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Kao v. Cardconnect Corp.

United States District Court, E.D. Pennsylvania

June 26, 2019

TEH SHOU KAO, and T S KAO, INC., on behalf of themselves and all others similarly situated, Plaintiffs,
v.
CARDCONNECT CORP., Defendant. TECH LOUNGE SP, LLC, and THE LAW OFFICE OF KEVIN ADAMS, PLLC, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
CARDCONNECT CORP., Defendant.

          MEMORANDUM

          GERALD J. PAPPERT, J.

         Plaintiffs are family-owned and operated small businesses: T S Kao, Inc., is a Chinese restaurant in Michigan run by Teh Shou Kao and his wife; Tech Lounge SP, LLC, is a video game lounge and coffee bar in Wisconsin owned by a husband and wife; and The Law Office of Kevin Adams, PLLC, is a firm in Michigan staffed by a husband, wife and their daughters. Plaintiffs used CardConnect, a merchant services provider, to process their debit and credit card payments. After CardConnect allegedly charged unauthorized rates and fees, Plaintiffs filed class action lawsuits.

         The case was previously assigned to Judge Ditter, who determined that there was no express binding contract between the parties. Although the parties agreed that there was an implied contract, they disputed its terms. Judge Ditter directed the parties to take discovery on that issue and then submit briefs on their respective proposed terms. After reviewing the parties' extensive submissions and responses thereto, Judge Ditter agreed with the Plaintiffs that a service contract between the parties dictated the terms of the implied agreement. CardConnect seeks reconsideration of Judge Ditter's findings or, in the alternative, certification for interlocutory review. For the reasons set forth below, the Court denies CardConnect's Motion for Reconsideration as well as its request for certification for interlocutory review.

         I

         Judge Ditter discussed the facts of this case in a prior memorandum. See (Order, ECF No. 68). Kao and T S Kao filed their four-count class action Complaint against CardConnect on November 1, 2016. See (Compl., ECF No. 1). In Counts One and Two, they alleged that no binding contract existed between the parties and, as a result, CardConnect was unjustly enriched. See (id. at ¶¶ 79-89). In Counts Three and Four, Plaintiffs pled an alternative theory of liability: if a contract existed, then CardConnect breached it and the implied covenant of good faith and fair dealing, and certain contract terms were invalid. See (id. at ¶¶ 90-107).

         The parties filed a joint status report on September 22, 2017. (Status Report, ECF No. 40.) In it, they disagreed about the discovery process with respect to class certification. Plaintiffs proposed “proceeding with class discovery, followed by a motion for class certification, and then dispositive motion practice.” (Id. at 4.) CardConnect, however, proposed to narrow the issues first. (Id. at 2.) Specifically:

Defendant believes that the Court envisioned the matter proceeding in a phased approach starting with discovery related to the named Plaintiffs, the parties agreeing to Stipulated Facts to narrow the issues in dispute and identify the legal theories that the Plaintiffs seek to pursue on a class basis . . . [T]he discovery produced to date should enable the Plaintiffs to determine whether they will pursue their claims that there is no enforceable written contract between the parties (Count I) and that they are entitled to recovery under an unjust enrichment theory (Count Two), or that there is an enforceable contract between the parties, but CardConnect breached an implied covenant of good faith and fair dealing (Count Three), and that certain contractual terms are unconscionable (Count Four).

(Id. at 2-3.) Also in their joint status report the parties requested consolidation with Tech Lounge SP, LLC, and The Law Office of Kevin Adams, PLLC, v. CardConnect Corp., No. 17-4014 (E.D. Pa. Sept. 7, 2017), because the plaintiffs there had filed a class action Complaint against CardConnect on September 7, 2017, alleging the same four counts as in Kao. (Id. at 2.); see Tech Lounge SP, LLC, and The Law Office of Kevin Adams, PLLC, v. CardConnect Corp., No. 17-4014 (E.D. Pa. Sept. 7, 2017), (Compl. ¶¶ 90-126, ECF No. 1). The cases were consolidated on September 26, 2017. See Kao and T S Kao, Inc., v. CardConnect Corp., No. 16-5707 (E.D. Pa. Sept. 26, 2016), (Order, ECF No. 41).

