Dynamic Accident Lawyers: Target Agrees to Pay Banks $39M in Data Breach Settlement

Target has reached an agreement with plaintiff financial institutions to settle a class action lawsuit stemming from the 2013 Target data breach for $39 million, and on Dec. 2 the Class of banks asked the court for preliminary approval of that settlement. Target had previously resolved a consumer class action in a separate settlement.

In this settlement with the remaining Class of financial institutions, Target has agreed to pay $20 million into a settlement fund that will pay back banks that had to issue new cards to its members because of the data breach.

As part of this same settlement, Target has also agreed to pay the remaining $19 million to MasterCard to resolve costs it paid to financial institutions based on the data breach. A class of MasterCard institutions had previously tried to settle for that $19 million sum earlier this year, but not enough financial institutions signed on to that potential settlement. In addition, Target has agreed to pay all administrative costs and expenses for notice to Class Members and distribution of the settlement, separate from the $39 million.

“The settlement thus provides significant relief to financial institutions and lies well within the range of reasonableness necessary” for the court to approve the Target data breach settlement, according to the lead plaintiff banks.

The Target data breach class action settlement documents indicate the parties have heavily litigated this case since 2013. “Millions of pages of documents were reviewed by the parties and 49 witnesses were deposed,” according to the plaintiff banks.

This class action settlement joins previous settlements with VISA for $67 million and with individual consumers for $10 million. This data breach settlement resolves claims that Target was negligent, and did not do enough to prevent the hacking of its financial data in December of 2013.

Class Members of the Target data breach settlement include all financial institutions in the United States that issued credit or debit cards that were compromised by the Target data breach, and that have not already settled.

Financial institutions that were not paid by VISA, MasterCard, or Target prior to this settlement will be able to apply for money from the $20 million settlement fund created by this agreement. From this settlement fund, banks will be able to get either $1.50 per card they had to replace, or 60 percent of the total amount the bank paid for “fraud, reissuance, and other costs related to the data breach.” Financial institutions that opt for the 60 percent restitution will have to prove their expenses before being paid from the settlement fund.

If the court approves the preliminary settlement, the lead plaintiff banks expect to contact affected banks directly and have a final approval hearing sometime next year.

The plaintiff class of financial institutions is represented by Charles Zimmerman, J. Gordon Rudd, Brian C. Gudmundson, and David M. Cialkowski of Zimmerman Reed PLLP, and Karl Cambronne, Jeffrey D. Bores, and Bryan L. Bleichner of Chestnut Cambronne PA, among others.

The Target Data Breach Class Action Lawsuit MDL is In re: Target Corp. Customer Data Security Breach Litigation, Case No. 0:14-md-02522, in the U.S. District Court for the District of Minnesota.

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