Home Depot fired back against allegations it sent out misleading notices to potential class members in litigation over massive customer data breach.

The company claimed that lawyers for financial institutions suing the Atlanta-based home improvement chain made “significant factual misstatements and misrepresentations” about Home Depot's role in the communications.

“Home Depot did not send or authorize and was not even aware of” notices announcing a settlement with MasterCard International Inc. that were sent to financial institutions that are either plaintiffs or potential plaintiffs in the multidistrict litigation, wrote lawyers at Atlanta's Alston & Bird defending Home Depot.

They asked U.S. District Chief Judge Thomas Thrash Jr. to disregard a Nov. 30 motion by the financial institutions for what Home Depot's lawyers claimed was a “Draconian order” that would limit how Home Depot communicates with financial institutions and order significant disclosures about the apparent settlement.

Home Depot lawyers also contended that the financial institutions' motion was “replete with factual inaccuracies” and that the plaintiff banks and credit unions “don't purport to have actual support for the allegations that Home Depot was responsible in any way” for the settlement notices, which were sent out over the Thanksgiving holiday.

Home Depot's motion did not address whether it had reached a settlement with MasterCard. But Home Depot spokesman Steve Holmes confirmed that the home improvement chain had reached “a tentative settlement” with MasterCard that he says is contingent on its acceptance by a certain number of the financial institutions.

Earlier filing

In the Nov. 30 motion, the financial institutions' lawyers claimed that, without their knowledge, agents of Home Depot sent “highly misleading and coercive communications” offering an apparent settlement both to their clients, who are parties in the litigation, as well as other potential plaintiffs. Those notices were sent while the judge had under consideration a request by Home Depot that would allow the chain's lawyers or other representatives to communicate directly with potential class members without prior screening of those communiques either by plaintiffs' lawyers or by the court.

The notices announced that Home Depot and MasterCard had reached a settlement in the data security breach litigation but provided little detail about the settlement terms. The notices, copies of which are included in the court files, gave financial institutions either until Dec. 2 or Dec. 7 to participate in the announced settlement. Some notices said that a failure to act within the specified time limit would result in an automatic enrollment in the settlement and a release of all claims associated with financial damages incurred by the security breach.

Last week, the banks' lawyers demanded that Home Depot “explain its actions” and asked Thrash to limit further communications by Home Depot or its agents with any potential class members. The lawyers also suggested they may also seek an injunction to bar Home Depot and anyone acting in concert with the chain from implementing the settlement or enforcing any releases that may have been secured as a result of the notices. They also asked for a copy of the MasterCard settlement and any other settlement agreements Home Depot may have reached with potential class members, as well as all communications regarding the settlement and a list of all those to whom those communications were sent.

On Monday, Thrash had not yet acted on the plaintiffs' motion.

Last year, a string of banks, credit unions and customers sued Home Depot, claiming that, collectively, they sustained millions of dollars in damages as a result of the security breach, which exposed the personal payment information of about 56 million customers to computer hackers for at least five months.

Instant Insights /

Home Depot Says Settlement Notices Unauthorized

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