Banc of Am. Merch. Servs., LLC v. Arby's Rest. Grp., Inc.

Banc of Am. Merch. Servs., LLC v. Arby’s Rest. Grp., Inc., 2021 NCBC 42.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
MECKLENBURG COUNTY 20 CVS 426

BANC OF AMERICA MERCHANT
SERVICES, LLC,

Plaintiff and Counterclaim
Defendant,

v.
ORDER AND OPINION
ARBY’S RESTAURANT GROUP, ON THIRD-PARTY DEFENDANTS
INC., VISA, INC.’S AND MASTERCARD
INTERNATIONAL INC.’S
Defendant, Counterclaim MOTIONS TO DISMISS
Plaintiff, and Third-Party
Plaintiff,

v.

VISA, INC.; and MASTERCARD
INTERNATIONAL INC.,

Third-Party Defendants.

1. This case arises out of an indemnification dispute between Banc of America

Merchant Services, LLC (“BAMS”) and Arby’s Restaurant Group, Inc. After a data

security incident at Arby’s restaurants across the country, Visa, Inc. and Mastercard

International Inc. assessed roughly $20 million in fees on Bank of America, N.A.

(“BANA”), the bank that sponsored Arby’s as a participating merchant in Visa’s and

Mastercard’s payment card networks. BAMS, as BANA’s assignee, sought

reimbursement from Arby’s for those assessments, but Arby’s refused. So BAMS filed

this suit against Arby’s.

2. Arby’s denies any responsibility for the incident and any duty to indemnify

BAMS. It also contends that Visa and Mastercard should not have imposed the
assessments in the first place. It has brought third-party claims against Visa and

Mastercard, seeking to challenge the assessments as BANA’s equitable subrogee.

3. Visa and Mastercard have moved to dismiss the third-party complaints

against them for lack of personal jurisdiction, improper venue, and failure to state a

claim. (ECF Nos. 67, 71.) For the following reasons, the Court concludes that it lacks

personal jurisdiction over Visa and Mastercard, dismisses the third-party complaints

on that basis, and denies all other requested relief as moot.

McGuireWoods LLP, by Jodie Herrmann Lawson, and Covington &
Burling LLP, by Alexander A. Berengaut, for Plaintiff/Counterclaim
Defendant Banc of America Merchant Services, LLC.

Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P., by
Christopher G. Smith, and Orrick, Herrington & Sutcliffe LLP, by Seth
Harrington and Douglas H. Meal, for Defendant/Counterclaim
Plaintiff/Third-Party Plaintiff Arby’s Restaurant Group, Inc.

Bradley Arant Boult Cummings LLP, by C. Bailey King, Jr. and Bridget
V. Warren, and O’Melveny & Myers LLP, by Randall W. Edwards,
Megan Havstad, and Eric Ormsby, for Third-Party Defendant Visa Inc.

Cozen O’Connor, by Tracy L. Eggleston, and Golenbock Eiseman Assor
Bell & Peskoe LLP, by Martin S. Hyman and Matthew C. Daly, for Third-
Party Defendant Mastercard International, Inc. 1

Conrad, Judge.

I.
DISCUSSION

4. When a defendant moves to dismiss for lack of personal jurisdiction, the

plaintiff must establish, by a preponderance of the evidence, a prima facie case that

jurisdiction exists. See Bauer v. Douglas Aquatics, Inc., 207 N.C. App. 65, 68 (2010).

1 After
these motions were filed, the Court granted Ms. Warren, Ms. Lawson, and Ms.
Havstad leave to withdraw as counsel. (ECF Nos. 93, 131, 136.)
Here, the parties rely on dueling affidavits, exhibits, and the allegations in the

third-party complaints. In such a case, “the trial judge must determine the weight

and sufficiency of the evidence presented in the affidavits much as a juror.” Capitala

Grp., LLC v. Columbus Advisory Grp. LTD, 2018 NCBC LEXIS 183, at *3 (N.C.

