Wednesday, December 16, 2015
Atlanta U.S. District Chief Judge Thomas Thrash Jr. seemed to side with plaintiffs, who took issue with the timing, tone and terms of the settlement offer. An incoherent agreement, mailed the day before Thanksgiving, gave card issuers an average of 2 business days to accept or reject the proposed terms. The financial institutions promptly mobilized and demanded a court review of the settlement terms.
In their filing, they stated, "[O]n the eve of the Thanksgiving holiday weekend, Wednesday, November 25, 2015, third-party payment processors, evidently acting in concert with Home Depot, sent email notifications to putative Class members – including named FI Plaintiffs known to be represented by counsel in this matter – stating that Home Depot and MasterCard had reached a settlement involving the Home Depot data breach."
The plaintiffs further noted that they had been given an ultimatum. "Some of the class communications state that failure to affirmatively opt out of the Settlement will result in a release of all claims pending in this case, without even specifically mentioning the litigation, or even telling the Class members how much they would receive under the Settlement," they wrote.
Plaintiffs are seeking a fair trial, with sufficient time to understand the settlement terms and potential ramifications. "Recovery amounts for credit unions and community banks are insufficient as compared with the losses," said Diana Dykstra, President and Chief Executive Officer of the California Credit Union League. The League and The National Association of Credit Unions are participating in the Home Depot class action suit.
Judge Thrash granted another month to plaintiffs' legal counsel to conduct a thorough examination of the settlement agreement between Home Depot and MasterCard. Attorneys will then be in a better position to identify their clients' best interests and how they can participate in the settlement, he said.
A new hearing, set for January 2016, has made some financial analysts hopeful that the financial institutions will have their day in court and an opportunity to address their concerns. Judge Thrash also signed a court order requested by Home Depot attorneys that facilitates communication among all potential plaintiffs. The order requires Home Depot to provide details of settlement terms and further explanation of settlement offers in a forthright manner. This includes disclosing rights of any potential members who choose to participate in a class action and fully explaining what they may gain by abstaining compared with what they may win if the litigation is successful.
Alston & Bird partner Cari Dawson, who represents Home Depot, said the MasterCard settlement had stipulated that at least 65 percent of the card-issuing financial institutions had to agree to the settlement terms in order for the settlement to take effect. For that reason, Home Depot and its counsel are representing the agreement as conditional. Dawson also claimed that Home Depot had neither supervised nor was aware of the written communications that were mailed out over the Thanksgiving holiday.
Joseph Guglielmo, partner at New York's Scott & Scott and lead co-counsel for the plaintiffs dismissed Dawson's claim as implausible, adding that the Thanksgiving notices were an attempt to "do an end run around this court."
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