Banks Ask 5th Circ. To Revive Heartland Data Breach Claims

Megan Stride of Law360 writes that a lawsuit against Heartland Payment Systems over their 2008 breach may not be totally dead:

A group of banks on Friday asked the Fifth Circuit to revive their negligence claims against Heartland Payment Systems Inc. in multidistrict litigation over a 2008 data breach, saying Heartland’s claim that it shared a contractual relationship with the banks shouldn’t defeat their appeal.

In their reply brief, nine credit-card-issuing banks. including Amalgamated Bank and Lone Star National Bank NA, argue that a New Jersey economic loss rule doesn’t bar their negligence claim against Heartland because it only bars claims for foreseeable economic losses when the parties are in a contractual relationship.

The payment card processor argued in its own Jan. 22 brief that it had a contract-based relationship with the banks because all the parties had agreed to be bound by a set of operating regulations that allowed issuers to recover losses resulting from another participant’s security failures. But the financial institutions say they never negotiated or entered into a contract with Heartland.


The banks are appealing a Texas federal court’s dismissal of their New Jersey law negligence claims against Heartland, which were part of an MDL that also included a litigation track for consumer claims.The case is Lone Star National Bank NA et al. v. Heartland Payment Systems Inc., case number 12-20648, in the U.S. Court of Appeals for the Fifth Circuit.

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