In Peptide Tech. LLC v. Avidia Bank, a Massachusetts district court granted Avidia Bank’s motion to dismiss all five counts asserted by Peptide Tech, LLC, a Wyoming-based merchant engaged in the sale of peptides marketed as research chemicals.
The case arose from Mastercard’s placement of Peptide Tech on the Member Alert to Control High-Risk Merchants (MATCH) list in December 2024, following Avidia’s reporting of the merchant under a “violation of standards” designation. Peptide Tech alleged, among other claims, that Avidia’s conduct in causing that placement and terminating a merchant processing agreement (MPA) constituted a violation of Chapter 93A, Section 11.
Peptide Tech’s Chapter 93A claim centered on two theories of allegedly deceptive or unfair conduct by Avidia. First, Peptide Tech argued that Avidia’s agreement to provide payment processing services, followed by its decision to terminate those services for purportedly unjustified or arbitrary reasons, constituted deceptive and misleading conduct. Second, the plaintiff alleged that Avidia affirmatively misled the card brands into believing Peptide Tech’s products were unapproved or otherwise disapproved, when in fact they were not subject to any legal or regulatory prohibition.
The court dismissed the Chapter 93A claim in its entirety. On the first theory, the court emphasized that the MPA expressly granted Avidia “sole discretion” to terminate the agreement. The court relied on the Massachusetts Supreme Judicial Court’s analysis in A.L. Prime Energy Consultant, Inc. v. Massachusetts Bay Transportation Authority, which made clear that “sole discretion” language unambiguously permits unilateral termination. Because the termination was expressly authorized by the contract, the court held that it was materially different from a “deceptive act” within the meaning of Chapter 93A. This is an important defense principle: where a party exercises a right expressly granted by contract, that exercise ordinarily cannot be reframed as a deceptive or unfair act under Chapter 93A.
On the second theory — that Avidia misled the card brands about the approval status of Peptide Tech’s products —the court found that Peptide Tech had failed to plead the requisite factual specificity. Chapter 93A claims sounding in fraud are subject to the heightened pleading standard of Fed. R. Civ. P. 9(b), which requires a plaintiff to specifically allege the time, place, and content of the false representations at issue. Peptide Tech’s complaint did not identify when or where Avidia allegedly made false statements to the card brands. The court further noted the internal inconsistency in Peptide Tech’s own pleading: Peptide Tech had acknowledged elsewhere in the complaint that Mastercard never disclosed the basis for the “violation of standards” finding, which undermined its conclusory assertion that Avidia must have told the card brands that Peptide Tech’s products were unapproved. The court refused to credit that speculative inference at the pleading stage.
The court also reaffirmed the well-established Chapter 93A principle that a mere breach of contract, without more, does not constitute a Chapter 93A violation. For a contract-related dispute to rise to the level of a Chapter 93A claim, the conduct must involve something beyond a mistake or an honest commercial dispute — some level of bad faith must be present. Here, Peptide Tech essentially attempted to re-plead its breach of contract theory as a 93A violation by labeling Avidia’s termination decision as “unjustified or arbitrary.” The court rejected that approach, underscoring that creative relabeling of contract conduct may not transform an entity’s alleged actions into a Chapter 93A violation, particularly where the defendant acted within the express terms of the agreement.