Judge Refuses to Dismiss Neiman Marcus Data Breach Class Action

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Neiman Marcus Group LLC has lost a bid to toss a class action alleging that the retail clothing chain’s negligence caused a massive data security breach and then hid the problem right before the holiday shopping season in 2013.

The Neiman Marcus class action lawsuit was filed by Hilary Remijas on behalf of consumers affected by the alleged breach. The lawsuit alleged that data security measures were neglected by Neiman Marcus leading to the data breach and that Neiman Marcus kept the breach secret from consumers so the retail giant would not be affected during the lucrative holiday shopping season.

Initially, U.S. District Court Judge James B. Zagel dismissed the Neiman Marcus class action in September of 2014 when he found that consumers would not be injured because their financial institutions would reimburse monetary losses resulting from the breach; however, the plaintiffs appealed their claims to the Seventh Circuit who overturned the dismissal.

The Seventh Circuit ruled in July of last year that the proposed class had, in fact, suffered injuries, including cost of credit monitoring services and replacement card fees. “At this stage in the litigation, it is plausible to infer that the plaintiffs have shown a substantial risk of harm from the Neiman Marcus data breach,” stated the court in its decision.

“Why else would hackers break into a store’s database and steal consumers’ private information?” they asked, rhetorically. The Seventh Circuit also pointed out that Neiman Marcus must have expected their consumers would suffer consequences from the data breach because they offered free credit counseling services.

The Neiman Marcus data breach class action lawsuit landed back in district court. The luxury retailer argued that the claims should still be dismissed because the injuries identified by the Seventh Circuit did not demonstrate that Neiman Marcus had be negligent in regards to data security.

The plaintiffs contended, in turn, that the Seventh Circuit had found that whether or not Neiman Marcus consumers had been reimbursed by their financial institutions for charges resulting from the data breach was factual and could not be dismissed. Additionally, the plaintiffs pointed out that at a minimum, the proposed class had claims based on the amount of time spent dealing with potentially fraudulent charges.

Judge Zagel agreed with the plaintiffs and refused to dismiss the Neiman Marcus class action lawsuit. Judge Zagel stated that dismissal of the lawsuit was “not appropriate at this time.”

The plaintiffs are represented by Tina Wolfson, Robert Ahdoot and Theodore W. Maya of Ahdoot & Wolfson PC; John A. Yanchunis of Morgan & Morgan Complex Litigation Group; Joseph J. Siprut of Siprut PC; W. Lew Garrison Jr. of Heninger Garrison Davis LLC; Lionel Z. Glancy and Brian P. Murray of Glancy Binkow & Goldberg LLP; Abbas Kazerounian ofKazerouni Law Group APC; Joshua B. Swigart of Hyde & Swigart; and Paul C. Whalen of Law Offices of Paul C. Whalen.

The previous Neiman Marcus Data Breach Class Action Lawsuit is Donna Clark v. Neiman Marcus Group LLC, Case No. 1:14-cv-0236, in the U.S. District Court for the Northern District of Georgia.

The current Neiman Marcus Data Breach Class Action Lawsuit is Hilary Remijas, et al. v. the Neiman Marcus Group LLC, Case No. 1:14-cv-01735, in the U.S. District Court for the Northern District of Illinois, Eastern Division.

UPDATE: On March 17, 2017, Neiman Marcus agreed to pay $1.6 million to end a data breach class action lawsuit that alleged the credit card data of 350,000 shoppers was compromised.

UPDATE 2: On June 21, 2017, an Illinois federal judge preliminarily approved a $1.6 million class action settlement that will resolve allegations Neiman Marcus failed to safeguard customers’ credit card data, which was exposed in a 2013 data breach.

UPDATE 3: The Neiman Marcus Data Breach Class Action Settlement is now open. Click here to file a claim.

UPDATE 4: October 2019, a new, updated website has been established for a $1.6 million Neiman Marcus data breach class action settlement after the initial settlement terms were rejected.

UPDATE 5: On Nov. 15, 2019, a $1.6 million Neiman Marcus data breach class action settlement was initially approved after rejecting a previous version.