Jim Sciaroni v. Target Corporation
847 F.3d 608
8th Cir.2017Background
- In 2013 Target announced a data breach affecting payment card/personal data of up to 110 million customers; consumers filed a class action and parties reached a settlement.
- The settlement created a $10 million fund: documented-loss claimants paid first; remaining balance distributed equally to undocumented-loss claimants; no recovery for class members with no loss.
- District court preliminarily certified a nationwide settlement class and preliminarily approved the settlement; class counsel could request up to $6.75 million in fees paid separately by Target.
- Class members Olson and Sciaroni objected; Olson argued class certification was improper because some class members (a "zero-recovery subclass") receive no monetary relief yet release future claims, creating an intraclass conflict.
- The district court overruled Olson’s objections, entered final certification and settlement approval, and required a $49,156 Rule 7 appeal bond; appellants appealed certification and bond amount.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequacy of class representation under Rule 23(a)(4) | Olson: district court failed to conduct a "rigorous analysis" and named reps do not adequately represent zero-recovery members | Target/class: preliminary certification was proper; district court need not re-litigate after preliminary certification | Court: remanded — district court abused discretion by not articulating a rigorous Rule 23(a) analysis; must reassess adequacy and conflicts on remand |
| Intraclass conflict / need for subclass for zero-recovery members | Olson: members who get no monetary relief have divergent interests from those who do, creating a fundamental conflict requiring subclassing | Class/Target: single settlement class appropriate; no separate subclass needed | Court: identified conflict issue as substantial and directed district court to evaluate whether conflict is present and, if fundamental, whether subclasses are needed (no final determination) |
| Inclusion of delay-based administrative costs in Rule 7 appeal bond | Appellants: bond may only secure costs recoverable under an applicable statute or rule; delay/administration costs not recoverable, so must be excluded | Appellees: delay/administration costs tied to appeal and courts may include them in bonds | Court: held Rule 7 bond may include only costs that a prevailing appellant could recover under a specific statute or rule; reversed and remanded to reduce bond to recoverable costs only |
| Joint and several liability for bond | Olson: district court erred in making him jointly and severally liable with Sciaroni | Appellees: joint liability appropriate | Court: declined to overturn joint-and-several imposition; but remand and Olson’s partial success may affect disposition going forward |
Key Cases Cited
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (rigorous analysis required to certify class)
- Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147 (actual conformance with Rule 23(a) indispensable)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (courts must guard against intraclass conflicts in settlement classes)
- Petrovic v. Amoco Oil Co., 200 F.3d 1140 (8th Cir.) (abuse-of-discretion standard for class certification and duty to reassess during litigation)
- Adsani v. Miller, 139 F.3d 67 (2d Cir.) (Rule 7 bond should not create an impermissible barrier to appeal; link bond to recoverable costs)
- Tennille v. W. Union Co., 774 F.3d 1249 (10th Cir.) (appeal bond may not include delay costs when no statute allows their recovery)
- In re Uponor, Inc., 716 F.3d 1057 (8th Cir.) (reduced Rule 7 bond to direct appeal costs; excluded administrative delay costs)