Attorneys representing banks and credit unions in a suit against Home Depot have won permission from a Georgia district court to examine controversial communications sent to card issuers about a proposed settlement related to the retailer's 2014 data breach.
The ruling came after attorneys for the plaintiffs objected to emails that went to financial institutions the week of Thanksgiving. The communications, sent by third-party payment processors, indicated Home Depot and MasterCard had reached a proposed settlement regarding the data breach but withheld key information, according to the attorneys, who then requested an emergency hearing. Calling the offers “misleading” and “coercive,” they also asked the judge to unwind any settlements those financial institutions may have accepted.
“The order granting immediate discovery will allow the court to learn all the facts about Home Depot's agreement with MasterCard and determine whether to grant plaintiffs' requests to vacate any releases and require a curative notice be sent to class members,” plaintiffs' attorneys Gary Lynch, Kenneth Canfield and Joseph Guglielmo said in a statement. “In the meantime, we recommend that financial institutions not accept any tentative settlement offer until sufficient information is provided that enables them to make an informed decision.”
The plaintiffs now have until the end of January to conduct discovery of the communications, according to the court. It will hold a hearing in February to decide what happens next.
In a separate order, Judge Thomas Thrash also said Home Depot and MasterCard can communicate directly with financial institutions about a settlement – but not without a few conditions.
According to the order, once a settlement offer has been “fully and finally negotiated” between Home Depot and a card brand, the offer must be in writing, must provide details about the pending class-action suit and must disclose whether the institution can participate in a class-action suit if it accepts a settlement offer. It must also “explain to the putative or absent class members that the settlement offer represents a lesser recovery than they may potentially recover if they remain parties in the class action and are successful in that litigation,” the order said.
Some large banks – which Home Depot and MasterCard contacted separately and individually – have already declined their settlement offers, according to a statement to the court from Home Depot Director of Financial Services Michael Williams. He declined to say which banks.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
