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Case Center

Comdata

  • Issue: Monopolization

Comdata Truck Stop Antitrust Class Action

Introduction: Comdata Lawsuits Filed

Marchbanks Truck Service, Inc. and Universal Delaware, Inc. filed a class action lawsuits against Comdata, owner of the monopoly credit card system used by practically every truck stop in the United States.

The lawsuits charge that Comdata has harmed competition by using its market dominance to impair the ability of rival card issuers to challenge Comdata's monopoly, resulting in independent truck stops having to pay millions of dollars in excessive fees. The suit was filed on behalf of a proposed class of all independent truck stops.

Court Denies Motions to Dismiss

On March 24, 2011, the U.S. District Court denied Comdata's motion to dismiss the case. On March 29, 2012, the Court rejected the effort by the remaining defendants, Ceridian, plus the chain truck stop defendants, to dismiss the complaint.

Background on Comdata's Operation

Comdata is based in Brentwood, Tennessee and is a subsidiary of Minneapolis-based Ceridian Corporation. The suit alleges that in the mid-1990s Comdata acquired its chief truck stop card rival (NTS) and the monopoly point of sale system (Trendar). After becoming a monopolist in the truck stop card and point of sale system markets, Comdata changed its pricing system and significantly increased card fees paid by independent truck stops relative to fees charged to the chain truck stops.

Plaintiffs' Factual Allegations

Chain truck stops (such as Pilot, Petro, and Travel Centers of America) typically pay one dollar or less per transaction. Independent truck stops pay a percentage of the value of the transactions, typically over 2%. Given that the vast majority of affected transactions, which usually involve truckers buying large quantities of diesel fuel, are far in excess of $25, the card fee independents pay is almost always significantly greater than the fee chain truck stops pay. Plaintiffs allege that the difference in charges costs independent truck stops millions of dollars annually, impedes competition by independent truck stops and ultimately leads to all consumers paying more.

Relief Sought

The lawsuit seeks treble damages for the overcharges to the plaintiffs and the proposed class of independent truck stops, and an injunction to prevent the ongoing anticompetitive conduct.

Contact Lieff Cabraser

Truck stop owners who wish to report their experiences with Comdata or to learn more about the litigation are welcome to contact an antitrust attorney at Lieff Cabraser.