TJX » Topics » ITEM 3. LEGAL PROCEEDINGS

These excerpts taken from the TJX 10-K filed Mar 31, 2009.
ITEM 3. LEGAL PROCEEDINGS
 
Putative class actions consolidated in the United States District Court for the District of Massachusetts, In re TJX Companies Retail Security Breach Litigation, 07-cv-10162, were filed against TJX (i) putatively on behalf of customers in the United States, Puerto Rico and Canada whose transaction data were allegedly compromised by the Computer Intrusion (“Customer Track”)and (ii) putatively on behalf of financial institutions that received alerts from MasterCard or Visa related to the Computer Intrusion identifying payment cards issued by such financial institutions and that thereafter suffered damages from actual reissuance costs, monitoring expenses or fraud loss (“Financial Institutions Track”). These putative class actions asserted claims for negligence and related common-law and/or statutory causes of action stemming from the Computer Intrusion, and sought various forms of relief including damages, related injunctive or equitable remedies, multiple or punitive damages, and attorneys’ fees.
 
  •  Customer Track.  On December 30, 2008, the District Court judgment in the Customer Track approving the Amended Settlement Agreement, dated as of November 14, 2007, among TJX, its acquiring bank and the named plaintiffs, individually and on behalf of the settlement class, became final.
 
  •  Financial Institutions Track.  On October 12, 2007, the District Court dismissed the plaintiffs’ claims in the Financial Institutions Track, other than their claims of negligent misrepresentation and violation of the Massachusetts consumer protection statute (Chapter 93A) based on negligent misrepresentation, and denied the plaintiffs’ motion for class certification of the non-dismissed claims. Subsequently, the District Court dismissed the Financial Institutions Track of the action for lack of subject matter jurisdiction and ordered the case transferred to state court in Massachusetts. On March 30, 2009, the United States Court of Appeals for the First Circuit affirmed the dismissal of the plaintiffs’ claims for negligence and breach of contract, affirmed the denial of the plaintiffs’ motion for leave to amend their complaint to add a count for conversion, and vacated the order transferring the case to state court in Massachusetts. The First Circuit further upheld the decision not to dismiss plaintiffs’ claims for negligent misrepresentation and for violation of Chapter 93A based on negligent misrepresentation (but in so doing noted that the plaintiffs had not appealed from the lower court’s denial of class certification of such claims) and reversed the dismissal of the plaintiffs’ claim for breach of Chapter 93A based on an unfairness theory. Finally, the First Circuit remanded to the District Court for further proceedings on those claims that the First Circuit ruled were not subject to dismissal, noting that during such further proceedings TJX will have an opportunity to move for summary judgment on all such claims and to challenge class certification of the plaintiffs’ claim for breach of Chapter 93A based on an unfairness theory.
 
Those financial institutions that (for themselves and, in the case of MasterCard issuers, on behalf of their affiliated and their sponsored issuers) accepted the settlement offer under the Settlement Agreement among TJX, Visa U.S.A. Inc. and Visa Inc. and TJX’s acquiring bank dated as of November 29, 2007 or the Settlement Agreement between TJX and MasterCard International Incorporated dated as of April 2, 2008, released and indemnified TJX and its acquiring banks with respect to any claims of such issuers as Visa issuers or MasterCard issuers, respectively, with respect to any claims by reason of any matter, occurrence, or event pertaining to the Computer Intrusion, including but not limited to claims in the Financial Institution Track and state court case described below. In addition, the named plaintiffs in the Financial Institutions Track other than AmeriFirst Bank previously settled with TJX.
 
On January 16, 2008, AmeriFirstBank and an additional plaintiff filed an action in Massachusetts state court, AmeriFirstBank et al. v. The TJX Companies, Inc. et al, Massachusetts Superior Court 08-0229, raising allegations and claims nearly identical to those asserted in the Financial Institutions Track of the purported federal class action. The complaint stated plaintiffs’ intention to bring class allegations depending on pre-trial rulings by the state court. The state court stayed the state action pending adjudication by the federal court of the appeals in the Financial Institutions Track. On March 30, 2009, the First Circuit issued the opinion described above on those appeals.
 
 
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Table of Contents

A multi-state group of 41 state Attorneys General is investigating whether TJX may have violated their respective state consumer protection laws with respect to the Computer Intrusion. TJX has responded to Civil Investigative Demands with respect to this investigation.
 
