No Class Conflict in Data Breach Settlement Involving Class Members With and Without Economic Injury

By Andrew Glass, Matthew Lowe, and Brandon Dillman

On remand from the Eighth Circuit,[1] the United States District Court for the District of Minnesota recently recertified a data breach settlement class over an objector’s assertion of an intraclass conflict.  Specifically, the objector asserted that a conflict existed between class members who purportedly had suffered loss and were guaranteed a payout under the proposed settlement, and those who had not suffered loss and were not guaranteed a payout.  See In re Target Customer Data Security Breach Litig., No. 14-2522 (PAM), 2017 WL 2178306 (D. Minn. May 17, 2017).  In rejecting the objector’s alleged conflict, the Court emphasized that “the question is not whether there is any potential or theoretical conflict among class members, it is whether class members’ different interests are antagonistic to each other.”  Id. at *3.

Importantly, in rejecting the objector’s theory, the District Court found that four years after the data breach, it was unlikely class members would face future injuries.  Because “as a practical matter there are no remaining future injuries in the class,” the District Court held that the interests of the two categories of class members were not “antagonistic” to each other.  Id. at *3, 5.  And the Court noted that the objector had offered “no evidence … regarding what recovery an individual who had sustained no quantifiable damages would be entitled to receive.”  Id. at *3.

The District Court did not address the issue of whether the plaintiffs and class members who had suffered no loss had Article III standing.  But the Court intimated that this could have been an issue if the settlement had sought to certify a “separate no-injury class” for which the objector seemed to be advocating.  Id. at *3, n.3.

We will continue to monitor this matter and report if the objector takes an appeal to the Eighth Circuit.

[1] For a summary of the Eighth Circuit’s decision, please see our prior alert, Eighth Circuit Requires Further Review of Data Brach Settlement Involving Class Members Who Have No Loss at https://www.consumerfinancialserviceswatch.com/‌2017/‌02/‌eighth-circuit-requires-further-review-of-data-breach-settlement-involving-class-members-who-have-no-loss/.