PREMIER PAYMENTS ONLINE, INC. v. PAYMENT SYSTEMS WORLDWIDE
2:11-cv-03429
E.D. Pa.Jan 27, 2012Background
- PPO is a Pennsylvania corporation that intermediates banks to provide credit card processing; PSW and Centerline are sales agents that referred merchants for commissions.
- PPO began withholding commissions in June 2009 due to merchant chargebacks and fraud concerns.
- PPO filed a Pennsylvania Complaint in May 2011 against PSW and Centerline (and others) asserting breach, unjust enrichment, misrepresentation, and declaratory relief.
- PSW and Centerline moved to dismiss in June 2011; PPO sought a stay of the California Action brought by PSW/Centerline in California federal court.
- California Action mirrors Pennsylvania claims, with an added willful failure to pay commissions claim under California law; California Action was transferred to this court and consolidated with the Pennsylvania Action.
- The court denied PPO’s motion to dismiss under the first-filed rule and compulsory counterclaim rule, and consolidated the California Action with the Pennsylvania Action; it reserved ruling on unjust enrichment and conversion, and denied a motion for a more definite statement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| First-filed rule applicability | PPO argued California Action should be dismissed as second file. | PSW/Centerline urged consolidation; no need to dismiss. | First-filed rule denied as basis for dismissal; consolidation favored. |
| Compulsory counterclaim rule and consolidation | PPO urged dismissal of California Complaint as compulsory counterclaim. | PSW/Centerline favored consolidation for efficiency. | Compulsory counterclaim rule satisfied; California Action consolidated with Pennsylvania Action. |
| Unjust enrichment viability | Unjust enrichment cannot coexist with contract claim. | Alternative theory permitted; still viable pending choice-of-law analysis. | Denied to dismiss unjust enrichment claims without prejudice. |
| Conversion claim viability | Gist-of-the-action doctrine bars conversion. | Plaintiffs may have a property right in commissions; claim should survive. | Denied to dismiss conversion; unresolved pending discovery on contract existence and timing. |
| Willful failure to pay commissions under California Act | Act applies; meritorious claim should proceed. | Act may not apply; dormant Commerce Clause issue. | Denied to dismiss; discovery needed to determine applicable law and reach. |
Key Cases Cited
- E.E.O.C. v. Univ. of Pa., 850 F.2d 969 (3d Cir. 1988) (first-filed rule and comity guidance for parallel federal actions)
- FMC Corp. v. AMVAC Chem. Co., 379 F. Supp. 2d 733 (E.D. Pa. 2005) (discretion to depart from first-filed rule under appropriate circumstances)
- In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410 (3d Cir. 1997) (court may consider documents integral to complaint)
- Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250 (3d Cir. 1994) (standard for evaluating Rule 12(b)(6) dismissals)
- Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009) (two-part plausibility inquiry under Iqbal/Twombly)