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Table of Contents

Lead Story

Payment IPOs in the public eye

Ann Train

News

Industry Update

China UnionPay expands mPOS options

Bright future predicted for Global, Heartland

FIs gain time in Home Depot settlement dispute

Countdown for charitable giving

Features

Balancing big data and consumer privacy

The Clearing House stakes its claim in real-time payments

Bob Rohr
First Annapolis Consulting

Mobile forward 2016

ISOMetrics:
What will global payments look like in 2019?

Dispense with bad tech habits in 2016

Selling Prepaid

Gift card spend to reach $26 billion

Views

Online, mobile gaining on brick and mortar

Patti Murphy
ProScribes Inc.

A giving commitment

Thom Aldredge
The Give Back Campaign

Education

Street SmartsSM:
What does the crystal ball say for 2016? - Part 2

Jeffrey I. Shavitz
TrafficJamming LLC

The one man show: Be a piker, dream middle class

John Tucker
1st Capital Loans LLC

Build your business with trust in 2016

Jeff Fortney
Clearent LLC

2016 payment trends - What's to come?

Michael Gavin
Cayan

Company Profile

Capital for Merchants LLC

New Products

Turnkey e-wallet, e-commerce solution

ShopperPress module
Allied Wallet

iPad POS tableside ordering

TouchBistro 7.0
TouchBistro

Inspiration

Switch it up in 2016

Departments

ADVISORY BOARD: Welcome to a new year in payments

Letter from the Editors

Readers Speak

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

January 11, 2016  •  Issue 16:01:01

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FIs gain time in Home Depot settlement dispute

A two-hour hearing held Dec. 14, 2015, in Atlanta was the latest in a series of developments stemming from the 2014 data security breach at The Home Depot U.S.A. Inc. that affected as many as 56 million store customers. The Atlanta-based retailer had reached an agreement in November with MasterCard Worldwide and subsequently notified potentially affected financial institutions of settlement terms. However, many of the recipients were observing the Thanksgiving holiday when the notices were mailed; they had little time to react or review the agreement with legal counsel when they returned to their offices.

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.

Put up or shut up

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 and Nevada Credit Union Leagues. The Leagues and The Credit Union National Association are participating in the Home Depot class action suit.

Next steps

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 LLP 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 LLP 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."

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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