First Data Merchant Services v. SecurityMetrics, Inc.

Filing

UNPUBLISHED AUTHORED OPINION filed. Originating case number: 1:12-cv-02568-RDB. Copies to all parties and the district court. [999978695]. [15-2301, 15-2364]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 15-2301

FIRST
DATA
MERCHANT
SERVICES
CORPORATION,
corporation; FIRST DATA CORPORATION,

a

Florida

a

Florida

Plaintiffs – Appellees,
v.
SECURITYMETRICS, INC., a Utah corporation,
Defendant – Appellant.

No. 15-2364

FIRST
DATA
MERCHANT
SERVICES
CORPORATION,
corporation; FIRST DATA CORPORATION,
Plaintiffs – Appellants,
v.
SECURITYMETRICS, INC., a Utah corporation,
Defendant - Appellee.

Appeals from the United States District Court for the District
of Maryland, at Baltimore. Richard D. Bennett, District Judge.
(1:12-cv-02568-RDB)

Argued:

October 25, 2016

Decided:

Before SHEDD, DUNCAN, and FLOYD, Circuit Judges.

December 1, 2016

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Affirmed by unpublished opinion.
Judge Duncan
opinion, in which Judge Shedd and Judge Floyd joined.

wrote

the

ARGUED: Lannie Rex Sears, MASCHOFF BRENNAN LAYCOCK GILMORE
ISRAELSEN
&
WRIGHT
PLLC,
Salt
Lake
City,
Utah,
for
Appellant/Cross-Appellee.
Michael Lee Eidel, FOX ROTHSCHILD
LLP, Philadelphia, Pennsylvania, for Appellees/Cross-Appellants.
ON BRIEF: Sterling A. Brennan, MASCHOFF BRENNAN LAYCOCK GILMORE
ISRAELSEN & WRIGHT PLLC, Salt Lake City, Utah; J. Stephen Simms,
SIMMS SHOWERS, LLP, Baltimore, Maryland, for Appellant/CrossAppellee. Joshua Horn, Clair E. Wischusen, FOX ROTHSCHILD LLP,
Philadelphia, Pennsylvania; Charles N. Curlett, Jr., LEVIN &
CURLETT
LLC,
Baltimore,
Maryland,
for
Appellees/CrossAppellants.

Unpublished opinions are not binding precedent in this circuit.

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DUNCAN, Circuit Judge:
First

Data

Corporation

Merchant

Services

(collectively,

“First

Corporation
Data”)

and

and

First

Data

SecurityMetrics,

Inc. (“SecurityMetrics”), business partners turned adversaries,
bring this appeal and cross-appeal challenging two orders of the
district

court.

Throughout

this

protracted

litigation,

the

parties have asserted numerous claims against each other, but
only

four

are

at

issue

here.

SecurityMetrics

appeals

three

counterclaims on which the district court granted First Data
summary judgment on December 30, 2014 (the “December Order”).
First

Data

attorneys’

cross-appeals
fees

in

“September Order”).

an

the

order

district
dated

court’s

September

denial

22,

2015

of
(the

For the reasons discussed below, we affirm

both orders.

I.
A.
First Data and SecurityMetrics are both companies in the
Payment Card Industry (“PCI”).
primary

service

providers.

The PCI includes three types of
Issuers

supply

payment

cards

to

consumers and collect amounts due; acquirers clear and settle
payment card transactions on behalf of merchants; and processors
facilitate the communication and settlement of payment.
PCI

providers

outsource

certain
3

functions

to

Some

third-party

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Data

both

vendors.

First

functions.

SecurityMetrics is a third-party vendor.

The

PCI

Security

performs

Standards

acquirer

Council,

an

and

processor

independent

body

created by the five major payment card brands, 1 issues a set of
security standards, called the PCI Data Security Standard (“PCI
Standard”

or

“PCI

theft and fraud.

DSS”)

to

help

protect

against

credit

card

The PCI Standard is universal but the payment

card brands each have different requirements for demonstrating
or validating compliance with the standard.
the

category

transaction

at

issue

volume

and

here--have

are

required

the
to

Level 4 merchants-lowest
submit

individual

annual

self-

assessment questionnaires to demonstrate compliance.
Any merchant that accepts credit payments must adhere to
the PCI Standard.
their

merchants

Acquirers, like First Data, must ensure that

comply

with

the

PCI

Standard

noncompliance penalties and fees on merchants.
rely

on

third-party

vendors,

such

as

and

can

impose

Acquirers often

SecurityMetrics,

to

validate their merchants’ compliance.
B.
From 2008 until 2012 the parties worked together pursuant
to a series of contracts.
First

Data
1

listed

Under the terms of the agreements,

SecurityMetrics

as

its

preferred

American Express, Discover, JCB, MasterCard, and Visa.

