Anne Bucher  |  January 29, 2014

Category: Consumer News

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Michaels-Neiman-MarcusOn Monday, Neiman Marcus Group Ltd. LLC and Michaels Stores Inc. were hit with class action lawsuits over recent data breaches that may have put customers’ payment card information at risk.

Plaintiff Donna Clark filed a class action lawsuit against Neiman Marcus in Georgia federal court, claiming the retailer failed to take reasonable precautions to protect customer data. As a result, Clark says that she and other Neiman Marcus customers are at risk of identity theft.

Clark says that she used her credit card to make purchases at the Neiman Marcus store in Atlanta on July 23, 2013 and Sept. 26, 2013. According to the class action lawsuit, Clark received an email from Neiman Marcus stating that “some of our customers’ payment cards were used fraudulently.”

The class action lawsuit claims that Neiman Marcus learned of the breach in mid-December, but waited until earlier this month to disclose the data breach. An estimated 1.1 million Neiman Marcus customers’ payment card information may have been compromised due to the breach. Clark accuses the retailer of failing to notify customers of the data breach and warn them of potential ramifications in a timely manner.

Clark also says that Neiman Marcus failed to inform consumers about the “precise nature” of the data breach, “leaving the plaintiff and the class to guess at what data of theirs has been stolen and/or utilized in fraudulent transactions or for unjust purposes.

“The plaintiff and the class have had their privacy rights violated, have been exposed to the risk of fraud and identity theft, and have otherwise suffered damages,” the class action lawsuit says. “Neiman Marcus’ negligence is to blame.”

Clark seeks to certify a class of Neiman Marcus customers whose personal financial data, including but not limited to credit card and debit card information, was received by the retailer during a point-of-sale transaction in the last six months of 2013.

Plaintiff Christina Moyer filed a similar class action lawsuit against Michaels, alleging the craft store failed to secure and safeguard customers’ private financial information.

According to Moyer’s class action lawsuit, Michaels issued a statement on Jan. 25, 2014 that warned of a possible data breach.

“As you may have read in the news, data security attacks against retailers have become a major topic of concern,” the statement read. “We recently learned of possible fraudulent activity on some U.S. payment cards that had been used at Michaels, suggesting we may have experienced a data security attack.”

Although Michaels insisted that the security of its customers’ data is of “critical importance,” the craft retailer failed to disclose that it had been previously subject to a major data breach in May 2011, which resulted in a class action settlement. The class action lawsuit claims that Michaels failed to adequately monitor its payment systems in such a manner that would enable them to detect fraud or other signs of tampering “so that the breach of security and diversion of customer information was able to continue unnoticed for a period of time.”

Moyer filed the class action lawsuit on behalf of herself and other individuals in the United States who made purchases with a credit or debit cards at Michaels craft stores any time prior to Jan. 25, 2014.

These class action lawsuits were filed on the heels of a massive data breach that hit Target Corp. during the holiday shopping season, compromising the payment card data of an estimated 70 million customers. Target has already been hit with several class action lawsuits related to this data breach.

Clark is represented by James F. McDonough III and W. Lewis Garrison of Heninger Garrison Davis LLC. Moyer is represented by Mark T. Lavery of Hyslip & Taylor LLC LPA and Christopher V. Langone.

The Data Breach Class Action Lawsuits are Donna Clark v. Neiman Marcus Group Ltd. LLC, Case No. 1:14-cv-0236, in the U.S. District Court for the Northern District of Georgia, and Moyer v. Michaels Stores Inc., Case No. 1:140cv-00561, in the U.S. District Court for the Northern District of Illinois.

UPDATE: Michaels Stores Inc. urged a federal judge on May 28, 2014, to dismiss the proposed class action lawsuit, claiming that plaintiffs were not harmed by the data breach. 

UPDATE 2: The Neiman Marcus data breach class action lawsuit was dismissed on Sept. 16, 2014.

UPDATE 3: On July 20, 2015, the Seventh Circuit ruled that the proposed class had, in fact, suffered injuries, including cost of credit monitoring services and replacement card fees. The Neiman Marcus data breach class action lawsuit was then revived by plaintiff Hilary Remijas.

UPDATE 4: On Jan. 13, 2016, Neiman Marcus lost a bid to toss the refiled class action lawsuit.

UPDATE 5: 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 6: 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 7: The Neiman Marcus Data Breach Class Action Settlement is now open. Click here to file a claim.

UPDATE 8: 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 9: On Nov. 15, 2019, a $1.6 million Neiman Marcus data breach class action settlement was initially approved after rejecting a previous version.

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7 thoughts onClass Action Lawsuits Blame Neiman Marcus, Michaels For Data Breaches

  1. Top Class Actions says:

    UPDATE 7: The Neiman Marcus Data Breach Class Action Settlement is now open. Click here to file a claim.

  2. Top Class Actions says:

    UPDATE 6: 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.

  3. Top Class Actions says:

    UPDATE 5: 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.

  4. Top Class Actions says:

    UPDATE 3: On July 20, 2015, the Seventh Circuit ruled that the proposed class had, in fact, suffered injuries, including cost of credit monitoring services and replacement card fees. The Neiman Marcus data breach class action lawsuit was then revived by plaintiff Hilary Remijas.

    UPDATE 4: On Jan. 13, 2016, Neiman Marcus lost a bid to toss the refiled class action lawsuit.

  5. Top Class Actions says:

    UPDATE 2: The Neiman Marcus data breach class action lawsuit was dismissed on Sept. 16, 2014.

    1. adam silber says:

      Its currently on appeal at the 7th Circuit Court

  6. Top Class Actions says:

    UPDATE: Michaels Stores Inc. urged a federal judge on May 28, 2014, to dismiss the proposed class action lawsuit, claiming that plaintiffs were not harmed by the data breach.

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