ITEM 3. LEGAL
PROCEEDINGS



 





Putative class actions consolidated in the United States
District Court for the District of Massachusetts, In re TJX
Companies Retail Security Breach Litigation
, 07-cv-10162,
were filed against TJX (i) putatively on behalf of
customers in the United States, Puerto Rico and Canada whose
transaction data were allegedly compromised by the Computer
Intrusion (“Customer Track”)and (ii) putatively
on behalf of financial institutions that received alerts from
MasterCard or Visa related to the Computer Intrusion identifying
payment cards issued by such financial institutions and that
thereafter suffered damages from actual reissuance costs,
monitoring expenses or fraud loss (“Financial Institutions
Track”). These putative class actions asserted claims for
negligence and related common-law
and/or
statutory causes of action stemming from the Computer Intrusion,
and sought various forms of relief including damages, related
injunctive or equitable remedies, multiple or punitive damages,
and attorneys’ fees.


 




























  • 

Customer Track.  On December 30, 2008, the
District Court judgment in the Customer Track approving the
Amended Settlement Agreement, dated as of November 14,
2007, among TJX, its acquiring bank and the named plaintiffs,
individually and on behalf of the settlement class, became final.
 
  • 

Financial Institutions Track.  On
October 12, 2007, the District Court dismissed the
plaintiffs’ claims in the Financial Institutions Track,
other than their claims of negligent misrepresentation and
violation of the Massachusetts consumer protection statute
(Chapter 93A) based on negligent misrepresentation, and denied
the plaintiffs’ motion for class certification of the
non-dismissed claims. Subsequently, the District Court dismissed
the Financial Institutions Track of the action for lack of
subject matter jurisdiction and ordered the case transferred to
state court in Massachusetts. On March 30, 2009, the United
States Court of Appeals for the First Circuit affirmed the
dismissal of the plaintiffs’ claims for negligence and
breach of contract, affirmed the denial of the plaintiffs’
motion for leave to amend their complaint to add a count for
conversion, and vacated the order transferring the case to state
court in Massachusetts. The First Circuit further upheld the
decision not to dismiss plaintiffs’ claims for negligent
misrepresentation and for violation of Chapter 93A based on
negligent misrepresentation (but in so doing noted that the
plaintiffs had not appealed from the lower court’s denial
of class certification of such claims) and reversed the
dismissal of the plaintiffs’ claim for breach of
Chapter 93A based on an unfairness theory. Finally, the
First Circuit remanded to the District Court for further
proceedings on those claims that the First Circuit ruled were
not subject to dismissal, noting that during such further
proceedings TJX will have an opportunity to move for summary
judgment on all such claims and to challenge class certification
of the plaintiffs’ claim for breach of Chapter 93A
based on an unfairness theory.


 



Those financial institutions that (for themselves and, in the
case of MasterCard issuers, on behalf of their affiliated and
their sponsored issuers) accepted the settlement offer under the
Settlement Agreement among TJX, Visa U.S.A. Inc. and Visa Inc.
and TJX’s acquiring bank dated as of November 29, 2007
or the Settlement Agreement between TJX and MasterCard
International Incorporated dated as of April 2, 2008,
released and indemnified TJX and its acquiring banks with
respect to any claims of such issuers as Visa issuers or
MasterCard issuers, respectively, with respect to any claims by
reason of any matter, occurrence, or event pertaining to the
Computer Intrusion, including but not limited to claims in the
Financial Institution Track and state court case described
below. In addition, the named plaintiffs in the Financial
Institutions Track other than AmeriFirst Bank previously settled
with TJX.


 



On January 16, 2008, AmeriFirstBank and an additional
plaintiff filed an action in Massachusetts state court,
AmeriFirstBank et al. v. The TJX Companies, Inc. et
al
, Massachusetts Superior Court
08-0229,
raising allegations and claims nearly identical to those
asserted in the Financial Institutions Track of the purported
federal class action. The complaint stated plaintiffs’
intention to bring class allegations depending on pre-trial
rulings by the state court. The state court stayed the state
action pending adjudication by the federal court of the appeals
in the Financial Institutions Track. On March 30, 2009, the
First Circuit issued the opinion described above on those
appeals.


 



 



17






Table of Contents








A multi-state group of 41 state Attorneys General is
investigating whether TJX may have violated their respective
state consumer protection laws with respect to the Computer
Intrusion. TJX has responded to Civil Investigative Demands with
respect to this investigation.


 






EXCERPTS ON THIS PAGE:

10-K (2 sections)
Mar 31, 2009
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