Premier Payments Online, Inc. v. Payment Systems Worldwide
848 F. Supp. 2d 513
E.D. Pa.2012Background
- PPO, a Pennsylvania corporation, provided credit card processing services and paid commissions to sales agents like PSW and Centerline.
- PSW referred merchants to PPO; Centerline previously did so under a CNP/Centerline arrangement; PPO allegedly withheld commissions beginning June 2009 due to merchant chargebacks and fraud concerns.
- PPO filed a Pennsylvania action (No. 11-CV-3429) alleging breach of contract, unjust enrichment, misrepresentation, and declaratory relief; PSW and Centerline filed a California action asserting willful failure to pay commissions, breach of contract, unjust enrichment, and declaratory relief.
- California Action was transferred to this Court and consolidated with the Pennsylvania Action; the California Complaint and Pennsylvania Counterclaim are mirror images with one difference: willful failure to pay commissions versus conversion.
- PPO moved to dismiss the California Complaint and certain Pennsylvania Counterclaim counts and sought a more definite statement; PSW and Centerline urged consolidation rather than dismissal and asserted unjust enrichment as an alternative theory.
- The court denied dismissal under the first-filed rule and compulsory counterclaim rule, ordered consolidation, and found issues suitable for discovery and further briefing, with several counts to be adjudicated later.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| First-filed rule applicability | PPO seeks dismissal under first-filed rule. | PSW/Centerline urge consolidation; first-filed rule not controlling. | First-filed rule does not require dismissal; consolidation favored. |
| Compulsory counterclaim rule applicability | California Action should be dismissed as compulsory counterclaims. | Counterclaims are logically related; consolidation is appropriate. | Compulsory counterclaim rule denied; California Action consolidated with Pennsylvania Action. |
| Unjust enrichment claims | Unjust enrichment cannot stand where contract exists; should be dismissed. | Unjust enrichment pleaded as alternative theory; remains viable pending choice-of-law. | Denied without prejudice pending discovery and choice-of-law analysis. |
| Conversion claim (Pennsylvania Counterclaim) | Gist-of-the-action does not bar conversion; plaintiff has a property interest in withheld commissions. | Gist-of-the-action doctrine may bar duplicative contract claims as to conversion. | Denied for now; unresolved contract validity and discovery required to determine immediate right to commissions. |
| California Act 1738.15 applicability and dormant Commerce Clause | Act applies; dormant Commerce Clause challenge is baseless. | Act may not apply; potential interstate implications require development. | Denied to dismiss; premature to determine choice-of-law, applicability, or Dormant Commerce Clause impact. |
Key Cases Cited
- E.E.O.C. v. Univ. of Pa., 850 F.2d 969 (3d Cir. 1988) (first-filed rule promotes judicial efficiency and comity; exceptions exist)
- Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009) (two-part test: identify pleadings' elements and plausibility of claims)
- Van Dusen v. Barrack, 376 U.S. 612 (U.S. 1964) (transfers govern choice-of-law rules; ensures law consistency post-transfer)
- Ferens v. John Deere Co., 494 U.S. 516 (U.S. 1990) (extends Van Dusen to plaintiff-initiated transfers; choice of law follows transferor state)
- Volvo Construction Equipment North America, Inc. v. CLM Equipment Co., 386 F.3d 581 (4th Cir. 2004) (illustrates non-mechanical application of Van Dusen where transfers are mirror-like)