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BOSTON — A federal judge ordered parties involved in the TJX Companies security breach case to discuss sending a question to the Massachusetts Supreme Judicial Court about whether the economic loss doctrine bars a negligence cause of action under Massachusetts law stemming from a defendant’s failure to protect a third party’s data. The TXJ security breach case involves personal and financial information about TJX customers stolen by computer hackers. It includes a consumer track, which is settled in principle, and a financial institutions track. In re TJX Companies Retail Securities Breach Litigation, No. 07-10162 (D. Mass.) The so-called financial institution plaintiffs, which include five banks, three bankers’ associations and a credit union that issued credit and debit cards to consumers, brought claims against TJX and it’s bank, Fifth Third Bancorp, for negligence, third-party beneficiary breach of contract, negligent misrepresentation and violation of Massachusetts consumer protection laws. On Oct. 12, Judge Young dismissed the negligence and contract claims but not the negligent misrepresentation and Massachusetts consumer protection law claims. The financial institution plaintiffs then asked Judge William G. Young to reconsider a finding that the economic loss doctrine bars their negligence claims or to send the question to the state supreme court. “The parties are, however, directed to confer in good faith within the next 30 days to see whether they can agree on a question to certify to the Supreme Judicial Court and the accompanying record,” wrote Judge Young. A long line of cases bars negligence except in cases of actual physical injury, but the law was developed prior to the computer age, said financial institution plaintiffs’ lawyer Joe R. Whatley, Jr. of Whatley Drake & Kallas’ New York office. “We argued that those cases we rely upon don’t have relevance to modern day notions of property that involve computer data,” Whatley said. TJX lawyers at Boston’s Ropes & Gray and Fifth Third lawyer Jim Carroll in the Boston office of New York’s Skadden, Arps, Slate, Meagher & Flom declined to comment.

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