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International Cards Company, Ltd. v. Mastercard International Inc.

United States District Court, S.D. New York

March 24, 2017

INTERNATIONAL CARDS COMPANY, LTD., Plaintiff,
v.
MASTERCARD INTERNATIONAL INC, Defendant.

          OPINION AND ORDER

          LORNA G. SCHOFIELD, District Judge:

         For the third time, Defendant MasterCard International Inc. (“MasterCard”) moves for summary judgment on Plaintiff International Cards Company, Ltd.'s (“ICC”) breach of contract claim. For the reasons explained below, the motion is granted.

         I. BACKGROUND

         Familiarity with the underlying allegations and procedural history is assumed. See Int'l Cards Co. v. MasterCard Int'l Inc., No. 13 Civ. 2576, 2016 WL 3039891, at *1-3 (S.D.N.Y. May 26, 2016). New York contract law applies. Id. at *1. The following facts are taken from the parties' submissions and are undisputed.

         From 1999 until April 2, 2013, ICC was granted a MasterCard Membership and related brand licenses. During this period, the parties executed license agreements that incorporated by reference MasterCard's Rules and Standards (“Rules”). MasterCard's Rules and the operative license agreements comprised ICC's contract with MasterCard.

         The Rules governed ICC's Membership in the MasterCard system. They apply to all Members, which are referred to as Customers.

         Rule 1.6 governs “Termination of Participation” in the MasterCard system. At issue on this motion is Rule 1.6.2, “Termination by the Corporation.” It states in pertinent part:

A Customer [i.e., ICC] may be terminated as a Customer by the Corporation [i.e., MasterCard]. The termination is effective upon delivery, or an inability to deliver after a reasonable attempt to do so, of written or actual notice by the Corporation to the Customer.
The Corporation may, at its sole discretion, effect such termination forthwith and without prior notice if: . . .
3. The Customer fails or refuses to make payments in the ordinary course of business or becomes insolvent . . . .

         The second paragraph of Rule 1.6.2, quoted in part above, contains a total of eight subparts, including subpart 3 quoted above. Each subpart describes a circumstance concerning a Customer's business operations, such as being placed in liquidation or failing to do business for 26 consecutive weeks.

         Rule 1.6.1 governs termination by a Customer. It states in part: “A Customer may voluntarily terminate its Participation . . . . In order to voluntarily terminate as a Customer, a Customer must give written notice addressed to the Secretary of this Corporation . . . .” Rule 1.6.1 does not require a Customer to provide a reason for termination, although the date on which the Customer's termination is to take effect must be “at least thirty days after the notice is received by the Secretary.”

         On April 2, 2013, ICC received a letter from MasterCard, stating ICC's “principal Membership in MasterCard . . . and brand licenses for MasterCard . . . have been terminated effective 2 April 2013 (Termination Date), as specified in MasterCard Rule 1.6.2.”

         II. ...


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