Super. Ct. Dec. 3, 2018) (citation and quotation marks omitted). The Court must

make findings of fact “adequate to resolve its inquiry,” and must “resolv[e] contested

facts as necessary.” Diamond Candles, LLC v. Winter, 2020 NCBC LEXIS 28, at *12

(N.C. Super. Ct. Mar. 12, 2020) (citation omitted), aff’d per curiam, 2021-NCSC-59.

Once a defendant offers evidence to support its challenge to jurisdiction, “the

allegations of an unverified complaint can no longer be taken as true or controlling,”

although the Court will “construe uncontroverted allegations in the complaint in

plaintiff’s favor.” Id. at *12–13 (citations omitted).

5. The motions have been fully briefed, and the Court held a hearing in August

2020. Having considered all relevant matters, the Court finds the following facts by

a preponderance of the evidence and makes the following conclusions of law.

A. Findings of Fact

6. This case involves the relationship between the various players involved in

credit and debit card transactions. The relevant facts are more or less undisputed.

7. Visa and Mastercard operate the payment card networks that facilitate

transactions between merchants and consumers. (See Aff. of Chad Stout ¶ 2, ECF

No. 73 [“Stout Aff.”]; Aff. of Marie Russo ¶ 8, ECF No. 69 [“Russo Aff.”].) Both card

organizations are incorporated in Delaware, with Visa headquartered in California
and Mastercard headquartered in New York. (See Visa Compl. ¶ 10, ECF No. 42;

Stout Aff. ¶ 2; Mastercard Compl. ¶ 10, ECF No. 43; Russo Aff. ¶ 3.)

8. Visa and Mastercard do not issue the credit and debit cards that bear their

logos, and they do not have a direct relationship with the consumers who use the

cards or with the merchants that accept them. (See Stout Aff. ¶¶ 2, 4; Russo Aff.

¶¶ 10, 12, 23, 24.) Instead, issuing banks (“issuers”) and acquiring banks

(“acquirers”) contract with the card organizations to use their trademarks and

participate in their networks. Issuers provide cards to consumers, and acquirers

provide merchants with access to the payment networks. (See, e.g., Stout Aff. ¶¶ 2,

4; Russo Aff. ¶¶ 8–10, 12, 23, 24.)

9. BANA is an issuer and an acquirer for Visa and Mastercard. (See Visa

Compl. ¶ 33; Stout Aff. ¶ 3; Mastercard Compl. ¶ 32; Russo Aff. ¶¶ 9, 13.) It was

headquartered in California until 1999 when it moved to North Carolina. (See Russo

Aff. ¶ 14.)2 BAMS is an affiliate of BANA. It is a Delaware company that, at all times

relevant, was headquartered in Georgia. 3

2 See Bank of America, National Association, FDIC, https://banks.data.fdic.gov/bankfind-
suite/bankfind/details/3510 (last updated June 25, 2021) (navigate to “History” tab). The
Court may take judicial notice of information on the FDIC’s official website about FDIC-
regulated banks. See N.C. R. Evid. 201(b), (c); e.g., Tehranchi v. Plan River Inv., LLC, 2012
U.S. Dist. LEXIS 200080, at *7 (C.D. Cal. May 2, 2012).
3 BAMS moved to North Carolina in 2020. See Application for Certificate of Authority for
Limited Liability Company for Banc of America Merchant Services, LLC (SOSID: 1119625)
(filed Oct. 14, 2009), available at https://www.sosnc.gov/; Limited Liability Company Annual
Report for Banc of America Merchant Services, LLC (SOSID: 1119625) (filed Apr. 3, 2020),
available at https://www.sosnc.gov/. The Court may take judicial notice of public filings
available on the North Carolina Secretary of State’s official website. See N.C. R. Evid. 201(b),
(c); e.g., Willard v. Barger, 2020 NCBC LEXIS 117, at *25 (N.C. Super. Ct. Oct. 9, 2020).
10. BANA’s agreement with Mastercard dates back to October 1976. It was

formed between Mastercard’s predecessor (Interbank Card Association) and BANA’s

predecessor (Bank of America NT&SA), which was headquartered in California at

the time. (See Russo Aff. ¶¶ 13, 14; Russo Aff. Ex. 3, ECF No. 69.4 [“Mastercard

Agrmt.”].) The agreement contains a New York choice-of-law clause. (See Mastercard

Agrmt. § 19; Russo Aff. ¶ 19.) And Mastercard’s “Rules,” which are incorporated by

reference, contain New York forum-selection and choice-of-law clauses. (Russo Aff.

