Oops, sorry ‘bout that!

I guess that’s what you say to your client after it has paid you well over $4 million in fees on a case that wouldn’t have been brought, if somebody (like you, maybe?) had read the damn contract.

International Cards Co. is a company based in Jordan, and for about 15 years it was a Mastercard “Member.”  Don’t ask me what it means to be a member of Mastercard; I assume it means you can issue Mastercard Credit Cards.  Anyway, ICC and Mastercard had a contract, and the contract stated, in section 1.6.2 that:

A Customer (i.e., Member) 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.

On April 2, 2013, Mastercard delivered a letter to ICC, which stated that Mastercard had terminated the contract pursuant to Section 1.6.2.

Pretty simple, eh?  Member terminated.  Maybe it’s not a nice thing for Mastercard to do, but that was the agreement.  Shed no tears for ICC.  If you’re sophisticated enough to issue credit cards, you should be able to read a simple contract (way more simple than what is written in tiny letters on the back of my Mastercard statement).

Not so simple.  After the provision quoted above, the contract stated that Mastercard could terminate the agreement without any prior notice for a number of reasons, such as non-payment of fees.  Apparently somebody at ICC took that to mean Mastercard could terminate the contract only for one of those reasons.  Since ICC didn’t believe that any of the “without any prior notice” conditions were applicable, and it sued Mastercard for breach of contract.  That was in April, 2013.  As in four years ago.

The interpretation of a contract is a legal issue, which means that a judge, not a jury, decides.  Technically, this is only when the language of the contract is clear and unambiguous, but guess who decides whether the language is clear and unambiguous?  Yep, the judge.  You might think that when Mastercard got sued, it showed the judge the contract and said “look, Your Honor, the contract said that we could terminate a member at any time, so we can’t be sued for breach of contract.”  In legal parlance, this is done by a motion to dismiss, which can be made at the very beginning of the case, and often is in contract cases.

Not here.  For reasons unknown, Mastercard did not ask to have the case dismissed. Instead, it and ICC slugged it out for almost four years.  Then, on the very eve of trial, Mastercard pointed out that it had the right to terminate the contract just by sending a letter, and it asked for the case to be dismissed.

Why did Mastercard wait four years to ask to have the case thrown out of court?  That remains to be seen.  The judge was not amused.  Although she had no choice but to dismiss the case, she invited ICC to make a motion for the attorneys’ fees it was forced to pay because Mastercard waited so long to make its motion to dismiss.  ICC filed its motion, asking to be reimbursed its legal fees for bringing a case and losing.  Seppuku might be more appropriate.

Here’s how ICC’s motion starts off:

“Following four years of litigation and millions of dollars in unnecessary fees and expenses on both sides, the parties and the court system are all losers.”

Ahem.  Not “all” are losers.  ICC’s lawyers seem to have done just fine, having charged their client a cool $4.6 million for the extraordinary results they obtained.

Now, I don’t know about you, but I’d be kinda embarrassed taking $4.6 million from a client for bringing a lawsuit that a first year law student probably could have seen through on a contracts exam.  And not for nothing, but what’s with the fees?  Really, that is almost exactly $100,000 a month for four years.  Just for comparison purposes, I added up the time my firm put in on the crane case, which has been going on now for over eight years, included a mistrial, a trial that lasted a full year, several appeals and a bankruptcy.  Our time on that case has come out to $1.5 million, give or take a few dollars.  Admittedly, I had co-counsel, so double my time.

I don’t get paid by the hour, so I have no incentive to run up time charges or inflate bills. I’m not saying that anybody has done so here, obviously I don’t know that, but I’m just saying.  That’s a lot of legal fees.

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