         No written record exists of Judge Ditter's ruling with respect to the discovery dispute; however, on October 10, 2017, CardConnect filed a memorandum arguing that there was a binding express contract between the parties, and if not, there was an implied contract. See (Def.'s Mem., ECF No. 44). In response, Plaintiffs asserted that there was no binding express contract but conceded that there was an implied contract. See (Pls.' Ans., ECF No. 45). At some point thereafter during a telephone conference, Judge Ditter determined there was no express binding contract between the parties.[1]Neither side sought reconsideration of this ruling.

         From November 2017 to January 2018, the parties unsuccessfully attempted to stipulate to the terms of the implied contract. See (ECF Nos. 47, 51-52, 55). Consequently, Judge Ditter ordered the parties to conduct discovery on that issue. See (Stip. Sched. Order, ECF No. 58). On March 26, 2018, the parties filed memoranda on their respective proposed implied contract terms. See (ECF Nos. 60-61). Plaintiffs argued that “[t]he Court should hold that the implied contract terms required CardConnect to process Plaintiffs' payments in accordance with the Service Fee Schedule.” (Pls.' Mem. at 1, ECF No. 60.) CardConnect, however, urged Judge Ditter to consider the Service Fee Schedule among other “communications, correspondence, and the parties' own course of dealings and course of performance.” (Def.'s Mem. at 2, ECF No. 61.) In addition to the parties' memoranda and numerous exhibits, they also filed responses. See (ECF Nos. 65-67).

         On September 26, 2018, Judge Ditter ruled in favor of the Plaintiffs, finding that “CardConnect agreed to provide its services and rates set forth in each Plaintiff's service contract and is limited to those terms absent a mutual modification of the implied contract.” (Order, ECF No. 69.) On October 10, 2018, the case was reassigned from Judge Ditter to this Court. See (ECF No. 70). That same day, CardConnect moved for reconsideration or, in the alternative, certification for interlocutory review of Judge Ditter's September 26 Order. (Mot. Recons., ECF No. 71.)

         II

         A motion for reconsideration should be granted “sparingly” and should not be used to “rehash arguments which have already been briefed by the parties and considered and decided by the [c]ourt.” PBI Performance Prods., Inc. v. NorFab Corp., 514 F.Supp.2d 732, 744 (E.D. Pa. 2007) (citation omitted). It should not give a party a “second bite at the apple.” Bhatnagar v. Surrendra Overseas Ltd., 52 F.3d 1220, 1231 (3d Cir. 1995). “A motion for reconsideration is not properly grounded on a request that a court reconsider repetitive arguments that have already been fully examined by the court . . . .” Vaidya v. Xerox Corp., No. 97-547, 1997 WL 732464, at *4 (E.D. Pa. Nov. 25, 1997). A party seeking reconsideration must show “(1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court granted the motion . . . or (3) the need to correct a clear error of law or fact or to prevent manifest injustice.” Max's Seafood Cafe ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). Thus, a motion for reconsideration may address “only factual and legal matters that the Court may have overlooked” and may not “ask the [c]ourt to rethink what it had already thought through-rightly or wrongly.” Glendon Energy Co. v. Borough of Glendon, 836 F.Supp. 1109, 1122 (E.D. Pa. 1993) (citation omitted).

         CardConnect timely filed its Motion pursuant to Local Rule 7.1(g), arguing that the Court erred by failing to apply the law governing implied contracts and by failing to cite to a single legal authority. (Mot. Recons. at 2.) CardConnect also asserts that the Court committed a clear error of law when it “circumvented the role of the jury and decided the central issue by weighing evidence and deciding disputed issues of fact.” (Id. at 1.) As a result, CardConnect contends that the Court should reconsider Judge Ditter's September 26 Order to prevent manifest injustice. Plaintiff, however, argues that ‚ÄúDefendant clearly does not agree with [Judge Ditter's] ruling . . . ...


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