4

data

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compliance
Level 4

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vendor

in

merchants.

all
First

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communications
Data

with

charged

First

merchants

Data’s
a

PCI

compliance fee and then paid SecurityMetrics for its compliance
services on behalf of the merchants.
First

Data

with

SecurityMetrics’s

a

weekly

system

so

SecurityMetrics provided

data

that

feed

First

Data

and

access

to

track

the

could

compliance status of its merchants.
This arrangement continued without issue until First Data
decided

to

offer

its

own

compliance

service

2012. 2

in

In

preparation for the launch of its service, First Data ordered
SecurityMetrics

to

cease

communication

with

its

Level

4

merchants effective June 1, 2012.

In response, SecurityMetrics

alleged

their

First

Data

had

breached

contract

and

stopped

sending its weekly data feed.
C.
In May 2012, First Data filed suit against SecurityMetrics
in the United States District Court for the District of Utah
(the “Utah litigation”) alleging breach of contract and other
tortious

conduct.

The

parties

Utah

litigation

pursuant to a document titled “Terms of Settlement.”

Under the

2

settled

the

During the course of this litigation, First
down its proprietary compliance service and began
different
third-party
PCI
compliance
vendor,
Trustwave became First Data’s preferred PCI compliance

5

Data wound
to use a
Trustwave.
vendor.

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Terms

of

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Settlement,

the

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parties

agreed

to

a

few

basic

provisions that were to be memorialized in a confidential final
settlement

agreement

that

disparagement provisions.”

would

include

J.A. 217.

“mutual

non-

First Data agreed to pay

SecurityMetrics $5,000,000 and dismiss the Utah litigation with
prejudice, and SecurityMetrics was granted the “use of Merchant
Data for the purpose of selling its products and services.”
A final settlement agreement never materialized.

Id.

Less than

three months after signing the Terms of Settlement, First Data
filed

the

United
First

underlying

States
Data

action

District

alleged

nine

against SecurityMetrics. 3
fifteen

counterclaims. 4

Court

against
for

counts

of

the

SecurityMetrics
District

of

post-settlement

in

the

Maryland.
misconduct

SecurityMetrics answered and asserted
The

parties

filed

cross-motions

for

3

First Data asserted the following counts: (1) Declaratory
relief as to the definition of Merchant Data; (2) Breach of
Contract of the Terms of Settlement; (3) Common Law Unfair
Competition;
(4)
Tortious
Interference
with
Existing
and
Prospective
Contractual
and
Business
Relationships;
(5) Injurious Falsehoods; (6) False Endorsement/Association,
Lanham Act, 15 U.S.C. § 1125(a)(1)(A); (7) Trademark/Service
Mark/Trade Name Infringement, Lanham Act, 15 U.S.C. §§ 1114(1),
1125(a)(1)(A); (8) False Advertising, Lanham Act, 15 U.S.C.
§ 1125(a)(1)(B); and (9) Declaratory Relief as to PCI compliance
reporting data.
4

SecurityMetrics alleged First Data had, through its
advertisements and communications with merchants, disparaged
SecurityMetrics
and
brought
the
following
counterclaims:
(1) Specific Performance of the provision in the Terms of
Settlement
to
execute
a
final
settlement
agreement;
(Continued)
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summary judgment, and the district court held a hearing on the
motions and issued the December Order.

In the December Order,

the district court denied SecurityMetrics’s motion for summary
judgment but granted First Data’s motion for summary judgment as
to Counts 4 through 15 of SecurityMetrics’s counterclaims.
The district court scheduled a trial as to the remaining
claims.

On the eve of trial, the parties narrowed the claims

down to the sole issue of the meaning of the term “Merchant
Data” in the Terms of Settlement.

Following a two-day bench

trial, the district court ruled in favor of SecurityMetrics.
After the trial, First Data filed a motion for attorneys’
fees in relation to SecurityMetrics’s Utah Truth in Advertising
Act (“UTIAA”) claim (Count 8) on which the district court had
granted First Data summary judgment in the December Order.

The

UTIAA provides that “[t]he court shall award attorneys’ fees to
the prevailing party” in a UTIAA action.