Ex. 1 § 2.4, ECF No. 69.2; Russo Aff. ¶ 20.) There is no evidence in the record of

where the agreement was negotiated or signed.

11. BANA has also had a long relationship with Visa, though their current

agreement is more recent, dated October 2014. (See Stout Aff. ¶ 3; Stout Aff. Ex. 1,

ECF No. 75 [“Visa Agrmt.”].) It too contains New York forum-selection and choice-of-

law clauses. (See Visa Agrmt. § 18.1(r), (s).) Notices must be sent to BANA in North

Carolina with copies to its offices in Delaware, Illinois, and Texas. (See Visa Agrmt.

§ 18.1(h).) Again, there is no evidence in the record of where the agreement was

negotiated or signed.

12. Each agreement contemplates that BANA will contract with merchants as

an acquirer to enable those merchants to participate in the Visa and Mastercard

payment networks. Less relevant here, though also covered by the agreements, are

BANA’s activities as an issuer. (See, e.g., Stout Aff. ¶ 3; Visa Agrmt. § 2.1; Russo Aff.

¶¶ 9, 13; Mastercard Agrmt. at 1.) Both agreements have a wide geographic scope.

The Visa agreement applies to BANA’s activities throughout the United States. (See
Visa Agrmt. § 12.1(b).) The Mastercard agreement applies to BANA’s activities not

only in the United States but also in Canada, Hong Kong, Singapore, Australia, India,

and elsewhere. (See Russo Aff. ¶ 15; Russo Aff. Ex. 4, ECF No. 69.5.)

13. As an acquirer, BANA must ensure that its affiliated merchants abide by

various rules—including rules related to data security—promulgated by the card

organizations. (See Stout Aff. ¶ 5; Stout Aff. Exs. 2, 4, ECF Nos. 76, 78; Russo Aff.

¶¶ 10, 11; Russo Aff. Ex. 1; Russo Aff. Ex. 2, ECF No. 69.3.) Compliance with industry

standards for data security, formally called the Payment Card Industry (“PCI”) Data

Security Standards, is also mandatory. (See Stout Aff. ¶ 5.) If there is a data breach,

BANA must take additional actions, including engaging an independent forensic

specialist to investigate. (See Russo Aff. ¶ 30; Russo Aff. Ex. 2 § 10.2.2.1; Stout Aff.

Ex. 2 at 12–13.)

14. Noncompliance with card organization rules or industry data security

standards may result in fines and fees. Visa and Mastercard have each established

programs designed to remedy losses from security breaches and to allocate

responsibility for them. (See, e.g., Stout Aff. ¶ 6; Russo Aff. ¶¶ 11, 25.) Visa has the

Account Information Security (“AIS”) and Global Compromised Account Recovery

(“GCAR”) programs, and Mastercard has the Account Data Compromise (“ADC”)

program. (See Stout Aff. ¶¶ 1, 7–10; Russo Aff. ¶¶ 1, 25–27.) In short, if the card

organizations conclude that a data breach occurred due to noncompliance, they may

impose assessments on the acquirer, ostensibly to compensate issuers and to ensure

that consumers suffer no financial loss. (See Stout Aff. ¶¶ 6–9; Russo Aff. ¶¶ 25–27.)
Visa and Mastercard do not require the acquirer to pass the assessments on to the

merchant, nor are they involved in any decision by the acquirer to seek

reimbursement or indemnification from the merchant. (See Stout Aff. ¶ 8; Russo Aff.

¶¶ 28, 43.)

