Home Depot fired back against allegations it sent outmisleading notices to potential class members in litigationover massive customer data breach.

The company claimed that lawyers for financial institutionssuing the Atlanta-based home improvement chain made “significantfactual 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 plaintiffsor potential plaintiffs in the multidistrict litigation, wrotelawyers at Atlanta's Alston & Bird defending Home Depot.

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

Home Depot lawyers also contended that the financialinstitutions' motion was “replete with factual inaccuracies” andthat the plaintiff banks and credit unions “don't purport to haveactual support for the allegations that Home Depot was responsiblein any way” for the settlement notices, which were sent out overthe Thanksgiving holiday.

Home Depot's motion did not address whether it had reached asettlement with MasterCard. But Home Depot spokesman Steve Holmesconfirmed that the home improvement chain had reached “a tentativesettlement” with MasterCard that he says is contingent on itsacceptance by a certain number of the financial institutions.

Earlier filing

In the Nov. 30 motion, the financial institutions' lawyersclaimed that, without their knowledge, agents of Home Depot sent“highly misleading and coercive communications” offering anapparent settlement both to their clients, who are parties in thelitigation, as well as other potential plaintiffs. Those noticeswere sent while the judge had under consideration a request by HomeDepot that would allow the chain's lawyers or other representativesto communicate directly with potential class members without priorscreening of those communiques either by plaintiffs' lawyers or bythe court.

The notices announced that Home Depot and MasterCard had reacheda settlement in the data security breach litigation but providedlittle detail about the settlement terms. The notices, copies ofwhich are included in the court files, gave financial institutionseither until Dec. 2 or Dec. 7 to participate in the announcedsettlement. Some notices said that a failure to act within thespecified time limit would result in an automatic enrollment in thesettlement and a release of all claims associated with financialdamages incurred by the security breach.

Last week, the banks' lawyers demanded that Home Depot “explainits actions” and asked Thrash to limit further communications byHome Depot or its agents with any potential class members. Thelawyers also suggested they may also seek an injunction to bar HomeDepot and anyone acting in concert with the chain from implementingthe settlement or enforcing any releases that may have been securedas a result of the notices. They also asked for a copy of theMasterCard settlement and any other settlement agreements HomeDepot may have reached with potential class members, as well as allcommunications regarding the settlement and a list of all those towhom 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 suedHome Depot, claiming that, collectively, they sustained millions ofdollars in damages as a result of the security breach, whichexposed the personal payment information of about 56 millioncustomers to computer hackers for at least five months.