Utah Code § 13-11a-

(2) Declaratory Judgment with respect to the Merchant Data
provision of the Terms of Settlement; (3) Declaratory Judgment
with respect to the confidentiality clause of the Terms of
Settlement;
(4)
Injurious
Falsehoods;
(5)
Federal
False
Advertising; (6) Federal False Endorsement; (7) Cancellation of
Registration; (8) Utah Deceptive Trade Practices violations;
(9) Tortious Interference with Business Relations; (10) Federal
Restraint of Trade; (11) Federal Monopolization and Attempted
Monopolization; (12) Maryland Restraint of Trade; (13) Maryland
Monopolization and Attempted Monopolization; (14) Maryland
Predatory Pricing; (15) Anticompetitive pricing arrangements in
violation of Md. Code Com. Law § 11-204(a)(6).
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4(2)(c).

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The district court denied this motion in the September

Order finding that, although First Data did prevail as to the
UTIAA claim itself, it was not a “prevailing party” at trial and
with respect to the litigation as a whole.
D.
On appeal, the parties do not contest the district court’s
ruling at trial as to the meaning of the term Merchant Data.
Rather,

the

claims

at

issue

pretrial December Order.

before

us

originate

from

the

SecurityMetrics appeals three of its

counterclaims that the district court dismissed.
First, SecurityMetrics alleges First Data’s advertisements
violated

the

Lanham

Act.

Certain

First

Data

promotional

materials stated its merchants would have to pay First Data’s
compliance fee regardless of whether the merchant also used a
third-party compliance vendor.

SecurityMetrics claims this is a

false statement because First Data actually provided refunds to
merchants who used third-party compliance vendors.

Finding the

statements were literally true, the district court granted First
Data summary judgment on this claim.
Second,
interfered

SecurityMetrics

with

its

business

contends
relations

First
by

Data

making

tortiously
disparaging

comments to merchants about SecurityMetrics.

The district court

also

as

granted

First

Data

summary

8

judgment

to

this

claim

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it

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found

that

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SecurityMetrics

had

not

offered

the

district

any

admissible evidence to establish causation.
Third,

SecurityMetrics

challenges

ruling as to its antitrust claims.

court’s

SecurityMetrics alleged that

First Data violated several antitrust laws when it launched its
own competing PCI compliance service.
that,

because

competition,

SecurityMetrics
rather

than

had

simply

The district court found

not

injury

standing to pursue those claims.

demonstrated
to

itself,

injury
it

to

lacked

The court therefore granted

First Data summary judgment as to these claims.
First

Data

cross-appeals

the

district

court’s

denial

attorneys’ fees as to SecurityMetrics’s failed UTIAA claim.
first

consider

evaluate

First

SecurityMetrics’s
Data’s

claims

cross-appeal.

For

in

turn

the

of
We

and

then

reasons

that

follow, we affirm the district court’s rulings on both parties’
claims.

II.
Summary judgment is appropriate when “there is no genuine
dispute as to any material fact.”

Fed. R. Civ. P. 56(a).

We

review the district court’s grant of summary judgment de novo,
viewing the facts and drawing all reasonable inferences in the
light most favorable to the nonmovant.
F.3d 263, 266 (4th Cir. 2016).

Askew v. HRFC, LLC, 810

In doing so, “it is ultimately
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the nonmovant’s burden to persuade us that there is indeed a
dispute of material fact.

It must provide more than a scintilla

of

merely

evidence--and

speculation--upon
favor.”

not
which

a

conclusory

jury

could

defeat

properly

find

in

or
its

CorTel Va., LLC v. Verizon Va., LLC, 752 F.3d 364, 370

(4th Cir. 2014) (citation omitted).
imposed

allegations

by
a

the

burden

motion

for

of

Regardless of the standard

persuasion,

summary

judgment

the

nonmovant

“without

may

not

offering

any

concrete evidence from which a reasonable juror could return a
verdict in his favor [nor] by merely asserting the jury might,
and legally could,” disbelieve the movant.

Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 256 (1986).

III.
A.
We

first

consider

whether

the

district

court

erred

in

granting summary judgment to First Data on its false advertising
claim.

We conclude it did not.