15. One of BANA’s affiliated merchants is Arby’s, which owns and franchises a

nationwide chain of fast-food restaurants. Arby’s is incorporated in Delaware and

headquartered in Georgia. (See Visa Compl. ¶¶ 9, 34; Mastercard Compl. ¶¶ 9, 33.)

16. Arby’s entered into a merchant agreement with BANA in December 2009.

(See App. Ex. A, ECF No. 33.1 [“Merchant Agrmt.”].) Among other things, the

agreement enables Arby’s to accept Visa and Mastercard payment cards at its

restaurants, requires Arby’s to comply with each card organization’s rules and the

PCI Data Security Standards, and delegates to Arby’s the responsibility to engage a

forensic investigator after a suspected data breach. (See Merchant Agrmt. §§ 1,

7(A)(xi), 13.) There are two indemnification provisions of varying (and disputed)

scope. (See Merchant Agrmt. §§ 10(B), 21.)

17. In early 2017, Arby’s reported that it had suffered a significant data security

incident involving criminal infiltration into its computer network and resulting in the

theft of its customers’ payment card data. (See Visa Compl. ¶¶ 37–41; Mastercard

Compl. ¶¶ 36–40.) Arby’s hired a forensic investigation firm. (See Visa Compl. ¶ 38;

Mastercard Compl. ¶ 37; Russo Aff. ¶ 30.) This firm, called CrowdStrike, conducted

its investigation from its California headquarters, collecting data remotely from the

Georgia headquarters of Arby’s as well as from over a thousand restaurants across
the country. (See Russo Aff. ¶¶ 31, 32.) Neither CrowdStrike nor Arby’s sent anyone

to North Carolina in connection with the investigation. (See Russo Aff. ¶¶ 33, 34.)

18. After CrowdStrike finished its investigation, Visa and Mastercard reviewed

its findings and performed their own investigations. They reached the same

conclusion: that Arby’s had not complied with industry standards. (See, e.g., Stout

Aff. ¶ 11; Russo Aff. ¶ 35.) Visa and Mastercard then imposed assessments on BANA

as part of the GCAR, AIS, and ADC programs. BANA appealed all three assessments

with help from Arby’s. Mastercard agreed to reduce its assessment, but Visa denied

the appeals and imposed an additional appeal fee.

19. Visa’s investigation was “conducted and finalized in the San Francisco Bay

Area,” and “no aspect” of the investigation or decision “was carried out in North

Carolina.” (Stout Aff. ¶ 12.) Mastercard’s investigation took place in New York and

Missouri. (See Russo Aff. ¶ 44.) There is no evidence that either card organization

sent employees to North Carolina or met with representatives of Arby’s, BANA, or

BAMS in North Carolina. (See Stout Aff. ¶ 12; Russo Aff. ¶ 44.) The primary contact

at BANA for communications concerning the investigations and assessments was in

Kentucky. (See Russo Aff. ¶¶ 36, 38.) Although Arby’s has offered evidence that Visa

and Mastercard also communicated with a BAMS employee in North Carolina, it has

not shown how many communications there were or what they concerned. (See Aff.

of Nils Okeson ¶¶ 7, 8, ECF No. 108.)

20. All told, the assessments amounted to roughly $20 million. (See Stout Aff.

¶ 11; Russo Aff. ¶¶ 35, 39.) Visa debited its assessment from BANA’s bank account
in New York. (See Stout Aff. ¶ 13.) Mastercard also sent its invoice to BANA in New

York. (See Russo Aff. ¶ 41.)

21. After BANA paid the assessments, a dispute arose that led to this lawsuit.

BANA sought reimbursement from Arby’s under the merchant agreement, but Arby’s

refused. BANA assigned its claims to BAMS, which filed suit against Arby’s for

breach of contract. (ECF No. 3.) Arby’s denies that it has any duty to indemnify

BAMS.

