Judge Slaps Retailer Target with a Class Action Lawsuit over Data Breach
A federal judge has certified a class-action lawsuit against Minneapolis-based retailer Target that had originally been brought up by several banks for damages after the retailer’s data breach in 2013.
U.S. District Judge Paul Magnuson in St.Paul, Minnesota granted class-action status to several financial institutions that are suing Target Corp. for damages during the retailer’s massive data breach in 2013, reports Reuters.
Charles Zimmerman, a leading lawyer, representing the banks said in a statement:
This important ruling brings financial institutions one step closer to collectively holding Target accountable for its unprecedented data breach.
The 2013 breach that occurred during the holiday season that year compromised at least 40 million credit cards altogether over a three-week period. In the immediate aftermath of the breach at the time, Target customers sought out for replacement cards from banks and other credit-card companies to replace the compromised cards.
Target is Likely to Pay up Plenty
A spokeswoman speaking for Target, Molly Snyder, revealed that the retailer was “disappointed” with the ruling and would “evaluate its next steps” after further review of the decision.
Target estimates that it has incurred about $264 million in breach-related costs and damages, including funds earmarked for litigation. Insurance has covered about $90 million. The new ruling makes the possibility of a substantial settlement all the more likely.
Target has already agreed to pay as much as $67 million to affected financial institutions that issue Visa cards, in a deal struck four weeks ago, directly with the credit card network Visa Inc.
A proposed $19 million settlement with MasterCard Inc. fell through earlier this year after a certain number of banks refused the agreement.
Snyder stressed that the class action suit only includes card issuers who haven’t settled their claims and declined to comment on the number of financial institutions that agreed to partake in the Visa deal from last month.
However, Attorney Zimmerman contends that the Visa deal, much like the unsuccessful MasterCard settlement, does not reimburse banks fully for their losses and was negotiated without the necessary input from the plaintiffs.
“We will provide notice to financial institutions that are now members of this class, and look forward to obtaining proper compensation for the losses they suffered from the Target breach,” Zimmerman said in a statement.
Featured image from Northfoto / Shutterstock.