Target Request to Halt Discovery Opposed

Financial institution and consumer plaintiffs in class action lawsuits filed against Target in the wake of the retailer's December 2013 data breach have filed a memorandum arguing the discovery process should not be delayed. The latest case update comes just a few weeks after the retailer had requested that a U.S. district court halt the discovery process until the court can consider its forthcoming motions to dismiss most of the suits (see: Target to Seek Lawsuit Dismissals).

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A July 3 filing by attorneys for Target said: "The experiences of courts and litigants with similar motions to dismiss in data breach related class actions instruct that Target has a substantial likelihood of succeeding in seeking dismissal of all or most of the claims anticipated in the consolidated complaints. Given the burden that discovery regarding potentially moot questions would impose on the parties and this court, good cause exists for continuing the discovery stay for a few months until the motions to dismiss can be resolved."

Bank and consumer plaintiffs argue that federal courts disfavor staying discovery while a motion to dismiss is pending. "Target has not met its burden of demonstrating that its anticipated motion to dismiss will resolve all claims in its favor," the July 18 memorandum said.

"In fact, a review of other data breach cases and the undisputed facts here suggest that plaintiffs' claims are virtually certain to overcome a motion to dismiss in some form," the memo said. "Moreover, Target's requested stay would prejudice plaintiffs by further delaying the prosecution of their claims, which were first filed in December 2013, and seriously jeopardize the July 1, 2015, discovery cut-off deadline established by the court."

Target's Argument

During a June 25 status briefing, Wendy Wildung, partner at Faegre Baker Daniels, who's representing Target throughout the litigation process, said that the financial institutions involved in the case "have no business relationship with Target, Target has no contracts with them and, so, there's a threshold duty question."

In arguing that Target likely would succeed in getting the cases dismissed, Wildung said: "In consumer cases that have been brought across the country, the vast majority of them have been dismissed. The kinds of injury they claim is really the threat or risk of future harm, and courts have pretty universally found that to be insufficient."

The July 22 memo by the plaintiffs rebutted: "Target's arguments that financial institution plaintiffs' claims will be dismissed and that consumer plaintiffs lack standing are premature and incorrect. Neither argument warrants a stay of discovery."

Target has also had discussions with the plaintiffs in cases filed on behalf of consumers regarding the possibility of an early case resolution, Wildung said. "The parties have agreed on a mediator. And we have reserved a date for an early mediation in the consumer cases," which is set for August 11.

Lawsuit Consolidation

Back in May, dozens of class action lawsuits filed on behalf of banking institutions, consumers and shareholders against Target were consolidated into three groups.

More than 140 lawsuits, including 29 brought on behalf of banks and credit unions, were consolidated before U.S. District Judge Paul Magnuson on May 14, according to local news publication Pioneer Press.

In their lawsuits, banking institutions claim Target should be responsible for card re-issuance and replacement expenses that card issuers have incurred as a result of the retailer's breach, which is estimated to have exposed some 40 million debit and credit cards.

More information on the lawsuits and court proceedings can be found here.