When TJX revealed earlier this year that they’d failed to keep safe over 45 million customer credit card accounts, they were hit with both consumer and bank class action lawsuits. Now they’ve submitted a proposed settlement for the consumer class action suit that includes a strange, somewhat insulting offer: a “one-day sale” for victims of the theft. Attorneys general from eight states have filed an objection against the proposal, citing that even if it’s a well-intentioned goodwill gesture, it doesn’t belong as part of any official, legal settlement, which should be designed to benefit the victims rather than the retailer.
In the complaint, Massachusetts Attorney General Martha Coakley argues that a sales event is not a settlement, and that the lawyers for the consumers shouldn’t be able to reap additional fees from the addition of a sales event.
We are unaware of precedent in which a special event, or any type of sale open to the general public, has been deemed a benefit of a class-action settlement and this court should avoid that precedent. We believe this aspect of the proposed settlement demeans the class-action process, which can be used as a meaningful tool to protect consumers.
“The special event is nothing more than a retail sale, which would primarily benefit the defendant, TJX Companies. If deemed a benefit to the class, the retail sale also presumably would benefit class action counsel, whose fees would be impacted by a nominally higher valued settlement,” Coakley wrote. “It is unclear what benefit, if any, the class gains from a retail sale that is open to the general public. TJX should not inure the good will of this court or the public for a sale that enhances its bottom line, nor should the class’s attorneys reap large fees for an unquantifiable and dubious benefit. Here, class action counsel anticipates receiving fees of $6.5 million, based, at least in part, on an unquantifiable benefit to the class from the special event. This represents a tremendous amount of money to the extent it is linked to the special event, or vouchers.”
“Massachusetts AG Slams TJX Consumer Settlement Sale” [eWeek via The Register]