Ruling Vacating Target Consumer Class Settlement Highlights The Problem Of Standing In Data Breach Cases

When hackers steal consumer data, injury to consumers is not a foregone conclusion. This is particularly so where credit and debit card numbers are stolen. Banks, not consumers, bear the cost of fraudulent charges. Consumers' credit ratings are unaffected by such charges, and stolen payment card numbers cannot be used to steal consumers' identities. As a result, it can be difficult for consumers in payment card data breach cases to prove damages or injury.

This problem manifested itself in an unusual way in connection with an objection to the consumer class settlement in the Target data breach litigation. The proposed settlement released claims of all consumers whose card data had been stolen, but only paid settlement consideration to class members who alleged or could prove actual losses arising from the settlement. A member of the class who did not allege any losses objected to certification of the settlement class, asserting that there was an intra-class conflict