NEW YORK–A federal judge has rejected a proposed $75-million class action settlement between American Express and a group of retailers, ruling that one of the attorneys involved had engaged in “egregious conduct.”
The lawsuit had been filed by the retailers, which are seeking to charge consumers more for American Express credit cards.
Judge Nicholas G. Garaufis ruled that communication, including e-mails, sent between several attorneys, breached confidentiality and could jeopardize the fairness of any settlement. One attorney seemed to understand what was at stake, noting in one e-mail “burn after reading.”
A spokesperson for American Express told The New York Times the company was “disappointed” in the ruling. “We believe we have strong defenses against the merchants’ claims, and will continue to fight our case in court,” the spokesperson told the Times.
The merchants are seeking an alternative resolution of the case that will provide greater discretion in passing the fees they pay for accepting American Express cards on to consumers, among other terms.