CEI’s Center for Class Action Fairness objected to an unfair settlement deal resulting from the much-publicized 2013 data breach at retail giant Target Corporation. Forty-one million consumers had credit card information stolen and 60 million consumers had personal information stolen as a result of the data breach. But the subsequent settlement deal helped class attorneys far more than class members. The terms of the deal provided a $10 million fund to class members that, in reality, is unlikely to be exhausted, gave class counsel a disproportionate $6.75 million fee, and left a large subclass of class members with zero recovery.
Representing class member Leif Olson, CEI attorneys argued that the class action could not be certified because it froze out millions of class members, releasing their claims for no recovery, without separate representation. CEI further objected to the excessive fee request and the inclusion of a “kicker” clause, whereby any decrease in the fee request would revert to the defendant (Target).
Nonetheless, the United States District Court for the District Of Minnesota approved the settlement deal, and in 2016, CEI appealed the case to the United States Court of Appeals for the Eighth Circuit. The appeal challenged both the district court’s error that class certification could not be revisited once granted and the violation of a federal rule requiring attorneys who represent a class to fairly and adequately protect the interests of the class.
In February, 2017, CEI received an important ruling on its appeal. The Eighth Circuit remanded the case back to the district court, finding that the lower court abandoned its ongoing duty to ensure class certification was proper when the court had failed to consider CEI’s objections. Additionally, the judge reversed the lower court’s ruling for an unlawful appeal bond, resulting in $46,872 being returned to CEI.
Following a hearing in district court on May 10, 2017, the judge seven days later approved again the certification of the class action, and CEI returned to the Eighth Circuit to challenge this recent order. On August 15, 2017, CEI filed a supplemental brief asking the circuit court to reverse class certification. But the Eighth Circuit subsequently rejected CEI’s challenge on June 13, 2018.