Neiman Marcus to Pay $1.6M to End Credit Card Breach Case

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By Jimmy H. Koo

Neiman Marcus Group LLC agreed to pay up to $1.6 million and strengthen its information technology security to settle class allegations over a January 2014 payment card data breach ( Remijas v. Neiman Marcus Grp., LLC , N.D. Ill., No. 1:14-cv-01735, motion for preliminary approval 3/17/17 ).

Plaintiffs March 17 asked the U.S. District Court for the Northern District of Illinois to preliminarily approve the no-fault class settlement for Neiman Marcus customers who used their credit and debit cards from July 16, 2013, to Jan. 10, 2014.

In January 2014, Neiman Marcus announced that it had been a target of a malware attack that went after the payment card data of 1.1 million customers. Plaintiffs filed suit, seeking to represent a class of approximately 350,000 Neiman Marcus customers affected by the hacking.

The court September 2014 dismissed the suit for failing to show concrete injury to establish standing. Reversing and remanding the case, the U.S. Court of Appeals for the Seventh Circuit found that the plaintiffs satisfied the requirements of Article III standing based on alleged future injuries, including loss of time and money spent to protect themselves against future identity theft and fraudulent charges.

Judge Samuel Der-Yeghiayan of the federal district court Feb. 9 voluntarily dismissed the lawsuit, after the parties jointly asked for a fifth extension of time for the company to file a required document. The lawsuit had “stagnated” on the docket, the court said. Plaintiffs March 8 asked the court to reinstate the action, saying they were “never provided a warning that their case would be dismissed as a result of granting defendants more time to file a response.”

Ahdoot & Wolfson PC and Morgan & Morgan Complex Litigation Group represent the plaintiffs. Sidley Austin LLP represents Neiman Marcus.

To contact the reporter on this story: Jimmy H. Koo in Washington at jkoo@bna.com

To contact the editor responsible for this story: Donald Aplin at daplin@bna.com

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