Umphrey using his firm, his bank to fight Target over data breach

Beaumont plaintiff’s attorney Walter Umphrey is using his law firm and his bank to fight Target over the retailer’s massive data breach.

Provost Umphrey Law Firm LLP filed a class action lawsuit on Jan. 29 in the U.S. District Court in Minnesota on behalf of Community Bank of Texas NA, FNBT.com and other similarly situated banks against the Target Corp. 

The suit was filed in Minnesota because Target is headquartered in Minneapolis.

The retail giant was hit by hackers between Nov. 27, 2013, and Dec. 15, 2013 – the height of the Christmas shopping season. During the security breach, hackers obtained the credit and debit card information of approximately 40 million Target customers, and the personal information of approximately 70 million Target customers.

“The Security Breach was the direct and foreseeable result of Target’s failure to implement and maintain reasonable and industry-standard security measures to protect customers’ credit card, debit card and personal information,” the suit states.

But the breach affected more than the customers, it affected the customers’ banks as well, the suit claims.

“This nation’s financial institutions, including CommunityBank and FNBT, have been left on the hook for tens, if not hundreds, of millions of dollars as a result of Target’s failure to implement reasonable and industry-standard measures,” the suit states.

CommunityBank got its start after purchasing County Bancshares Inc., a seven-branch bank based in East Texas in 2007.

According to Bloomberg, the bank holding company for County Bancshares Inc. is CBFH Inc. CBFH Inc. operates as a subsidiary of Umphrey II Family Limited Partnership. And, according to his bio information on the Provost Umphrey firm’s website, Walter Umphrey is senior chairman of the board and director of Community Bank.

In the class action, Umphrey claims the financial institutions were hit with the expense of creating, issuing and mailing new payment cards to their customers (which costs about $12 each), customer reimbursements for fraudulent charges, administrative expenses and overhead charges associated with monitoring and preventing fraud and lost customers, the suit states.

The suit also claims that Target has knowingly burdened the financial institutions when it “began advising irate customers to call their banks instead of the Target customer service lines,” because Target was not prepared to handle the complaints.

“We feel that CommunityBank is well positioned to represent a nationwide class of banks, credit unions, and other financial institutions. It is too early to determine just how much money banks have lost, but early indications are that losses could run in the hundreds of millions of dollars,” Michael A. Havard, a Provost Umphrey attorney working with Walter Umphrey on the litigation, said in a press release.

The 22-page suit accuses Target of negligence, negligent misrepresentation and negligent performance of services. The plaintiffs are seeking class certification, statutory and compensatory damages in an amount to be determined at trial, treble and exemplary damages, interest, attorneys' fees, expenses and other relief "as necessary to correct for the effects of Target's unlawful conduct," according to the suit.

In addition to Umphrey and Havard, other counsel for the plaintiffs include Rhett McSweeney of McSeweeney Langavin LLC in Minneapolis, Minn.; Ben Barnow of Barnow & Associates PC in Chicago, Ill.; Don Barrett of Barrett Law Group PA of Lexington, Miss.; Dewitt Lovelace of Lovelace & Associates PA in Miramar Beach, Fla.; and Mike Roberts of Roberts Law Firm PA in Little Rock, Ark.

The case has been assigned to Minnesota District Court Judge Joan N. Ericksen and referred to Judge Janie S. Mayeron for pretrial proceedings.

U.S. Court for the District of Minnesota Case No. 0:14-cv-00271