On the one-year anniversary of Target’s announcement that it had suffered a massive data breach, Judge Magnuson in the District of Minnesota cleared the way for a consumer class action against the retailer to move forward into discovery. Earlier this month, the court ruled that the financial institution class actions can also proceed.
In the consumer case, Target argued that the plaintiffs failed to allege injury, and thus had Article III standing to proceed with the suit in federal court. The court found that consumers did claim enough injury to proceed, citing to their allegations that they suffered “unlawful charges, restricted or blocked access to bank accounts, inability to pay other bills, and late payment charges or new card fees.” The judge also will allow the consumers to pursue their claims for injunctive relief, by which plaintiffs seek to force Target to adopt new information security measures. The judge will allow the consumers discovery as to Target’s duty to disclose, and how well it performed that duty.
The judge analyzed state consumer protection and data breach notification laws of each state, demonstrating the complexity of this multi-district litigation. The consolidated consumer class action alone involves 114 named plaintiffs from all but five states, and asserts theories under 50 states’ laws. When Target raised the issue of standing in the five states with no named plaintiff resident, the court ruled that such an Article III standing analysis was premature at the motion-to-dismiss stage, and could be reassessed after the class-certification stage.
In the course of this decision, Judge Magnuson gave Target a few concessions, dismissing certain claims under certain state laws, and indicated as to many points that Target would be able to later assert their defenses. Judge Magnuson dismissed with prejudice the consumers’ bailment claim, which alleges that consumers trusted Target with their personal information as property. The judge also dismissed the unjust enrichment claim that was based on a theory that plaintiffs were overcharged for goods at Target because the goods included a premium for adequate data security that did not exist. However, the court allowed plaintiffs to proceed with the unjust enrichment claim based on the theory that had Target notified customers in a timely manner, plaintiffs would not have shopped at the store, and thus Target was not entitled to receive the money plaintiffs spent at the store.