Antitrust Law Daily Wrap Up, ANTITRUST NEWS: American Express agrees to pay $3.8M in attorney fees, costs, (May 14, 2015)

By Greg Hammond, J.D.

Following the issuance of an injunction, prohibiting American Express (Amex) from enforcing its so-called “anti-steering” rules and ordering the firm to delete language from its agreements with merchants that prevent them from encouraging customers to use other cards, Amex has agreed to pay $3.8 million in attorney fees and costs to 17 plaintiff states for the investigation and litigation of the antitrust suit. The stipulation and proposed order was filed in the federal district court in Brooklyn on May 13, 2015 (U.S. v. American Express Co., Case No. 1:10-cv-04496-NGG-RER).

The court previously found that the U.S. Department of Justice and 17 state attorneys general established at trial that the Amex rules violated Section 1 of the Sherman Act. The court identified language in contracts between Amex and merchants that was no longer enforceable; however, it did not go so far as to craft contract language to inform merchants of their right to engage in steering. Nevertheless, the injunction included affirmative contractual language, establishing a “safe harbor” of acceptable language concerning merchant signage and oral communications.

The stipulated order states that if final judgment is not reversed or modified on Amex’s appeal, then Amex will pay $3.65 million to the plaintiff states for their attorney fees, along with $180,000 for costs. However, if the final judgment is reversed, the stipulation and Amex’s obligations therein will become null and void.

Attorneys: Evan R. Chesler (Cravath, Swaine & Moore LLP) and Donald L. Flexner (Boies, Schiller & Flexner LLP) for American Express Co. Mitchell L. Gentile for Office of the Ohio Attorney General.

Companies: American Express Co.

News: Antitrust