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Heartland Payment Systems Wins on Motion to Dismiss Computer System Intrusion Class Action Suit

December 13, 2011 Practices: Data, Privacy & Cybersecurity

A team of litigators in Ropes & Gray’s privacy and data security practice recently achieved an important victory on a motion to dismiss for payment card processor Heartland Payment Systems, Inc. in the pending class action litigation facing the company relating to its computer system intrusion. Various class action suits, including actions on behalf of payment card issuing banks, have been centralized in a multi-district litigation before Judge Lee H. Rosenthal in the United States District Court in the Southern District of Texas. The master complaint filed by the issuing banks asserted claims for negligence, breach of contract, misrepresentation, and violations of various state consumer protection statutes.

On Dec. 1, the court granted our motion to dismiss the complaint almost in its entirety, dismissing all but one relatively minor claim. Significantly, many of the court’s claim dismissals were with prejudice, including the dismissal of the negligence claim, and the only surviving claim, for violation of Florida Deceptive and Unfair Trade Practices Act, is limited to the law of one state. Further, even where the court’s dismissals were without prejudice, its decision significantly narrowed the scope of plaintiffs’ ability to re-plead the claims in question. A copy of the court’s ruling can be found here.

The Ropes & Gray litigation team for this victory included partner  Mark Szpak and associate Anne Johnson Palmer.