TJX Motion to Dismiss Bank's Claims

I came across this ruling in the TJX matter that dismisses some of the banks' claims against TJX: Link

Consistent with past decisions (B.J. Wholesalers) it looks like issuing banks cannot rely on a 3rd party beneficiary theory to go after merchants for breach of contract. Also appears that the economic loss doctrine is still an effective block to general negligence actions.

However, the negligent misrepresentation claim and unfair/deceptive business act claims both survived. The negligent misrepresentation argument was very interesting. Basically, it appears that the issuing banks alleged that by participating in an a financial network that relies on members taking appropriate security measures, TJX made "implied representations" that they would take security measures required by industry practice. The court let these allegations stand, indicating that the economic loss doctrine does not apply to a negligent misrepresentation claim in Massachusetts. In addition the court ruled that the banks' reliance on such implied representations is a question of fact inappropriate for resolution at the motion to dismiss phase. These allegations also serve as the basis for the Banks' unfair and deceptive business practices claims under Chapter 93 of Massachusetts' law.

While the survival of these claims is certainly good news for the banks, TJX may still be able to stop this case from going to trial using a motion for summary judgment further down the line. It will be interesting to see if the Banks can successfully argue that the costs of preemptively reissuing credit cards constitutes "damages" for purposes of negligent misrepresentation.