A $39 million settlement was reached between Target Corporation and a class of banks and credit unions on December 1, 2015. Provost Umphrey filed a class action lawsuit against Target on January 29, 2014 on behalf of CommunityBank of Texas, N.A. and FNBT.com, Inc. and other similarly situated banks. The lawsuit was in response to the Target security breach that occurred in late 2013. During the breach, hackers obtained the debit and credit card information of approximately 40 million Target customers. Previouslym Target settled with MasterCard and Visa as a result of this litigation, bringing the combined value of the settlements to over $100 million.
Provost Umphrey's Michael Havard represents CommunityBank and FNBT.com. Havard handles complex commercial and business litigation, as well as Federal False Claims Act "Qui Tam" litigation.
"This settlement sets an important precedent that banks and credit unions do not have to bear the costs of merchants' negligence associated with data breaches. It's a win-win for all financial institutions in the country," says Havard.
The settlement gives each financial institution the opportunity to submit a "fixed premium" claim at $1.50 per card, or a 60% of-actual-losses claim. Target will also pay the plaintiffs' legal fees up to $20 million if approved by the court. The settlement negotiations were supervised by Judge Boylan, and the settlement agreement has received preliminary approval. A hearing for final approval is scheduled for May 10, 2016.