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Heartland Payment Systems, Inc. v. Mercury Payment Systems, LLC

United States District Court, N.D. California

November 4, 2014



CLAUDIA WILKEN, District Judge.

Plaintiff Heartland Payment Systems (Heartland) asserts various unfair business practice claims against Defendant Mercury Payment Systems (Mercury). Mercury moves to transfer the case to the District of Colorado under 28 U.S.C. § 1404(a) (Docket No. 19). Heartland opposes. Having considered the papers, the Court DENIES the motion to transfer.


On January 29, 2014, Heartland, a New Jersey-based company incorporated in Delaware, filed a complaint against Mercury, a Colorado-based company incorporated in Delaware, alleging various unfair business practices claims. The complaint was brought in the Northern District of California.

Both parties are payment processors who provide businesses, known as merchants, point-of-sale (POS) systems. Compl. ¶ 11. POS systems enable merchants to accept credit cards and debit cards. Id . at ¶ 9. Through POS systems, banks and credit card brands are able to receive their fees, merchants are able to receive the proceeds from the sale, and consumers have their accounts charged. Id.

The complaint alleges that Mercury engages in unfair business practices in violation of federal and California law. Both companies use, although not exclusively, an "interchange-plus pricing model." Id . According to this model, banks and credit card brands charge a fee, typically as a percentage of the transaction plus a per-transaction fee. Id . at ¶ 16. POS systems providers then charge an additional fee to the merchants as the cost for being the intermediary between the banks, credit card brands and the merchants. Id . The interchange fee is that which is charged by the banks and credit card brands, and is not controlled by the POS systems providers. Id . The "plus" fee is controlled by the POS system providers. Id.

Heartland alleges that Mercury deceptively inflates the interchange fee when presenting its pricing and billing to merchants and prospective merchants. Id . Rather than disclosing an increase in the "plus" fee, Heartland alleges that Mercury instead represents that any increase in the interchange-plus fee is due to the banks and credit card brands increasing the interchange fee. Id.

Heartland's claims center on how Mercury prices and bills its services to merchants, as well as how it advertises its services. Id . at ¶¶ 18-38. Heartland asserts five causes of action against Mercury: (1) false advertising in violation of 15 U.S.C. § 1125(a)(1)(B) (Lanham Act); (2) unfair competition in violation of California's Unfair Competition Law, Business and Professions Code section 17000 et seq. (UCL); (3) false advertising in violation of California Business and Professions Code section 17500 et seq.; (4) intentional interference with contractual relations; and (5) intentional interference with prospective economic advantage.


"For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented." 28 U.S.C. § 1404(a). "Under § 1404(a), the district court has discretion to adjudicate motions for transfer according to an individualized, case-by-case consideration of convenience and fairness. A motion to transfer venue under § 1404(a) requires the court to weigh multiple factors in its determination whether transfer is appropriate in a particular case." Jones v. GNC Franchising, Inc. , 211 F.3d 495, 498 (9th Cir. 2000). "To support a motion for transfer, the moving party must establish: (1) that venue is proper in the transferor district; (2) that the transferee district is one where the action might have been brought; and (3) that the transfer will serve the convenience of the parties and witnesses and will promote the interest of justice." Reflex Packaging, Inc. v. Audio Video Color Corp., 2013 WL 5568345, at *2 (N.D. Cal.) (citations omitted).

The Ninth Circuit considers the following factors to determine whether to transfer venue: "(1) plaintiff's choice of forum, (2) convenience of the parties, (3) convenience of the witnesses, (4) ease of access to the evidence, (5) familiarity of each forum with the applicable law, (6) feasibility of consolidation with other claims, (7) any local interest in the controversy, and (8) the relative court congestion and time of trial in each forum." Id . (citing Jones , 211 F.3d at 498-99.) "The burden is on the defendant to show that, of the relevant factors, the balance of convenience weighs in favor of transfer to another district." TransPerfect Global, Inc. v. Motionpoint Corp., 2010 WL 3619565, at *2 (N.D. Cal.) (citing Commodity Futures Trading Comm'n v. Savage , 611 F.2d 270, 279 (9th Cir. 1979)).


Mercury argues that the District of Colorado is a proper venue, that convenience factors overwhelmingly favor the transfer and that the interests of justice ...

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