The Eighth U.S. Circuit Court of Appeals last week ordered a federal judge in Minneapolis to hold hearings to determine all customers were treated fairly in Target Corp.’s (NYSE: TGT) 2015 settlement of claims related to a massive data breach in 2013. Nearly 42 million customers had credit/debit card data stolen in the cybercrime and another 60 million had personal information stolen.
Federal district Judge Paul Magnuson has been ordered to review the class certification he approved in the November 2015 settlement. The settlement required Target to establish a $10 million fund from which a customer can claim up to $10,000 in documented unreimbursed losses. Once all such claims have been paid, remaining funds will be divided equally among customers who suffered a loss but have no documentation. Customers with no financial loss get nothing.
Target customer Leif Olson appealed the settlement because it forces him to release Target from liability for any claims resulting from future illegal use of his data. Olson argued that customers in his position should be put in a sub-class and represented separately. It is that separation which Judge Magnuson has been ordered to review for conflicts of interest.
In addition to the $10 million fund to reimburse customers, Target’s settlement with MasterCard has climbed to near $20 million to reimburse the credit card issue for fraudulent transactions and the cost of issuing new cards. That total could reach as high as $240 million, depending on the outcome of a class action lawsuit on behalf of banks and credit unions for reissuing cards to the 100 million customers affected by the Target breach.
Target’s stock traded up about 0.3% late Tuesday morning, at $63.63 in a 52-week range of $62.94 to $84.14. The stock’s 12-month consensus price target is $73.97.