In re Kmart Corp. Customer Data Security Breach Litigation

Judicial Panel on Multidistrict Litigation

In re Kmart Corp. Customer Data Security Breach Litigation

109 F. Supp. 3d 1368, 2015 U.S. Dist. LEXIS 76163, 2015 WL 3654635

CourtUnited States Judicial Panel on Multidistrict Litigation

DecidedJune 8, 2015

DocketMDL No. 2625

StatusPublished

This text of 109 F. Supp. 3d 1368 (In re Kmart Corp. Customer Data Security Breach Litigation) is published on Counsel Stack Legal Research, covering United States Judicial Panel on Multidistrict Litigation primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

In re Kmart Corp. Customer Data Security Breach Litigation, 109 F. Supp. 3d 1368, 2015 U.S. Dist. LEXIS 76163, 2015 WL 3654635 (jpml 2015).

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Opinion

ORDER DENYING TRANSFER

SARAH S. VANCE, Chair.

Before the Panel:

* Plaintiff in an action pending in the Northern District of Illinois moves under 28 U.S.C. § 1407 to centralize pretrial proceedings in this litigation in the Northern District of Illinois. This litigation consists of three actions pending in the Northern District of Illinois, the Eastern District of Louisiana, and the Western District of Pennsylvania, as listed on Schedule A.¹ All responding parties support centralization in the Northern District of Illinois.² Plaintiff in the action pending in the Western District of Pennsylvania alternatively suggests that district as an appropriate transferee district.

On the basis of the papers filed and the hearing session held, we conclude that centralization will not serve the convenience of the parties and witnesses or further the just and efficient conduct of this litigation. Although all responding parties support centralization, the Panel has an institutional responsibility that goes beyond accommodating the particular wishes of the parties. These actions share factual questions arising from an alleged criminal intrusion into the payment data system at retail stores owned or operated by defendant Kmart Corporation (Kmart) that resulted in the electronic theft of payment card information of customers who made purchases at Kmart stores between September 1, 2014, and October 9, 2014. There are, however, only five actions (including the two related actions) at issue, three of which are pending in the same district. Where only a minimal number of actions are involved, the proponent of centralization bears a heavier burden to demonstrate that centralization is appropriate. See In re Transocean Ltd. Sec. Litig. (No. II), 753 F.Supp.2d 1373, 1374 (J.P.M.L.2010). Movant has not met that burden here.

We have held that “centralization under Section 1407 should be the last solution [1369]*1369after considered review of all other options.” In re Best Buy Co., Inc., Cal. Song-Beverly Credit Card Act Litig., 804 F.Supp.2d 1376, 1378 (J.P.M.L.2011). These options include transfer pursuant to 28 U.S.C. § 1404, as well as voluntary cooperation and coordination among the parties and the involved courts to avoid duplicative discovery or inconsistent pretrial rulings. In the circumstances presented here, both of these alternatives seem preferable to centralization. Though no Section 1404 motion to transfer venue has been filed in any of these actions, plaintiffs in both actions pending outside the Northern District of Illinois have indicated that they agree that this litigation should proceed in that district. Accordingly, the parties ought to be able to agree to voluntarily transfer those two actions to Northern District of Illinois pursuant to Section 1404. See In re Gerber Probiotic Prods. Mktg. & Sales Practices Litig., 899 F.Supp.2d 1378, 1380 (J.P.M.L.2012) (discussing the advantages of Section 1404 transfer over centralization). If the parties are unable to do so, voluntary cooperation and coordination among the small number of parties and involved courts appears eminently feasible. We encourage the parties to employ various alternatives to transfer which may minimize the potential for duplicative discovery and inconsistent pretrial rulings in this litigation. See, e.g., In re Eli Lilly & Co. (Cephalexin Monohydrate) Patent Litig., 446 F.Supp. 242, 244 (J.P.M.L.1978); see also Manual for Complex Litigation, Fourth, § 20.14 (2004).

IT IS THEREFORE ORDERED that the motion for centralization of these actions is denied.

SCHEDULE A

MDL No. 2625 — IN RE: KMART CORPORATION CUSTOMER DATA SECURITY BREACH LITIGATION

Northern District of Illinois

FIRST NBC BANK v. KMART CORPORATION, ET AL., C.A. No. 1:14-10088

Eastern District of Louisiana

GULF COAST BANK & TRUST COMPANY v. KMART CORPORATION, ET AL., C.A. No. 2:15-00558.