To bring a false advertising claim under the Lanham Act, a
plaintiff must establish that (1) the defendant made a false or
misleading description of fact or representation of fact in a
commercial advertisement about his own or another's product that
(2) is material and (3) actually deceives or has the tendency to
deceive a substantial segment of its audience (4) after being
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placed in interstate commerce, (5) causing the plaintiff injury.
PBM Prods., LLC v. Mead Johnson & Co., 639 F.3d 111, 120 (4th
Cir. 2011).
Only the first element--whether First Data’s advertisements
were false or misleading--is at issue here.
establish

the

first

element

by

showing

A plaintiff can

an

advertisement

is

either (a) literally false or (b) literally true but likely to
mislead

or

confuse

consumers.

C.B.

Fleet

Co.

v.

SmithKline

Beecham Consumer Healthcare, L.P., 131 F.3d 430, 434 (4th Cir.
1997).

SecurityMetrics proceeds on the first theory.

“In analyzing whether an advertisement . . . is literally
false, a court must determine, first, the unambiguous claims
made

by

the

advertisement . . .

claims are false.”

and,

second,

whether

those

PBM Prods., 639 F.3d at 120 (quoting Scotts

Co. v. United Indus. Corp., 315 F.3d 264, 274 (4th Cir. 2002)).
“A literally false message may be either explicit or conveyed by
necessary implication when, considering the advertisement in its
entirety, the audience would recognize the claim as readily as
if it had been explicitly stated.”
F.3d at 274).

Id. (quoting Scotts Co., 315

A false-by-necessary-implication claim must fail

if the advertisement “can reasonably be understood as conveying
different messages.”
unambiguous

message

Scotts Co., 315 F.3d at 275.
can

be

literally

false.”

Id.

“Only an
at

275–76

(quoting Novartis Consumer Health, Inc. v. Johnson & Johnson11

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Merck Consumer Pharm. Co., 290 F.3d 578, 587 (3d Cir. 2002)
(emphasis in original)).
The challenged First Data advertisements state:
If you choose to use a third-party vendor for PCI
DSS compliance services, you will need to contract
with and pay that vendor directly.
In addition to
your alternate vendor’s charges for PCI DSS compliance
services, you still will need to pay the Compliance
Service Fee charged to you by your merchant services
provider.
The Compliance Service Fee is not affected
by your choice to use a third-party vendor.
* * *
If First Data’s PCI compliance services are
contractually available to you, you will be charged an
applicable annual compliance fee for those services,
regardless of whether you use them or utilize the
services of some other third-party PCI compliance
services vendor.
If you utilize the additional
services of a third party vendor, you will pay that
third party vendor’s charges for those fees in
addition to First Data’s annual compliance fee.
J.A. 799–800 (emphasis added).
these

advertisements

refunded

some

compliance

are

merchants

fee

advertisements

and
can,

in

literally
that

a

According to SecurityMetrics,

paid

third-party
context,

be

false
both

because
the

First

vendor.
read

more

First
Data

Because
than

one

Data
PCI
the
way,

however, we reject SecurityMetrics’s argument.
It is undisputed that First Data has always charged its
merchants

a

PCI

together

under

SecurityMetrics

compliance
their

from

the

fee.

contract,
PCI

When
First

compliance

12

the

parties

Data
fee

worked

would

charged

to

pay
the

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merchants.

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Once

Pg: 13 of 26

SecurityMetrics

was

no

longer

a

preferred

vendor, as the advertisements state, First Data still required
its merchants to pay its PCI Compliance fee.

If the merchant

used First Data’s PCI compliance services, the merchant would
not pay anything additional.

If, however, a merchant wished to

use a third-party compliance vendor--such as SecurityMetrics-the merchant would have to pay that fee directly to the third
party.

Hence,

a

merchant

would

pay

for

compliance

services

twice.

SecurityMetrics contends that, though this was First

Data’s official policy, in practice First Data would refund a
merchant

that

complained

about

being

amount of the SecurityMetrics fee.
argues,

the

falsehood.

advertisement
The

district

double

in

the

Therefore, SecurityMetrics

necessarily
court

charged

implies

disagreed

and

a
found

literal
these

statements were “only problematic due to what was left unsaid-that a refund might be available.”

5

J.A. 1369.

We agree. 5

SecurityMetrics also objects that, on the motion for
summary judgment, the district court “without warning or other
intervening change in circumstances” changed course from an
earlier position. Appellant’s Br. at 15. When First Data moved
to dismiss the false advertising claim, the district court found
that the claim was “articulable as an affirmative misstatement-i.e., that merchants will pay for the service but that some do
not because of the refund.”
J.A. 229–30.
SecurityMetrics
alleges the district court erred in subsequently dismissing the
claim.
Of course this argument ignores the fundamental
difference between attacking a claim on a motion to dismiss and
at the summary judgment stage.
In a motion to dismiss, the
court must accept the factual allegations in the plaintiff’s
(Continued)
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First

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Data’s

Pg: 14 of 26

advertisements

are

not

therefore cannot be literally false.

unambiguous

and

On one reading of the

advertisement, the service fee is affected because First Data
would, if asked, refund customers an amount equal to the thirdparty vendor charge.

