Lawsuit Against Target Gains Class Action Status
Yesterday, U.S. District Court Judge Paul A. Magnuson ruled against Target’s claim that the lawsuit against them should not gain class action status.
Financial institutions filed the suit due to a December 2013 security breach, when hackers gained access to Target’s computer system and stole the financial information of more than 100 million Target customers.
While the consumer case has settled, banks are still seeking recompense. Umpqua Bank, Mutual Bank, Village Bank, CSE Federal Credit Union, and First Federal Savings of Lorain collectively claim a loss of $30 million, as they had to reissue approximately 25,000 debit and credit cards.
In his 16-page ruling, Judge Magnuson calls the retailer’s computer system, “virtually unfettered,” so Target was negligent in protecting consumers’ financial information.
Target claims the credit card companies, “were not required by contract, law, or regulation to reissue” the potentially breached cards and call this a “business decision.” Target goes on to say that there is no proof the banks reissued the cards “as a result of the breach.”
Judge Magnuson calls these claims absurd, as Target, in response to the breach, issued new RedCards to all of its customers.
While each bank may eventually need to release information about its specific damages, class action status allows all financial institutions to file a single claim. Additionally, because the case has been designated a class action suit, other banks can now join as plaintiffs.
Visa and MasterCard have already settled with Target and cannot join the lawsuit.