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BOSTON — The TJX Companies Inc. announced a settlement for undisclosed terms with three banks and three state bankers associations that sued the discount retailer for an immense security breach. The Framingham, Mass.-based TJX said it settled with the Massachusetts Bankers Association, Connecticut Bankers Association and Maine Association of Community Banks, Eagle Bank, Saugusbank and the Collinsville Savings Society on December 18. In re TJX Companies Retail Securities Breach Litigation, No. 07-10162 (D. Mass.) Criminal hackers that breached TJXs computer systems compromised the security of at least 45.7 million consumer credit and debit cards, according to court papers. As part of the settlement, TJX said it reimbursed the bankers associations and banks for their expenses — excluding attorneys fees — from a second-quarter reserve taken by the company. TJX set aside $107 million for computer intrusion-related costs, according to its second quarter financial statement. The banks and associations were members of the financial institution plaintiffs group that issued consumer credit and debit cards. The financial plaintiffs 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. The court dismissed contract, negligence and negligence per se claims in October and denied class certification to financial institution members in November. Amerifirst Bank of Union Springs, Ala. and SELCO Community Credit Union Eugene, Oregon have not settled because the terms were unfavorable to Mastercard issuers like Amerifirst and small financial institutions like SELCO, said Joe R. Whatley Jr. a financial institution plaintiffs’ lawyer of Whatley Drake & Kallas’ New York office. “It would be crazy for these folks to settle for such small dollars when the damages had been so significant,” Whatley said. TJX’s attorneys at Boston’s Ropes & Gray referred questions to the company, which did not return a call for comment. The settling banks’ lawyers at New Haven, Conn.-based Tyler Cooper & Alcorn and New York-based Wolf Popper also did not return calls for comment. On December 19, Judge William Young Dec. stayed his order to transfer to the remainder of the case to Massachusettts state court pending TJX’s appeal of the transfer to the 1st Circuit. TJX shouldn’t think this litigation is going away, Whatley said. “There are hundreds of small banks and financial instituations around the country that have lost money,” Whatley said. “They’re going to go forward and try to collect it.” A proposed settlement of the case’s consumer track, which brought claims of negligence, breach of contract and implied contract and violation of Massachusetts consumer protection laws, is awaiting corut approval. TJX has proposed issuing vouchers to customers and holding a three-day sale discounting all merchandise by 15%.

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