Merchants who asked for and received a

refund did not pay the third-party fee in addition to the PCI
compliance

fee.

However,

by

another

reading,

because

First

Data’s refund policy was discretionary and not automatic, the
advertisement

is

true

on

its

face.

Put

another

way,

if

a

SecurityMetrics customer never asked First Data for a refund, it
would, as the advertisement states, pay a third-party vendor fee
“in addition to” First Data’s PCI Compliance fee.
claim
usually

that

is

cannot

“implicit,
fairly

be

attenuated,
characterized

or
as

J.A. 799.

merely

A

suggestive

literally

false.”

Design Res., Inc. v. Leather Indus. of Am., 789 F.3d 495, 502
(4th Cir. 2015) (quoting Clorox Co. P.R. v. Proctor & Gamble
Commercial

Co.,

228

F.3d

24,

35

(1st

Cir.

2000)).

SecurityMetrics “asks us to reach entirely outside the face of

complaint as true.
Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007). However, a plaintiff has a higher burden when
faced with a motion for summary judgment.
At that stage of
litigation, the party opposing summary judgment “must set forth
specific facts showing that there is a genuine issue for trial.”
Liberty Lobby, 477 U.S. at 256 (internal citation omitted).
SecurityMetrics failed to carry its burden.

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the ad and into the context surrounding the ad’s publication to
uncover a false message it argues is necessarily implied,”

Id.

at 503, but the false-by-necessary-implication doctrine does not
stretch

that

far.

Therefore,

the

district

court

properly

granted First Data summary judgment on that issue. 6
B.
SecurityMetrics next argues that the district court erred
in

granting

First

Data

interference claim.
with

economic

summary

as

to

the

tortious

Under Maryland law, tortious interference

relations

“(1) intentional

judgment

and

requires

willful

acts;

a
(2)

claimant

to

show

calculated

to

cause

damage to the plaintiffs in their lawful business; (3) done with
the

unlawful

purpose

to

cause

such

damage

and

loss,

without

right or justifiable cause on the part of the defendants (which
constitutes malice); and (4) actual damage and loss resulting.”
Alexander & Alexander Inc. v. B. Dixon Evander & Assocs., Inc.,
650 A.2d 260, 269 (Md. 1994) (quoting Willner v. Silverman, 71
A.

962,

establish

964

(Md.

1909)).

causation,

the

Because
district

6

SecurityMetrics
court

granted

failed
First

to

Data

SecurityMetrics also argues that a jury must decide
whether the statements were literally false. That is incorrect.
Although literal falsity is a question of fact, C.B. Fleet Co.,
131 F.3d at 436, whether a nonmovant has put forth sufficient
evidence to establish a genuine dispute as to that fact is a
legal question for the district court’s determination.
See
Design Res., 789 F.3d at 502.

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summary judgment on the tortious interference claim.

We affirm

for the same reason.
SecurityMetrics alleged First Data used the Utah litigation
as “a weapon . . . for the . . . purpose of interfering with
SecurityMetrics’s
J.A.

194.

actual

and

According

to

prospective

economic

SecurityMetrics,

it

relations.”

lost

280,000

existing customers as well as potential new customers because of
this alleged misconduct.

SecurityMetrics sought to introduce

two

show

forms

phone

of

calls

evidence
and

to

emails

from

causation:

customers

(1)

stating

transcripts
why

they

of

were

canceling or not renewing their contracts with SecurityMetrics
and (2) an expert report prepared by Clarke Nelson (the “Nelson
report”).
The
whether

The district court excluded both pieces of evidence.
viability
the

of

district

SecurityMetrics’s
court

properly

argument

refused

customer calls and emails and the Nelson report.

to

depends
admit

on
the

We review the

district court’s rulings on the admissibility of evidence for
abuse of discretion and will only reverse if the ruling was
arbitrary and irrational.

Minter v. Wells Fargo Bank, N.A., 762

F.3d 339, 349 (4th Cir. 2014).

We find no abuse of discretion

here.

