In a decision that could affect the resolution of future data breach class actions, the Eighth Circuit recently set aside the settlement in the Target Corp. data breach litigation. See In re Target Corp. Customer Data Security Breach Litig., No. 15-3909, — F.3d —, 2017 WL 429261 (8th Cir. Feb. 1, 2017). The litigation arose from claims that in 2013, hackers compromised credit and debit card data of up to 110 million Target customers. The parties ultimately agreed to a settle on a class basis. According to the settlement agreement, Target agreed to establish a $10 million settlement fund, which would be allocated first to class members with documented losses and then to members with asserted, but undocumented, losses. Members who had “suffered no loss from the security breach [would] receive nothing from the settlement fund,” but would still be “bound under the settlement to release Target from liability for any claims” that may someday arise in the future. Id. at *1.
From the February 7, 2017 article in American Banker
With good cause, anxiety has been expressed regarding the direction of the Department of Justice’s civil rights division under the Trump administration.
Unfortunately, the past 16 years have seen the pendulum fly first to lax civil rights enforcement and improper politicization of the division under the Bush administration, and then to overreaching under the Obama administration. Trump administration officials would be wise to seek a balance. To get there, guidance is available from the division’s longer-range history — including during years that might not seem obvious, like under the Reagan administration. Balance would benefit both the nation and the future of the division.
To read the full article, click here.
New York partners Anthony Nolan and Judith Rinearson will be speaking in a Strafford live webinar on “New Special Purpose National Bank Charter for FinTech Companies: Evaluating the Benefits and Regulatory Pitfalls on Thursday, March 16 2017 at 1:00pm-2:30pm EDT. This will focus on a recent proposal by the United States Office of the Comptroller of the Currency (OCC) to consider granting special purpose national bank charters to FinTech companies that are engaged in fiduciary activities or in activities that include receiving deposits, paying checks, or lending money. The special purpose charter offers the benefits of federal preemption and some state licensing requirements. However, there are regulatory and supervisory burdens that must be carefully considered such as activity limitations, BSA/AML requirements and minimum capital and liquidity requirements.
The panel will provide an overview of the OCC’s proposal for special purpose national bank charters for FinTech companies and the potential regulatory pitfalls that FinTech companies must consider. The program will address the OCC’s chartering process and the supervisory, financial and operational conditions that would apply. It will review these and other key issues:
- Benefits of special purpose national bank charters for FinTech companies;
- Regulatory pitfalls of special purpose national bank charters for FinTech companies;
- The OCC’s chartering process and the supervisory, financial and operational conditions that would apply;
- Positions of other relevant US bank regulatory agencies;
- Implications for the future development of the Fintech industry in the United States.
For more information or to register click here.
From the January 27, 2017 issue of the Washington Legal Foundation’s LEGAL BACKGROUNDER, Vol. 32 No. 3, with permission from the Washington Legal Foundation (WLF).
Last term, in Spokeo, Inc. v. Robins, the United States Supreme Court issued a much-anticipated opinion on Article III standing. The Court reiterated that to establish standing at the pleading stage, a plaintiff must allege an injury-in-fact that is both particularized and concrete. In other words, a plaintiff bringing suit upon an alleged statutory violation may not establish standing by merely alleging “a bare procedural violation, divorced from any concrete harm.”
Much has been written about Spokeo in the intervening months. Some members of the plaintiffs’ bar have lauded the decision as purportedly protecting consumer rights; some members of the defense bar have suggested Spokeo may signal the end of statutory class actions. Yet, to date, courts have not taken a uniform, bright-line approach in applying Spokeo to civil litigation asserting statutory causes of action, including those styled as putative class actions. Even still, courts have begun to develop two apparent schools of thought on how to analyze standing under Spokeo, resulting in increasingly divided case law across the country.
This article analyzes a few notable decisions applying each of these two approaches and considers the possibility that courts may begin to apply a third, “hybrid” approach.
To read the full article, click here.
The Consumer Financial Protection Bureau (“CFPB”) recently released a report detailing the results of a first-of-its-kind survey on consumer experiences with debt and debt collection. The CFPB conducted the survey in connection with its ongoing effort to promulgate the first-ever federal debt collection regulations. The agency sent the survey to nearly 11,000 consumers, of whom only a little over 2,000 (just less than 20%, roughly) responded. The CFPB explained that “[t]o ensure that the survey included a sufficient number of responses from consumers who had experienced debt collection,” it targeted consumers with recent debt collection experiences at a higher rate than other consumers. Of the approximately 20% of consumers who responded to the survey, 30% were consumers with long-term debt whereas only 15% were respondents with more recent debt. The survey was comprised of 67 questions ranging from the consumers’ general financial experiences and preferences for the ways in which collectors could contact them to questions about specific debt collection attempts in the year preceding the survey (which was conducted between December 2014 and March 2015). The latter category inquired about the types of debt in collection, the manner and frequency of contacts, whether there were any erroneous attempts to collect a debt, and whether the consumer paid the debt after being contacted. Notably, the CFPB did not release the results for all 67 questions.
The U.S. District Court for the Northern District of West Virginia recently granted summary judgment for the defendant alarm manufacturers in In re Monitronics International, Inc. Telephone Consumer Protection Act Litigation (“Monitronics”). In doing so, the Monitronics court rejected Telephone Consumer Protection Act (“TCPA”) claims based on alleged liability for acts of vendors, distributors, or other third parties. The court also expressly overruled its own earlier, contrary opinion rendered in Mey v. Monitronics International, Inc., which matter was consolidated into Monitronics as part of a multidistrict litigation (“MDL”). Thus, the court joined a growing number of jurisdictions that have questioned the ability of plaintiffs to prove vicarious liability in connection with TCPA claims.
To read the full alert, click here.