Atlanta attorney Joe Gleason (left) and Montana attorney Jeff Oven. (Courtesy photos)

A DeKalb County jury has awarded a Montana firm $135 million in a breach-of-contract battle with one of the world's largest electronic payments processors. 

The jury issued the verdict in favor of Frontline Processing Corp. on Monday after a weeklong trial, said Atlanta attorney Joe Gleason. It also rejected Global Payments' counterclaim, he said.

Gleason was co-counsel with Jeffery Oven of Crowley Fleck Law in Bozeman, Montana.

The jury awarded $24.3 million in direct damages for losses Frontline sustained after Global Payments stopped paying the Montana company monthly fees from merchants it recruited to do business with Global and $109.8 million in consequential damages resulting from the overall harm to Frontline's bottom line, Gleason said.

"The company was profitable and growing," the lawyer explained. "Now it's just treading water."

The jury also awarded $1.07 million in legal fees to pay for the DeKalb litigation and defending itself in a separate, related federal lawsuit, he said.

The jury simultaneously rejected Global Payments' counterclaims against Frontline, according to the jury verdict form.

DeKalb County Superior Court Judge Linda Hunter presided over the case.

Steven Rosenwasser, a partner at Atlanta's Bondurant, Mixson & Elmore who defended Atlanta-based Global Payments Inc., declined comment, referring The Daily Report to Global Payments.

Calling the case "completely without merit," a company spokeswoman said that Global Payments intends to appeal immediately.

"The outcome is inconsistent with the facts and well settled law, and we fully expect to prevail on appeal," said Kim Mann, Global Payments' vice president of corporate relations. "We will not stop until this gross miscarriage of justice is reversed."

Gleason said Frontline's case against Global Payments stems from a U.S. Consumer Financial Protection Bureau complaint filed in 2015 against multiple companies affiliated with the electronic payment industry, including Frontline and Global.

The CFPB lawsuit alleged that debt collectors and debt payment processors had allied to use robocalls to threaten and harass consumers into collectively paying millions of dollars in debts they did not owe. The suit alleged that debt collectors would not have been successful without the participation of telemarketing companies and payment processors.

Gleason—who also represented Frontline in the federal case—said the suit was the first time the federal government attempted to hold electronic payment processors liable for the wrongdoings of people who were swiping credit cards, including debt collectors who signed up for Global Payments' electronic payment processing services.

Both Frontline and Global Payments were dismissed from the suit in 2017 after U.S. District Senior Judge Richard Story sanctioned the CFPB for "willfully" violating the judge's repeated instructions to identify a factual basis for some of its claims and failing to make a knowledgeable witness available to speak on the agency's behalf.

But Gleason said that Global Payments "threw Frontline under the bus" in an effort to avoid blame and then used the CFPB complaint as "a convenient excuse" to withhold all of Frontline's residual fees, end what he said was a 13-year successful contractual relationship, "and, in the process, take over all of Frontline's merchants," he said.

Frontline acted as an independent sales contractor for Global Payments, soliciting merchants to use Global Payments' electronic payment services, Gleason said. The arrangement allowed Frontline to collect fees as high as $500,000 a month from Global Payments for hundreds of merchants who processed more than $20 million a month through Global Payments' electronic systems, the lawyer explained.

Global Payments' action stripped Frontline of its primary source of revenue. "Before all this happened, Frontline was a successful, growing company on a great trajectory in a solid industry that has boomed," Gleason explained.

Gleason said the dispute between Global Payments and Frontline centered on two debt collectors that Frontline recruited that had previously been approved by Global Payments through another contract sales company. Global Payments approved the debt collectors as customers a second time after Frontline submitted them as clients, he said. Global Payments never informed Frontline that, by then, Visa had notified Global Payments that it would not do business with debt collectors, Gleason said. Moreover, a Global senior vice president reassured Frontline's CEO that the debt collectors posed no problem, Gleason said.

But after the federal suit targeting the debt collectors' practices was filed, Global Payments publicly blamed Frontline for recruiting them, Gleason said. "It's not fair to publicly say Frontline snuck these guys in the back door when they shouldn't have when, in reality, that's not what happened, Gleason said.