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1.
First,

the

customer

district

court

did

communications

not

as

err

in

excluding

inadmissible

the

hearsay.

SecurityMetrics asserts the calls and emails should have been
admitted either because they are verbal acts, and therefore not
hearsay, or under the state of mind exception to the hearsay
rule.
Under

the

declarations

Federal

where

Rules

“the

of

Evidence,

statement

itself

verbal

acts--those

affects

the

legal

rights of the parties or is a circumstance bearing on conduct
affecting their rights”--are not hearsay.

Fed. R. Evid. 801

advisory committee’s note to subdivision (c).

“[P]roof of oral

utterances by the parties in a contract suit constituting the
offer and acceptance which brought the contract into being are
not

evidence

verbal

of

conduct

liabilities.”

assertions
to

which

offered
the

testimonially

law

attaches

but

rather

duties

and

2 McCormick on Evidence § 249 (7th ed.) (2016)

(emphasis added).
Although portions of the calls and emails--references to
contract

terminations

constitute
evidence

verbal
of

the

SecurityMetrics’s

and

acts,

account
these

closure

admissible

causation

element

tortious

interference

instructions--might
sections

necessary

to

claim.

are

not

support
What

SecurityMetrics wants to use from the calls--comments made by
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customers regarding First Data’s conduct--are not verbal acts.
In other words, the existence of the contract is a verbal act
but

irrelevant

to
the

causation--why

causation;

the

merchants

portions

decided

not

that

to

would

renew

or

go

to

sign

a

contract--are relevant but inadmissible.
Nor

can

the

calls

and

recordings

state of mind exception to hearsay.
from

hearsay

“[a]

statement

of

be

admitted

under

the

That exception excludes

the

declarant’s

then-existing

state of mind . . . but not including a statement of memory or
belief

to

prove

the

fact

remembered

or

believed

unless

relates to the validity or terms of the declarant’s will.”
R. Evid. 803(3).

it

Fed.

SecurityMetrics attempts to avail itself of

this exception by stating that the calls and emails are offered
only to prove “what customers believed and why they did what
they

did.”

statements

Appellant’s
are

asserted--that
SecurityMetrics

also
the

Br.

offered
merchants

because

of

at

52.

for

However,

unless

the

truth

of

canceled

their

contracts

First

Data’s

the

the

matter
with

misconduct--these

customer statements do not show causation.
Put simply, to escape a hearsay exclusion, SecurityMetrics
could

only

offer

the

evidence

demonstrating causation.
hearsay.

Therefore,

the

for

purposes

irrelevant

to

The relevant evidence is inadmissible
district

18

court

did

not

abuse

its

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discretion

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in

determining

Pg: 19 of 26

that

no

admissible

portion

of

the

calls and emails satisfied the element of causation.
2.
SecurityMetrics’s argument as to the Nelson report is also
unavailing.

On

appeal,

SecurityMetrics

faults

the

district

court for not considering its expert’s report as evidence of
causation.

However, SecurityMetrics retained Mr. Nelson as an

expert to opine on the amount of damages, not causation.

In

Mr. Nelson’s deposition in connection with First Data’s motion
in limine to exclude the report, he stated he did not “intend to
give an opinion on causation . . .

from a legal standpoint,”

but he did “intend to express opinions that” a “correlation”
existed between First Data’s “alleged bad acts and harm that was
suffered.”

J.A. 1027–28.

Upon further questioning, Mr. Nelson

reiterated that he was not going to offer an opinion at trial as
to

whether

damage.”

“the

alleged

J.A. 1903.

bad

acts

by

First

Data

caused

any

Therefore, the district court did not

abuse its discretion by disregarding the Nelson report since it
was not offered to prove any opinion on causation.
C.
Next,

we

SecurityMetrics

turn

to

asserted

SecurityMetrics’s
six

antitrust

19

antitrust

counts.

counterclaims

against

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First Data under federal and Maryland law. 7

To proceed on any of

its

establish

claims,

standing,

SecurityMetrics

which

requires

must

some

first

cognizable

antitrust

antitrust

injury.

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489
(1977).

“Because the antitrust laws are intended to protect

competition, and not simply competitors, only injury caused by
damage

to

the

competitive

antitrust claim.”
L.P.,

57

alleged

F.3d

frustrated

price

may

form

the

basis

of

an

Thompson Everett, Inc. v. Nat’l Cable Adv.,

1317,

antitrust

process

1325

injury

(4th
in

Cir.

the

competition.

