Schnuck Markets, Inc. v. First Data Merchant Services Corp., No. 15-3804 (8th Cir. 2017)Annotate this Case
Schnucks, a grocery store chain, filed suit against First Data, a credit card processor, and Citicorp, the acquiring bank for its credit transactions. Schnucks brought declaratory judgment and breach of contract claims, alleging that defendants withheld more money from Schnucks following a data breach at Schnucks than their contract allowed. Defendants counterclaimed. The district court denied defendants' motion for judgment on the pleadings and granted Schnucks's motion for judgment on the pleadings. Determining that it has jurisdiction, the court applied Missouri law and concluded that the assessments are not carved out from Schnucks’s limitation of liability as “third party fees.” Furthermore, the court concluded that the district court did not err in holding that the assessments for issuing banks’ losses do not constitute “fines or penalties.” The underlying business arrangement, which represents defendants’ choice to vouch for Schnucks’s compliance with data-security standards, is not rendered commercially unreasonable merely because the limitation on Schnucks’s liability is broader than defendants now wish it to be. The court held that the district court did not misapply the standard for judgment on the pleadings in concluding that defendants had not raised the issue of the separate $3,000,000 limitation of liability. Finally, the district court did not abuse its discretion in denying defendants’ motion for reconsideration or leave to amend, which essentially restated their assertions of error regarding judgment on the pleadings, and defendants failed to show good cause. Accordingly, the court affirmed the judgment.