TravelCenters of America LLC Wins Litigation Against Comdata
TravelCenters of America LLC (Nasdaq: TA) today announced that it has won its litigation against Comdata, Inc. regarding the fees charged by Comdata to TA for processing payments at TA’s locations using Comdata fuel cards.
As previously reported, TA began its litigation against Comdata on November 30, 2016 in response to communications from Comdata alleging that TA had breached certain agreements which require Comdata to process customer transactions using Comdata cards at set fees through January 2, 2022. Comdata had asserted that it was no longer bound by this contract and unilaterally raised the processing fees charged TA effective February 1, 2017. TA has previously publicly estimated that the excess fees being charged by Comdata have cost TA approximately $900,000 per month.
Today’s decision is included in a 101 page opinion issued by Chancellor Andre Bouchard of the Delaware Court of Chancery after extensive discovery and a four day trial which concluded earlier this year. Both TA and Comdata are organized under Delaware law. The decision orders Comdata to honor TA’s contract terms and to reimburse TA for all excess amounts charged to TA since February 1, 2017, plus interest. The decision also requires Comdata to reimburse TA for its reasonable 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.
Commenting upon today’s decision, Tom O’Brien, President and Chief Executive Officer of TA, made the following statement:
“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.’
“During this litigation, TA discovered, and the Court’s opinion noted, that Comdata has considered ways it might hurt TA’s business if TA did not agree to higher fees. 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 Chancery Court decision dismissed TA’s claims against FleetCor Technologies, Inc. (NYSE: FLT), 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 itself lacked sufficient resources to pay the judgment. Also, the Chancery Court’s decision 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 is represented in this litigation by the Boston, MA office of Ropes & Gray LLP (Jane E. Willis, Matthew L. McGinnis and C. Thomas Brown) and the Wilmington, DE office of Skadden, Arps, Slate, Meagher & Flom LLP (Robert S. Saunders, Joseph O. Larkin and Jessica R. Kunz).
TravelCenters of America LLC (TravelCenters), headquartered in Westlake, Ohio, conducts business in 43 states and in Canada, principally under the TA® and Petro Stopping Centers® and TA Express® travel center brands. For more information on TA, TA Express, and Petro, please visit www.ta-petro.com.