1995).

form
The

of

SecurityMetrics

reduced

district

output

court

and

correctly

rejected those claims because SecurityMetrics failed to support
either theory with sufficient evidence to survive a motion for
summary judgment.
As

an

initial

matter,

we

note

SecurityMetrics

did

not

properly plead its antitrust claims because it did not allege
any

antitrust

injury

before

the

summary

judgment

stage.

Generally, a party may not raise new arguments after discovery
without amending its complaint.

U.S. ex rel. Owens v. First

Kuwaiti Gen. Trading & Contracting Co., 612 F.3d 724, 731 (4th
Cir. 2010).
7

SecurityMetrics argues that it did not need to

Federal
SecurityMetrics’s
202(a)(2).

antitrust
state law

analysis
claims.

20

also
applies
to
See Md. Code § 11-

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plead which theory it would rely upon.

Even assuming that is

correct, SecurityMetrics was required to allege some antitrust
injury, which its complaint did not.
Even if SecurityMetrics did properly plead its antitrust
claims, they nonetheless fail.

SecurityMetrics’s evidence for

its antitrust claims consisted of a wholly undeveloped claim
that it lost 280,000 customers in two years, 70,000 of which
went to First Data.

SecurityMetrics points to the remaining

unaccounted for 210,000 merchants as evidence of reduced output.
SecurityMetrics provides no evidence to support its speculation
that these “lost merchants” resulted from misconduct on the part
of First Data.

Any number of reasons might similarly explain

the merchants’ departure, all of which are conjecture. 8

The

merchants could have migrated to a company other than First Data
or

SecurityMetrics,

gone

out

of

business

altogether,

changed

their business mode, or no longer been in the market for a
number
conduct.

of

other

reasons

unrelated

to

First

Data’s

alleged

SecurityMetrics’s “tenuous” inferences are simply not

enough to “fall within the range of reasonable probability” and

8

SecurityMetrics claims only First Data had access to the
evidence
related
to
the
“lost
merchants,”
leaving
SecurityMetrics with the sole option of deposing 210,000 third
parties to show reduced output.
This argument, of course,
overlooks the possibility that SecurityMetrics could have
retained an expert to opine on the issue of reduced output.

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overcome a summary judgment challenge.
F.3d at 1323.

Thompson Everett, 57

The district court therefore properly rejected

reduced output as a plausible antitrust injury.
SecurityMetrics’s attempt to establish antitrust standing
based on harm to price competition fails for the same reason.
SecurityMetrics
higher

than

claims

that

SecurityMetrics,

although
First

First

Data

while SecurityMetrics has lost them.
price competition this fact reflects.

Data’s

has

prices

gained

are

customers

It is unclear what harm to
SecurityMetrics does not

allege predatory pricing, which is the only pricing practice
that

“has

the

requisite

anticompetitive

effect.”

Atlantic

Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 340 (1990).
SecurityMetrics may have shown injury to its business but the
record lacks any evidence that First Data’s practices harmed the
“competitive process.”

Thompson Everett, 57 F.3d at 1325.

We

must therefore conclude that its antitrust claims fail.

IV.
Finally,

we

consider

First

Data’s

sole

issue

on

cross-

appeal: the district court’s denial of its attorneys’ fees as it
relates to SecurityMetrics’s UTIAA counterclaim.

We review the

denial of attorneys’ fees for abuse of discretion.
Evers, 187 F.3d 348, 362 (4th Cir. 1999).

Reinbol v.

We apply Utah law to

determine whether an award of attorneys’ fees to First Data is
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warranted.

Filed: 12/01/2016

See Hitachi Credit Am. Corp. v. Signet Bank, 166

F.3d 614, 631 (4th Cir. 1999).
judgment,

Pg: 23 of 26

and

reverse

“[W]e defer to the trial court’s

a

trial

court’s

attorney

fees

determination only if the trial court exceeds the bounds of its
discretion.”

Neff v. Neff, 247 P.3d 380, 399 (Utah 2011).

SecurityMetrics

brought

a

counterclaim

under

the

UTIAA,

which was enacted “to prevent deceptive, misleading, and false
advertising practices and forms in Utah.”
1.

