A federal judge has dismissed most of the complaints financial institutions, including credit unions, brought against Heartland Payment Systems for its January 2009 card data breach.

The credit unions and banks which brought suit were ones that declined to participate in a previous settlement agreement.

The breach has been recognized as one of the largest ever, compromising information from more than 100 million U.S. consumers.

Litigation was brought by banks and credit unions across the nation and then consolidated into one complaint which was heard by U.S. District Judge Lee Rosenthal in the U.S. District Court for the Southern District of Texas.

The credit unions which brought original actions included the 11,000-member, $130 million Matadors Community CU in Chatsworth, Calif.; the $1.8 billion, 303,000-member GECU in El Paso, Texas; and the $1.6 million, 151,000 -member MidFlorida CU in Lakeland, Fla., among others.

In her 62-page decision, Rosenthal ruled that the financial institution plaintiffs' claims failed because they were not specifically protected in contracts between Heartland Payment Systems and its acquiring banks, Heartland Bank and KeyBank.

Nor, the judge decided, were financial institutions covered in contracts between Heartland and the major card brands.

The judge also dismissed claimed of alleged misrepresentation by Heartland and violations of different states consumer protection law as well as negligence.

All told, nine of the 10 complaints were dismissed, but in some of them Rosenthal said the court would allow the plaintiff financial institutions to file amended complaints which might better present their claims.

The financial institution plaintiffs have until Dec. 23 to file an amendment to their master complaint.

Instant Insights /

Court Throws Out Most FI Complaints Against Heartland

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