Simultaneously, the Justice Department settled with Visa and MasterCard, which agreed to allow merchants to offer discounts to consumers who use less expensive types of credit or debit cards.
The companies said the settlement, subject to court approval, did not involve any payment.
The lawsuit has the potential to cut into a significant source of profits for American Express and threatens to reshape the competitive landscape of the card processing business.
Shares of American Express, which charges merchants more on average for processing credit card transactions than its rivals, closed down 6.5 percent at $39.05.
Consultant Philip J. Philliou, a former executive for American Express and MasterCard, said via email that the lawsuit was "problematic for AmEx.
"If nothing else, it highlights to retailers and consumers the premium that retailers pay to accept AmEx as a form of payment," he wrote.
"This ruling may impact which card a consumer pulls out of their wallet," Philliou added.
American Express said the lawsuit would hurt consumers by limiting their ability to use their AmEx card.
"We have no intention of settling the case," Kenneth Chenault, chairman and chief executive officer of American Express, said in a statement.
American Express executives and lawyers declined repeatedly on a conference call with investors and reporters to quantify the potential impact of losing the lawsuit, or to say how much it would have cost the company in revenue to settle the case.
"I think, with reason, AmEx thinks the negative impact would be material," consultant Eric Grover, who previously worked at Visa, Reuters reported.
