Jim Sciaroni v. Target Corporation, 892 F.3d 968

Background

This appeal arises from settlement of claims by US consumers whose payment card or personal data was compromised in Target’s 2013 data breach; the district court certified a settlement-only class and approved a $10 million fund.
Settlement structure: documented-loss claimants paid first (up to $10,000 each); then class representative awards; remaining funds pro rata to undocumented-loss claimants; injunctive relief (data-security measures) and notice/administration costs paid by Target.
Target waived appeal of attorney-fee awards up to $6.75 million; the $10 million class fund is separate from fees.
On prior appeal the Eighth Circuit vacated certification for insufficient pre-certification analysis; on remand the district court re-certified after a rigorous review.
Objectors: Leif Olson (challenges certification based on alleged factual misapprehension and intraclass conflicts) and Jim Sciaroni (challenges fee award and settlement fairness, alleging inadequate relief and possible collusion).
The Eighth Circuit affirms: it rejects Olson’s factual-misunderstanding and conflict claims, and rejects Sciaroni’s objections to fee calculation and overall fairness of the settlement.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether district court misunderstood settlement (did it treat zero-loss members as entitled to fund share)	Olson: court misstated that zero-loss members would receive pro rata share, which demonstrates factual error that taints certification	District court accurately described settlement and did not rely on the later statements; no reversible factual error	Affirmed — no abuse of discretion; statements did not determine certification outcome
Whether an intraclass conflict exists between documented-loss and zero-loss subclasses requiring separate counsel	Olson: interests conflict (current/verified claimants vs. speculative future harms) and Amchem/Ortiz require separate counsel/subclasses	Target/class: injuries are uniform from single breach, future harm speculative, named reps exist for both groups, interests congruent	Affirmed — no fundamental conflict; Amchem/Oritz distinguishable; no separate counsel required
Whether notice and administration costs may be included in the settlement ‘benefit’ when awarding attorneys’ fees	Sciaroni: administrative/notice costs are not a benefit to class and should be excluded from the fee base	District court: administrative costs are part of total settlement benefit; Eighth Circuit precedent permits inclusion	Affirmed — inclusion of administrative costs as part of benefit was within discretion
Whether fee award and settlement approval were reasonable and uncollusive	Sciaroni: fees excessive; settlement provides worthless or inadequate injunctive relief; clear-sailing/kicker indicate collusion	District court: fee ($6.75M) reasonable under lodestar and percentage methods; settlement fair when weighing merits, complexity, defendant ability, and minimal opposition	Affirmed — fee and settlement approval not an abuse of discretion; no clear evidence of collusion

Key Cases Cited

Petrovic v. Amoco Oil Co., 200 F.3d 1140 (8th Cir. 1999) (standard of review for class-certification and fees; abuse-of-discretion; lodestar/percentage guidance)
Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (class settlement analysis; need for separate subclasses where conflicts between present and future claimants exist)
Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999) (further discussion of Amchem holding on heterogenous class conflicts and subclassing)
Huyer v. Buckley, 849 F.3d 395 (8th Cir. 2017) (administrative costs may be included in benefit when calculating percentage-of-the-fund fees)
In re Life Time Fitness, Inc., Tel. Consumer Prot. Act Litig., 847 F.3d 619 (8th Cir. 2017) (same: fund administration costs may be included in benefit for fee calculation)
Keil v. Lopez, 862 F.3d 685 (8th Cir. 2017) (factors and standards for evaluating class settlement fairness and fee awards)
Hensley v. Eckerhart, 461 U.S. 424 (1983) (district court must provide concise, clear explanation for fee awards; lodestar principles)
In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) (discusses clear-sailing and reversion/kicker clauses as potential collusion indicators)
In re Uponor, Inc., F1807 Plumbing Fittings Prods. Liab. Litig., 716 F.3d 1057 (8th Cir. 2013) (four-factor Van Horn test for settlement fairness review)