On Dec. 2, 2015, it was announced that Target Corporation agreed to settle claims with financial institutions over the 2013 data breach that compromised more than 40 million payment cards. This marks the first time that a retailer has agreed to a data breach settlement with financial institutions. The settlement, which has received preliminary approval from United States District Judge Paul A. Magnuson, totals nearly $40 million.
The settlement applies to all United States financial institutions that issued payment cards put at risk as a result of the 2013 data breach. A total of $20,250,000 is to go directly to the class members and to pay for the notice and administration of the settlement, while the remaining $19,107,939.38 will fund MasterCard’s Account Data Compromise program relating to the breach. The financial institutions also already received a settlement from Visa reportedly valued at $67 million. Beasley Allen is among the firms representing the financial institutions in multidistrict litigation (MDL) against Target, and its lawyers are serving on the settlement committee that helped structure this settlement.
The massive Target data breach occurred just as the 2013 holiday shopping season was getting underway, between Nov. 27 and Dec. 15. It is believed to have compromised at least 40 million credit and debit cards and resulted in identity theft affecting as many as 110 million people. A consolidated class-action complaint was filed in August 2014, and the district court refused to dismiss most of the litigation in December 2014. Then, in September of this year, the financial institutions won their motion to certify a class of all financial institutions that issued cards impacted by the hack.
Class counsel also requested service awards for each of the five settlement class representatives as well as attorneys’ fees and costs, which Target has agreed to pay separately from the settlement fund and pledged not to appeal any award of attorneys’ fees that is less than $20 million. The final settlement approval hearing is set for May 10.
If you need more information relating to the settlement or anything else about the litigation, contact Dee Miles or Leslie Pescia, lawyers in our Consumer Fraud and Commercial Litigation Section, at 800-898-2034 or by email at Dee.Miles@beasleyallen.com or Leslie.Pescia@beasleyallen.com. Dee is the Section Head and Leslie is a lawyer in the Section.
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