Visa 2008 Annual Report Download - page 190

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2008
(in millions, except as noted)
Article 53 of the EEA Agreement). Visa International and Visa Europe filed an appeal of the ruling with the Court of First Instance on December 19, 2007.
The European Commission filed a defence on June 9, 2008 and Visa International and Visa Europe filed their rejoinder on September 29, 2008. Pursuant to
existing agreements, Visa Europe has acknowledged full responsibility for the defense of this action, including any fines that may be payable.
Parke Litigation
On June 27, 2005, a purported consumer and merchant class action was filed in California state court against Visa U.S.A., Visa International,
MasterCard, Merrick Bank and CardSystems Solutions, Inc. The complaint stems from a data-security breach at CardSystems, a payment card processor that
handled Visa and other payment brand transactions. The complaint alleges that Visa U.S.A. and Visa International's failure to inform cardholders of the
CardSystems breach in a timely manner constitutes an unlawful and/or unfair business practice under California's Unfair Competition Law and violates
California's statutory privacy-notice law. In August 2005, the court denied the plaintiffs' application for a temporary restraining order, except with respect to
the defendants' retention of affected account-identifying information, and in September 2005 denied plaintiffs' motion for a preliminary injunction. Also in
September 2005, the court dismissed the claims brought by the merchant class. On November 18, 2005, the defendants answered the remaining claims.
Limited discovery occurred.
CardSystems filed for bankruptcy in U.S. District Court for the District of Arizona in May 2006, staying the litigation as to it. The plaintiffs removed
the case to U.S. District Court for the Northern District of California on August 10, 2006, and then sought to transfer the case to federal court in Arizona. Visa
U.S.A., Visa International and MasterCard moved for remand to state court. On October 11, 2006, the court granted the defendants' motion for remand and
denied the plaintiffs' motion to transfer the case. Proceedings involving CardSystems continue in the bankruptcy court in Arizona, and the California state
court plaintiffs appear to be pursuing claims against CardSystems in that forum. The state court in California has not set discovery deadlines or a trial date.
The parties are currently engaged in settlement negotiations. The potential settlement amount is not considered material to the Company's consolidated
financial statements.
The ATM Exchange Litigation
On November 14, 2005, The ATM Exchange filed a complaint for money damages against Visa U.S.A. and Visa International in the U.S. District Court
for the Southern District of Ohio. The plaintiff asserts claims of promissory estoppel, negligent misrepresentation and fraudulent misrepresentation, alleging
that Visa's deferment of a July 1, 2004 member deadline that required newly deployed ATMs to be certified by a Visa- recognized laboratory as meeting
certain PIN-entry device testing requirements harmed the plaintiff by reducing demand for its ATM upgrade solution. The parties engaged in written
discovery, party and third-party depositions and expert discovery. On June 29, 2007, Visa U.S.A. and Visa International filed motions for summary judgment
on liability and damages. On July 30, 2007, the court vacated the tentative September 2007 trial date. The court indicated that it would set another trial date, if
necessary, in its forthcoming ruling on the motions for summary judgment.
On August 14, 2008, the district court entered an order denying Visa's motion for summary judgment on liability. On October 21, 2008, the court
denied Visa's motion for summary judgment on damages. A new trial date has not been set.
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