Banks Won’t Sign Target Data Breach Class Action Settlement

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

On May 22, Target Corp. announced that the retail company and MasterCard Inc. did not get enough banking institutions to agree to participate in a $19 million Target data breach settlement. This settlement was supposed to settle a proposed Target data breach class action lawsuit filed in Minnesota federal court (which is consolidated in a larger Target data breach multidistrict litigation), alleging that because of the massive 2013 Target data breach compromised countless of Target consumers’ credit card data.

According to the Target data breach class action settlement agreement, Target and MasterCard needed at least 90 percent of banks and credit unions to join the proposed Target data breach class action settlement by May 20, in order to tackle one piece of the data breach MDL concerning the 8.8 million MasterCards affected by the Target breach.

The number of banks of the hundreds of financial institutions affected by the Target data breach that have agreed to the $19 million settlement offer has not be released. However, the attorneys representing the financial institutions in this Target data breach class action lawsuit state that if the percentage was close enough, Target and MasterCard would have said so to the court and U.S. District Judge Paul A. Magnuson.

The attorneys for the banks and credit unions also argued that the proposed $19 million Target data breach class action settlement is miniscule when compared to the estimated $160 million owed to the MasterCard accounts and he believes the individual banks came to the same conclusion. Additionally, the lack of response from the financial institutions amounts to a rejection of the proposed Target data breach class action settlement, meaning that this could be the financial institutions proclaiming that they are done being held financially responsible for other companies’ data breaches.

Even if MasterCard and Target had managed to get 90 percent of the banks and credit unions to sign onto the settlement, this Target class action lawsuit would not have been over by a long shot. According to the Target data breach MDL that this case is a part of, MasterCard only represents a third of the approximately 40 million cards compromised during the 2013 Target data breach. About 110 million Target consumers’ financial and personal information may have been compromised in the 2013 data breach.

Back on April 27, Target had argued those institutions that who participated in the Target data breach class action settlement would be entitled to receive over 70 percent of the maximum recoverable amount on their data breach claims. The national retailer also asked Judge Magnuson to deny the bank credit unions’ motion  for a preliminary injunction that would void the Target data breach class action settlement.

Since this data breach class action settlement was announced by the two companies on April 15, the deal has faced a wave of opposition. The legal representatives for the data breach Class have stated that they were not consulted or involved in the Target data breach settlement discussions, a fact that has led them to accuse Target of unfairly asking for a full release of the bank and credit unions’ data breach claims against the popular retailer.

The financial institutions are represented by Zimmerman Reed PLLP, Lockridge Grindal Nauen PLLP, Chestnut Cambronne PA, Reinhardt Wendorf & Blanchfield and Barrett Law Group PA, among others.

The Target Data Breach 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.

UPDATE: Target has agreed to a class action settlement with financial institutions that were affected by the data breach. Financial institutions can get more information about the settlement at www.TargetBankSettlement.com.