Lawyers for clothing retailer Genesco Inc. last week requested summary judgment on its request to dismiss $10,000 in data breach fines from Visa Inc.

The request was filed to Chief Judge William J. Haynes Jr. in U.S. District Court in Nashville on Aug. 23.

The Genesco case revolves around $13 million that was seized from Genesco's merchant accounts this year by Wells Fargo and Fifth Third after Visa fined the banks over the breach of Genesco's network.

The $13 million figure was not included in Genesco's recent filing. The banks paid the $10,000 in fines to Visa, and sought repayment from the retailer to cover the costs.

Genesco claims the fines are legally unenforceable under California law because they are penalties, which are amounts that should be set in advance and cannot be compared to actual damage that resulted from any security failings Visa alleges.

Essentially, Genesco argues that the money was not "fair compensation" for any loss the card brand suffered as a result of alleged non-compliance with its rules.
Genesco claims Visa determined the amount after the data loss incident, rather than fixing the amount in an advance agreement.

The Genesco case has attracted attention because the retailer skipped the common step of suing its merchant acquirer and instead aimed its legal guns at Visa.

Genesco also stands out as one of the first to directly challenge card companies over the use and interpretation of the self-regulated Payment Card Industry data security standards.

In its Aug. 23 filing, Genesco again contends it did not violate the PCI standards in a manner which Visa claims and, as such, the acquiring bank did not breach its "contractual obligation" to ensure the retailer's compliance with the PCI data security standard.

"Visa does not even pretend that the fines it imposes…are intended to estimate the fair compensation to Visa for any loss it may have sustained" because of alleged security failings, Genesco states in its judgment request.

In late May, Visa requested a federal judge dismiss some of the claims. Earlier this month, the parties failed to reach a settlement.

Legal teams for Genesco and Visa have not commented about the case in the past and did not respond to inquiries prior to deadline. Bass, Berry & Sims Plc and Ropes & Gray LLP attorneys represent Genesco in the case.

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