22. In addition, Arby’s has brought third-party claims against Visa and

Mastercard. (See Visa Compl.; Mastercard Compl.) Arby’s maintains that the

assessments were unlawful. It has asserted direct claims for unjust enrichment,

contribution, and violations of California and Georgia statutes governing unfair

business practices. Arby’s also asserts several other claims as BANA’s equitable

subrogee on the theory that it may challenge the assessments under the Visa and

Mastercard acquirer agreements. Visa and Mastercard have moved to dismiss the

claims for various reasons, including lack of personal jurisdiction.

B. Conclusions of Law

23. “Personal jurisdiction refers to the Court’s ability to assert judicial power

over the parties and bind them by its adjudication.” In re A.B.D., 173 N.C. App. 77,

83 (2005) (citation and quotation marks omitted). Determining whether personal

jurisdiction exists is usually a “two-step analysis”: jurisdiction must be authorized by

the State’s long-arm statute and consistent with the federal Due Process Clause.
Beem USA LLLP v. Grax Consulting LLC, 373 N.C. 297, 302 (2020). The parties

address only the second, constitutional step, so the Court does the same.

24. The Fourteenth Amendment’s Due Process Clause requires that a defendant

“have certain minimum contacts” with the forum State such that the exercise of

jurisdiction over the defendant is “reasonable” and “does not offend ‘traditional

notions of fair play and substantial justice.’ ” Int’l Shoe Co. v. Washington, 326 U.S.

310, 316–17 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). The

“primary focus” of this inquiry “is the defendant’s relationship to the forum State.”

Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773, 1779 (2017).

25. Sometimes, the relationship is exceptionally close. A court has general

jurisdiction “to hear any and all claims against” defendants whose contacts “are so

continuous and systematic as to render them essentially at home in the forum State.”

Goodyear Dunlop Tires Operations, S. A. v. Brown, 564 U.S. 915, 919 (2011) (citation

and quotation marks omitted). That is not the case here. North Carolina is not home

to Visa or Mastercard. (See Opp’n to Visa 1–7, ECF No. 106; Opp’n to Mastercard 1–

7, ECF No. 107.)

26. More commonly, a “nonresident defendant has situational, rather than

systematic, contacts with the forum State.” Lunsford v. ViaOne Servs., LLC, 2020

NCBC LEXIS 127, at *9 (N.C. Super. Ct. Oct. 28, 2020). These more limited contacts

may give rise to “specific or case-linked jurisdiction,” Goodyear, 564 U.S. at 919,

depending on “the relationship among the defendant, the forum, and the litigation,”

Daimler AG v. Bauman, 571 U.S. 117, 133 (2014) (citation and quotation marks
omitted). There must be a nexus between the forum and the underlying controversy

such that “the suit arises out of or relates to the defendant’s contacts with the forum.”

Goodyear, 564 U.S. at 923–24 (cleaned up); see also Skinner v. Preferred Credit, 361

N.C. 114, 122 (2006).

27. A crucial factor is foreseeability—whether the defendant’s contacts with the

forum are such that it should “reasonably anticipate being haled into court there.”

Beem, 373 N.C. at 303 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S.

286, 297 (1980)). This typically requires evidence of “some act by which the defendant

purposefully avail[ed] itself of the privilege of conducting activities within the forum

State, thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357

U.S. 235, 253 (1958). Due process does not permit a court to exercise jurisdiction

based on “a defendant’s ‘random, fortuitous, or attenuated’ contacts with the forum

state.” Beem, 373 N.C. at 303 (quoting Walden v. Fiore, 571 U.S. 277, 286 (2014)).

28. Even substantial contacts may be inadequate if they do not give rise to or

relate to the plaintiff’s claims. As the United States Supreme Court recently

reiterated, specific jurisdiction “covers defendants less intimately connected with a

State, but only as to a narrower class of claims.” Ford Motor Co. v. Mont. Eight Jud.

