HOUSTON – On July 17, Landry’s Inc. petitioned a federal judge to declare summary judgment in a lawsuit against it filed on May 17 by Paymentech and JPMorgan Chase Bank.
The banks’ petition accused Landry’s of breach of contract in their refusal to pay $20 million in damages assessed by Visa and MasterCard related to a data breach that occurred at Landry’s businesses between May 2014 and December 2015.
Paymentech and JPMorgan Chase Bank filed suit against Landry's in the Houston Division of the Southern District of Texas on May 17.
According the complaint, during the data breach, millions of credit card accounts were compromised at multiple Landry’s properties across 14 different merchant brands, including Bubba Gump, McCormick & Schmick’s, Rainforest Cafe and Saltgrass restaurants.
Landry’s said in a press release that it appeared the information affected in the data breach included the data contained in the magnetic strip on the back of payment cards such as a cardholder’s name, card number, expiration date and internal verification code, the suit states.
“Under the explicit and unambiguous terms of the agreement, Landry’s is contractually obligated to indemnify Chase Paymentech for its failure to comply with the payment brand rules that led to assessments, fines, or penalties by payment brands (Visa and MasterCard),” according to the complaint.
The complaint explained that Landry’s had previously expressly agreed to reimburse Chase Paymentech for “any assessment, fine, or penalty imposed on Chase Paymentech for any related loss, cost or expense assessed by the payment brands as a result of Landry’s failure to comply with the payment brand rules, including the security guidelines, or the compromise of any payment instrument information.”
Plaintiffs said in their complaint that a demand letter for payment was sent on March 23 to Landry’s by Chase Paymentech requesting payment for the $20 million assessed by Visa and MasterCard and debited from Chase Paymentech in connection with the Data Breach.
However, such demand was rejected by Landry’s and the company refused to pay Chase Paymentech for the amounts assessed.
Landry's argued in its summary judgment motion that a Chase Paymentech liquidated-damages formula for calculating how much the hospitality company owes due to the contract breach is not legally enforceable.
In its suit, Chase Paymentech asked for actual damages from Landry’s including, but not limited to, the $20 million assessed and debited by the payment brands as a result of their investigations into the data breach, as well as prejudgment and post-judgment interest and costs allowed under law. Chase Paymentech also seeks attorney’s fees.
Chase Paymentech is represented by the law firm of Morgan, Lewis & Bockius in Houston.