Wawa, the convenience store chain, has just stumbled in its legal dance with Mastercard. The $10.7 million lawsuit, charging the payments giant with breach of contract and other misdeeds following a 2019 data breach, has hit a snag. The United States District Court of the Southern District of New York just threw out four of Wawa's five claims against Mastercard "without prejudice." That means Wawa has until October 23 to refile those claims. As for the fifth claim, which accused Mastercard of shady business practices, it’s gone for good.
The legal tango started with a malware attack on Wawa's credit card system in 2019, affecting about 34 million payment cards used across all its stores. Mastercard initially slapped a hefty $17.8 million reimbursement assessment against Wawa's bank, Bank of America. After some haggling, that figure was whittled down to the current $10.7 million.
Now, aside from accusing Mastercard of behaving badly, Wawa's suit also throws breach of contract, breach of implied covenant of good faith and fair dealing, and "unjust enrichment" into the mix. The court, however, sees these five claims as just one breach of contract claim, which makes Mastercard's argument for dismissal "procedurally proper."
This legal battle is just one chapter in a story of woes stemming from the 2019 breach. Earlier this year, Wawa agreed to a $12 million settlement for affected customers, followed by an $8 million settlement shared among several states. And let's not forget the up to $28.5 million Wawa is paying to settle negligence claims tied to the breach.
It just goes to show that data security should never be taken lightly. It would be a really bad idea to, for example, post some code on a public website and accidentally give the denizens of the internet access to 38 terabytes of your company information.
It also goes to show that, through Mastercard will seemingly partner with just about anyone, the company doesn’t take accusations of misbehavior lightly. There are rich rewards to be had, but high prices to pay when things go wrong.
