Litigation News: Pulse Network Alleges Antitrust Violations; Target Breach Suit Continues (Dec. 4, 2014)
Houston-based debit/ATM network PULSE Network LLC, a Discover Financial Services company, filed a lawsuit against Visa Inc. late last month alleging antitrust law violations it says undercut competition, harming merchants, acquirers, card issuers, consumers and debit networks. Following implementation of the Durbin Amendment, debit cards must have a signature and PIN authentication option, and “Visa imposed a new mandate on its issuing financial institutions … that requires issuers of Visa signature debit cards to include Visa’s PIN authentication functionality on their cards,” according to the complaint. PULSE is seeking compensation for lost profits and restoration of an environment of healthy competition for general purpose debit card network services in the U.S., among other restitution. The lawsuit was filed in U.S. District Court in the Southern District of Texas, Houston Division.
In other litigation news, a U.S. District judge in Minnesota this week denied Target’s request to dismiss a lawsuit several banks have filed against the retailer in connection with its data breach last year. In his ruling, Judge Paul A. Magnuson wrote that the plaintiffs—Umpqua Bank, Mutual Bank, Village Bank, CSE Federal Credit Union and First Federal Savings of Lorain—plausibly pled that Target was negligent in failing to provide sufficient security to prevent the hackers from accessing customer data; Target violated Minnesota’s Plastic Security Card Act, which prohibits storing certain cardholder data more than 48 hours after a transaction, in addition to a negligence per se claim. The judge dismissed count four of the suit, which alleged that Target’s failure to inform plaintiffs of its insufficient security constitutes a negligent misrepresentation by omission. The plaintiffs have 30 days to refile an amended negligent misrepresentation by omission claim.