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In re Target Corporation Customer Data Security Breach Litigation

United States Court of Appeals, Eighth Circuit

June 13, 2018

In re: Target Corporation Customer Data Security Breach Litigation
v.
Consumer Plaintiffs Plaintiff- Appellee Jim Sciaroni Objector - Appellant Target Corporation Defendant-Appellee In re: Target Corporation Customer Data Security Breach Litigation Leif A. Olson Objector - Appellant
v.
Consumer Plaintiffs Plaintiff- Appellee Target Corporation Defendant-Appellee In re: Target Corporation Customer Data Security Breach Litigation Leif A. Olson Objector - Appellant
v.
Consumer Plaintiffs Plaintiff - Appellee Target Corporation, Defendant - Appellee In re: Target Corporation Customer Data Security Breach Litigation Jim Sciaroni Objector - Appellant
v.
Consumer Plaintiffs Plaintiff - Appellee Target Corporation, Defendant - Appellee In re: Target Corporation Customer Data Security Breach Litigation Leif A. Olson Objector - Appellant
v.
Consumer Plaintiffs Plaintiff - Appellee Target Corporation, Defendant - Appellee

          Submitted: September 19, 2017

          Appeals from United States District Court for the District of Minnesota - Minneapolis

          Before BENTON and SHEPHERD, Circuit Judges, and STRAND, District Judge. [1]

          SHEPHERD, CIRCUIT JUDGE

         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. See In re Target Corp. Customer Data Sec. Breach Litig., 847 F.3d 608, 613 (8th Cir. 2017). On remand, the district court[2] re-certified 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.

         I. Background

         In 2015, the district court certified a class of "[a]ll 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 December 19, 2013." As has become common, the class was certified solely for the purpose of entering into a settlement agreement. The parties presented such an agreement to the court in short order.

         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.[3] 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.

         There were two primary objectors to the court's certification of the class and approval of the settlement agreement: Leif Olson and Jim 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. We agreed with Olson's argument and therefore remanded to the district court without considering Sciaroni's objections.

         On remand, the court again certified the class. Olson appeals that decision, claiming the district court factually misunderstood the settlement agreement and failed to account for a number of alleged conflicts of interest between class counsel and class members and among competing subgroups of class members. In addition, Sciaroni's original objections to the settlement are before us. We first address Olson's claims before moving to Sciaroni's objections.

         II. Olson

         On appeal, Olson raises two principal challenges to the district court's certification order.[4] First, he contends the district court fundamentally misunderstood the structure of the settlement agreement. Next, he argues 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 counsel.[5] We address each argument in turn, applying the deferential abuse of discretion standard. See Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1145 (8th Cir. 1999).

         A.

         Olson first launches a factual challenge to the district court's order. Under the terms of the settlement, the proceeds are first distributed to those individuals who submit proof of actual loss, up to a total amount of $10, 000 per claimant. Next, the class representative awards are paid. Then any remaining proceeds are distributed in equal amounts to those claimants with undocumented losses. The district court accurately presented this structure on page 3 of its order, but it later made two comments which form the basis of Olson's attack:

Plaintiffs who have not suffered any monetary injury likely have no claim to any future payment and thus the equitable relief from the settlement, in addition to the possible pro-rata share of the remaining settlement fund, constitutes all of the relief they could hope to reap from this litigation. . . . .
Plaintiffs who have no demonstrable injury receive the benefit of Target's institutional reforms that will better protect consumers' information in the future, and will also receive a ...

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