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<b><i>Online Extra:</b></i> Banks' Lawyers Balk at Target's Data-Breach Deal
Plaintiffs lawyers representing some banks and financial institutions caught up in Target's 2013 data breach say the $67 million deal struck last month between the retailer and Visa Inc. leaves their clients shortchanged.
The banks and credit unions are the only plaintiffs left in the data breach litigation after Target paid $10 million in March to'settle'more than 140 class actions filed by its customers.
The'deal, made public on Aug. 18, is designed to reimburse banks that issued Visa cards affected by the breach, which compromised 40 million credit and debit cards.
But plaintiffs lawyers representing those financial institutions claim the Visa deal doesn't compensate them enough for costs incurred in reissuing cards and reimbursing customers for fraudulent charges.
In a statement on Aug. 20, lead plaintiffs lawyers Karl Cambronne, a shareholder at Chestnut Cambronne, and Charles 'Bucky' Zimmerman, a founding partner of Zimmerman Reed, both in Minneapolis, said the timing of the Visa settlement was no coincidence, noting that the deadline to participate in the deal is Sept. 4 ' six days before a hearing on their motion for class certification. They claim the deal was Target's attempt to avoid higher damages they are asking for on behalf of a class of thousands of banks and credit unions.
'This eleventh-hour settlement is a clear attempt by Target to prevent financial institutions from recognizing the extent of Target's negligence and the strength of joining their claims against the retailer,' they said. 'We strongly recommend that financial institutions not accept the optional alternative recovery offers or sign any document containing a release against Target.'
Visa was not a plaintiff to a data breach lawsuit against Target and the involvement of a third party such as the credit card company is an unusual twist to the data breach litigation. But it could end up being a significant advantage for Target, which fought to keep the class certification papers under seal, citing the potential risk of another attack.
'It's best for Target not to be involved in the litigation because they won't be in discovery giving away more information than what's happened,' said Michael Sussmann, a partner in the privacy and data security practice at Perkins Coie in Washington, who is not involved in the deal.
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