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Technology/Services

TA Wins Litigation Against Comdata

Ruling orders payment solution provider to reimburse retailer for excess fees

WESTLAKE, Ohio --TravelCenters of America LLC (TA) announced on Sept. 11 that it won its litigation against payment solutions provider Comdata Inc. regarding fees charged by Comdata to TA for processing payments.

The Westlake, Ohio-based retailer began its litigation against Comdata on Nov. 30, 2016, in response to communications from Comdata alleging that TA had breached agreements that require Comdata to process customer transactions using Comdata cards at set fees through Jan. 2, 2022. Comdata, Brentwood, Tenn., asserted that it was no longer bound by this contract and raised the processing fees on Feb. 1, 2017. TA has estimated that the excess fees being charged by Comdata have cost them about $900,000 per month.

The ruling issued by Chancellor Andre Bouchard of the Delaware Court of Chancery orders Comdata to honor TA’s contract terms and to reimburse TA for all excess amounts charged to TA since Feb. 1, plus interest. Comdata is also required to reimburse TA for its attorneys’ fees. The final amount of the payment due to TA from Comdata will be determined by post trial proceedings, which have not yet been scheduled.

“TA is pleased with today’s decision. The court has found that Comdata did not have a proper basis for breaching its long-standing agreements with TA, and the court noted that the evidence presented suggests that ‘Comdata’s representation that the February rates are what a merchant similar in size to TA would pay was not entirely honest,’ ” said Tom O’Brien, president and chief executive officer of TA. “I personally want to say a special thank you to all the TA customers who remained loyal to TA during our dispute with Comdata. I sincerely hope that normal business may now continue without any efforts by Comdata to direct business away from TA.”

The Court of Chancery decision dismissed TA’s claims against Peachtree Corners, Ga.-based FleetCor Technologies Inc., the parent company of Comdata, because the court found that TA had not presented evidence sufficient to pierce Comdata’s separate corporate existence and because there was no evidence that Comdata lacked sufficient resources to pay the judgment. The decision also found that TA should not be awarded triple damages under the Tennessee Consumer Protection Act, which TA had argued might apply to Comdata’s conduct in this case.

TA was represented by the Boston office of Ropes & Gray LLP and the Wilmington, Del., office of Skadden, Arps, Slate, Meagher & Flom LLP.

TA’s nationwide business includes travel centers in 43 states and in Canada, stand-alone convenience stores in 11 states and stand-alone restaurants in 14 states. The company ranked No. 19 in CSP's 2017 Top 202 list of the largest chains in the United States.

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