By Jonathan Stempel

NEW YORK (Reuters) – Walmart settled its lawsuit against Capital One over their credit card partnership, which had made Capital One the exclusive issuer of Walmart-branded consumer credit cards before ending last month.

The case was dismissed on Thursday by U.S. District Judge Katherine Polk Failla in Manhattan, after the companies resolved all claims and counterclaims. Terms were not disclosed.

Failla had ruled in March that Walmart could end the partnership early because Capital One’s customer service had fallen short. The partnership began in 2019.

A spokeswoman for Bentonville, Arkansas-based Walmart declined to comment on Friday.

Capital One, based in McLean, Virginia, and its lawyers did not immediately respond to requests for comment.

Walmart, the world’s largest retailer, sued Capital One in April 2023, saying the bank was too slow to post transactions to cardholder accounts, and failed to replace lost cards promptly.

Capital One countered that its alleged failures did not justify terminating the partnership, which both companies considered a “nuclear option.”

In announcing the end of the partnership, Capital One said it would convert eligible Walmart-branded cards to other cards, and cardholders would not lose accrued rewards.

Capital One agreed in February to buy credit card rival Discover Financial Services in an all-stock transaction valued at $35.3 billion.

The case is Walmart Inc et al v Capital One NA, U.S. District Court, Southern District of New York, No. 23-02942.

(Reporting by Jonathan Stempel in New York; Editing by Nick Zieminski)