The $10 million settlement by Target Corp. with consumers over the retailer’s massive data breach is a pretty good indication that banks, credit unions, and other financial institutions remaining in the litigation with the company are in very good shape. They are in a much stronger position to prove that the substantial costs incurred replacing payment cards are directly linked to the intrusion. U.S. District Judge Paul A. Magnuson has already given preliminary approval to the settlement with consumers. If given final approval, the accord would resolve legal claims brought on behalf of the 110 million consumers impacted by the 2013 breach.
It should be noted that this settlement does not affect the second prong of the litigation. That is the part of the litigation brought on behalf of financial institutions that contend Target is liable for the costs incurred as a result of replacing millions of customer payment cards. Lawyers in our firm’s Consumer Fraud Section are heavily involved in that part of the litigation.
The settlement clearly indicates that Target may very well need to negotiate a settlement that would end all of the litigation. Target has the capacity and the ability, and should now have the desire, to resolve the financial institutions’ claims. However, thus far, there have been no indications that Target is ready to talk on that front. So trial preparation will continue.
Kevin Cambronne of the Chestnut Cambronne law firm serves as lead Plaintiffs counsel for the financial institutions. Our firm is serving in a leadership position on the Financial Institution side of the case. Dee Miles, who is the head of our firm’s Consumer Fraud Section, was appointed last spring by Judge Magnuson to serve on the Plaintiffs Leadership Committee. Dee, and the other lawyers in leadership roles, have successfully defeated Target’s Motion to Dismiss the complaint and now are in the midst of heavy discovery and are on track for a trial next January.
The settlement on the consumer side of the case will certainly be helpful to the entire case. But it should be noted that the Financial Institution side of the case is very different, especially as it relates to damages. Clearly, the banks have incurred substantial damages. Those include the reissuing of credit/debit cards; fraudulent charges that resulted from data stolen from Target; the labor costs associated with re-issuance and fraud charges; and other damages. The class of Financial Institutions consist of hundreds of banks, credit unions, and other entities. We believe the result in this part of the litigation will involve huge class damages. The case is moving in a most positive direction and we will keep our readers posted on developments in this most significant case.
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