Dist. Ct., 141 S. Ct. 1017, 1024 (2021). Absent some meaningful relationship between

the defendant’s forum-related activity and the claims, “specific jurisdiction is lacking

regardless of the extent of a defendant’s unconnected activities in the State.” Bristol-

Myers, 137 S. Ct. at 1781; see also Ford, 141 S. Ct. at 1024–25.
29. At issue here are claims brought by a company based in Georgia (Arby’s)

against companies based in California (Visa) and New York (Mastercard). The events

that gave rise to these claims occurred outside North Carolina. Visa and Mastercard

conducted their investigations of the 2017 data security incident from their home

offices and, in Mastercard’s case, a satellite office in Missouri. Neither sent

employees to North Carolina for any purpose. Nor did the California-based

investigator hired by Arby’s. When Visa and Mastercard issued their assessments

and entertained the resulting appeals, they communicated primarily with a BANA

employee in Kentucky and with others in Virginia and California. And when Visa

and Mastercard collected the assessments from BANA, they did so through its

accounts in New York. (See, e.g., Stout Aff. ¶¶ 11–13; Russo Aff. ¶¶ 31–42, 44.)

30. Still, Arby’s argues that Visa and Mastercard have sufficient minimum

contacts to support the exercise of personal jurisdiction. Arby’s points to the acquirer

agreements with BANA as evidence of the card organizations’ longstanding business

relationships with a North Carolina resident. Arby’s further contends that its

claims—especially those asserted as BANA’s subrogee—arise from or are related to

these agreements. 4

31. Courts have long rejected the notion that “an individual’s contract with an

out-of-state party alone can automatically establish sufficient minimum contacts in

4 “[M]any courts have held that specific jurisdiction should be decided on a claim-by-claim

basis.” JCG & Assocs., LLC v. Disaster Am. USA, LLC, 2019 NCBC LEXIS 112, at *10 (N.C.
Super. Ct. Dec. 19, 2019) (first citing Marten v. Godwin, 499 F.3d 290, 296 (3d Cir. 2007);
then citing Phillips Exeter Acad. v. Howard Phillips Fund, Inc., 196 F.3d 284, 289 (1st Cir.
1999)). No party has argued that the jurisdictional analysis plays out differently for the
direct claims than it does for the subrogated claims.
the other party’s home forum.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478

(1985). The plaintiff must show something more: the suit must be based on a contract

with a “substantial connection with this State.” Beem, 373 N.C. at 304 (citation and

quotation marks omitted). This involves looking to prior negotiations, contemplated

future consequences, the terms of the contract itself, and the parties’ actual course of

dealing. See Burger King, 471 U.S. at 479.

32. Arby’s has not carried its burden. It has not offered any evidence to show

who contacted whom to begin negotiations, where the negotiations occurred, or where

the acquirer agreements were signed. The circumstances suggest that Visa and

Mastercard did not reach into North Carolina to begin a relationship with BANA.

Indeed, BANA was headquartered in California when it contracted with Mastercard

in 1976. And according to Arby’s, Visa’s relationship with BANA began even earlier.

(See Opp’n to Visa 3.) This cuts against a finding of purposeful availment. See, e.g.,

Cambridge Homes of N.C. L.P. v. Hyundai Constr., Inc., 194 N.C. App. 407, 413 (2008)

(“Which party initiates the contact is taken to be a critical factor in assessing whether

a nonresident defendant has made purposeful availment of the privilege of conducting

activities within the forum State.” (citation and quotation marks omitted)).

33. Although Arby’s insists that Visa and Mastercard “knew that BANA would

perform its obligations in North Carolina,” (Opp’n to Visa 3–4; Opp’n to Mastercard

3), that is “an inference unsupported by the evidence,” US Chem. Storage, LLC v.

Berto Constr., Inc., 253 N.C. App. 378, 386 (2017). The agreement itself is largely

silent about where performance must occur. Arby’s has not pointed to any terms that
require BANA to perform contractual services in North Carolina. Likewise, Arby’s

has not offered any evidence that the contracting parties expected BANA to perform

services in the State.

