finalized, the parties have signed memoranda of understanding and agreed to present a final agreement in Pennsylvania federal court on Feb. 28, 2014.

Also named as defendants in the class action lawsuit are Petro Stopping Centers LP, Pilot Travel Centers LLC, Love’s Travel Stops & Country Stores Inc. and Travel Centers of America Holding Company LLC.

Comdata, a subsidiary of Ceridian Corp., operates a credit card network used by trucking companies to purchase fuel and other items at truck stops and participating gas stations.

If approved, the class action settlement would resolve claims that Comdata created an anticompetitive scheme that charged independent truck stops a higher amount than the bigger chain stores to use its trucker payment cards. The plaintiffs alleged that Comdata’s trucker payment cards and point-of-sale systems required to process them gained immense popularity in the 1990s, leaving them with no choice but to accept them as payment or risk losing business.

The plaintiffs also accused Comdata of implementing a two-tiered pricing system that imposed higher processing fees on independent truck stop companies. Truck stop chains, on the other hand, allegedly paid significantly lower processing fees to discourage them from developing payment card systems that would compete with Comdata’s system. The plaintiffs allege that the truck stop chains agreed not to compete with Comdata in exchange for the lower transaction fees. According to the class action lawsuit, this behavior enhanced Comdata’s market power, protected it from competition, and caused independent truck stops to pay artificially inflated transaction fees.

“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,” Stuart C. Harvey Jr., the chairman and CEO of Comdata, said. “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 class action lawsuit was initially filed in 2007. The class involves more than 4,000 independent truck stop companies and other retail fueling merchants.

The plaintiffs are represented by Eric L. Cramer and Andrew Curley of Berger & Montague PC; Stephen Neuwirth, Dale Oliver and Jeffrey Shandel of Quinn Emanuel Urquhart & Sullivan LLP; and Eric Fastiff and Dean Harvey of Lieff Cabraser Heimann & Bernstein LLP.

The Comdata Truck Stop Payment Card Class Action Lawsuit is Universal Delaware Inc., et al. v. Ceridian Corp., et al., Case No. 2:07-cv-01078, in the U.S. District Court for the Eastern District of Pennsylvania.