BNA's Privacy & Security Law Report: Massachusetts Justices Dismiss Credit Union Claims in BJ's Payment Card Breach Lawsuit
Cincinnati partner Breck Weigel is noted as the attorney of record for Fifth Third Bank in the December 21, 2009, Bureau of National Affairs' Privacy & Security Law Report article, "Massachusetts Justices Dismiss Credit Union Claims in BJ's Payment Card Breach Lawsuit."
According to the article, a putative class of some 70 credit unions and their insurer cannot continue with their fraud, breach of contract, and other claims against BJ's Wholesale Club Inc. over a data breach involving some 9.2 million credit card accounts, the Massachusetts Supreme Judicial Court ruled Dec. 11, affirming dismissal of the litigation (Cumis Ins. Soc'y Inc. v. BJ's Wholesale Club Inc., Mass., No. SJC-10400, 12/11/09).
According to the article, from July 2003 until early 2004, hackers stole unencrypted credit card transaction data from computers at some 150 BJ's stores. Banks and credit unions that replaced payment cards, as well as Cumis Insurance Society Inc., which paid credit unions "millions of dollars for fraudulent transactions made using the compromised accounts," filed suit against BJ's. The plaintiffs asserted class action claims for fraud and negligent misrepresentation, equitable indemnification, and breach of contract.
The claims were based on the allegation that BJ's storing of credit card transaction data after a payment was authorized violated agreements with its card processing bank, Fifth Third Bank, as well as Visa and MasterCard rules. The plaintiffs argued that they were third party beneficiaries of data security promises made in those agreements, according to the article. In separate rulings, the trial court dismissed all of the plaintiffs' claims. The plaintiffs appealed. On its own motion, the Massachusetts high court transferred the case from the appeals court.
Weigel, represented Fifth Third Bank, along with Timothy Blank, of Dechert LLP, in Boston.