Plaintiffs Win Class Certification in Target Data Breach Litigation

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On September 15, 2015, U.S. District Court Judge Paul A. Magnuson granted class certification to all entities that issued payment cards that were compromised during Target’s 2013 holiday shopping season data breach. The widely reported incident lasted for over three weeks, and as a consequence, computer hackers were able to steal the financial information of more than 40 million Target customers.

Both consumers and financial institutions sued Target Corporation after the company’s disclosure of the breach, alleging that the Minnesota-based company was negligent in failing to provide sufficient security to prevent hackers from accessing their data and had violated Minnesota’s Plastic Security Card Act. After consolidation of the cases into a multi-district litigation, the Court separated the actions accordingly into the “Consumer Cases” and the “Bank Cases.”

In March 2015, just three months after denial of the retailer’s motion to dismiss, a settlement was preliminarily approved in the Consumer Cases. Under the agreement, Target agreed to pay up to $10 million to class members who could prove substantial loss as a result of the data breach. Those individuals who proved substantial loss were eligible for a maximum of $10,000.

After the Consumer Cases settlement, which is still pending final approval, only the Bank Cases remained. In August 2015, a portion of the Bank Cases was resolved as Target agreed to provide up to $67 million to Visa issuers. Nevertheless, the lead plaintiffs—four banks and a credit union—continued to pursue class certification under Rule 23(b)(3) against Target.

Judge Magnuson, in granting class certification, ruled that “given the number of financial institutions involved and the similarity of all class members’ claims, Plaintiffs have established that the class action devise is the superior method for resolving this dispute.” In a statement quoted by Reuters, lead plaintiffs’ counsel Charles Zimmerman stated, “This important ruling brings financial institutions one step closer to collectively holding Target accountable for its unprecedented data breach.”

The case is: In re: Target Corporation Customer Data Security Breach Litigation, Docket No. 0:14-md-02522.

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