TravelCenters of America Settles Fleet Card Antitrust Case
Aggregate payments by all defendants totals $130 million, including $10 million by TA
Published in CSP Daily News
WESTLAKE, Ohio -- TravelCenters of America LLC has announced that it has entered a memorandum of understanding to settle a long-running, civil class-action antitrust case, Marchbanks Truck Service Inc., et al. v. Comdata Network Inc., et al. pending in the U.S. District Court for the Eastern District of Pennsylvania. In this case, the plaintiffs alleged antitrust violations arising from Comdata Inc.'s contractual relations with truckstop operators.
It named fleet payment solutions provider Comdata, its parent company Ceridian, TA and other chain operators of travel centers, Pilot Travel Centers LLC and Love's Travel Stop & Country Stores Inc. as defendants. All of the defendants in this case have entered settlement memorandums which, if completed, will result in aggregate payments by all defendants totaling $130 million, including $10 million to be paid by TA.
The settlement by certain other defendants is expected also to result in certain nonmonetary consideration in the form of changes in Comdata's enforcement of its contracts, none of which TA believes will be detrimental to TA's business.
TA said it determined to enter this settlement in order to avoid the expense and distraction of this continuing litigation, especially because certain other defendants determined to settle separately which likely would have increased TA's costs of continuing litigation.
TA expects to record the $10 million settlement as a charge to earnings in the fourth quarter of 2013.
"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. 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," said Stuart C. Harvey Jr., chairman, CEO and president of Comdata.
"Comdata's No. 1 priority is, and has always been, to serve as a trusted, independent partner for customers on both sides of fueling transactions. This settlement reflects our commitment to leadership in the industry by moving forward in a way that is fair and appropriate to both fueling merchants and the fleets that patronize them," said Randy Morgan, executive vice president of Comdata's fleet business.
Under the terms of the memorandum of understanding, which will need to be finalized in a definitive settlement agreement and approved by the court, Comdata has agreed to make a one-time cash payment of $100 million as part of a $130 million global settlement with other defendants in the lawsuit, and to provide certain prospective relief with respect to specific provisions in its merchant agreements. This settlement will provide Comdata and affiliated companies, including Ceridian, with a broad release of claims and will limit their exposure to legal claims by merchants.
Comdata, Brentwood, Tenn., is a leading business-to-business provider of innovative electronic payment solutions. As an issuer and a processor, the company provides fleet, corporate payment, healthcare, virtual card and prepaid solutions to more than 30,000 customers. Comdata's SVS division is a global gift card and loyalty provider that manages more than 600 million cards and processes more than one billion transactions from more than 45 countries and in 26 currencies worldwide every year. It enables more than $60 billion in payment volume annually.
Westlake, Ohio-based TA primarily operates and franchises travel centers under the TravelCenters of America, TA, Petro Stopping Centers and Petro brand names that offer diesel and gasoline fueling, restaurants, truck repair facilities, stores and other services. TA also operates convenience stores primarily in Kentucky and Tennessee under the brand name Minit Mart. TA's nationwide business includes locations in 42 U.S. states and Canada.