Utah Code § 13-11a-

The district court granted First Data summary judgment as to

this claim because “the relevant provisions of the [UTIAA] track
the

Lanham

Act

[so]

SecurityMetrics’
J.A. 1372. 9

statute fail as well.”
court

shall

Utah

Code

award

attorneys’

fees

§ 13-11a-4(2)(c).

claims

under

the

state

Under the UTIAA, “[t]he
to

the

prevailing

Notwithstanding

the

party.”

statutory

language, the district court did not award First Data attorneys’
fees because it was not the prevailing party “within the context
of the case as a whole.”

J.A. 1939.

First Data argues the

district court’s decision was an error of law.
The
party”

Supreme

Court

specifically

general

framework

as
to

of
to

Utah
the

has
UTIAA,

ascertain

the

not
but

We disagree.

defined
it

has

prevailing

SecurityMetrics did not appeal its UTIAA claim.

23

provided

party

action.
9

“prevailing

in

a
an

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In Neff v. Neff, 247 P.3d 380 (Utah 2011), two brothers and
one-time

business

partners

became

spanning more than six years.

embroiled

litigation

After trial, both parties sought

attorneys’ fees, which the trial court denied.
appealed.

in

Only one brother

The Supreme Court of Utah affirmed the denial and

held that a trial court “must base its decision [whether to
award attorney fees] on a number of factors.”

Id. at 398.

These factors include the language of the contract or
statute that forms the basis of the attorney fees
award, the number of claims brought by the parties,
the importance of each of the claims relative to the
entire litigation, and the amounts awarded on each
claim. . . .
Accordingly, it is possible that, in
litigation where both parties obtain mixed results,
neither party should be deemed to have prevailed for
purposes of awarding attorney fees. This is true even
where the statutory language states that a prevailing
party ‘shall be entitled to’ fees.
Id. at 398–99 (emphasis added) (footnotes omitted).
Here, the district court properly applied the rationale and
standard announced in Neff.
twenty-four

claims

before

Between the two parties, there were
the

district

court.

The

district

court granted First Data summary judgment as to eleven of the
claims.

The parties voluntarily dismissed or withdrew eleven

other claims. 10

Though the district court granted First Data

10

After various pre-trial motions, First Data had four
remaining claims (Counts 1, 2, 4, and 9) and SecurityMetrics had
two remaining claims (Counts 2 and 3). The Friday before trial,
the parties reached a partial resolution to winnow the remaining
claims down to the meaning of Merchant Data under the Terms of
(Continued)
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summary judgment on several claims, it “never ruled that the
conduct of which SecurityMetrics complained was not actionable,”
but

rather

that

SecurityMetrics

burdens.

J.A. 1940.

issue

trial

at

was

had

not

met

its

evidentiary

Out of the twenty-four counts, the sole
the

parties’

competing

claims

as

to

the

meaning of Merchant Data.
Under

Neff,

the

“prevailing

party”

does

not

refer

to

a

single count nor is it simply a matter of adding up which party
won the most claims.

The district court here determined that,

while First Data did prevail as to the UTIAA claim, it “had only
limited

success

J.A. 1938.
issue

at

when

the

case

is

considered

as

a

whole.”

The interpretation of Merchant Data was the only
trial,

an

“resounding loss.”

issue

on

which

J.A. 1940.

First

Data

suffered

a

Considering the Neff factors,

the district court determined First Data’s UTIAA claim “occupied
a peripheral position in the litigation as a whole.”

J.A. 1939.

The district court did not abuse its discretion in so finding.
First Data’s argument that the plain language of the UTIAA “does
not

state

prevailing

party

in

the

entire

action”

is

plainly

Settlement (First Data Count 1 and SecurityMetrics Count 2).
The parties filed a consent order to dismiss with prejudice the
remaining
claims
(First
Data
Counts
2,
4,
and
9
and
SecurityMetrics Count 3), each side bearing their own costs and
fees. The parties also withdrew their request for a jury trial.

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foreclosed by Neff’s holding that a district court must consider
“each of the claims relative to the entire litigation . . . even
where

the

statutory

language

shall be entitled to fees.”
citation omitted).

states

that

a

prevailing

party

Neff 247 P.3d at 398–99 (internal

Therefore, we affirm the district court’s

denial of attorneys’ fees.

V.
On the record before us, SecurityMetrics did not present
evidence

of

a

genuine

issue

of

material

fact

sufficient

to

survive a motion for summary judgment on its Lanham Act claim,
tortious interference claim, or antitrust claims.

The district

court did not abuse its discretion in finding that First Data
was not a prevailing party in the overall action and, therefore,
not entitled to attorneys’ fees under the UTIAA.

For these

reasons, the judgment of the district court is
AFFIRMED.

26