Walmart and Capital One Settle Lawsuit Over Credit Card Partnership
Walmart and Capital One have resolved their lawsuit regarding their credit card partnership, which previously made Capital One the exclusive issuer of Walmart-branded consumer credit cards. The lawsuit was dismissed by U.S. District Judge Katherine Polk Failla on Thursday in Manhattan after both companies settled all claims and counterclaims. The exact terms of the settlement were not disclosed.
Key Points of the Dispute
- Early Termination of Partnership: In March, Judge Failla ruled that Walmart could end the partnership early due to Capital One's falling short in customer service.
- Issues Raised by Walmart: Walmart filed the lawsuit in April 2023, alleging that Capital One was slow to post transactions and failed to promptly replace lost cards.
- Capital One's Defense: Capital One countered that these alleged failures did not justify ending the partnership, considering termination a "nuclear option."
Background and Resolution
The partnership, which began in 2019, officially ended last month. Capital One announced that eligible Walmart-branded cards would be converted to other cards, and cardholders would retain their accrued rewards.
Impact on Consumers
Walmart's lawsuit had raised concerns over the quality of customer service provided by Capital One. The resolution ensures that Walmart-branded cardholders will transition smoothly to new cards without losing any accumulated benefits.
A spokesperson for Walmart declined to comment on the settlement. Capital One and its legal team also did not immediately respond to requests for comments.
Capital One's Recent Moves
Despite the legal dispute with Walmart, Capital One continues to expand its market presence. Earlier this year, Capital One agreed to acquire credit card rival Discover Financial Services in a deal valued at $35.3 billion.
Case Information
The case is officially titled Walmart Inc et al v Capital One NA, with its proceedings taking place at the U.S. District Court, Southern District of New York. The case number is 23-02942.
This settlement marks the end of a significant legal battle between two major financial and retail giants, ensuring that their customers experience minimal disruption during the transition.
