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Objections Fall Short as Appeals Court Affirms Target Settlement

Last week, the U.S. Court of Appeals for the Eighth Circuit affirmed the district court’s approval of a $17 million settlement between Target Corp. and consumers whose credit card data was compromised in the 2013 data breach. In one of the largest data breaches to hit U.S. retailers, hackers stole information from 40 million credit and debit cards during the 2013 holiday season.

The settlement, initially reached in 2015, requires Target to establish a $10 million fund for the consumer class and to implement a number of data-security measures. The remaining $7 million of the settlement is earmarked for attorney’s fees.

This was the second trip to the Eighth Circuit in this case. Back in 2017, the Eighth Circuit vacated and remanded the district court’s order certifying the class and approving the settlement agreement after concluding that the district court’s order lacked sufficient legal analysis. We blogged about the prior appeal here

On remand, the district court again certified the class and approved the settlement. Two class members appealed from that order. 

The first class member argued that the district court had erred in certifying the class because the court had factually misunderstood the settlement agreement and because the court failed to consider an alleged intra-class conflict between class members who could prove damages from the data breach and those who could not.

The second class member attacked the award of attorney’s fees as excessive as well as the settlement's overall fairness.

None of these arguments persuaded the Eighth Circuit. The court first found that, despite two comments in the district court order mischaracterizing the class structure, the district court had not, in fact, relied on an erroneous understanding of the class in certifying it. Next, the court concluded that no intra-class conflict existed. The interests of class members who could prove damages and those that could not, according to the court, were “more congruent than disparate” and thus “no fundamental conflict requiring separate representation” existed. Finally, the court dispatched the second class member’s arguments regarding attorney’s fees and fairness, finding the district court had not abused its discretion in either respect.