ST. LOUIS – A three-judge panel in the 8th U.S. Circuit Court of Appeals recently affirmed the rulings of the U.S. District Court for the District of Minneapolis regarding the settlement of claims related to Target customers whose data was breached.
U.S. Circuit Judge Bobby E. Shepherd, who led the panel, said in the June 13 ruling, “This case is back to us after our reversal of the certification of a class composed of individuals whose payment card information was compromised as a result of the 2013 Target security breach. On remand, the district court recertified the class after conducting a rigorous analysis. Class member Leif Olson again objects to the certification on a number of grounds. In addition, class member Jim Sciaroni objects to the district court’s approval of the settlement agreement. We see no error and affirm.”
As reported in the court documents, in 2015, the district court certified a class of “all persons in the United States whose credit or debit card information and/or whose personal information was compromised as a result of the data breach that was first disclosed by Target on Dec. 19, 2013.” As has become common, the class was certified solely for the purpose of entering into a settlement agreement. Under the terms of this agreement, Target agreed to pay $10 million to settle the claims of all class members and waived its right to appeal an award of attorney’s fees less than or equal to $6.75 million.
For those class members with documented proof of loss, the agreement called for full compensation of their actual losses up to $10,000 per claimant. For those class members with undocumented losses, the agreement directed a pro rata distribution of the amounts remaining after payments to documented-loss claimants and class representatives. Additionally, Target agreed to implement a number of data-security measures and to pay all class notice and administration expenses.
Shepherd explained that there were two primary objectors to the court’s certification of the class and approval of the settlement agreement – Olson and Sciaroni.
In the original appeal of this matter, Olson argued that the court failed to conduct the appropriate pre-certification analysis and Sciaroni objected to the court’s approval of the settlement. Shepherd said, “We agreed with Olson’s argument and therefore remanded to the district court without considering Sciaroni's objections.”
On this appeal, Olson raised two principal challenges to the district court’s certification order. First, he contended the district court fundamentally misunderstood the structure of the settlement agreement. Next, he argued that there is an intraclass conflict between class members who suffered verifiable losses from the data breach and those, like Olson, who have not, and that this conflict necessitates separate legal action.
In addition, the judge said that Sciaroni launched a twofold challenge to the court’s award of attorney’s fees, arguing that the court erred by considering the costs of notice and administration expenses as a benefit to the class and then challenging the overall reasonableness of the award. Next, he contended that the court erred in approving the settlement.
“Sciaroni’s position simply voices generalized grievances with these provisions,” Shepherd said. “Nowhere does he explain how the clauses, even assuming they are present, operated to the detriment of the class. Sciaroni directs us to no authority that such provisions are per se unlawful, and he has likewise failed to provide any clear evidence of collusion. Accordingly, because he has not demonstrated that the settlement was unfair or inequitable, we affirm the court’s approval of the settlement agreement. For the aforementioned reasons, we affirm the rulings of the district court.”
The two other judges on the three-judge panel, U.S. Circuit Judge Duane Benton and U.S. District Judge Leonard T. Strand of the U.S. District Court for the Northern District of Iowa, concurred.