Gucci America, Inc. v. Frontline Processing Corporation et al

Filing 75

DECLARATION of Charles A. Vernon (with exhibits) in Opposition re: 66 MOTION for Summary Judgment.. Document filed by Woodforest National Bank. (Mentlik, William)

Gucci America, Inc. v. Frontline Processing Corporation et al

Doc. 75

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK GUCCI AMERICA, INC. Plaintiff, v. FRONTLINE PROCESSING CORPORATION; WOODFOREST NATIONAL BANK; DURANGO MERCHANT SERVICES LLC d/b/a NATIONAL BANKCARD SYSTEMS OF DURANGO; ABC COMPANIES; and JOHN DOES, Defendants. : : : : : : : : : : : : x Civil Action No. 09-6925-HB District Judge Harold Baer, Jr.

DECLARATION OF CHARLES A. VERNON IN SUPPORT OF DEFENDANT WOODFOREST'S OPPOSITION TO PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT I, CHARLES A. VERNON, declare and state as follows: 1. I am Executive Vice President and General Counsel of Woodforest National Bank

("Woodforest"), a defendant in the above-noted action. I have personal knowledge of the facts and matters discussed in this declaration, and if called as a witness, could and would testify to the matters set forth below. 2. Woodforest is a bank, organized and existing under the laws of the United States,

and having its principal place of business at 1330 Lake Robbins Drive, Suite 100,, The Woodlands, Texas 77380. 3. The merchant service provider for Woodforest is Delta Card Services, Inc., a

Texas corporation which conducts business under the names Merchants' Choice Card Services, MCCS, Merchants' Choice Payment Solutions, and MCPS (hereafter collectively "DeltaCard"). 4. Woodforest's policies prohibit approval of merchants engaged in illegal and As examples, merchants engaged sales activities over the Internet

prohibited activities.

involving child pornography, firearms, drugs, alcohol and tobacco would be illegal and would

Vernon Decl. (accepted changes).doc

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also be prohibited by Visa and/or MasterCard. Woodforest's policies did not prohibit us from accepting merchants who were said to sell replicas. 5. I understand that Woodforest's policies are consistent with the policies of

MasterCard and Visa which allow their credit cards to be used for the sale of replica merchants, but not for counterfeiters. The card associations such as MasterCard and Visa regularly notify processing banks regarding the types of sales that are prohibited. During the November 2006 to May 2008 time frame, no such notice was ever received from the associations prohibiting processing for merchants selling replicas. Attached as Exhibit A is a true and accurate copy of pages from MasterCard Rules involving prohibited practices and its current BRAM program. The recent BRAM program prohibits counterfeit products, but not replicas. Attached as

Exhibit B is the Visa operation Regulations for preventing illegal activities. It also does not mention replicas. 6. I understand that on or about November 13, 2006, Woodforest accepted an

application for the Laurette Company, an Internet merchant which advertised replica handbags for sale. Woodforest's policies would not have prohibited us from accepting credit card

processing services at that time for Internet merchants selling replicas. I understand that on about June 2, 2008, Gucci obtained a "freeze order" prohibiting the Laurette Company from doing further business on its Web site and the site was closed down shortly thereafter. 7. I also understand, based on review of documents, that during the period

November 2006 until May 2008, Woodforest accepted applications from other Internet merchant offering replica products. To my knowledge, over this entire period of time, Woodforest never received a single notice, letter, complaint, lawsuit or subpoena from any trademark owner complaining that the products sold on these Web sites were counterfeit products, and not just

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