Failure to Obtain Required Retailer Approval Scuttles Target-MasterCard Data Breach Settlement

By Kevin M. McGinty

Target’s attempt to resolve claims of MasterCard-issuing banks through a $19 million private settlement with MasterCard has been terminated for failure of issuers of 90% of the affected cards to accept the settlement by the Wednesday, May 20 acceptance deadline.  Press reports on Friday, May 22 indicated that both Target and MasterCard had confirmed that failure to meet the 90% requirement had voided the settlement.  The termination of the settlement means that MasterCard issuing banks no longer have the option to accept a portion of the proposed $19 million MasterCard settlement pool to settle their claims against Target.

For now, the claims that would have been resolved in the MasterCard settlement continue to be the subject of the consolidated class action pending in federal court in Minnesota.  It remains to be seen whether Target and MasterCard will go back to the drawing board to craft a new and richer settlement, or if Target will abandon its attempt to obtain a private settlement and pursue resolution of the MasterCard claims through the federal court lawsuit.

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Kevin M. McGinty

Member / Co-chair, Class Action Practice

Kevin is a member of the firm's Health Care Enforcement Defense Group and has significant experience representing health care–related entities in a variety of litigation matters, including contract, regulatory, False Claims Act and class action lawsuits. Kevin's health care industry clients have included pharmacies, PBMs, hospitals, clinical laboratories, diagnostic imaging providers, pharmaceutical companies and managed care organizations.