Updated from 12:41 p.m. EST

American Express

(AXP) - Get Report

wants rivals

MasterCard

and

Visa

and eight big banks to pay damages for years of allegedly uncompetitive practices in the charge card business.

The big financial services company sued the 10 defendants Monday in federal court in Manhattan. The lawsuit comes a month after the U.S. Supreme Court refused to overturn a lower court ruling that MasterCard and Visa had violated federal antitrust laws.

The lawsuit charges that the two credit card associations, in conjunction with the eight banks, engineered a boycott of American Express' charge card, a move that cost the company billions of dollars in lost business. Some of the banks named as defendants are

J.P. Morgan Chase

(JPM) - Get Report

,

Bank of America

(BAC) - Get Report

,

Capital One

(COF) - Get Report

and

Wells Fargo

(WFC) - Get Report

.

The litigation seemed inevitable after the Supreme Court rejected an appeal filed by MasterCard and Visa in a long-running antitrust case that challenged the credit associations' monopoly over the charge business.

In 2001, a federal judge in New York, in a watershed ruling, struck down a rule imposed by Visa and MasterCard, which had prohibited member banks from issuing cards from other companies. A federal appellate court last year upheld the lower-court ruling. MasterCard and Visa were left with no legal options after the Supreme Court refused to hear the appeal.

Both American Express and

Discover

, the credit card division of

Morgan Stanley

(MWD)

, have praised the lower-court ruling. The companies claimed the prohibition imposed by MasterCard and Visa prevented them from striking deals to market their charge cards to the nation's banks. Consumer advocates also hailed the ruling, claiming it would give consumers more options.

A few weeks ago, Discover filed its own lawsuit seeking damages from MasterCard and Visa. But Discover didn't sue any of the banks that had partnered with MasterCard and Visa.

David Boies, the noted attorney hired by American Express to pursue the litigation, says he had hoped MasterCard and Visa would have been receptive to negotiating a settlement after the Supreme Court rendered its decision.

"This is a lawsuit that ought not to be necessary," says Boies, who held a press conference to discuss the litigation.

One thing keeping the parties from settling is a determination of how much American Express and Discover are entitled to. Boies would only says the figure could reach into the billions.

"Ninety percent of an antitrust trial is about liability and that already has been established by a federal court judge,'' says David Balto, an attorney with Robins, Kaplan, Miller & Ciresi. "It's only a question of the amount of damages."

American Express, in a press release, made a point of noting that it did not name

MBNA

(KRB)

, one of the nation's largest credit card companies, as a defendant. That's because MBNA and American Express entered into a marketing deal earlier this year, shortly after the lower court ruled against Visa and MasterCard.

MasterCard and Visa both issued strongly worded statements rejecting American Express' allegations and challenged the company to drop the lawsuit.

"It's time for American Express to stop looking to the courts to solve its problems and compete in the marketplace instead," said Daniel Tarman, a Visa senior vice president. MasterCard, meanwhile, called the lawsuit "misguided" and said "American Express can no longer hide in the shadow of the government."