34. At most, the agreements broadly allow BANA to act as an acquirer for

merchants located throughout the United States (and overseas for Mastercard). (See

Visa Agrmt. § 12.1(b); Russo Aff. ¶ 15; Russo Aff. Ex. 4.) But there is no reason to

believe that BANA—a large financial institution with offices around the country—

necessarily performs these services at its headquarters in North Carolina. No

evidence shows that it does. In fact, the key activities in this case were performed

elsewhere: BANA served as an acquirer for a Georgia merchant and dealt with the

card organizations’ assessments and appeals through personnel in Kentucky. When

the contract does not specify performance within the forum and contractual services

are in fact performed elsewhere, the case for personal jurisdiction is substantially

weakened. See Lulla v. Effective Minds, LLC, 184 N.C. App. 274, 279 (2007)

(“Nothing in the contract specified that any work performed under the contract was

to be performed in North Carolina. In fact, . . . the work performed was completed in

New Jersey and Texas, not in North Carolina.”); see also Capitala, 2018 NCBC LEXIS

183, at *11–13; WLC, LLC v. Watkins, 454 F. Supp. 2d 426, 438 (M.D.N.C.) (R. & R.),

adopted, 454 F. Supp. 2d 426 (M.D.N.C. 2006).

35. It bears repeating that Visa and Mastercard carried out their own

contractual duties outside North Carolina. Neither sent employees to North Carolina

during their investigations or after, and both communicated with BANA personnel
elsewhere. Arby’s contends that the card organizations also communicated with one

BAMS (not BANA) employee in North Carolina, but its evidence is conclusory. It is

unclear what the role of this employee was, how many communications there were,

and what was said. Without more, this is not the kind of purposeful contact that due

process requires. See, e.g., Miller v. Szilagyi, 221 N.C. App. 79, 92–93 (2012)

(concluding that over 100 telephone calls to plaintiff in North Carolina did not

establish sufficient minimum contacts); Le Bleu Corp. v. Standard Cap. Grp., Inc., 11

F. App’x 377, 380 (4th Cir. 2001) (holding no personal jurisdiction despite visits and

communications to North Carolina); Capitala, 2018 NCBC LEXIS 183, at *14 (same).

36. Both agreements also contain New York forum-selection and choice-of-law

clauses. When entering into the agreements, Visa and Mastercard (and BANA) would

have expected disputes arising from the agreements to be resolved in a New York

court under New York law. 5 Neither could have “reasonably anticipate[d] being haled

into” a North Carolina court by a Georgia plaintiff. Beem, 373 N.C. at 303 (citation

and quotation marks omitted). Moreover, North Carolina’s interest in resolving a

dispute between nonresident entities based on the laws of another State is not

immediately obvious. See Tejal Vyas, LLC v. Carriage Park Ltd. P’ship, 166 N.C.

5 Visa and Mastercard contend that the forum-selection clauses require the third-party
claims to be litigated in New York and that venue is improper here. Although Arby’s seeks
to enforce the acquirer agreements, it argues that it is not bound by their forum-selection
clauses. Having concluded that personal jurisdiction is lacking, the Court need not resolve
the venue dispute. See, e.g., Sutton v. Houllou, 191 A.D.3d 1031, 1034 (N.Y. App. Div. 2021)
(“Under the ‘closely related’ doctrine, a forum selection clause may also be enforced against
a non-signatory.” (citation omitted)); Schwarz v. St. Jude Med., Inc., 254 N.C. App. 747, 752–
53 (2017) (holding that the scope of a forum-selection clause is determined by applying the
law specified by a contract’s choice-of-law provision).
App. 34, 41 (2004) (observing that Illinois choice-of-law clause weighed against

personal jurisdiction), aff’d per curiam, 359 N.C. 315 (2005).

37. For these reasons, this case is significantly different than those cited by

Arby’s, including Burger King. There, a Michigan franchisee contested personal

jurisdiction in Florida. His challenge failed because the franchise agreement was

made in Florida, the “contract documents themselves emphasize[d] that Burger

King’s operations [were] conducted and supervised from the Miami headquarters,”

the parties’ “actual course of dealing repeatedly confirmed that decisonmaking

authority was vested in the Miami headquarters,” there was “a continuous course of

direct communications” with Burger King’s Florida-based employees, and the

agreement included a Florida choice-of-law provision. Burger King, 471 U.S. at 480–

81.

