Herrera's civil suit follows a federal court decision from earlier this year, in which the U.S. Justice Department and 17 state attorneys general prevailed in their case that restrictions long imposed by the global charge card giant on participating merchants unlawfully restrained trade and violated federal antitrust laws. As a result, Herrera's suit alleges, Amex owes billions in civil penalties and restitution to merchants in the nation's largest state under California's tough Unfair Competition Law.

"The party is over for American Express, and the bill is coming due in California," Herrera said. "The federal court ruling earlier this year merely confirms what millions of retailers, economists and U.S. Justice Department officials have known for years: American Express has rigged the game. They shook down merchants, stifled competition, and shifted costs for their extravagant member perks to even cash-paying consumers. It's unfair, it's illegal, and—under state law—it warrants tough penalties and restitution for California's merchants."

American Express for years has exacted a 3 percent fee on each charge card transaction—well in excess of fees charged such competitors as Visa and MasterCard—accounting for roughly $2.25 billion in fee payments annually by California merchants alone. At the same time, according to Herrera's complaint, Amex strictly prohibited its participating merchants from taking any step to encourage consumers' use of less costly payment methods, including cash. Barred from assessing surcharges or offering discounts—or even expressing a simple preference for cash or competing cards—sellers' uniform pricing mandates effectively forced all consumers to subsidize the high fees and generous rewards American Express continues to lavish on its generally affluent cardholders.

Herrera's complaint, filed in San Francisco Superior Court on Nov. 6, seeks a judicial declaration that Amex's merchant restraints violate California law together with an injunction barring the company from enforcing its illegal contractual provisions. California's Unfair Competition Law authorizes civil penalties of $2,500 for each violation, which Herrera contends equates to each charge card transaction. The complaint also seeks restitution for California merchants in an amount to be determined at trial as well as attorneys' fees and costs of the suit.