First Data Merchant Services Corporation v. SecurityMetrics, Inc., 1:12-cv-02568

Background

First Data (FDMS and parent FDC) are payment processor/acquirer entities; SecurityMetrics (SM) is a PCI-certified vendor (ASV/QSA/etc.) that performed PCI compliance services for Level 4 merchants.
The parties had a long-standing commercial relationship and signed one-page "Terms of Settlement" in 2012 after litigation in Utah; the Terms contemplated a mutually acceptable final settlement agreement and included confidentiality and non‑disparagement provisions and a $5,000,000 payment by First Data.
First Data later launched a competing service called "PCI Rapid Comply," allegedly promoted to ISOs and counted toward ISO billing minimums while excluding third‑party vendor fees, disadvantaging SM.
SM sued First Data in counterclaims asserting breach of the Settlement Terms and a range of claims including Lanham Act false advertising and false endorsement, trademark cancellation, tortious interference, federal and Maryland antitrust (tying, restraint, monopolization/attempted monopolization), Maryland predatory pricing, and Maryland tying.
First Data moved to dismiss several counterclaims; the district court applied the Twombly/Iqbal plausibility standard and accepted SM’s pleaded facts for purposes of the motion.
The court denied dismissal as to most contested counts, but dismissed the portions of Counts XI and XIII that alleged actual monopolization under § 2 of the Sherman Act (and the analogous Maryland monopolization provision); attempted monopolization and the other federal and state claims survived at this stage.

Issues

Issue	Plaintiff's Argument (First Data)	Defendant's Argument (SecurityMetrics)	Held
Specific performance of the Term requiring a mutually acceptable final agreement	First Data says no enforceable obligation because the draft was not mutually acceptable and Judge Shelby found the draft unacceptable	SM says First Data’s refusal to execute the June 11 draft breaches the Term; factual issues inappropriate at 12(b)(6) stage	Denied dismissal — SM’s specific performance claim survives (fact disputes inappropriate on motion to dismiss)
Lanham Act false advertising (§ 43(a)(1)(B))	FD argues alleged statements are literally true or merely nondisclosures and thus not actionable	SM alleges affirmative misstatements that merchants "will pay" additional fees, deterring use of SM; refunds show statement misleading	Denied dismissal — SM plausibly alleged actionable false or misleading commercial statements
Lanham Act false endorsement/standing (§ 43(a)(1)(A))	FD argues SM lacks standing because it does not own a confusingly similar mark	SM contends § 43(a) allows any commercial plaintiff harmed by misleading designation; it alleges competitive injury	Denied dismissal — court finds SM has alleged commercial injury and standing despite lacking ownership of the PCI term
Cancellation of FD’s "PCI Rapid Comply" registration (15 U.S.C. § 1064)	FD: SM lacks standing without ownership or proprietary interest in a mark	SM: registration likely causes confusion and injures its commercial interests	Denied dismissal — SM has a "real interest" and pleaded injury sufficient at pleading stage
Sherman Act § 1 / Maryland § 11‑204 tying & restraint of trade	FD contends SM fails to plead conditioning/tying, market definition, market power, or concerted action	SM alleges FD’s billing/counting of PCI Rapid Comply fees toward ISO minimums coerces ISOs/merchants and restrains competition; alleges market and market power	Denied dismissal — SM plausibly pleaded tying/restraint claims (market definition and power adequate at pleading stage)
Sherman Act § 2 monopolization/attempted monopolization	FD argues SM failed to plead monopoly power (high market share) and other §2 elements	SM points to alleged anticompetitive tying, predatory pricing, misinformation and exclusionary conduct supporting willfulness and dangerous probability	Partial: dismissal granted as to actual monopolization (§2) for failure to plead monopoly power; denial as to attempted monopolization — attempted claim survives
Maryland predatory pricing (Md. Com. Law § 11‑204(a)(3))	FD relies on federal‑law arguments to seek dismissal	SM alleges discriminatory discounts to ISOs who adopt PCI Rapid Comply that may lessen competition and injure competitors	Denied dismissal — SM plausibly alleged predatory/pricing discrimination under Maryland law
Maryland tying (Md. Com. Law § 11‑204(a)(6))	FD repeats federal arguments	SM alleges ISO pricing/discount mechanics condition purchasing and may tend to create monopoly in Maryland	Denied dismissal — SM’s Maryland tying claim survives at pleading stage

Key Cases Cited

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (pleading must state a plausible claim)
Ashcroft v. Iqbal, 556 U.S. 662 (legal conclusions not entitled to assumption of truth; plausibility standard)
Aziz v. Alcolac, Inc., 658 F.3d 388 (4th Cir.) (court accepts allegations in counterclaims as true on motion to dismiss)
PBM Products, LLC v. Mead Johnson & Co., 639 F.3d 111 (4th Cir.) (elements of Lanham Act false advertising claim)
Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (Lanham Act §43 scope and limits)
E.I. Du Pont de Nemours v. Kolon Indus., Inc., 637 F.3d 433 (4th Cir.) (market‑definition and antitrust pleading principles)
Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2 (tying doctrine and per se tying elements)
Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (standards for monopolization/§2 claims)