38. These hallmarks of jurisdiction are absent here. There’s no evidence that

the acquirer agreements were negotiated or made in North Carolina. The agreements

do not say that BANA will perform its operations from its North Carolina

headquarters. Actual performance—certainly for the events at issue—took place

elsewhere. And the terms of the agreement designate New York as the venue of

choice and the source of governing law. The only connection to North Carolina is that

BANA is headquartered here. That is not enough, as Burger King itself makes clear.

See id. at 478; see also US Chem. Storage, 253 N.C. App. at 386; Bank of Am., N.A. v.

Corporex Cos., LLC, 2014 U.S. Dist. LEXIS 102670, at *8–9 (W.D.N.C. July 28, 2014).
39. Other arguments pressed by Arby’s are equally unpersuasive. Arby’s

stresses, for example, that Visa and Mastercard have had “long-standing”

relationships with BANA, a North Carolina resident. (Opp’n to Visa 2; Opp’n to

Mastercard 2.) Again, the fact that BANA happens to have its headquarters in North

Carolina does not, by itself, support jurisdiction. That remains true regardless of how

long it has resided in the State. In fact, the length of the relationship cuts the other

way because the card organizations’ relationships with BANA began when it was a

California resident.

40. Arby’s also argues that the Court has personal jurisdiction over Visa and

Mastercard because their assessments injured a North Carolina resident. (See Opp’n

to Visa 2, 5; Opp’n to Mastercard 3, 5.) The United States Supreme Court has rejected

that argument. “The proper question is not where the plaintiff experienced a

particular injury or effect but whether the defendant’s conduct connects him to the

forum in a meaningful way.” Walden, 571 U.S. at 290; see also Bank of Am., 2014

U.S. Dist. LEXIS 102670, at *9 (following Walden).

41. It is tempting to cast all this aside and find jurisdiction because Visa and

Mastercard are omnipresent in modern commercial life. Neither could complain that

litigating in North Carolina is inconvenient. But to do so would dissolve the barrier

between general and specific jurisdiction for many large corporations. And it would

weaken our federal system of shared sovereignty. Restrictions on personal

jurisdiction “are more than a guarantee of immunity from inconvenient or distant
litigation. They are a consequence of territorial limitations on the power of the

respective States.” Hanson, 357 U.S. at 251.

42. In short, Arby’s has not met its burden to show that its claims arise from or

relate to the contacts that Visa or Mastercard have had with this State. The acquirer

agreements are not adequate to show purposeful availment, and there is no

“affiliation between the forum and the underlying controversy.” Ford, 141 S. Ct. at

1025 (citation and quotation marks omitted). The Court therefore concludes that it

may not exercise personal jurisdiction over Visa or Mastercard.

43. One final matter remains. In a two-sentence footnote, Arby’s asks to conduct

jurisdictional discovery. (See Opp’n to Visa 7 n.10; Opp’n to Mastercard 7 n.5.)

“Whether to grant jurisdictional discovery is within the Court’s discretion, but the

party seeking discovery must offer more than speculation or conclusory assertions

about contacts with a forum state.” Azure Dolphin, LLC v. Barton, 2017 NCBC

LEXIS 90, at *12 (N.C. Super. Ct. Oct. 2, 2017) (citation and quotation marks

omitted), aff’d, 371 N.C. 579 (2018). In its conclusory footnote, Arby’s has not

explained why jurisdiction would be found if discovery were permitted. See, e.g.,

Genzyme Corp. v. Shire Human Genetic Therapies, Inc., 906 F. Supp. 2d 9, 19 (D.

Mass. 2012). The Court denies the request.

II.
CONCLUSION

44. For all these reasons, the Court GRANTS Visa’s and Mastercard’s motions

to dismiss for lack of personal jurisdiction. The third-party complaints are

DISMISSED without prejudice. The motions are otherwise DENIED as moot.
SO ORDERED, this the 30th day of June, 2021.

/s/ Adam M. Conrad
Adam M. Conrad
Special Superior Court Judge
for Complex Business Cases