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In re Target Corp. Customer Data Security Breach Litigation

United States District Court, D. Minnesota

May 17, 2017

In re Target Corporation Customer Data Security Breach Litigation, This document relates to


          Paul A. Magnuson United States District Court Judge

         This matter is before the Court on limited remand from the Eighth Circuit Court of Appeals. For following reasons, Consumer Plaintiffs' renewed Motion to Certify Class in Accordance with Limited Remand Order is granted.


         On November 17, 2015, after nearly two years of litigation, this Court approved the settlement of the consumer cases in this multi-track Multi-District Litigation arising out of a massive data breach that involved tens of millions of Target customers' personal financial information. (Docket No. 645.) In doing so, the Court overruled the objections of Objector Leif Olson (Docket No. 513) that the settlement class was not appropriately certified under Rule 23. Olson appealed, and the Eighth Circuit Court of Appeals determined that this Court's evaluation of class certification was not the “rigorous analysis” that precedent required. In re Target Corp. Customer Data Sec. Breach Litig., 847 F.3d 608, 612 (8th Cir. 2017). The Eighth Circuit thus remanded the matter for a more detailed analysis of one of Olson's objections to certification, specifically whether class representatives and class counsel can adequately represent the class as a whole.[1]

         As the Eighth Circuit stated, this Court must “evaluate upon remand” the following issues:

First, whether an intraclass conflict exists when class members who cannot claim money from a settlement fund are represented by class members who can. Second, if there is a conflict, whether it prevents the class representatives “from fairly and adequately protecting the interests of all of the class members.” Third, if the class is conflicted, whether the conflict is “fundamental” and requires certification of one or more subclasses with independent representation.

Id. at 613 (citations omitted).

         Plaintiffs then brought a renewed Motion to Certify Class in accordance with the limited remand. Olson opposes the Motion. The Court held a hearing on the Motion on May 10, 2017, at which Plaintiffs, Olson, and Target weighed in on the issues.


         A. The Class and Settlement

         The class as preliminarily and finally certified consists of Target customers in the United States “whose credit or debit card information and/or whose personal information was compromised as a result of the [December 2013] data breach.” (Docket No. 645 at 1.) The parties estimate that the personal information of nearly 100 million American consumers was compromised in the breach.

         Target agreed to settle the consumers' claims by paying $10 million directly to class members, instituting substantial reforms to prevent the occurrence of another data breach, paying all expenses of class notice and settlement administration in addition to the $10 million settlement payment, and paying attorney's fees of slightly less than 30% of the total fund-also separate from the $10 million settlement payment.

         The settlement provides for consumers to be reimbursed for all of their documented losses from the Target data breach, up to a maximum of $10, 000.[2] Customers who did not suffer any direct loss but who purchased identity theft protection or credit monitoring services after the data breach are eligible for reimbursement of those expenses. And, once all claims and class representative service awards are paid, the settlement funds will be distributed on a pro-rata basis to individuals who do not have any documented proof of loss. At the time of the final settlement approval hearing, Consumer Plaintiffs estimated that such payments would amount to approximately $40 per claimant.

         Since the November 2015 settlement approval, more than 225, 000 individuals have submitted claims for reimbursement under the settlement. No claims have yet been paid, however, because of the pending appeals by Olson and one other objector.

         B. Rule 23

         A district court may not certify a class until it “is satisfied, after a rigorous analysis, ” that Rule 23(a)'s certification prerequisites are met. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 351 (2011) (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982)) (internal quotation marks omitted). Consistent with the Supreme Court's premise that “actual, not presumed, conformance with Rule 23(a) remains . . . indispensable, ” Falcon, 457 U.S. at 160, after initial certification, the duty remains with the district court to assure that the class continues to be certifiable throughout the litigation, Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1145 (8th Cir. 1999). See also Barney v. Holzer Clinic, Ltd., 110 F.3d 1207, 1214 (6th Cir. 1997) (“The district court's duty to assay whether the named plaintiffs are adequately representing the broader class does not end with the initial certification . . . .”). Where, as here, adequacy of class representation is at issue, “close scrutiny” in the district court is even more important given the need to protect the due process rights of absent class members. See Rattray v. Woodbury Cnty., 614 F.3d 831, 835 (8th Cir. 2010).

         In re Target, 847 F.3d at 612. As the Eighth Circuit repeatedly emphasized, this Court must conduct a “rigorous analysis” of the requirements for class certification. That analysis must examine whether the named representatives have common interests with the class, and whether those representatives will prosecute those interests vigorously through class counsel. Id. (citing Fed.R.Civ.P. 23).

         1. Intra-Class Conflict

         There are two components to the class-conflict analysis. First is whether there are class representatives who have suffered the same or similar injury as the class members they seek to represent. Second is whether some class representatives and class counsel have interests that are so at odds with other class representatives and class members that a singular class is inappropriate.

         The class representatives in this case include individuals who suffered no demonstrable or quantifiable injury. Indeed, there are numerous class representatives who, like Olson, allege only that their personal information was stolen in the data breach and do not allege any other element of damages. (See, e.g., 1st Am. Compl. (Docket No. 258) ¶¶ 35, 36, 45, 64, 65, 66; see also Esades ...

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