ST. PAUL, Minn. (10/7/14)--U.S. District Judge Paul Magnuson will hear a motion to dismiss a class action lawsuit brought against Target as a result of the data breach that resulted in financial institutions incurring costs to reissue credit and debit cards, as well as addressing potential fraud.
The plaintiffs include at least 10 credit unions and a number of banks that allege "the breach, which compromised the records of 110 million customers and caused plaintiffs enormous losses, would not have happened in Target's defective data security practices had not let it happen," according to the lawsuit.
Target's motion to dismiss argues that it does not owe a duty of care to financial institutions, and that the scope of Minnesota's favorable state law is not broad enough to cover Target's alleged negligence.
Many of the same lawyers representing the plaintiffs against Target are seeking plaintiffs for a similar case against Home Depot, which also had a data breach. According to Credit Union National Association General Counsel Eric Richard, at least three claims involving credit unions have been filed against Home Depot.
CUNA has been active in connecting credit unions with class action lawyers and has been conducting surveys of credit unions to assess the cost of such breaches. According to a survey on the Target data breach, credit unions incurred $30.6 million in costs directly related to the breach--not including fraud costs.
"CUNA will serve as a kind of information center to help credit unions get in touch with the various class action firms that have decided to invest in this type of litigation," Richard said. "We continue to believe that it would be inadvisable for CUNA to try to litigate these cases itself, because we would be challenged on whether we have standing to sue. However, we are looking for opportunities to file briefs supporting the credit union position in these cases."
A decision on the motions presented at the Dec. 11 hearing is likely in early 2015.