American Express Co. said it might scuttle its settlement with retailers over credit-card swipe fees if some businesses continue trying to pursue legal challenges to the company's rules.

Kroger Co., Publix Super Markets Inc., Rite Aid Corp. and Walgreen Co. are among the merchants unsatisfied with terms of the settlement that require them to drop their lawsuit once the agreement receives preliminary approval from a judge, according to a letter the card company filed Jan. 31 in federal court in Brooklyn, N.Y.

Allowing further consideration of the retailers' claims "will destroy the essence of the settlement agreement and result in its termination," the company's lawyer, Philip C. Korologos, wrote.

If U.S. District Judge Nicholas G. Garaufis doesn't overrule the retailers' objection and give his initial approval to deal by Feb. 13, "we will be compelled to exercise our termination right," Korologos wrote.

The settlement, announced in December, would resolve two lawsuits over fees and rules imposed by Amex on merchants that accept the company's cards. Under the accord, Amex agreed to modify its rules so merchants can charge customers more to use its cards than to swipe cheaper, competing debit cards, which Amex doesn't offer.

That would end a company policy that compelled merchants who sign up with Amex to charge the same amount regardless of which card was used.

Amex also agreed to pay as much as $75 million for attorneys fees and as much as $4 million to cover the costs of notifying plaintiffs.

The New York-based card company said it has 30 days under the agreement to walk away if certain parties raise an objection, and it doesn't want to lose that option if the dispute with the merchants continues.

"We cannot take that risk," Korologos wrote.

Amex can back out if the settlement doesn't remain in its current form either after final approval or an appeal, or if the 2012 settlement of the Visa Inc. and MasterCard Inc. case is changed after appeals.

Lawyers representing retailers objecting to the American Express settlement didn't immediately respond to requests for comment.

The deal followed a contentious court approval process in another lawsuit over swipe fees, also known as interchange fees, for Visa and MasterCard credit cards.

That settlement, worth $5.7 billion and resolving price- fixing claims by merchants nationwide, received final approval from a federal judge in December. Merchants unhappy with the settlement, including Wal-Mart Stores Inc. and, have appealed.

The cases are American Express Anti-Steering Rules Antitrust Litigation, 1:11-md-2221, U.S. District Court, Eastern District of New York (Brooklyn) and Marcus Corp. v. American Express Co., 1:04-cv-5432, U.S. District Court, Southern District of New York (Manhattan).

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