Target’s Class Action Settlement In Danger
Target’s $17 million class action settlement, which would have resolved consumer claims over a 2013 data breach, is imperiled. The Eighth Circuit Court has identified a possible conflict of interest.
The appeal was triggered because the lower court had not seriously investigated claims by a class member, Leif Olson, that certain representatives were not adequately representing the entire class, as some were receiving compensation while the others were not.
Currently, the appeals court has sent the case back to the U.S. District Court for the District of Minnesota to reconsider class certification. If that court decides the class should not have been certified, the deal could fall through.
“Over 99 percent of the Target data breach class gets nothing in this multimillion dollar settlement, so we are glad that the Eighth Circuit recognizes that the District Court cannot rubber-stamp settlements where class counsel cuts corners on procedural fairness so they can get paid quickly and generously,” objector counsel Melissa Holyoak of the Center for Class Action Fairness in Washington said in an e-mailed statement to Bloomberg.
The settlement, which was approved in November 2016, provides a $10 million fund for customers and $6.75 million for plaintiffs’ attorneys.
The 2013 breach exposed the data of millions of Target customers’ payment cards. Under this settlement, any class member with a documented loss would be compensated first from the fund before remaining funds would be distributed to those with undocumented losses. Those who have not suffered a loss will not be compensated.
Olson argued the named class members, who would be compensated from the fund, should not have been able to represent people like him who had not suffered any losses. His argument is that even those members who did not receive money from the fund were required to release Target of liability for further claims arising from the breach.
This appeal will not affect the $39 million class settlement, which was approved in May 2016, between Target and banks.