Western District of Pennsylvania

FIRST CHOICE FEDERAL CREDIT UNION v. KMART CORPORATION, ET AL., C.A. No. 2:15-00241.

Certain Panel members who could be members of the putative classes in this litigation have renounced their participation in these classes and have participated in this decision.

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ORDER DENYING TRANSFER

SARAH S. VANCE, Chair.

Before the Panel:

* Plaintiff in an action pending in the Northern District of Illinois moves under 28 U.S.C. § 1407 to centralize pretrial proceedings in this litigation in the Northern District of Illinois. This litigation consists of three actions pending in the Northern District of Illinois, the Eastern District of Louisiana, and the Western District of Pennsylvania, as listed on Schedule A.¹ All responding parties support centralization in the Northern District of Illinois.² Plaintiff in the action pending in the Western District of Pennsylvania alternatively suggests that district as an appropriate transferee district.

On the basis of the papers filed and the hearing session held, we conclude that centralization will not serve the convenience of the parties and witnesses or further the just and efficient conduct of this litigation. Although all responding parties support centralization, the Panel has an institutional responsibility that goes beyond accommodating the particular wishes of the parties. These actions share factual questions arising from an alleged criminal intrusion into the payment data system at retail stores owned or operated by defendant Kmart Corporation (Kmart) that resulted in the electronic theft of payment card information of customers who made purchases at Kmart stores between September 1, 2014, and October 9, 2014. There are, however, only five actions (including the two related actions) at issue, three of which are pending in the same district. Where only a minimal number of actions are involved, the proponent of centralization bears a heavier burden to demonstrate that centralization is appropriate. See In re Transocean Ltd. Sec. Litig. (No. II), 753 F.Supp.2d 1373, 1374 (J.P.M.L.2010). Movant has not met that burden here.

We have held that “centralization under Section 1407 should be the last solution [1369]*1369after considered review of all other options.” In re Best Buy Co., Inc., Cal. Song-Beverly Credit Card Act Litig., 804 F.Supp.2d 1376, 1378 (J.P.M.L.2011). These options include transfer pursuant to 28 U.S.C. § 1404, as well as voluntary cooperation and coordination among the parties and the involved courts to avoid duplicative discovery or inconsistent pretrial rulings. In the circumstances presented here, both of these alternatives seem preferable to centralization. Though no Section 1404 motion to transfer venue has been filed in any of these actions, plaintiffs in both actions pending outside the Northern District of Illinois have indicated that they agree that this litigation should proceed in that district. Accordingly, the parties ought to be able to agree to voluntarily transfer those two actions to Northern District of Illinois pursuant to Section 1404. See In re Gerber Probiotic Prods. Mktg. & Sales Practices Litig., 899 F.Supp.2d 1378, 1380 (J.P.M.L.2012) (discussing the advantages of Section 1404 transfer over centralization). If the parties are unable to do so, voluntary cooperation and coordination among the small number of parties and involved courts appears eminently feasible. We encourage the parties to employ various alternatives to transfer which may minimize the potential for duplicative discovery and inconsistent pretrial rulings in this litigation. See, e.g., In re Eli Lilly & Co. (Cephalexin Monohydrate) Patent Litig., 446 F.Supp. 242, 244 (J.P.M.L.1978); see also Manual for Complex Litigation, Fourth, § 20.14 (2004).

IT IS THEREFORE ORDERED that the motion for centralization of these actions is denied.

SCHEDULE A

MDL No. 2625 — IN RE: KMART CORPORATION CUSTOMER DATA SECURITY BREACH LITIGATION

Northern District of Illinois

FIRST NBC BANK v. KMART CORPORATION, ET AL., C.A. No. 1:14-10088

Eastern District of Louisiana

GULF COAST BANK & TRUST COMPANY v. KMART CORPORATION, ET AL., C.A. No. 2:15-00558.

Western District of Pennsylvania

FIRST CHOICE FEDERAL CREDIT UNION v. KMART CORPORATION, ET AL., C.A. No. 2:15-00241.

Certain Panel members who could be members of the putative classes in this litigation have renounced their participation in these classes and have participated in this decision.

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109 F. Supp. 3d 1368, 2015 U.S. Dist. LEXIS 76163, 2015 WL 3654635, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-kmart-corp-customer-data-security-breach-litigation-jpml-2015.

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