FI suit against Heartland dismissed

All consumer and financial institution suits brought against Heartland Payment Systems Inc. are now finished. In March 2012, Federal District Judge Lee Rosenthal of the Southern District of Texas, Houston Division, approved a consumer settlement brought in the wake of the theft of 130 million debit and credit card numbers from Heartland. The theft was first reported in January 2009. Now the judge has dismissed all claims brought by financial institutions against Heartland

Suits brought against Heartland were divided into two tracks: consumer litigation and financial institution litigation. The consumer litigation was settled in March 2012. Rosenthal also dismissed, for the second time, a breach of contract suit filed by a group of financial institutions against Heartland and its acquirers Heartland Bank and KeyBank N.A. The ruling follows the court's earlier dismissal of a class-action lawsuit brought by nine banks against Heartland. The court allowed leave to amend the claim, however. The banks subsequently refiled an amended claim and this second complaint was dismissed on March 14, 2012.

Judge Rosenthal granted Keybank's move to dismiss the amended complaint for failure to state a claim. The banks claimed Keybank had a duty to monitor Heartland adequately on their behalf – an argument Rosenthal said failed as a matter of law. There is no proof the acquirers were part of a joint venture with the banks and agreed to share losses with the banks, the judge held.

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.